Volume 666 Week 52 - Tuesday 24 August 2010(continued on Wednesday 25 August 2010) 
Volume 666 Week 52 - Tuesday 24 August 2010(continued on Wednesday 25 August 2010) 
[Volume:666;Page:13423] 
Tuesday 24 August 2010 
( 
continued on Wednesday 25 August 2010 
) 
Trans-Tasman Proceedings Bill 
In Committee 
Debate resumed. 
JO GOODHEW (Junior Whip—National) 
: 
 I seek leave for the parts and clauses to be taken as one question this morning under the— 
The CHAIRPERSON (Eric Roy) 
: So you are seeking leave for there to be one debate and one question? 
JO GOODHEW 
: Thank you. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for there to be one question. Is anyone opposed to that course of action? There is not. 
Parts 1 and 2 schedules 1 and 2 and clauses 1 and 2 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Another member was on his feet last night and I was hoping that he would continue with the call because it was such an interesting contribution to the debate. 
Hon Ruth Dyson 
: Who was that? 
Hon LIANNE DALZIEL 
: I cannot remember his surname so I cannot say—ha ha! Perhaps one of my colleagues could help me. 
Hon Ruth Dyson 
: It wasn’t Maurice Williamson was it? 
Hon LIANNE DALZIEL 
: No it was not. 
Seriously I do have a serious question to ask. One of my colleagues Raymond Huo made a contribution to the second reading debate last night. The point he was making was in relation to some concerns that had been raised by Chapman Tripp in the public arena prior to the Trans-Tasman Proceedings Bill going to the Justice and Electoral Committee. I alluded to this point myself in the first reading debate but I did so at the end of my contribution. I said that I would deal with it once we got to the Committee stage because as my colleague Raymond Huo pointed out—very well I thought—it is actually quite a tricky area. Let me just run back over the end point of my contribution on the first reading debate. 
I have here the Chapman Tripp publication  
Trans-Tasman integration: court proceedings and enforcement.  
It states: “The proposed recognition and enforcement of regulatory sanctions is perhaps the most controversial part of the regime. The proposed reforms partially displace the longstanding rule that domestic courts do not enforce penal (as opposed to compensatory) laws of foreign states because to do so is contrary to the principles of independent sovereignty.” The point that my colleague Raymond Huo made last night was that under the proposed reforms some of the Australian regulatory penalties imposed by courts can now be seen to be directly enforceable in New Zealand courts and vice versa in the same way civil judgments are. The point he was making—and this is the point elucidated in this commentary—is that regulatory regimes based around civil penalties and regulatory regimes based around criminal penalties are going to be treated differently under the new regime. For civil penalties there will basically be cross-border reach unless it is expressly excluded and that is dealt with in Subpart 7 of the bill which is the part of the bill that I would like the Minister to focus his attention on—clauses 68 and 69. These provisions refer back to Subpart 5 as well. For criminal penalties it will be where they are included in the regulatory reach. On the one hand if sanctions are framed as civil pecuniary penalties they will be directly enforceable unless specifically excluded by Order in Council—“a negative list” approach. Sanctions framed as “regulatory regime criminal fines” will be directly enforceable only if declared to be so by Order in Council—a “positive list” approach. It would be worthwhile to have on the record of the House why the distinction applies in this legislation. It would be an extremely useful contribution to an understanding around how this will work in practice. 
The reason I am asking for this is that Chapman Tripp basically said that it was not obvious that the difference in treatment was warranted because for some of the civil penalties versus criminal penalties arguments one will literally be dancing on the head of a pin. It used the example of a fine under section 40 of the Fair Trading Act which is a criminal penalty and a fine under section 80 of the Commerce Act which is a civil penalty. I think it is quite an interesting point and it would be really worthwhile if the Minster would contribute to our understanding of why there is the difference between the two regimes as they are being implemented in the Trans-Tasman Proceedings Bill. 
It is quite an interesting argument and Chapman Tripp takes it a little bit further. The question is this: “As a matter of broader principle one might ask when and to what extent direct and mutual enforcement of the regulatory penalties is desirable.” So this is really the second issue—the first issue is the distinction between the civil and the criminal penalties. The point that Chapman Tripp went on to make is that “Where those court judgements relate to regulatory proceedings the domestic regulatory systems of both New Zealand and Australia will have a broader reach. But this does not ensure (or even seek to ensure) that the respective regulatory systems will promote the same policies or pull in the same direction.” So the point raised in this article is that there is “a risk of cross-cutting rather than more streamlined regulation in areas such as competition law securities regulation and consumer protection.” As I also said in the first reading debate on this bill it was in my role as the Minister of Commerce that I welcomed the introduction of the Trans-Tasman Proceedings Bill on the basis that a lot of the work that would be seen to be able to be concluded under it would fall within the ambit of my concern in that area. 
But the point that Chapman Tripp makes in this article is that anecdotal evidence suggests “that New Zealand and Australian regulators are still a lot way from sharing a common mindset or working in a truly coordinated fashion. The New Zealand Commerce Commission is unlikely to accept arguments that a New Zealand penalty should be reduced to take account of penalties imposed in Australia in respect of the same or related conduct. Likewise for the Australian Securities and Investments Commission. Perhaps in time a regime of mutual enforceability will foster a joint approach by regulators in such situations. For now one can expect a somewhat imperfect overlap as the effects of closer coordination but not single-source regulation are felt.” I do not necessarily agree with Chapman Tripp on this point. I think that sometimes we leap to an end conclusion without seeing whether there are intermediate steps that we can take along the way and in many respects I prefer the graduated approach that this legislation seems to favour which is to have the mutual enforceability through the approach of the Trans-Tasman Proceedings Bill rather than to have single set of regulation applying across the Australian Securities and Investments Commission the Commerce Commission and indeed the Securities Commission. 
We have moved a long way and as I also said in my first reading speech the mutual recognition of securities offerings and the sorts of advancements that were made under the previous Labour Government will benefit I think from the platform that this establishes. But I think it is worthwhile for the Government to place on record a response to this particular issue because it is one that commentators will continue to reflect on as the legislation comes into force. The legislation as a whole is legislation that we absolutely welcome. As I said in the first reading I was the Minister who was fortunate enough to be able to sign the original agreement on behalf of the New Zealand Government and that is something that obviously someone in my situation would regard as an absolute privilege to do. So we are very pleased that the Government has taken up legislative requirements to match the legislative requirements put in place in Australia. But those two issues I think are worthy of having a good statement on the record of this House. Those who are going to study the in-depth detail of this legislation and are going to implement it from time to time will want to see why the Government has chosen to split the approach on civil and criminal penalties. They will want to see how the new system is supposed to operate when in fact the regulators may be working under different rules. In many respects the blurring of the line between the two will certainly mean that people will see that one country’s own domestic circumstances will be imposing on those of the other. 
CHARLES CHAUVEL (Labour) 
: 
 As we have heard the Trans-Tasman Proceedings Bill seeks to integrate our own justice system further with that of Australia. As far as I can see it is the most far-reaching attempt to achieve that integration since the days of Geoffrey Palmer as he then was and the mutual recognition that was extended between the Federal Court of Australia and our High Court as to certain orders and judgments. So it is good to see a scheme that further extends that pioneering work which is over 20 years old. One might say that we have tarried a bit to get to the situation that we are in now but that we have come even as far as this is thanks in large part to the excellent work of Lianne Dalziel in the previous regime. It is great to see that that work is being continued. 
I shall look at the regulatory impact statement in the legislation and then ask the Minister in the chair a couple of questions. I can see that he is intensely engaged in this debate! It would be very interesting to hear what the Minister has to say on the questions I have for him; perhaps the answers lie on his iPad which he is studying so assiduously. The regulatory impact statement weighs up four options. One is keeping the status quo— 
Paul Quinn 
: Looking at the bill. Get with the programme Charles—the bill is on the iPad. 
CHARLES CHAUVEL 
: Now we have the usual excellent quality contribution from Mr Quinn in the Committee stage! He is a learned figure in the Parliament on these matters so I hope he will keep chipping in! As he will know the regulatory impact statement suggests that there were four options to proceed with: we could keep the status quo which we clearly have not decided to do; we could amend existing legislation; we could implement changes modelled on another supranational project of note in the world at the moment the European Union with its integration of justice systems; or we could implement the changes outlined in this bill. The regulatory impact statement concluded given the needs that it outlined that the changes suggested in the bill are the best response to our needs. 
As well as identifying the problems within our current regime the statement gives a wider context as to why the bill’s reforms are needed. It notes the increase that has occurred in the movement of people between Australia and New Zealand the movement of assets and services between the two countries and the subsequent increase in cross-border disputes involving individuals or businesses based in both countries. 
We have always assumed in this Parliament I think that this is an inevitable process—that there is an ever-greater prospect of integration between Australia and New Zealand—but history of course shows that that is not the case. We need only look at the politics that were played with the trans-Tasman therapeutic regime in the last Parliament and now we have the prospect of a conservative Government if it comes to power in Australia having promised to look again at the ability of people to move freely between Australia and New Zealand for residential and working purposes. That would be a retrograde step; it would be a terrible thing if that agreement were altered if the special purpose visa that New Zealanders have for going to Australia as of right and Australians have for coming here were to be abolished. I certainly hope that Mr Abbott does not have the opportunity to get his hands on that agreement which I think has been a great thing for the two countries. I think it is unusual that Mr Key rang Mr Abbott on the weekend and left him a message but did not ring the Prime Minister of Australia to congratulate her on her campaign. But let us hope that this does not presage a change in the trend that we have seen so far of greater integration between the countries. 
Paul Quinn 
: You give her a ring Charles. Say you’re speaking on behalf of the nation. 
CHARLES CHAUVEL 
: Well I think it would be better to hear me speaking on behalf of the country than Mr Quinn because at least people would be able to understand what I was saying. 
In terms of what our needs are in the regulatory impact statement there are a number of problems that people currently run into. I ask Minister Williamson whether he is confident that those problems will be fully addressed by the legislation. The first problem is where a defendant does not submit to the jurisdiction of an Australian court. At the moment the resulting judgment may not be fully enforceable in New Zealand. 
There is another issue—final money judgments are the only things at the moment that are enforceable across the Tasman. There is no ability to get interim relief particularly in a commercial sense. One cannot apply for the freezing of assets to preserve the position of the parties in litigation when proceedings are based in the other country decisions of the tribunals of one country cannot be enforced in the other with any great ease and the rules to determine which country’s courts should decide a dispute are based in private international law. The same rules apply there as apply to say a dispute involving New Zealand on the one hand and Bolivia Zimbabwe or some other country on the other hand that we do not have any particular affinity with as far as legal systems are concerned. Clearly that is not a desirable state of affairs. Also civil pecuniary fines as Lianne Dalziel said imposed in one country are not enforceable in the other. The same situation applies to criminal fines so the inability to have that mutual level of enforcement lets certain regulatory offences continue to undermine trans-Tasman markets ultimately to the detriment of both Australia and New Zealand. Obviously it is desirable to have the same set of general rules applicable in both places. 
Obviously there will be some administrative costs involved in implementing those reforms; the statement recognises that. But it concludes that those will be outweighed by the many reduced regulatory costs to businesses and to people doing their activities on a trans-Tasman basis and because of better enforcement there will also be in the end lower costs. There will be other substantial benefits as other members have outlined. They include more efficient court proceedings and more effective remedies. The bill will also play a crucial part in the success of the furthering of closer economic relations and single economic market initiatives like streamlined trans-Tasman insolvency procedures which is obviously a good thing and the mutual recognition of financial intermediaries. So we should all hope that this integration process continue rather than grinding to a halt or hitting some speed bumps because of the internal politics in Australia I have referred to. I think one speaker on the opposite side last night noted that New Zealand has been the overwhelming beneficiary of these integration moves so certainly it is in our interests to enact this legislation. 
But I would like the Minister to consider in particular clause 51(1) of the legislation under which the Governor-General by Order in Council can declare certain tribunals of a state or a territory of Australia to be a tribunal to which the subpart applies. That is a way in which the executive can extend the application or the intended application of the legislation. I would be interested to know what types of tribunal the Government has in contemplation if it has any at all as far as that power is concerned. It seems to me that if the full purpose and effect of the legislation is to be realised then the sorts of tribunals that are contemplated by that clause will be quite wide; we will see a large number of Australian administrative tribunals gazetted by the Governor-General under that clause and we will see the ability to have a wide range of orders mutually enforced because hopefully we will see under the reciprocal provisions in Australia a similarly broad approach to New Zealand tribunals. That would be a good thing. As I said it would be useful to hear from the Minister in the chair whether there has been some thought on that issue or whether we will be looking at just another hiatus of 20 years before we take the next logical step toward integrating our legal systems. 
LYNNE PILLAY (Labour) 
: 
 It is a pleasure to stand and speak in support of the Trans-Tasman Proceedings Bill which we are debating under urgency. I note that most of the bills before the House are non-controversial. That is what we know and love about Maurice Williamson the Minister in the chair; “Mr Non-controversial” is what we often call him. When we consider some of the legislation that has gone through the House in very recent times it is a pleasure to speak to a bill that adds value. I understand that my colleague Brendon Burns will take a call on the bill after me and that is really good too. 
The bill and the equivalent Australian legislation will integrate our countries’ civil justice systems to simplify the resolution of legal disputes with a trans-Tasman aspect. The bill resulted if we are being really honest from work started by Helen Clark in 2003. I would like to speak briefly about the background. The Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement was established by Helen Clark and John Howard in 2003. It reported back in December 2006 and made a range of recommendations that included the use of video technology to allow witnesses to appear while overseas and an increase in the types of judgments that could be enforced in each country. The agreement produced was signed in 2008 by Labour’s previous speaker Lianne Dalziel as Minister of Commerce and Robert McClelland the Australian Attorney-General. The agreement went to the Law and Order Committee and the unanimous recommendation from that committee was that the agreement was the best way forward. 
In terms of the bill itself we know that it reduces the cost and complexity of litigation and provides better remedies. The bill will certainly enhance the very good relationship that we have with Australia even though it is absolutely romping ahead of us economically in the job stakes and in supporting people through a recession. In fact that country has barely felt the recession as opposed to this country. I am hoping that through this bill and the work that will happen across the Tasman this Government will be able to draw on some policies that will enhance New Zealand’s economy which is in a dreadful state. 
Hon Member 
: They’ve got none of their own. 
LYNNE PILLAY 
: The Government has none of its own as my colleague said. Perhaps its members will learn from our neighbours a way to support people in work rather than—[ 
Interruption 
]—exactly having a plan. 
I commend the Law and Order Committee which looked at a number of amendments to the bill. They included refining applications for stays of proceedings and giving New Zealand courts the power to declare jurisdiction. It also looked at the procedural rules of the courts and wanted “to allow rules prescribing things required or necessary for implementing the bill to be made using any powers given by any Act to make procedural rules for a court or tribunal.” Very sensible work was done by the Law and Order Committee which was quite an achievement given that the chair is not always up there in terms of achievement—would that be a fair comment? 
Paul Quinn 
: What? Say that again! 
LYNNE PILLAY 
: I am not talking about the Justice and Electoral Committee; I am certainly not talking about that select committee. I know that Brendon Burns will take a call so I will note just a couple more issues. One was the serving of initiating documents in Australia. In terms of the defendant’s address for service some really sensible work was done to ensure that it was the most efficient possible. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to take a call on the Trans-Tasman Proceedings Bill and to note that this is a continuation and an enhancement of the process of the closer economic relationship with Australia which I have to acknowledge began under a National Government in the late 1970s and early 1980s under the Hon Hugh Templeton. It got support from the Labour leader Bill Rowling at that time and took off and it was a very appropriate and timely move for this country. It acknowledges the strength and depth of our relationship with Australia and this bill continues to acknowledge that which is important. 
I think it is also important that we have some complementarities where possible in the judicial systems of Australia and New Zealand and this bill endeavours to implement some of those. It is important to have those complementarities because the capacity of New Zealanders to travel to Australia and of Australians to come to New Zealand is ever-increasing. Obviously our court systems have to acknowledge the fact that people are not always domiciled in one country; they can live in one country and cross to the other and court proceedings can take place in one country or the other. This bill effectively allows some sort of acknowledgment that there are issues that need to be resolved in courts across the two countries. 
But there are still some gaps that I will allude to and I have a constituent who is facing one at the moment. My constituent has had to return to Australia to face proceedings in Australia’s equivalent of our Family Court in relation to a custody case. It is a very distressing and harrowing case because this poor young woman has been forced to go back to Australia by the father of her child under circumstances that suggested that the father wanted to have ongoing contact with the child. She has now been back in Australia for some 9 months but the father has not made any contact. In fact I understand that he is on the run from the police in two states of Australia. I acknowledge the intervention last week of the Minister of Justice Simon Power who has asked his officials to investigate and who has also asked the Ministry of Foreign Affairs and Trade to provide whatever assistance it can to this poor young constituent of mine. She is faced with the ongoing demands and delays of a court system of which she has no knowledge no power and in her view no real authority to try to expedite proceedings. 
This bill does not extend to those issues; it is more related to the business community and those sorts of relationships but that case is a signal of the need for real complementarities between the justice systems of our two countries. We are a very movable nation and our affairs are often interwoven with Australian affairs. Our business and family relationships are increasingly taking us back and forward across the Tasman and this bill is an attempt to expedite those issues. 
The bill of course began under Helen Clark’s leadership. It has come through Parliament—it has been through the select committee process—and it will reduce some of the complexities and costs that are in place in trans-Tasman litigation and provide better remedies. It is therefore a very sensible measure. Through facilitating the effective resolution of trans-Tasman disputes this bill will foster those ever-increasing economic relationships with Australia and New Zealand. That is important. It will simplify proceedings within our courts and the enforcement of judgments. That is very sensible. We have had a significant increase in the movement of people assets and services across the Tasman; obviously they will be subject to disputes from time to time. Therefore it is important that we have this arrangement which is perhaps internationally one of the best arrangements between any two sovereign States with separate legal systems. We still retain our entire independence in respect of our judicial system but obviously we want to try to ensure that there are as few impediments as possible to the process of justice whether people are on this side of the Tasman or the other. 
The Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement has worked through these issues. The group was set up by Helen Clark and John Howard back in 2003. It has brought forward the proposals that are now enmeshed in this bill. It is appropriate that we now see this bill passed and move towards that closer integration of the New Zealand and Australian civil justice systems so that we can continue to develop and foster the closer economic relationship that began even before the time of the Hon Maurice Williamson in this House. Thank you. 
The question was put that the amendments set out on Supplementary Order Paper 160 in the name of the Hon Simon Power be agreed to. 
Amendments agreed to. 
Parts 1 and 2 schedules 1 and 2 and clauses 1 and 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
 on behalf of the  
Minister of Justice 
: I move  
That the Trans-Tasman Proceedings Bill be now read a third time 
. This bill is an important milestone in the creation of a comprehensive new regime to deal with court proceedings and regulatory enforcement across the Tasman. It implements in New Zealand the Agreement between the Government of New Zealand and the Government of Australia on Trans-Tasman Court Proceedings and Regulatory Enforcement which was signed in 2008. Together with its Australian equivalent also called the Trans-Tasman Proceedings Act this bill will streamline the resolution of disputes with connections to both New Zealand and Australia. 
As personal and business connections between countries increase the activities of individuals and businesses are increasingly likely to be affected by more than one legal system. Uncertainty about which court will hear a dispute or whether a person will be able to enforce a judgment in another country causes difficulties for both individuals and business. Addressing those issues between New Zealand and Australia is obviously a key plank in progress towards a single economic market. 
This level of cooperation between two countries on cross-border civil justice issues may be unparalleled anywhere in the world. If it proves successful it may even be looked at as a model of what can be achieved between jurisdictions. The high level of confidence each country has in the other’s legal system—and regulatory system by the way—and our common legal heritage has allowed us to push the boundaries. Most countries do not for example enforce another country’s penal laws. The two pieces of legislation will make an exception to that general rule and allow certain criminal fines imposed under one regulatory regime to be enforced in another in the same way as a civil judgment debt. Criminal fines play an important role in encouraging compliance with regulatory regimes. Improved enforcement of regulatory regimes that affect the integrity effectiveness and efficiency of trans-Tasman markets will deliver benefits to both countries. 
The sort of regulatory regimes this legislation will apply to include New Zealand’s Commerce Act and the Australian Trade Practices Act. The benefits of this new regime will span the range of interactions New Zealand has with Australia and its legal system. Those who will benefit extend from individuals involved in family proceedings and consumer disputes to major New Zealand corporations operating in Australia. 
Processes for effective and efficient resolution of disputes are essential to support the closer economic relations agreement and the initiatives that sit under it. We want New Zealand businesses to be able to operate in Australia and deal with Australian businesses with confidence. Businesses need to know that if a dispute arises it can be heard by the court most appropriate to hear it or by the court they agreed would hear it. Businesses need to know that they can readily obtain interim relief such as a freezing order if they need it and they need to know that if they obtain a final judgment it can be enforced effectively even if other parties’ assets are located in Australia. 
After the passage of this bill the New Zealand and Australian Governments will continue to work closely together to make the necessary supporting regulations and to bring the arrangements into force at the earliest opportunity. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I too am very pleased to see the final reading of the Trans-Tasman Proceedings Bill. The bill certainly has generated a lot of work between the two countries and the agreement was able to be signed on the anniversary of the signing of the Closer Economic Relations agreement which saw the original agreement on trans-Tasman court proceedings and regulatory enforcement signed. I made the point during the first reading that I was the one who had had the privilege of signing that agreement on behalf of the New Zealand Government and it certainly was a privilege to do so because the steps that we were taking as two countries were quite ground-breaking steps. We had confidence in each other’s judicial and regulatory institutions in order to sign off on such a significant piece of work. The legislation itself follows on from not only the signing of that agreement but also the significant amount of work undertaken by the working group represented very well on both sides of the Tasman which preceded the agreement. 
I found an article that was written at the time of the signing of the treaty by the Australian Attorney-General Robert McClelland and me back in 2008. This particular article said that the signing of that treaty once its advent was implemented by legislation “would make life a lot easier for businesses which now face a time-consuming and expensive process when dealing with trans-Tasman legal issues. Under the existing law fines and civil penalties imposed by New Zealand courts cannot be enforced in Australia and vice versa. Prosecutions under Australian law cannot be brought in New Zealand and vice versa. Criminal proceedings initiated in one jurisdiction probably cannot be served in the other although no one is absolutely sure about this but civil penalty proceedings in most cases can be. Orders made under regulatory laws in one country are not applicable in the other. What all this means is the moves made over the past 25 years towards trans-Tasman harmonisation of competition consumer and other laws meet an abrupt brick wall when parties seek to utilise the enforcement might of the courts.” It is that “abrupt brick wall” that we are breaking down with the legislation we are passing today. I think it will be of significant benefit to businesses and individuals on both sides of the Tasman. 
I also reflected during the Committee stage on a contribution made by the law firm Chapman Tripp in relation to concerns it had raised in respect of the potential departure from the longstanding rule that domestic courts do not enforce penal laws of foreign States because to do so is contrary to the principles of independent sovereignty. I thank the Minister for Building and Construction on behalf of the Minister of Justice for addressing that issue in his third reading speech. Unfortunately he did not manage to do it during the Committee stage but he touched on it in his third reading speech. He might not have been aware that he was doing that but he answered the question about the significance of that change and why the Government had chosen to go down the pathway of breaking with an element of tradition in that regard. However he did not manage to really explain it to the House so perhaps the next speaker for the Government might like to put on the record of the House why there is a difference between civil pecuniary penalties and criminal penalties. 
The example that is used in this particular article by Chapman Tripp which I think is worth raising again and which I hope the Government responds to is that the distinction between civil and criminal penalties may amount to nothing more than what I described in the Committee stage as dancing on the head of a pin. The example that Chapman Tripp gives is “a fine under section 40 of the Fair Trading Act is a criminal penalty and a fine under section 80 of the Commerce Act is a civil penalty.” I ask why one is an “opt-in” and the other an “opt-out”. That is a very simple question and I can see that the next speaker for the Government Chester Borrows is really excited about the opportunity to be able to respond to that question. He looks set to explain to the House why it was decided that we would have on the civil penalty side a “negative list” approach—that is the penalties will be directly enforceable unless specifically excluded by Order in Council—and that the regulatory regime on criminal fines would be directly enforceable only if declared to be so by Order in Council which is the “positive list” approach. I am looking forward to quite a major contribution to the advancement of the law by the Government stating for the record why there is a difference between the two approaches. I can see that the member opposite is looking forward to taking up that opportunity. 
The other question I asked the Minister during the Committee stage was about the differences in law on both sides of the Tasman. It was the question of whether the regulatory regimes because there are some nuanced differences in some instances but major differences in others between some of our competition laws in particular would have a situation where the de facto operation of this arrangement would mean that the Australian law would apply in New Zealand and vice versa. I think that is a really good point to raise and as I said in the Committee stage I do not necessarily agree with the proposition that Chapman Tripp put forward in the article I have here. Personally I think there are reasons for having different approaches on regulatory regimes and sometimes a stepping stone towards a more coordinated and mutual regime is having the enforcement recognition that we have under this Trans-Tasman Proceedings Bill. I am not completely struck by the argument but I would like the Government to put on the record why it has adopted this particular approach so that those who take a great interest in these matters can understand. 
I am sure members of the legal profession who will utilise this legislation at some stage in the future will look back at the contribution of various members to this debate and I know they will look most interestedly at Chester Borrows’ contribution— 
Charles Chauvel 
: And the courts. 
Hon LIANNE DALZIEL 
: —and the courts may look as well—because if there is any doubt about the law they will look at the history behind this bill and at the Government’s thinking. Chester Borrows as the chair of the Justice and Electoral Committee is all over the detail of this legislation and will be able to explain to us such issues as for example whether “The New Zealand Commerce Commission is unlikely to accept arguments that a New Zealand penalty should be reduced to take account of penalties imposed in Australia in respect of the same or related conduct. Likewise for the Australian Securities and Investment Commission.” Was that at the forefront of the Government’s mind in its thinking around the adoption of the particular form of legislation? We also heard in the Committee stage about the changes that were made by the select committee. It adopted a purpose clause in line with the Australian legislation that has been recently passed. I commend the select committee for its excellent work and that is why I am looking forward to the contribution from the chair of the select committee in that regard. 
I thought I would close with reference to David Goddard QC whom I know my colleague Charles Chauvel mentioned in his first reading speech. This is also mentioned in the article I referred to at the beginning of my contribution. David Goddard was a member of the trans-Tasman working group and he described the changes as the minimum level of coordination required to achieve the goals of reducing the cost of trans-Tasman dispute resolution and enhancing the effectiveness of regulatory regimes. He concluded that the significance of the reforms should not be underestimated as they represented the furthest-reaching such proposals between any two sovereign States with separate legal systems. That is an incredible endorsement of what we are able to achieve in Government and what this Government has been able to put in legislation. I commend the bill to the House. 
CHESTER BORROWS (National—Whanganui) 
: 
 It is an unusual situation when both sides of the House find themselves in agreement on legislation and in agreement on anything I guess. So that is if nothing else cause for us all to reconsider our positions. The work that was done within the Justice and Electoral Committee on the Trans-Tasman Proceedings Bill was very strong. A magnanimous gesture was made across the House in accepting that both sides would be looking again at their positions. 
A very insightful question was asked by the previous speaker Lianne Dalziel. I understand that there is an arrangement as far as recovery of criminal debts by way of trans-Tasman fines is concerned but I am sure that any lack of clarity will be cleared up by the erudite Minister of Justice when he speaks in the “fourth reading” of this bill. 
CHARLES CHAUVEL (Labour) 
: 
 Members on this side have been pleased to support the Trans-Tasman Proceedings Bill through all its stages in Parliament because we think it is a good bill. It reflects as has been noted the very hard work of the previous Labour Government and in particular that of my colleague the Hon Lianne Dalziel who was Minister of Commerce at the time that the agreement the legislation is based on was reached. 
This is legislation that truly benefits business. As far as this Government’s record is concerned the simple re-enactment or continuation of the enactment of legislation largely originated by Lianne Dalziel when she was either Associate Minister of Justice or Minister of Commerce has constituted all of its meaningful pro-business law reform agenda. It is worth noting that that is actually the case. For all the rhetoric for all the dog whistling about laws to extend the fire-at-will period to all businesses and the like that sort of legislation will not make a difference to business in reality; the substantive reform the pro-business law reform programme is a continuation of the work of my colleague. I want to put that on the record of the House fairly and squarely. 
The other matter that I want to refer to up front is the inappropriateness of this legislation going through the House under urgency. There is no justification whatsoever for doing that. Although there is multiparty agreement on the appropriateness of the legislation and its importance and certainly members on this side are pleased to see the legislation finally being progressed the procedure adopted here is an embarrassment. The Minister in the chair during the Committee of the whole House the Attorney-General clearly had had the job foisted on him. He did not know the answers to questions on the Government’s programme to allow the Governor-General through clause 51 to extend the Act to certain tribunals and courts in Australia. He simply did not know the answers to significant questions. The Committee should have heard those answers and they should have been placed on the record. 
I do not blame the Minister for that. He did a good job in the circumstances. But he did have officials present so he could have asked them a couple of questions so that he could enlighten the Committee on what the Government intended by further extending the scope of the bill—which clearly is a good thing. That is what happens when legislation is rushed through under urgency when the responsible Minister is not available to sit in the chair during the Committee stage and we have two substitute Ministers in the chair. They are simply not in a position to address the important questions. I would have hoped that on a measure as important as this—particularly when the Minister for Building and Construction who gave the third reading speech in the House today claims to be very pro-business—we might see a slightly more respectful process in this House. Unfortunately under this Government that is a vain hope. 
Simon Bridges 
: Speaking of vain. 
CHARLES CHAUVEL 
: That is an interesting interjection from a member opposite who is not known for his humility let it be said. 
It is true that it is good that the bill will allow a broader range of judgments to be registered and enforced between Australia and New Zealand. It will allow court appearances by video link between the two countries and it will allow the enforcement of regulatory regimes supporting trans-Tasman markets. All of this will make the doing of business and the resolution of disputes across the Tasman far simpler and more affordable. 
When I was working in the Sydney office of my old law firm one of the constant frustrations for businesses and individuals doing business across the Tasman was that the integrated single economic market was going along apace and people were very much in favour of it but when a legal dispute occurred between people based in say South Australia and New Zealand there was no effective way of enforcing the judgment unless it was a dispute that could be resolved in the Federal Court of Australia on the one hand and the High Court of New Zealand on the other. Then a reciprocal enforcement procedure was introduced thanks to work done by Geoffrey Palmer back in 1989-90 I think when there were amendments to the High Court Rules and the rules of court of the Federal Court of Australia. If one was lucky enough to have a dispute case brought in the Federal Court on a federal matter in Australia one could achieve some sort of mutual enforcement. But if the dispute was in a state court or in any other court in the federal regime one was essentially prejudiced. We are fixing that finally. That is a desirable outcome and that is why Labour substantially supports the bill. 
On the issue of economic catch-up with Australia which is a mantra we hear a lot in this House and outside it these days we need more of this sort of legislation to fix the real productivity issues that occur as roadblocks to trans-Tasman business. As I say I would like to see more of this sort of substantive reform; reform that is well-thought-through and evidence-based reform of the kind that was advanced so strongly by Lianne Dalziel and Michael Cullen in the previous Government rather than dog-whistle slogans about increasing productivity and trying to catch up with Australia which unfortunately is the record so far of members opposite. 
I will give an example of how the measures in this legislation are positive. An Australian-based company—“S”—is offering investment schemes to New Zealanders. It is registered as an overseas company in New Zealand and it has appointed somebody to handle its legal proceedings here. It makes a misleading statement in one of its documents. “S” is prosecuted under the Securities Act resulting in the imposition of a fine by the court. Well under the current system because “S” could withdraw all its assets from New Zealand and move them back to Australia to evade enforcement it is not possible to enforce any fine. That is a waste of legal costs for all involved and in fact people do not even bother with legal action in these circumstances and there is no accountability under the laws of New Zealand and that has a detrimental effect on respect for the legal system. Under the legislation proposed our Securities Act would be more enforceable in Australia. The fine against the company would be as enforceable there as it would have been if a civil judgment had been made in a New Zealand court. That has to be a good thing and it is something that certainly ought to be supported across the House. 
At the moment as I have said only final money judgments can be enforced on a trans-Tasman basis. There is no ability to get interim relief. The decisions of the tribunals of one country cannot be enforced in the other and even though the Minister could not tell us which tribunals the Governor-General will extend the legislation to we can assume that there will be such tribunals. The rules to determine which countries’ courts will decide a matter are confusing and neither civil pecuniary fines nor criminal fines can be enforced in a country other than the one they were imposed in. These are the sorts of real barriers to productivity that exist these are the sorts of problems that ought to be addressed but instead we see this Government trying to remove the rights of people to fairness at work. It says that that is the way to achieve better productivity on this side of the Tasman. Well we know that is nonsense. We know that the way to get proper productivity and proper business law reform to the benefit of our nation is to advance bills like this. It is a shame that this one is being done through urgency without the responsible Minister present to tell us the answers to some important questions. Lianne Dalziel has posed them I have tried to pose some of them and we have not heard answers so we are not in the best space possible. None the less the bill is finally going through and that is something we should be pleased about. 
SIMON BRIDGES (National—Tauranga) 
: 
 It is good to speak on the third reading of the Trans-Tasman Proceedings Bill. I spoke yesterday about the broader Australian relationship that this bill is a marker of and a facilitator of if you like in that it enables us to keep pace with the ever-closening relationships business deals and so on between us and Australia. I want to hone in not in particular detail on some of the things that this worthy bill does in particular on the area of service. Service of proceedings is perhaps something that most people will not think twice about. In fact it is a very interesting area practically speaking in principle and conceptually. As a law clerk and first-year solicitor I well remember having to serve proceedings by dumping them on people’s doorsteps and the like. I was the principal debt collector for State Insurance in the firm I worked for dealing with car accidents. Some of these cases went across the Tasman—and I am sure it is even more the case now than it was in 2000 and 2001—because people leave the country they move over there and the like. I can remember the kerfuffle that one would have in trying to serve these people and deal with things effectively and then if one got judgment in enforcing that judgment across the Tasman which is another practical part of this bill. 
The bill simplifies arrangements and the processes that we have with Australia in relation to service and in relation to enforcement of judgments. I have talked about some pretty simple examples—you know someone crashes a car and they then take off to Australia. But of course we know that this will be just as important—probably more so—in very complex large business transactions where we as a country and Australia as a country have every interest in keeping the relationships going and deepening those business relationships so that both sides of the Tasman can become more prosperous. Perhaps at first blush this is not the most exciting bill but it is a very worthy bill and it is a marker of the ever-closer relations and mutual success we have with our trans-Tasman partner Australia. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
:  
Tena koe Mr Assistant Speaker. Kia ora tatau. Morena ki a tatau i tenei ata. I thought it would be appropriate to provide the Maori Party perspective on the Trans-Tasman Proceedings Bill and say from the outset that we are supportive of its intent. My job is to raise a couple of the issues that were raised through the submissions provided to the Justice and Electoral Committee and give some overview from our perspective. 
The passage of people across the Tasman is a phenomenon that appears to have also included Maori in its wake. In 2006 a report namely  
Maori in Australia: Nga Maori i Te Ao Moemoea 
 predicted that between 115000 and 125000 Maori are living in Australia. We in the Maori Party have been over to Australia having been asked by whanau members here to make contact with Maori there and we can see the full extent of the challenges our people face in trying to maintain Maori cultural practices and in nurturing their sense of Maori identity in Ahitereiria te whenua moemoea. Despite the best attempts and efforts of whanau to bring loved ones home it is fair to conclude that a significant number of Maori will continue to call Australia their home away from home. 
This bill recognises therefore that there has been a significant increase in the movement of people assets and services between New Zealand and Australia. Almost 450000 New Zealanders live in Australia and I am told that about 60000 Australians live in New Zealand. 
Given the fact that Maori have been attracted across the Ditch to Te Ao Moemoea it was somewhat of a surprise that there were no submissions whatsoever from iwi during the select committee process. Mind you the select committee received a grand total of three submissions only I am told from interested groups and individuals. However one person by the name of Siaosi Tofi raised the concern that the bill will affect Maori interests and unfairly disadvantage Maori. Siaosi asked that the select committee investigate properly the potential effect of this legislation on Maori and its implications for them. In particular the submitter was concerned that Australian judges might decide civil disputes concerning Maori land or cultural and intellectual property. 
The impact of the United Nations Declaration on the Rights of Indigenous Peoples was also mentioned. As members will be aware the New Zealand Government has recently expressed its support for the Declaration on the Rights of Indigenous Peoples and the Australian Government expressed its support for it in April 2009. The question that Siaosi Tofi asked was: “Might there be a situation where the trans Tasman agreement and this bill come into direct conflict with the UN declaration on the rights of indigenous peoples to which NZ is a signatory?”. The Ministry of Justice I am pleased to say addressed the concerns raised by Siaosi. Clause 24 of the bill and section 19 of the Australian Trans-Tasman Proceedings Act adopt a common forum or give-way rule as between Australia and New Zealand. This should ensure that where the New Zealand court is more appropriate to determine a proceeding that proceeding will be heard here and not in Australia. This will assist New Zealand - based litigants including Maori. Although the range of enforceable Australian judgements is being expanded this will not have an adverse effect on the issue of Maori land. 
Nevertheless despite the submission of Siaosi Tofi this bill is primarily focused on the challenges posed by trans-Tasman trade relationships. The level of investment in goods and services brings about a greater number of disputes involving individuals or businesses with a cross-border element. This bill aims therefore for the dispute resolution processes to be cheaper more efficient and less complicated. This bill is supposedly intended to deliver tangible benefits to individuals and businesses in New Zealand and Ahitereiria. We therefore support it here at its third reading. 
LYNNE PILLAY (Labour) 
: 
 It is a pleasure to stand and take a call on this bill. As I said earlier today it is good to see a bill that adds value before the House because certainly that has not been the case with much of the legislation we have seen over the last week or two or indeed since National came into Government. But I will get back to this bill. 
I will go through the history of the bill because it does show a commitment. It shows the commitment of two nations working together for what will only enhance legal proceedings and civil justice systems in both countries. The Trans-Tasman Working Group on Court Proceedings and Regulatory Enforcement was established back in 2003 by the Prime Minister Helen Clark and of course the Prime Minister of Australia John Howard so we see there that it was certainly non-partisan and that two nations two Governments were working together for the greater good. That working group reported back in December 2006 and made many many recommendations which included the use of video technology to allow witnesses to appear while overseas and an increase in the types of judgments that could be enforced in each country. 
The agreement was signed in Christchurch by Lianne Dalziel and by Robert McClelland Australia’s Attorney-General and that happened in July 2008. I think it is quite significant that it happened in Christchurch which of course is Lianne Dalziel’s home town because she had put so much time and energy into this work. It was very fitting that Lianne had the opportunity to do that; I know that for her it was a very important part of her role at that time. 
That agreement which I have to say that I was mistaken about—which was pretty ridiculous because I was on the Justice and Electoral Committee—was covered by the Law and Order Committee. When the committee looked at the agreement it looked at the number of benefits that would flow by simplifying trans-Tasman court proceedings by expanding the range of enforceable judgments by improving the enforcement between Australia and New Zealand by supporting the success of the trans-Tasman relationship and by avoiding the incentive—and I think this is really important—for people to move themselves or their assets to another country in order to put themselves out of the range of accountability. That is really a large part of the justice measures we have seen from this mutual cooperation—there is no other way to put it—of the Trans Tasman Proceedings Bill. 
I want to correct what I said earlier. I mistakenly made a remark that was perhaps not very complimentary in terms of the chairing of the committee. I acknowledge Chester Borrows although at times I certainly do not agree with some of his views and certainly do not lately when looking at his and his party’s views on dealing to employees and taking away employment rights in New Zealand—and indeed human rights if we look at the 90-day “Sack at Will Act” that will be extended to cover all employers in New Zealand. Such things certainly do not bring about a feeling of warmth or working together from this side of the House. I was very disappointed in Chester’s speaking out about that at that stage but certainly with this bill he chaired the select committee very well. 
I know that a number of amendments were recommended by the select committee. As Simon—what is Simon’s other name? 
Moana Mackey 
: Bridges. 
LYNNE PILLAY 
: As Simon Bridges—affectionately known to everyone as Clark Kent— 
Moana Mackey 
: Or Gok Wan. 
LYNNE PILLAY 
: —or Gok Wan—said it was not the most exciting— 
Jacinda Ardern 
: That’s way too flattering. 
LYNNE PILLAY 
: People are saying that Gok Wan is way cooler than Simon Bridges but that is not the point; I think he is making an honest attempt to look cool and trendy and we should acknowledge that. But as Simon Bridges said the Trans-Tasman Proceedings Bill is probably not the most exciting bill that we have had before the select committee but the committee is hard-working—well most of the members are pretty hard-working; certainly the Labour members are—and the bill is important. It is a very very important bill and it enhances the relationship that we have with Australia. 
I will perhaps again go through a couple of the amendments that the select committee made. There were not many submissions to the select committee but the submissions that were made and the feedback the select committee received were very very productive and helpful. I certainly think that there was a will from everybody on the select committee that this bill needed to be brought forward in the best way possible to enhance our relationship with Australia and to see that people were held accountable and could not simply use a move to Australia to avoid that accountability. Of course people are moving to Australia in droves under this Government even though the Government said they would not. Most people do not go to Australia to avoid accountability; they go to Australia because this Government has not created any jobs or invested in any training here— 
Moana Mackey 
: Or increased wages. 
LYNNE PILLAY 
: —or increased wages—despite all the rhetoric and despite all the promises. Although the majority of people are going to Australia especially now because there is no hope of them getting support for their families they are probably going for a quality early childhood education as well as we see that being denigrated here. Of course many other things are causing concern for New Zealanders and persuading them to go across the Tasman. But a small number would travel to Australia to avoid being accountable for any misdemeanours they have done in New Zealand and of course both sides of the House find that totally unacceptable as indeed did Helen Clark and John Howard when they started the working group that led to this bill. That is why it is good for everyone to acknowledge the work that was done in the earlier days—not in the hugely early days but certainly in the earlier days—and also the work whereby this bill is now coming into effect. 
I think it is worth acknowledging some of the work that the select committee did. I also acknowledge the very hard-working staff of the select committee; they do a fantastic job. We have a really really good clerk and support people. I also acknowledge the officials who gave us very good advice. That was very much appreciated not only by the chair but by all members of the committee. Having the ability to send back to the House a very comprehensive report that certainly improves the bill can happen only when we have the support of good select committee staff and of course of advisers working as a team alongside the members of the committee. In this instance that was certainly the case. 
Some of the improvements that the select committee recommended were about applications for a stay of proceedings the power of the New Zealand court to decline jurisdiction the procedural rules of the court the service of initiating documents in Australia and the defendant’s address for service. As the bill was introduced it did not expressly allow for a defendant’s address for service to be changed to another address in either Australia or New Zealand. I am pleased to say that that action is now able to happen under the bill because issues were raised canvassed and improved during the select committee process. There are also issues around the power of an Australian court or tribunal in New Zealand to permit an Australian court or tribunal to exercise— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I regret to advise the member that her time has expired. 
HEKIA PARATA (National) 
: 
 Kia ora Mr Assistant Speaker Barker. Kia tatou hoki huri noa i to tatou Whare. I am pleased to stand and take a call on the Trans-Tasman Proceedings Bill. As previous speakers have noted—or as I at least would like to characterise it—this bill puts into civil and technical jurisprudential language the common-sense relationship that New Zealand is interested in securing stabilising and sustaining with Australia. 
We have long been committed to a single economic market between our two countries. In fact that commitment was the subject of our Prime Minister’s state of the nation speech earlier this year and it has continued to be demonstrated by a number of bills and other work that our National-led Government is doing. The trans-Tasman relationship is extremely important to New Zealand in many dimensions. 
This bill places on a very sound and comprehensive platform the civil jurisdiction between our two countries. It enhances international legal cooperation which is a vital part of the Government’s broader economic agenda. As we all know businesses require certainty in the way that they carry out their business. The role that the law and civil jurisdiction plays is a critical part of that certainty. This bill as speakers have discussed provides that certainty. 
Australia is often the first stop for New Zealand businesses looking to expand offshore and to develop overseas markets but getting to grips with different federal and state legislatures can be rather complex and difficult. This bill provides for the establishment of one seamless set of rules that will allow businesses whether they are geographically located here in New Zealand or in Australia to be able to be confident that they understand what their liabilities are and what remedies may be available to them in the conduct of their business. 
The bill is an important step towards closer cooperation and integration of the Australian and New Zealand civil justice systems and it enhances the legal cooperation between our two countries. It shows that we have greater confidence in each other not only at a business level but also in terms of the judicial and regulatory institutions that operate between our two countries. 
Mr Bridges spoke about his example of someone who flees his or her responsibilities here in New Zealand. In the past that person has been able to seek protection if not invisibility by relocating him or herself to Australia. At that particular level of criminal malfeasance that will no longer be possible at least in the civil sense. 
My colleague Te Ururoa Flavell talked about the many many Maori who have relocated to Australia and set up successful businesses there. One often wishes they would come home to New Zealand and contribute the business nous that they have established. This bill provides a platform to ensure that those businesses continue to flourish and that the across-the-Tasman relationship that goes on every day as Maori seek to cement and continue their whakapapa ties with New Zealand is supported by this legislative context as well. 
There will no longer be any possibility of avoidance between our two jurisdictions of Australia and New Zealand. That gives comfort not only to businesses but to travellers on both sides of the Tasman. Since the Australia and New Zealand Closer Economic Relations Trade Agreement was signed 26 years ago when many of us in the House were but 5 or 6 years old—no no—but since the agreement was signed 26 years ago— 
Te Ururoa Flavell 
: Oh now. 
HEKIA PARATA 
: Obviously I was not able to get that one past my colleague Te Ururoa Flavell but the rest of the House seems to agree on the lack of ageing amongst many of us here. Since the agreement was signed a generation ago many other steps have been put in place to secure the relationship between Australia and New Zealand and the Trans-Tasman Proceedings Bill is yet another example of that. 
There has been good progress on the single economic market between Australia and New Zealand. We have worked towards and are making good progress on a single cross-border insolvency proceeding. Another key area is in progress on the alignment of accounting standards for profit entities the establishment of an accounting and auditing standard and the establishment of infrastructure that will mirror that of Australia so that we will have not only a happy legal fraternity but also an equally happy accountancy fraternity as those professionals see that significant legislation incorporated into the relationship between New Zealand and Australia. Another key area is in the potential for mutual recognition of auditors and financial advisers. 
So as we can see we are steadily and incrementally putting in place a strong foundation for professional relationships between Australia and New Zealand. The Trans-Tasman Proceedings Bill is yet another example of that. I commend this bill to the House. Kia ora. 
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to speak on the Trans-Tasman Proceedings Bill. I was a member of the Justice and Electoral Committee which considered this bill. I have to say that with bills like this one often sees a select committee at its best. It is simply a matter of making sure that we have got all of the nuts and bolts worked out. This bill has traversed both a Labour Government and now a National Government. I point out that a piece of work like this bill has not come together simply in the past 12 or even 24 months. In fact this bill results from a work programme that really if we went back to its foundations we would find began under Helen Clark. I think that that was in 2003 in conjunction with John Howard—how things can change—and eventually through an agreement signed by Lianne Dalziel in 2008. I think that was an appropriate commentary on where we are currently with our closer economic agreement with Australia and how that is now becoming incorporated into so many pieces of our legislation and our legal framework as New Zealand’s ties with Australia become closer and the borders between the two become weaker and weaker. 
The Minister has already pointed out that the primary aim which is to simplify the resolution of legal disputes that traverse across trans-Tasman boundaries is essentially to try to reduce the cost and complexity of trans-Tasman litigation and I think that is something very few people would hold any objection to. But I also point out that in the wider context of New Zealand’s closer legal relationship with Australia and both countries’ attempts to streamline and create greater efficiencies in acknowledgment of the globalisation we are all now subject to we still maintain obviously our own sovereignty and our own right to make decisions that reflect the New Zealand context when it comes to our legal obligations in consulting with our Australian counterparts under various treaties. 
That was probably demonstrated most recently in the decision that the Minister for Food Safety made around folate. The food safety legislation sets out that the Minister is obliged to consult with his or her Australian counterparts to ensure that we comply with our agreements in that area—because again that is another area where we try to streamline. The Minister demonstrated that New Zealand can make its own decisions. Labour would argue that she made absolutely the wrong decision and an abhorrent one at that to decide not to introduce folate into bread and we will suffer the consequences of that but it probably again demonstrates the point that New Zealand still maintains a level of sovereignty over those mutual agreements and treaties. I do not think that it was the best way to prove that point and we will continue to suffer for that. But it is just an example that I thought would be timely to raise. 
I will go over some of the points in the bill that demonstrate how we have maintained the balance in ensuring the key elements of our justice system are maintained in the way that this legislation will work. Nonetheless it is a significant piece of work. David Goddard QC who was originally a member of the trans-Tasman working group said that these are the furthest-reaching proposals between two sovereign States with separate legal systems. So let us be under no illusion; they are significant. A lot of work has gone into them. 
The working group reported in 2006 and amongst its recommendations it delved into how New Zealand and Australia would apply differing rules around video technology. Since those recommendations have been made we have introduced earlier this year our own legislation on the use of audiovisual link technology in courts. I think we got the balance right eventually. Members will recall that there was a considerable stoush in this House over whether the extension of the use of audiovisual link technology had gone too far but I am very pleased a compromise was reached and I think we got the right outcome. 
Hon Simon Power 
: It wasn’t a stoush; it was a good debate. 
JACINDA ARDERN 
: I accept I say to the Minister that “stoush” may be too strong a word and I acknowledge the fact that he made a considerable concession from his perspective and I appreciate that. I think the words we use in this House are “robust debate”. In respect of audiovisual link technology in this particular bill the select committee made it clear that the Courts (Remote Participation) Act will not apply to remote appearances made under this bill. In fact the trans-Tasman evidence regime will operate in parallel and will not override or be subject to the Mutual Assistance in Criminal Matters Act. It was important given the fact that the select committee had dealt with those pieces of legislation that it ensured there was clarity around that. 
But what are the main provisions of the bill? Essentially they can be drilled down into seven parts and I want to traverse some of those briefly. The first is that when civil proceedings are commenced in New Zealand the bill provides that an initiating document for proceedings may be served in Australia as well. There are three exceptions to this but each of those is reasonable. Some other members of the House have already talked about the kinds of circumstances that might arise from civil litigation for instance over the sale of a house etc. where the seller may have moved overseas. This now means that if those civil proceedings related to New Zealand began there that initiating document then can still be served to an individual based in Australia. I think members would have to acknowledge that that can be commonplace now given the state of movement between our two countries. 
The second key point in the legislation is that a defendant in civil proceedings can apply to have the proceedings heard in an Australian court with certain criteria met. That was one of the changes that the select committee made. We wanted to make sure that the bill was consistent over where proceedings were heard. We wanted to make sure that a person served in Australia for New Zealand proceedings can apply for a stay of proceedings on the grounds that the matter should be dealt with by an Australian court. That was about ensuring consistency with the other subparts in the bill. 
The third key point relates directly to the provision that a party to proceedings commenced in an Australian court may apply for interim relief in a New Zealand court. The fourth is around remote appearances and remote evidence which is covered by the Evidence Act and I have already clarified the hierarchy of legislation in that regard. Then the fifth is the recognition of enforcement in New Zealand of specified Australian judgments. This is quite an important piece of the bill; it provides for the enforcement of Australian judgments in New Zealand and goes beyond just final monetary judgments. There was some discussion in the select committee about how this related to guardianship. We had some very important technical submissions around this and I thank those submitters who made those contributions to this bill. 
Those probably cover the most significant parts of the bill. It was obvious when the select committee was hearing evidence on this bill and considering it in detail that at the same time officials were working alongside Australian counterparts to make sure we had married up both pieces of legislation accurately. So a lot of the changes made at select committee probably bear out that we were at that point in the process. 
In conclusion I think that this demonstrates an important piece of work that shows that we do have to acknowledge the greater transience between Australia and New Zealand. Family relationships and legal relationships cut across the borders of Australia and New Zealand more and more and our legal systems need to demonstrate that. But at the same time we need to make the decisions that are right for us as a country. 
Bill read a third time. 
Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill 
In Committee 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for the Committee stage of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill to be taken as one question notwithstanding Standing Order 333 and for there to be unlimited calls. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. 
Parts 1 to 5 schedules 1 and 2 and clauses 1 and 2 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Mr Chairperson— 
Hon Simon Power 
: It was just about all over. 
Hon DAVID CUNLIFFE 
: The member should not confuse politeness with indecision. 
Hon Simon Power 
: Fair enough. 
Hon DAVID CUNLIFFE 
: Fair enough. I am pleased to say civility in the Chamber is not dead. Labour supports the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill but there are a number of important matters in it that bear the Committee’s consideration in some detail. I give notice that Labour will be introducing an amendment from Stuart Nash to this bill which will seek to exempt local authority rates from the higher rate of GST during the year of transition to that rate. That amendment follows from the massive 28 pages of amendments on Government Supplementary Order Papers that are already known as the “whoops we forgot about the changes on the way to breaking our promise” amendments. 
A number of important measures contained in this bill are worthy of the consideration and support of the whole Committee. The trans-Tasman portability of retirement savings has long been an issue and this Government is now seeking to legislate on it based on work started by the previous Labour administration. We commend the Government for bringing that work to a conclusion and we thank our partners across the Tasman for facilitating an agreement on that matter. The bill introduces new rules for 18-year-olds who seek to enrol in KiwiSaver; flexibility in the provisions applying to a resident cooperative company; the effective cancellation of branch equivalent tax account debits around conduit-relieved dividends; a number of new rules around binding rulings which will be of particular interest to the banking sector; and exemptions from gift duty for gifts made to local and central government. 
It has been interesting to read press reports about the Crafar farms deal because the current Government appears to be receiving $200000 in gifts from the consortium behind the Crafar farms deal. If I might I will interrupt this bipartisan broadcast to say what an outrage it is that this Government is accepting that kind of I hesitate to say bribe but gratuity— 
Hon Simon Power 
: No he can’t say that. 
Hon DAVID CUNLIFFE 
: That is why I hesitated. 
Hon Simon Power 
: I raise a point of order Mr Chairperson. You may have missed it while you were having a conversation with the Minister in the chair but the phrase just used by the member who has resumed his seat in relation to a matter that has no bearing on this Committee stage or the bill that is being considered by the Committee is outside the Standing Orders. The member should withdraw and apologise for using that phrase. 
Hon DAVID CUNLIFFE 
: Speaking to the point of order Mr Chairperson I point out in the first instance that it cannot be outside the scope of the bill because the bill contains an exemption for gifts made to central government. That was why I raised the point. But more important I used the phrase “I hesitate to say” a word which I then did not use. So the Minister is rather jumping at shadows. 
Hon Simon Power 
: You did use it. 
Hon DAVID CUNLIFFE 
: I used the word “gratuity” and I submit that that is not outside— 
Hon Simon Power 
: No that is not correct. Although I accept the first part of the member’s explanation that he said something to the effect of “I would hesitate to use” it was the word that followed those introductory remarks that members on this side of the Chamber have taken offence to. It was not the word “gratuity”; it was another word. The member knows what the word is and he should apologise for using it. 
Hon DAVID CUNLIFFE 
: To clarify the point I said “I hesitate to say bribe but gratuity”. So I did not in fact use the word “bribe” and there is nothing— 
The CHAIRPERSON (Hon Rick Barker) 
: I say to the member that that might be cute but it does not cut the mustard. To simply say “I’m not going to say something” and then utter the word is effectively the same as using the word. The member has condemned himself by his own words. The member will stand withdraw and apologise. 
Hon DAVID CUNLIFFE 
: I withdraw and apologise. This is a very important bill because it shows that in the Government breaking its promise not to raise GST—and there can be no doubt that the Government did make a promise and it did subsequently break it—it has fallen afoul of the huge complexity that is now falling on ordinary Kiwi businesses and households. That is why Ernst and Young and other prominent consulting and accounting firms are saying things like this. I quote from Ernst and Young last week: “As we face the harsh reality of the 1 October GST increase to 15 percent many are realising this is not a modest increase and the issues are actually more complex than anyone first imagined.” 
If anybody doubts the truth of that statement he or she needs to look no further than the Minister’s own 28-page Supplementary Order Papers the “Whoops we should have thought of this before we made the change” amendments which it is very important that the Committee now addresses. 
David Garrett 
: You’ve made that joke David. 
Hon DAVID CUNLIFFE 
: That brings me to Mr Garrett. Mr Garrett has Supplementary Order Paper 158 in his name on KiwiSaver contribution rates which Labour after sincere thought will be supporting. The Supplementary Order Paper suggests that members of the public should have the choice to up their KiwiSaver contribution rate to 4 percent 6 percent or 8 percent. What is really interesting about this is that there is no matching contribution from employers or the Government. We think that is a matter of concern. Although we do not oppose people having choice about their contribution rate we note that in the last 24 hours the Minister of Finance Bill English has told the country that any changes recommended by the Savings Working Group to improve KiwiSaver must be revenue-neutral. Well let us hang on a second. If the Government will not contribute to better incentives for savings if it thinks that a big bold solution is required and if the employer is not to contribute which the Supplementary Order Paper makes clear then exactly who is to contribute to it? The answer is logical: Kiwi households and individuals. If New Zealanders around the country are not to be incentivised why would they pay more? 
One can only reach the interim conclusion that compulsion is coming to a town near you. Compulsion is coming from the Government that has railed against the nanny State. Will it be the granny State with compulsory superannuation? Has Crosby/Textor thrown a loop somewhere? Has something gone wrong with the polling that the Minister has been doing? What has got into this Government? Here is a Supplementary Order Paper masquerading as a measure that will provide more choice. At the same time the Minister of Finance is saying there will be no new incentives from the Government and the measure has to be fiscally neutral yet the Government is making no move to improve employer contributions. That means only one thing: New Zealanders will be stuck with higher GST and compulsory savings which will be met from a pay cheque that has hardly moved during the recession. And many people are without jobs. How many people are unemployed? It is 159000 people which is 19000 more people than a couple of months ago. It is absolutely clear in that context that there is no recovery hitting Main Street. It is not hitting Wall Street either but it is certainly not hitting Main Street in the country towns and cities of New Zealand because the dole queues are lengthening. 
The debate that the House is about to have on KiwiSaver and improving New Zealand’s saving rates is indeed crucial; no more than that it is fundamental. It is fundamental because New Zealand’s international debt is approaching 100 percent of GDP. It is more than $40000 for every man woman and child and most of it is personal private debt that has been used to borrow for home mortgages in order to bid house prices up. There are some problems with that. The first is that we cannot eat our house so it is a very awkward form of retirement savings. Secondly the capital that we borrowed from foreigners has not gone into supporting our businesses or improving productivity. It is simply making housing less affordable. I would argue that that helps nobody in the long run. 
The Government after 2 years of having no plan and after 2 years and two Budgets of denying that the savings gap even exists has finally woken up to the mess and said it had better get a plan. It wondered how it would produce a plan given that National did not think of one while it was in Opposition so it decided to have another working-group. After two Budgets and 2 years of National being in Government finally there is to be a committee. 
Dr Ashraf Choudhary 
: Another committee? 
Hon DAVID CUNLIFFE 
: Another committee. It is to be just like the Tax Working Group when eminent people from the private sector and academia were put to work on a hard problem but then the Government ignored most of the recommendations. Will the Government ignore the recommendations of the Savings Working Group? Or has it thoroughly tied the hands of the group’s members before they start? The poor old experts on the group will have a very narrow ambit within which to come up with recommendations: no new Government money a Government shy of employer contributions and no more incentives. Oops that must mean compulsion. 
When we look at the fine print of the terms of reference for the working-group we find a couple of other sneaky little things. The first is the phrase “Government savings”. We all know what Government savings are do we not? Government savings are slash-and-burn in the Government’s Budget. That is how the Government saves under National. Three-quarters of the Government’s Budget is spent on health education and social services which means that if we are to have Government savings it will be saving on the teachers in our kids’ schools the doctors nurses orderlies and cleaners in our hospitals and the cops on the beat. That is how the Government makes savings. There are no more back-office services to be cut. This Government is through the fat and the meat and is into the bone. 
The other sneaky little phrase in the terms of reference is “a lack of incentives”. KiwiSaver was right down the bottom of the list. It was almost as though the Government was embarrassed to cover it. But when the Government did cover it it talked about examining the fairness and equity of KiwiSaver as though it is to try to pull it apart. There was no language about boosting KiwiSaver. There was no language about strengthening the scheme in order to get more New Zealanders involved. There are 1 million Kiwis in KiwiSaver at the moment. It is the best and biggest single attempt that New Zealand has ever made to improve the savings rate since Norman Kirk started the New Zealand superannuation scheme. And of course we know what happened to that: Rob Muldoon killed it. That was a $50 billion mistake which is rivalled only by the decision of Bill English and John Key to can the pre-funding of the New Zealand Superannuation Fund. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I begin by congratulating the member who has just resumed his seat David Cunliffe on an extraordinary effort to make something out of very little. It was a commendable effort and I am sure it is a good lead-in to the line he will follow throughout the remainder of this debate. 
Let me remind the Committee what we are debating this morning. We are debating the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill 2009. This bill came into the House last November to make as the member conceded a number of worthy changes that most people support. This is not a bill to debate measures that were put into the public arena only yesterday that will be the subject of public debate over the next few months and that will lead to some decisions being made which will come to the House next year. 
The member also made some comments about the changes that Supplementary Order Paper 157—which is 13 pages not 28—introduces to the GST regime. I found that rather extraordinary. I appreciate the member was not in the House in 1989—I was—when the Labour Government increased the rate of GST from 10 percent to 12.5 percent. The contrast between what has happened now and what happened at that point is worth bringing to the attention of the Committee. In May 1989 the Government announced an increase in the rate of GST from 10 percent to 12.5 percent to take effect from 1 July that year—so there was 8 weeks’ lead time. No compensation was paid to low-income groups or to anyone on a benefit or any form of fixed payment who might be adversely affected. Contrast that with this year’s changes which were announced in May and take effect on 1 October. There will be full compensation for all those on fixed incomes and benefits superannuation etc. including National Provident Fund and Government Superannuation Fund recipients. This is a vast change from the 1989 situation. 
In 1989 business simply had to adjust to all of the issues around the transformation within the space of 8 weeks. This year we established the GST Advisory Panel for the specific purpose of allowing those upon whom the rate change would have some technical impact to have their issues considered and for those issues if they required a legislative solution to then be addressed in this bill when it came to the House at this time. So the Supplementary Order Paper and I gather from the member’s comments that he supports the provisions in the Supplementary Order Paper deals with a number of taxpayer-friendly situations that will give specific relief on a number of the issues that have arisen—for instance lay-bys insurance contracts and so on and so forth—all of which fall in that particular transition period. So I find the member’s complaint that this is an “oops we should have done it better last time round” measure to be somewhat ironic given the history. The last time his party was in a position to change the GST rate it simply stated: “The rate takes effect from this date. You fall where you may in terms of your compliance with it.” What we have done through the GST Advisory Panel and the amendments before the Committee is give some clarity and some certainty to the business community and to the consumers of New Zealand who will be affected by that change. 
Finally I was grateful for the member’s confirmation in the round-about way in which he spoke of something that I have long suspected was the Labour Party’s long-term agenda with regard to savings and taxation. When the member spoke about the work of the Tax Working Group and the fact that the Government chose not to implement some of its recommendations it was clear that he was signalling that a land tax a capital gains tax and some of the other measures that this Government has so specifically ruled out are very much on his party’s agenda. As the debate begins it is good to have on the record that the Labour Party is saying it would introduce a capital gains tax and a land tax; that is great to know as part of the ongoing debate. 
This bill is substantially user-friendly. It makes a lot of changes in terms of savings portability with Australia in terms of the implementation of the GST changes and in terms of other matters that have been the subject of some public angst for a while and are now being addressed in a way that is satisfactory and favourable to the interests of most taxpayers. Therefore I commend the bill to the Committee. 
STUART NASH (Labour) 
: 
 I would like to say just one thing: I did not hear the Hon David Cunliffe say that the Labour Party was going to introduce a capital gains tax or a land tax. The reason I did not hear that was David Cunliffe did not say it at all. 
I have put forward a typescript amendment to the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. The intent of the amendment is to exempt local authority rate payments for residential properties due during the 2010-11 financial year from the GST increase legislated to come into effect on 1 October 2010 and I urge the Government to support it. There are two reasons why I have introduced this amendment. The first reason is that I have a very real concern about the impact of the GST increase on the vast majority of New Zealanders and the second reason is that I believe we need to do something about that. 
The Government has already recognised that the increase in GST will cause a number of issues for taxpayers. Accordingly it has introduced amendments to exempt a number of contracts and transactions such as 5-year finance leases lay-by sales and insurance contracts from the increased GST rate over a transition period. Local authority rate instalment payments are similar in principle and practice. They are a contract between the local council and the homeowner for which an invoice has already been sent. Although councils are offering to charge a GST rate of 12.5 percent to ratepayers who can pay their bills in one lump sum as they fall due on 1 July many New Zealanders are not in the position to take advantage of that offer. Those who are unable to pay in full will be required to pay some of their annual rates bills at the current 12.5 percent GST rate and some at the new 15 percent GST rate which puts them at an additional disadvantage compared with those able to pay in full. Essentially those who are least able to afford it will be required to pay more. I do not think this is fair. 
This amendment amends the bill to ensure that no ratepayer is unfairly disadvantaged by the increase in GST over the transition period. I make the point that times are tough for many hard-working New Zealanders at the moment. I take the example of the Napier electorate where the median income is only $22700 which means that 73 percent of people in Napier earn below $40000 a year. Napier is a city typical of many around the country where a significant proportion of the population will see very little if any benefit from the 1 October tax cuts. When we add in the impact of the GST rise we know that the family budget will be stretched to breaking point. 
Many of these fine people are however living the Kiwi dream; they own their own homes. They have saved hard and they take pride in the fact that they are bringing up a family or have brought up a family in their own house. However the cost of owning that house is about to increase. Residents by and large understand that rates go towards paying for essential services in the community. This time however a portion of any increase will not go towards improving their communities; it will go into the pockets of the Government in the form of GST. 
Times are tough out there and people who doubt this should go and talk to the budget advice services operating in their communities. I have and I do it on a regular basis. I know that the fantastic people in those services are beginning to see a different type of clientele such as homeowners who have lost their jobs that once provided good incomes and that is of huge concern. I urge the Government through the Minister of Revenue to cut the good people of New Zealand a bit of slack and support this typescript amendment that exempts local authority rate payments due during the 2010-11 financial year from the GST increase legislated to come into effect on 1 October 2010. That is fair that is just and we are on the side of the angels here. We do not want the good hard-working people of New Zealand to be disadvantaged any more. I urge the Government to support this amendment. Thank you. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 As a member of the Finance and Expenditure Committee I am very pleased to contribute to this debate and to support the amendment in the name of my colleague Stuart Nash in respect of some effort—some small effort—at some relief for the modest and low income New Zealanders who will be walloped by the increase in GST from 1 October. Those sorts of people such as those in my electorate of Christchurch Central 76 percent of whom earn less than $40000 a year are the sorts of people who need every bit of assistance they can get. This amendment is very timely and appropriate for assisting those people most in need. It acknowledges that those who have the money in the bank can pay their rates on 1 July and pay them at a GST rate of 12.5 percent but that most New Zealanders cannot do that. They will pay on a rates instalment system so they will be subject to a rate of 15 percent for GST across the balance of the year. Obviously this amendment provides a sensible mechanism for acknowledging that many New Zealanders are under very real pressure at the moment—very real pressure. We are feeling it across the country. The recession is still with us and the economy is still not in real recovery so we need to assist those on middle and lower incomes across New Zealand and do all we can to make sure they can survive. This amendment is a very appropriate and modest measure and I urge the Government to consider supporting it just as we in Labour are supporting the Minister’s Supplementary Order Paper. That is a very small method towards providing some relief for low and middle income New Zealanders. 
I will comment for a moment that of course the Minister in the chair the Hon Peter Dunne is a great fan and supporter of the whole process of income splitting and is obviously moving that forward as much as he can at the moment. That is a measure that particularly assists those in higher-income brackets but this amendment is about assisting those who are in the middle and lower income brackets. They are the ones most deserving of assistance. 
The primary function of this bill is to allow the flow of savings generated in Australia by New Zealanders who have been resident there for some time to be brought back home. I applaud and encourage this bill in respect of that. It makes absolute sense when our economies are very intertwined and when many New Zealanders have spent a considerable portion of their working lives in Australia. They have contributed of course to that country’s compulsory superannuation scheme at the rate of a 9 percent employer contribution. That is a fantastic savings record. Those people can bring back earnings that are many multiples of what many New Zealanders are able to save towards their retirement. That will be a very good cash-flow back into the New Zealand economy so this bill is very very appropriate in that respect and very important. 
I note that the Government is now finally recognising the importance of savings. It is finally recognising the importance of savings. The Minister is now setting up a working party on savings but I note that that working party has been told overnight—and certainly the public has been told—that there will be no Government contribution to any proposals for compulsory superannuation emerging from the working party. So having set up the working party the Minister of Finance is now prescribing to that working party that it go away and look at the issue then come back with a comprehensive report. Already he is starting to ordain what the shape of that report should be and is removing any prospect of there being any Government contributions to a compulsory savings regime. Well we have to ask what the heck is the point. What the heck is the point of going into the establishment of a working-group to look at the very important issue of compulsory savings? It is the sort of scheme whereby through this bill we are allowing New Zealanders who have been resident in Australia to bring their savings back from Australia in order to generate some investment in our economy and to support and assist people who have lived in Australia but who have come back to New Zealand with their Australian-generated schemes. Why on earth is the Government saying now that we should not consider whether there will be any Government contribution to a compulsory savings regime? It is a daft idea and it really fires a shotgun at those who have agreed to take part in that working party. I think it is very very short-sighted thing. 
The other issue I need to comment on is the fact that the Government has called this review on compulsory savings at a time when it has instigated two rounds of its own tax cuts in our economy the most recent of which will take effect in October. It has done that without any consideration of whether it might have been appropriate before it embarked on handing over tax cuts to look at what the Australians did when they set up their compulsory savings regime. The Australians very cleverly constructed a deal where there was a forgoing of wage rises for a period of time by Australian workers. I believe there was also some consideration of tax cuts but they decided to put their money into a savings regime. 
But not this Government. This Government went to the polls promising a new wave of tax cuts and introduced a second wave to take effect from 1 October and now it is scrambling around realising that it needs to have some form of savings to stop us becoming as the Prime Minister puts it tenants in our own land. We do need a savings regime but he squandered the opportunity to consider whether some of the two rounds of tax cuts might well have been better directed to a savings regime rather than giving them to people in a way that will obviously only add to inflationary pressures and will not contribute to anybody’s savings regime. We need a balanced approach to this matter and this Government has squandered two opportunities to consider whether some of those tax cuts might have been directed towards a compulsory savings regime. 
It is typical of this Government. National wrecked the first contributory scheme that this country ever saw which was established by the Kirk-Rowling Labour Government in 1972-75. Muldoon went to the polls and completely shafted that scheme abolishing it by executive fiat then had to put through amending legislation to enact what he had already announced. We then saw in the 1990 election campaign a “no ifs buts or maybes” promise by the then National Party leader Jim Bolger in respect of the national superannuation surcharge which he had to later back away from. Here we have another National Government coming into office and squandering the opportunity to have tax cuts considered as part of a savings regime putting on hold New Zealand Superannuation Fund contributions and axing 2 percent of the 4-percent contribution that employers were starting to make towards the KiwiSaver regime which was the first thing we had done in respect of savings since Muldoon axed the Kirk-Rowling scheme in 1976. 
This bill is exempt from the Government’s record on savings as it introduces a very sensible measure to encourage New Zealanders to return from Australia by being able to bring their savings back. But what we are doing is relying upon the largesse of Australian tax authorities and employers to build savings for New Zealanders who live there. We are doing nothing towards the building of savings for New Zealanders. That is what we should be debating in this Chamber. What we have instead are proposals on income-splitting an increase in GST with no relief for middle and lower income New Zealanders and an attempt to have a working party review of superannuation. But on  
Morning Report 
 this morning the Minister of Finance ruled out any Government contribution to a savings regime which really pulls one leg away from the stool and makes it very much harder to get savings up and running. 
This bill is a sensible move in respect of bringing back savings that were made in Australia under a scheme that the Australians had the wisdom to set in place. We are going in the opposite direction. We have seen KiwiSaver cut we have a freeze on the Superannuation Fund which Michael Cullen established and we are going backwards in terms of savings. Although it is a step forward in respect of savings generated by New Zealanders living in Australia this bill is doing absolutely nothing towards the savings that New Zealanders need to be making so that we do not become tenants and peasants in our own land. We need a savings regime that encourages New Zealanders to invest and create the funds so that we do not need to go overseas cap in hand every time we need funds. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 This debate has I think become quite sensibly focused on issues of tax policy and savings policy. The Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill addresses both issues so I think it is quite a good opportunity to have that debate on the issues surrounding this bill. 
Often overlooked in the debate is the fact that Part 1 applies to annual rates. Clause 3 sets the annual rates for the 2010-11 tax year and basically it implements the income tax cuts that the Government has introduced. These cuts involve borrowing to give tax cuts for upper income earners. Even when we look at the Government’s Budget overall in the net position of looking at all of the Government’s tax changes put together we see that the Government will still have to borrow about $1 billion over 4 years in order to fund its tax changes. But the cuts to income tax will cost considerably more than that although they are balanced to some degree by the increase in GST and by some other smaller changes. 
The Government’s tax strategy has been to cut taxes for those at the upper end of the income scale and to borrow from future generations in order to fund those tax cuts. The Green Party thinks that borrowing in order to fund tax cuts for upper income earners is not a very clever economic strategy. The reason we think that it is not a very clever economic strategy is that it will increase inequality in our country a country that already has major problems with inequality and that it will add enormous levels of debt to future generations. By adding debt to future generations we are increasing the interest payments they will have to pay so we are simply kidding ourselves to think that we can somehow give tax cuts to upper income earners—in order to get votes I guess which is part of the Government’s strategy—and that future taxpayers can pay the bill. It seems to me that that is a fiscally irresponsible strategy. 
The Green Party does not support an increase in borrowing in order to pay for tax cuts for upper income earners and I am very surprised that the Minister of Finance and the Minister of Revenue have taken us in the direction that is implemented through both this bill and the Budget legislation. I wonder why we are heading in that direction when it seems to me it is such a fiscally irresponsible approach for a country in which there has been high levels of private debt and in which currently there is increasing public debt because we have had to borrow more heavily during the global financial crisis in order to fund the economic stimulus package. Yet we are now increasing levels of public debt to fund tax cuts for upper income earners. 
We also know that in terms of a stimulus package tax cuts for upper income earners are not a very good way to produce jobs or stimulate the economy. We know that if we deliver tax cuts to low income earners they tend to spend most of the money because they simply cannot afford to save it whereas if we deliver tax cuts to upper income earners they are able to save the money because that is the position they are in. Although that is fine for those people and makes perfect sense for them at an individual level in terms of delivering a stimulus to the New Zealand economy it is extremely ineffective. Whether we read the papers of the OECD or of any other body those papers will tell us that tax cuts particularly tax cuts for upper income earners are not a good way to deliver a stimulus package. When we realise that we are funding those tax cuts through increased public borrowing it seems to me that the strategy is a tremendously irresponsible economic and fiscal strategy. 
When the Minister of Revenue spoke previously he criticised the Labour Party over the capital gains tax. The Green Party is on the record as being in support of a capital gains tax that excludes the family home. We think it is a very sensible strategy. It has been used overseas and would raise roughly $4.5 billion a year once it was in place; it would take a number of years to raise that much money. We think a capital gains tax that excludes the family home is both a very good revenue-raising measure and a very fair tax. It is a very progressive form of taxation because it tends to fall mostly on those who have the most wealth and the higher incomes. It would also have some positive beneficial effects in terms of trying to dampen demand for investment housing which has been a big problem for New Zealand over the last decade. There has been a big increase in the price of housing which has been driven in part by the treatment of tax. In response to the Minister of Revenue’s comments on this issue then the Green Party thinks yes a capital gains tax excluding the family home is quite a good idea. 
Looking at the savings side of this legislation the Green Party agrees that some of the changes for KiwiSaver are very positive and we support them. We think that the trans-Tasman portability of savings is a positive move and that some of the new rules about under-18-year-olds needing guardians’ or parents’ permission to enrol make sense. 
I think though that the debate we are having today on savings raises the broader issues about what we are doing with savings in New Zealand. This bill addresses those issues partially but it is obviously a broader debate. We face two simultaneous problems when it comes to savings one of which is the issue of the baby-boomers bubble coming through the system: how to afford the superannuation payments for those people from the public purse and the ratio between those who are retired and those who are of working age. That is one significant challenge for us. 
The other part of the challenge is national savings. The fact that as a nation we have been dissaving for so long has resulted in us running a very large current account deficit and we have been funding the current account deficit through two mechanisms. On the one hand we have been borrowing large amounts of money and on the other hand we have been selling off New Zealand - owned assets into overseas ownership. The effect of our poor level of savings over such a long time and the fact that we have had to increase borrowing and sell off assets in order to cover the current account deficit mean that only about 93 percent of GDP now stays in New Zealand. Back in the 1970s about 100 percent of GDP on a net basis stayed in New Zealand and was distributed to New Zealanders in the form of profits wages or investment. Now the percentage is down to about 93 percent. We are losing about 7 percent of GDP every year which is going to overseas owners either through debt—on money we have borrowed from overseas and on which we have to pay interest payments—or through dividends and profits that get paid back to overseas owners because of overseas ownership of productive assets within New Zealand. 
So our problem about savings has long-term implications for how wealthy and prosperous New Zealanders will be. If we are measuring GDP as a record of turnover currently only 93 percent of that turnover stays in New Zealand to be distributed as wages profits and investment. That is because we have had that savings problem. So the Green Party supports increasing savings in New Zealand but we recognise there will have to be contributions from employees—from individuals—and there will have to be employer contributions and Government contributions. They all need to come together. Those three parts are the three necessary parts of the savings puzzle so although this bill makes some positive changes to KiwiSaver there are much bigger issues particularly in light of the ongoing discussion on compulsion in superannuation. Those three components will have to be part of the solution if we are to improve our savings record using the KiwiSaver mechanism but it was very disappointing to hear the Government opposed to any kind of increase in Government contributions and it has also been disappointing to hear opposition from some employer groups about employer contributions because that is an essential part of the package of savings if we are to extend the KiwiSaver system further. 
On this bill and on savings issues more generally the Greens have had a lot of concerns about the way the Government is taking advice on this kind of legislation. We have been concerned about the role of banks and in particular of PricewaterhouseCoopers which provides some of the key advice on tax and savings in New Zealand. PricewaterhouseCoopers was of course the key adviser to banks that avoided unlawfully $2 billion worth of tax. So we are concerned about the constant use of these kinds of advisers becoming involved in the debate around tax and savings when they have had a track record of providing advice to banks about how to avoid tax. I really do recommend to the Government that it needs to go to someone else for advice rather than to continue going back to that particular source because we all know the record of that source. 
In finishing I say there are some good changes on savings; we support those. But we do not support the direction of the Government around income tax policy and for that reason we will not be supporting the bill. Thank you. 
CAROL BEAUMONT (Labour) 
: 
 I rise to speak on the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. As others have said we are supporting this bill and a number of very sensible changes are being proposed. I note that much of work was started under the previous Labour Government. We also have a Labour member’s typescript amendment in the name of Stuart Nash which I intend to come back to. 
The issue of improving trans-Tasman portability of retirement savings is a very important one given the movement of people between our two countries. Quite a significant amount of money is potentially being covered here up to NZ$16 billion. We think that improvement is a positive thing which potentially will assist individuals so that they are not stung by multiple fees for the administration of their retirement savings account. Obviously it will assist in something that both countries value which is ensuring that people can save for their retirement and have an adequate standard of living in their retirement. So that is a very positive part of this bill. 
It is interesting to note the question of the relationship between Australia and New Zealand and movement between the two countries. That question has been raised certainly when Labour was in Government and we have been raising it quite strongly in recent times given the increasing gap in wages between Australia and New Zealand. I know that others have tried to assert at various times particularly when Labour was in Government that the reason New Zealanders move to Australia is the difference in tax regimes—well for the record that claim is obviously rubbish. The main reason is the differential in wages which is around 30 percent and growing as we know. 
That is very worrying for us and I note that the Government has no plan to address that particular problem. Its economic development strategies do not focus on the workplace or on lifting workers’ skills. If we want to transform our economy and create the sort of high-wage high-skill highly productive workplaces that we need in order to be successful internationally we really need to focus on lifting wages lifting skills and looking at how we organise and invest in our workplaces. 
But let me come back to the matter at hand. We are supporting again some of the Supplementary Order Papers. It is interesting to note the fairly extensive transitional provisions that have had to be made to get the GST increase through without creating some very strange anomalies and unintended consequences. That is probably a consequence of the way the Government forced through GST increases under urgency in Budget 2010 without really considering some of the compliance costs and unforeseen consequences. I think that is a real shame. 
Accounting firm Ernst and Young stated last week: “As we face the harsh reality of the 1 October GST increase to 15 percent many are realising this is not a modest increase and the issues are actually more complex than anyone first imagined”. One of the transitional arrangements relates to the fact that the changes were forced through without considering all the consequences and now have to be tidied up in this bill. 
Very importantly for members on this side of the Chamber GST increases will have a hugely detrimental effect on New Zealand families and business. Every day my colleagues and I have people talking to us about their concerns about the additional costs they will face with GST rising the implications of that rise for inflation and their recognition that the so-called compensation they will have is absolutely ludicrous. People do not buy it when members opposite say that their concerns have been taken account of by the paltry for most New Zealanders tax cuts or the small increases for beneficiaries that have been made. People are not silly. They are really struggling already so they see that as a real issue. 
That is why I really want to speak in favour of the amendment put forward by my colleague Stuart Nash to exempt council rates from the increase in GST over the transition period. That is a very sensible provision and I urge members opposite to consider it. Basically it will exempt this year’s local government rates from the increase in GST to 15 percent. As I have noted there are a number of transitional provisions in this legislation that look at exempting at 5-year finance leases lay-by sales and insurance contracts from the increased GST rate. The underlying reason for that is broadly similar to the reason that Stuart Nash has put forward his amendment on exempting council rates. 
Let us look at why we need to make the amendment. As I have already mentioned the costs being faced by New Zealanders at the moment are enormous and people out there are struggling. The majority of wage earners and salary earners are seeing their wages and salaries lift by a massive zero percent. That is right; most people are not getting an increase in their income. Many people have lost hours of work including overtime payments and I know that if members opposite are honest unless they are wandering around with their eyes closed and not talking to people they know that to be a fact. Here in this amendment is a small thing that we can do to help relieve the pressure that families are facing. 
Mr Nash referred to budgeting services and I will also put on record my acknowledgment of those people. They do a fantastic job against the odds in trying to help struggling New Zealand families. Recently I was at a meeting hosted by the Mangere Budgeting Services Trust. It was a packed meeting with people from across Auckland present and I think some of the things that were raised at that meeting are worthy of the Committee’s interest. 
The budgeting services people noted what had just happened which was that 150 jobs were advertised at the New World store in Mount Roskill and 2700 people had tried to get those jobs showing that there was a huge issue with unemployment. They also talked about the fact that the average level of debt of those people approaching budgeting services was on the increase. They said they were seeing more and more people coming in with debt related to loan shark loans with rates of interest of over 100 percent. We know that members opposite have failed to take the opportunity to address that particular issue. I acknowledge the Hon Peter Dunne because he in fact did not take that position on my private member’s bill. He supported the Credit Reforms (Responsible Lending) Bill which would have made a difference. 
The budgeting services people also told us that when people were looking for housing—and as we know it is a very tight housing market in Auckland at the moment—they were being pushed more and more into the private sector. Many gave examples of people paying upwards of 65 to 70 percent of their income to a private landlord. That does not leave much for food. 
The thing that came through from all of the budgeting service people was that what was really being squeezed the thing that households could control—and the question is whether we think this is appropriate—was the food that they put on the table for their children and themselves. People are trying to live on ridiculously small amounts of money and they are not eating properly. They are really struggling and there has been a massive increase in food grants. I think it is worth noting some of those concerns raised by budgeting services in that very recent meeting. 
Coming back to the amendment I say that it will help. It will help people who are paying their rates by creating a situation where they do not have to pay the higher rate of GST on their rates for this year—that is the rates bill from 1 July 2010. Again I urge members opposite to support that change. 
I will also take this opportunity to talk about KiwiSaver. I acknowledge that we have Supplementary Order Paper 158 which I understand is now in the name of Mr Garrett. I assume that he is replacing Mr Boscawen our new Minister of Consumer Affairs in moving that amendment. We support that Supplementary Order Paper. We think it is logical. 
I note that it is extremely difficult for wage earners and salary earners to save at the moment for the very reasons I have outlined. It is very difficult for people to make ends meet. They are facing higher costs across the board so that is a problem. None the less the bill is a good move. Having a workers’ superannuation scheme has given Australia a real advantage over this country. A massive amount of capital has been built up in Australia as a consequence of having decent workers’ superannuation. Effectively it is a virtuous cycle because workers are saving so they get a good outcome in their retirement and the economy has access to capital. 
CRAIG FOSS (National—Tukituki) 
: 
 It is very interesting to note that Carol Beaumont the previous speaker is advocating asset testing for superannuation which is what they do in Australia. So when members opposite get up and speak about the Australian superannuation scheme at the end of the sentence should be “and asset testing of the recipients”. It is fair enough to have the debate but they have to give the full sentence in order to give the correct context rather than just give blank numbers of contribution rates of 2 percent for KiwiSaver and of 9 percent for the scheme over there. Asset testing for superannuation is on the agenda of the Labour Party unless another Labour member denies that just as a capital gains tax is on the agenda unless another Labour member denies that. It would have to withdraw some of the videos out there from its various spokesmen and various press releases. What else is on the agenda? Oh yes a land tax is on the agenda of the Labour Party at the next election. 
What is not on the agenda of the Labour Party at the next election apparently is axing the tax. Labour members are voting for the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial matters) Bill. They sent a bus around the country opposing a tax switch on GST— 
Aaron Gilmore 
: Paid for by the taxpayer. 
CRAIG FOSS 
: —yes—but actually they would not reverse it going by the way they are talking and they are voting for this bill. Members on the other side should focus a wee bit. Let us get on with things that matter because those members would not actually axe the tax—at least that is the latest version but who knows? 
Members opposite also talk about economic literacy. Well there is no better example of the need for national standards of numeracy and literacy than a pamphlet Labour put out about GST recently. It talks about “National’s 15 percent GST” somewhat misleadingly conveniently and dishonestly—am I allowed to say that—while ignoring the fact that GST went from zero percent to 10 percent under a Labour regime and went from 10 percent to 12.5 percent in 1989 with 8 weeks’ notice and preparation under a Labour regime without any compensation whatsoever. That is in total contrast to what we have coming in on 1 October which is a change in GST from 12.5 percent to 15 percent and a huge reduction in income tax one of the biggest changes in income tax and other taxation rates in 25 years which will produce a $3.5 billion to $4 billion boost to our economy over the year. That is what is coming in on 1 October. Again when members opposite talk about GST changing and all the damage that may occur they need to finish the sentence by saying that it is accompanied by a switch from income tax to consumption tax. It surprises me that the Green Party is voting against an increase in consumption tax when we line it up with all its other rhetoric. 
I will come to the bill in one moment because there are some interesting clauses in it but I ask why people are struggling after so many years under a Labour Government. Yes there is a recession going on. Hopefully it has bottomed out. Hopefully we are coming out of it. But in 9 years of a Labour Government real wages in New Zealand increased by only 3 percent. Over 9 years they increased by only 3 percent. People who are going to Labour members’ offices and to our offices to tell us that they are struggling are quite right because under the 9 years of the Labour regime the affordability of living increased by only 3 percent and that was in the best economic opportunities and conditions that this country had seen in many a generation. Labour blew it. What it did was almost criminal. When Labour members have a go at us for trying to slow it down trying to fix it up I say that thus far after 20-odd months of the National Government real wages have increased by 8.7 percent—8.7 percent after only 2 years. That is a response to some of the somewhat silly allegations from members on the other side of the Chamber. 
A married couple on superannuation is about $120 better off after the 2 years or so of this Government because of changes to after-tax wages an increase in average wages and lower inflation and interest rates. Also the changes on 1 October will be indexed. At the same time that GST changes superannuitants will be paid up front. Normally that occurs a year or 6 months later in this case. All distribution that can be indexed will be indexed. If only members opposite would finish their sentences and get off their high horse. The contradiction is that they say all this stuff but they are voting for the bill. They are actually voting for the bill. A reduction in the number of speeches from members opposite would be a nice wee contribution towards eliminating global warming; I wait with bated breath. 
A couple of speakers from the other side have been talking about budgeting advice. That is a very good point and it is quite correct. Budget advisers around the country are seeing quite a few more people who are trying to balance their affairs. As I said earlier the affordability of living has improved somewhat over the last 2 years but after 9 years of only 3 percent growth in real wages people are struggling. When they go to a budget adviser what does the budget adviser do? The budget adviser looks at both sides of the ledger at how much money is coming in and how much money is going out at what they cannot afford what they would like to afford and what they need. The budget adviser looks at basic necessities. Imagine Dr Cullen or Mr Cunliffe going along to a budget adviser. What would the adviser say? He or she would tell them to stop all these silly promises and commitments that mean they end up borrowing money; to manage the money coming in try to distribute the income a bit more and try not be at the risk of recessions if they can; and to try to grow the real part of their wages. 
Jacinda Ardern 
: Don’t borrow for a tax cut. And suspend your super savings. 
CRAIG FOSS 
: “And suspend your super savings”—from a somewhat economically illiterate person over there. Here is a point: the New Zealand Superannuation Fund manages about $15 billion or $16 billion. It manages that and it will return about 4 percent or 4.25 percent this year. The Crown is borrowing about $15 billion at 6 percent interest this year to keep the lights on. [ 
Interruption 
] No the tax cuts are fiscally neutral. Again I am more than happy to lend some quite basic textbooks with nice diagrams—perhaps in comic form—to some of the members opposite so that they can understand what is going on. The real side of the New Zealand economy is having a boost after the real side of the economy being in recession for 5 years with no real growth and hardly any real growth in wages. Actually the tax switching and some of the other changes in this allegedly non-controversial bill are all part of setting that platform—for example the changes in the branch equivalent tax account regime the controlled foreign company changes KiwiSaver transportability and the transportability of the Aussie scheme to New Zealand. It is all good stuff and was done in anticipation of New Zealanders coming home as a result of the election of the National Government in 2008 and perhaps in 2011—we will see how that goes. 
I acknowledge the Finance and Expenditure Committee. The process around this bill at the select committee was quite admirable. I acknowledge that. Generally there was consensus across the committee. We made some changes to the bill that originally came into the House. I acknowledge the members of all parties I acknowledge the officials and I acknowledge the independent advisers. I look forward to the continued debate which will perhaps be somewhat more formed as we go through the clauses in the bill. Thank you. 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou. Naturally we support the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill and it follows that it could do with a few improvements not the least of which lie with the very thoughtful contribution offered by my colleague Mr Stuart Nash. Up and down the country people on fixed incomes are facing pressures. Those pressures will definitely rise over the next 6 to 8 weeks. [ 
Interruption 
] 
Mr Foss is right in one respect: the gales of rhetoric across the Chamber will go on but what will not go on is the ignorance about what the Government’s agenda is in relation to fiscal policy. Never mind what we say in the House come October the changes and the cost rises will begin to bite. They will affect people’s pockets and they will affect their perceptions as to why the Government decided to shift the base of its tax revenue to consumption whilst at the same time borrowing from the international capital markets to fund tax cuts. That cannot be explained away. 
It is unfortunate that the spirit of companionship that my colleagues on the Finance and Expenditure Committee showed to Mr Foss and his confrères has not carried over to the savings debate in the Committee. The Savings Working Group 
is required to report back by 20 December. It will cover or obfuscate the gaping hole in the Government’s thinking. The Government has now outsourced to the Assistant Governor of the Reserve Bank Dr McDermott and a host of other identities from the commercial world the responsibility to find the answers that the Government can take forward and use to plug the gap. Although the Government is now running the rhetoric—of which this bill is a small part—that the problem is capital accumulation in the New Zealand economy it has found itself unwilling to derive or incapable of deriving ideas from amongst it own ranks or it has probably found that there is already within Treasury a belief that there is no savings crisis. The small changes in this bill were largely Labour policies anyhow. They are just a small set of minuscule changes grafted on to the architecture that the Government inherited in terms of savings. 
But there is a deeper point at stake. That point is that if the Government shares the view that the problem with the economy is capital accumulation then why has it made retrograde decisions over the last 18 months to disincentivise people to save and also to undermine New Zealand’s domestic sovereign fund? Those two decisions show that the Government acted in a panic-stricken state and has never had a strategy to deal with savings. 
I accept that a number of the identities in this task force have a positive contribution to make but it will be a contribution that they will be required to make within the pipeline of the Government looking for ideas to take to the next set of elections. It is a tragedy that taxpayers’ funds are being used to subsidise this crowd and its absence of intellectual rigour or original thought as to how New Zealand should deal with that deficiency. 
I will come back very briefly to the suggestion that we ought to offer relief in relation to the application of GST on rates. Gordon Copeland a colleague of the current Minister in the chair the Minister of Revenue warbled on about this at length which probably meant that the idea was never going to go anywhere. However having said that he had that suggestion and a host of other ideas. Given the obvious skill base and a host of other very positive attributes represented in my colleague Mr Nash who is bringing the idea forward the idea has obviously come on time. 
It is disappointing that quite apart from the refinement changes the Government is not addressing some of the deeper challenges and I daresay it is incapable of doing so. It seems as if it is gripped by a whole set of systemic problems and is unwilling to move on from the mantra of the 1990s and at the same time is unwilling to embrace a new paradigm or a new set of ideas to move New Zealand on to its next phase. Quite frankly if we strip away the refinement changes and Mr Dunne’s contributions etc. we find that deep down the architecture of this bill does not significantly differ—other than the tinkerings of the current Government—from what Dr Cullen sought to do in 2000 and 2001 and it does not bring forward an original contribution to arrest the decline of savings. 
If we seek to achieve the things that Mr Brownlee and others tend to talk about from time to time—such as boosting the productivity etc. of New Zealand firms—we will find that that cannot come unless we have access to capital. Unlike the Prime Minister members on this side of the House have grown quite tired and quite apprehensive about the flood of international capital—which is about to be shepherded through no doubt by the current Government—and the Government’s unwillingness to stop the sale of farmland to overseas interests. That no doubt will be an item that we will fight vigorously at the next election. 
We are no longer in the camp where we can see a worsening current account deficit and the laissez-faire attitude of the current Government that it does not mind where capital comes from. We actually want to husband sources of capital in our own country and we want to build reservoirs that give meaning to people when they say that they actually want to feel they have an ownership stake in their own economy in their own communities and indeed in overall society. That is why broadly speaking Labour is supportive of the refinement changes in this bill but we are not supportive of the other agenda which is to meander forward without a clear sense of direction in the absence of any compass that gives confidence to the next generation to the mokopuna—our grandchildren. 
When we listen to David Carter it is almost as if he contemplates a future where our country is one large farm and the Prime Minister contemplates a future where our country is one large hotel. Well that is not our view. We believe that in order to grow our wealth we need to deepen and broaden the diversity of the goods and services that we create. We cannot drive without a decent reservoir of savings capital that can be deployed to suit the agenda of New Zealanders rather than the agenda of nameless faceless international fund managers who do not care at all for the national interest of Aotearoa New Zealand. Their agenda quite rightly from their perspective is to find opportunities exploit them and grow the wealth of the funds that they hold. But if anyone tells me that we should embrace indiscriminately the portfolio theory of investment I will tell them to look at the actual record of many of those portfolio theorists over the last 5 years as we have watched international wealth and capital melt. That is why there is a key distinction here. 
I am sure that there is a desire amongst a host of our colleagues on the other side of the House to advance the savings debate but we differ. Our desire is to ensure that the savings are not all sent overseas but deployed to develop our own country and to develop endowments that create value. 
It is time that the current Government stopped trying to cadge the ideas of Dr Cullen and actually put forward a debatable point as to what its vision is. Labour’s vision is to continue to husband savings but to have them disproportionately deployed on issues at home and to create enterprises that actually build new firms and create more jobs. None of that has actually happened to date and that is a consequence of the current Government’s approach to economic growth and fiscal policy which is driven largely by panic-stricken reaction to the point that not even the business or the corporate community knows any longer what the Government stands for. 
On this side of the House in relation to the savings debate—and of course KiwiSaver is only one element of the savings debate but it is the most innovative—there will be no ambiguity and no vagueness as to where we stand. We support the bill but there is much unfinished business. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 I have great pleasure in taking a call on this bill. I have come into the Chamber and been astounded really that we have the bill here supported by the National Government. In fact it is National’s bill. There is some sweet irony here I guess. I have written a new title for the bill and it is the “Save Bill’s Butt Bill” because Bill English and the National Government in their first Budget slashed savings and any attempt to have savings in this country. Now we have a bill that quite rightly—and Labour will support it—facilitates superannuation payments made in Australia being brought back into this country. The Government now realises that there is value in having superannuation funds available to invest in this country to develop it. Well it is a bit late I say to Bill English the Minister of Finance because he—and Gerry Brownlee and John Carter his fellow Ministers—have been asleep. 
In fact I heard a question from Mr Brownlee before: “What did Labour do?”. Well we set up Kiwibank. We set up KiwiSaver. We set up a superannuation fund. That is what we did to develop higher levels of savings in this country. As the previous speaker said we understand the value of investing in ourselves and utilising savings made by us. The Australians—although we might criticise them and their rugby and their netball from time to time—have been so smart for so long. Eight percent of their income is invested in superannuation. That is smart. Now Bill English—the same Minister who destroyed our attempts to get savings up and running in this country destroyed Labour’s initiatives parked up the contributions to the superannuation fund and to KiwiSaver and undermined the superannuation fund—realises that if we are not doing it ourselves maybe we should get access to the $16 billion that has been accumulated in Australia by New Zealanders through a compulsory scheme that says that 8 percent of one’s salary should go into superannuation. That is smart. 
Labour started out with a rate of 4 percent and was moving in that direction. In fact the ACT Party now through its Supplementary Order Paper is saying that people should be able to contribute more. The ACT Party with all its ignorance on most issues I have to say now realises that superannuation is very smart. Thank God ACT members have learnt something in this House over these years! The National Party has too. Rather than continue with the savings initiatives put in place by the Labour Government the National Government slashed that gutted it undermined it in its first Budget and now to make up for that says it wants some of that Aussie money—that it wants to get its hands on that $16 billion. So we have the “Save Bill’s Butt Bill” so that Bill English can stand up in a year’s time and say that savings are up and running and we have an inflow of money into the country so we can look at investing in ourselves. 
Noises have been coming from National on that issue just recently. National members are saying that we should start thinking about our savings because they have not been quite good enough and that we cannot invest and control our own destiny. I say “Wake up!” to Mr Brownlee and Mr Carter. That truth has been there for a long time and the Labour Government moved on it. We moved on it through the superannuation fund. We moved on it through KiwiSaver and National slashed and gutted those two key initiatives. Now they are talking about reinventing something and they are saying through this bill that the money accumulated in Australia the $16 billion should be able to come back to New Zealand. That is great. It is smart. It is exactly why the Labour Opposition is supporting the bill but it is a bit sad to know that the same Ministers who gutted our savings regime are now attempting in a piecemeal way to get a savings task force or think tank or chat room back up and running. Well if they had just taken a little bit of advice from the previous Labour Government and continued on with our commitment to superannuation and KiwiSaver we would all be a lot better off and we would not have to rely on the $16 billion that this bill will help bring back into the country. 
Hon DAVID PARKER (Labour) 
: 
 Firstly I will respond to Gerry Brownlee’s interjection during Shane Jones’ contribution. Mr Brownlee asked what Labour did for New Zealand investment and New Zealand ownership. Well it is a very long list I say to Mr Brownlee and I am sad that Mr Brownlee as the Minister for Economic Development does not realise that. 
What did Labour do? Well we set up the Cullen fund so that in a time of Government surpluses the Government saved towards future retirement costs. We did that against the opposition of the National Party. National at every Budget called for what were patently unaffordable tax cuts which would have meant that we were not running a surplus in a time of plenty and that New Zealand would now be in the same position as Portugal Spain and Great Britain. We would not have been as badly off as Greece but we would have been on the road to having the problem Greece has with rising Government debt because we would not have put away money in a time of plenty. That is the first and probably the most important thing we did. We ran Budget surpluses consistently and we had tax cuts only when the economy was going into recession so that they were countercyclical. 
The second thing we did was recapitalise Air New Zealand. We made sure that Air New Zealand was maintained in the ownership of New Zealand. Who opposed that? Does anyone remember? 
Hon Members 
: National. 
Hon DAVID PARKER 
: That is right—National opposed that. What else did we do? With the leadership of Jim Anderton we set up Kiwibank. Jim Anderton actually deserves more credit for that than Labour does but we supported his doing it. Kiwibank has been an outstanding success. What else did we do? Someone yelled out “KiwiRail”. That is quite right. We made sure that the monopoly rail infrastructure was in New Zealand ownership and that was the right thing to do. What else did we do against the criticism of the National Party? We maintained Auckland Airport in New Zealand ownership when the National Party said it should be flogged off. 
What else did we do? We set up KiwiSaver. What has National done? Well if we look back a bit we see that it cancelled the Kirk savings scheme. I give credit to Sir Roger Douglas because for decades he has consistently supported improved savings in New Zealand. He was the designer of the Kirk scheme. It was National that reversed that scheme. As Brian Gaynor recently said in the  
New Zealand Herald 
 
if that scheme had been left to mature the New Zealand capital markets would be $300 billion deeper than they currently are and we would probably be in even a better position than the Australians are. They are plainly better off than New Zealanders because of their deeper capital markets. National also scuppered the Peters superannuation savings plans which were backed by ACT in the late 1990s. National has undermined KiwiSaver. 
National is not running Budget surpluses; it is running excessively large Government deficits to pay for its ridiculously extensive and unaffordable income tax cuts 35 percent of which go to the top 5 percent of income earners I think—the people who already earn the most in New Zealand— 
Stuart Nash 
: That’s not fair. 
Hon DAVID PARKER 
: It is patently not fair. It is one of the reasons why New Zealand’s Government deficit is so large. 
Against that background what economic plan did we have from the Government in February this year in its February document? At that stage it was still promising a step change in the New Zealand economy. It was focusing on extensions to mining it talked about the possibility of New Zealand being a financial services hub but it did not talk about savings. It did not talk about savings. What happened in August this year in the Government’s latest plan? There was still no talk about savings on 1 August this year despite that being the standout difference between the New Zealand economy and the Australian economy. The 1 August plan stopped talking about any step change in the New Zealand economy; the Government has given up on that ambition. It will not make any promise for which it can be held accountable between now and 2025 for bridging the wage gap with Australia notwithstanding the fact that that was National’s central election promise at the last election. The 2025 date is a long way out and the gap is growing wider. The Government has been widely criticised in the media for trying to spin the numbers to pretend that the gap is narrowing when it is in fact widening. But still there was no talk on 1 August in respect of savings. 
Now we have a committee. Now we have a committee that is to report at the end of the year. It is due to report at the end of the year on what is probably the most serious challenge facing New Zealand—that is the contribution of our invisibles to our current account deficit. It is caused by New Zealanders consuming too much and not saving enough. It is a problem that has bedevilled New Zealand for decades and is bad now. So the Government set up a committee. I thought that as the Government it was meant to lead. I thought that after 9 years in Opposition National would have some idea as to what it wanted to do. After close to 2 years and two Budgets it has come along to Parliament and conceded that the Labour Party is right and that it needs to improve New Zealand’s savings. That is essentially its message at the moment. It is not yet admitting it was wrong to undermine KiwiSaver; it is not yet admitting it was wrong to run Government deficits to pay for income tax cuts 35 percent of which go to the top 5 percent of earners; it is not yet admitting that it is wrong to stop contributions to the Cullen fund; and it is not yet admitting that it has got the tax mix wrong. But it has set up a committee to give it advice on all of those issues because it does admit that New Zealand is not saving enough. After two Budgets and 2 years it admits we have a problem with as Shane Jones says capital accumulation. It admits New Zealand has a problem in our failure to properly save but it does not know what to do. 
That is an indictment upon a Government in respect of a country that has growing unemployment a growing wage gap with Australia and broader and broader realisation amongst New Zealanders that the problem—or a major part of the problem—is our lack of savings. It is an indictment that the Government has taken 2 years to get to that position after it had 9 years in Opposition—9 years in Opposition. It ought to have realised before now that the major difference between New Zealand and Australia is not mining schedule 4 land and land in national parks but New Zealand’s relative lack of savings compared with Australia’s. 
The Government has squandered the last 2 years. By December this year it says it will have some recommendations. Well by that time we will be in the last year before the election. The election has to be held by November next year and there are rumours that the Government will hold the election before the Rugby World Cup in July or August next year so effectively it will have wasted a whole term in office in respect of the single most important economic issue facing the country which is our relative paucity of savings. The fact is that every year we get poorer. More and more of our country is sold off overseas because we are running a current account deficit so much of which now relates to invisibles—the interest and dividend flows that are paid to overseas investors in New Zealand. 
The Government has not taken any steps in respect of savings except negative ones. The list of the negative steps the Government has taken is long: stopping the contributions to the Cullen fund undermining KiwiSaver and of course the tax cuts which are too much weighted to those already on high incomes—35 percent going to the top 5 percent of income earners. We have a Government deficit of many more billions of dollars every year than would have been necessary had National’s tax package been more responsible and more equitable. 
It is lamentable that after inheriting one of the strongest Government balance sheets in the world from the prior Government this Government has both squandered what it inherited and gone backwards on what is the most important difference between New Zealand and Australia—that is savings. The Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial matters) Bill which we are currently considering ought to have provisions that strengthen KiwiSaver; it ought not to be limited to measures that ease the trans-Tasman transferral of KiwiSaver and Australian superannuation savings balances. That is a good thing to do but it misses the bigger point that New Zealand is short of savings. The Government is transparently without any adequate plan in this area. It has been exposed for its inadequacy on this front once again. 
AARON GILMORE (National) 
: 
 One would think that David Parker was a Luddite in a time warp given the speech we have just heard. The bill we are talking about today is the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. The bill is not about anything that that member was talking about; it is about tidying up and improving our savings environment in terms of bringing home hard-earned savings from those Kiwis who want to come back to New Zealand from Australia—and thousands have done so since the election. 
I want to talk about a couple of things: in particular two Supplementary Order Papers that have been put forward and the crazy amendment put forward by the member over there Mr Nash. In particular I will talk about the Supplementary Order Paper that has not been discussed earlier which has some nice tidy-ups around imputation credit accounts. That Supplementary Order Paper which has not been discussed here will allow the finance company restructuring that is occurring as we speak to occur in a better more efficient way to allow those imputation credits that are retained in a finance company to go with that group as that finance company restructuring occurs. They are good things that occur. They are some of the little steps that help our economy move and grow a bit faster. 
Mr Nash’s amendment is window dressing that puts in place an arrangement whereby for little overall gain to ratepayers there could be a one-off putting aside of GST. I will give an example. The average ratepayer in somewhere like Napier probably pays about $1000 in rates. So Mr Nash is talking about a $25 one-off gain to a ratepayer. Our tax cuts and changes will bring $25 per week to the average household—$25 per week. We have heard from members on that side of the Chamber that 75 percent of people earn less than $40000. Well I can tell members that in my household 75 percent of people earn less than $40000 because I am the only worker in my household. I have two children and I have a mother at home who looks after the children. Is that outrageous? No it is not. Those are the numbers those members use—they use selective numbers—to tell a story that is absolute rubbish and they know it. 
The real truth is that real after-tax wages—the wages in people’s back pockets—have been going up under National. After 9 years under Labour what did wages do? They went up by 3 percent—3 percent in 9 years. It is ridiculous. What was going on there? And what were those members saying at that stage? Nothing. 
This bill puts in place nice little changes that help our economy grow a bit faster. It allows savers to bring cash into New Zealand to invest in things that make sense. The bill does not invest billions of dollars in train sets which was an absolute disaster and made some investor in Australia richer. This bill allows Kiwis to bring home their own money and invest it more wisely in ways they see fit. That is a wonderful step in the right direction. 
We have heard Labour members talk about many savings-related issues that are not relevant to this bill. This bill is about tidying up GST and the tax system to improve savings in New Zealand and to improve our economic growth. It is not about what those members talk about which is absolutely irrelevant. I wish they would talk a bit more about what this bill does. 
Peter Dunne the Minister of Revenue has done a good job of bringing forward these Supplementary Order Papers and putting in place some changes that make the bill work more efficiently. I think that is a good thing. There was some wonderful work by the officials who listened to what people said and realised what was actually going on. Members on the other side of the Chamber do not want to argue because they do not have any answer to it—and I find that outrageous. 
This bill allows for great improvement economic growth and changes. The bill allows New Zealanders to save a little bit more of the money that they have earned overseas so that when they get out of the 747s and are home in New Zealand—like the thousands of Kiwis who have already done so and like the many members of my family who have done so—they do so because they want to live in New Zealand under a John Key - led National Government. The bill allows them to bring home their superannuation savings from Australia and invest them in New Zealand. That has to be a wonderful thing. Thanks very much. 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 That rave by the member Aaron Gilmore shows just how out of touch this Government is. He treats with contempt the ratepayer who will have to pay on average maybe $30 or $100 a year more for the three-quarters of a year Supplementary Order Paper 157 covers. He treats that person with contempt. 
This reminds me of a letter that was sent to me yesterday that had been sent to the Prime Minister. It was from a businessman. He said that this Government just does not understand what the impact of the increased prices it is imposing on businesses will be. He said that he will be paying more GST on everything including his food. He will be paying more for his rent because of the changes in property taxes. His business will be paying more in road-user charges GST accident compensation and the rest of it. He said to Mr Key that he had been a National voter but he would be changing his vote next time because Mr Key has put his business out of business and has imposed more taxes on people that he promised he would never impose. 
I say to Mr Gilmore that the small gesture in the Nash amendment which brings rates into line with other things like 5-year finance leases is a way that we can give a little relief to hard-pressed New Zealanders and by God they need it! Half of all New Zealanders did not get a wage rise last year—half of all New Zealanders did not get a wage rise last year. The fat cats on the other side of the Chamber did. They got big tax cuts. The tax cut for the average New Zealander is about $13 a week while the costs imposed by this Government—[ 
Interruption 
] 
The CHAIRPERSON (Eric Roy) 
: I am sorry to interrupt the member but members who are not in their own seats should not be barraging in the way that they are. 
Hon PHIL GOFF 
: Those members should stop shouting stop showing their arrogance and listen to what their constituents are actually telling them. Their constituents are telling them that at a time when people have not been getting wage increases the rise in GST is the straw that will break the camel’s back. It will break their backs on top of things like the fact that most renters in Auckland are paying $20 a week extra before increases to property taxes are brought in. Most people who have children in early childhood education will be paying $20 to $30 a week more for each child. It is no wonder that the early childhood centre that John Key opened last year in Mangere—a low-income area—has sent a letter to the Government saying that it will have to charge $20 to $30 a week more for early childhood education but that the parents simply cannot afford it. 
Mr Gilmore arrogantly says that it is a small amount of money. We know that it is a small amount of money to Mr Gilmore and the Minister of Finance but then the Minister of Finance gave himself $48000 a year to rent his own home—$48000 a year to rent his own home. This is the Minister of Finance who tells us that New Zealanders should not worry about the increased costs that this Government is imposing on them daily. 
The rate of GST will be 15 percent. 
Craig Foss 
: Tell us about the 3 percent. 
Hon PHIL GOFF 
: Does Mr Foss know what that rate makes consumption taxes in New Zealand? It makes New Zealand the fourth highest country in the world in terms of consumption taxes that a Government imposes on its people—the fourth highest in the world. What do we know about consumption taxes? We know that they fall heaviest on low and middle income earners. They will be paying a higher proportion of their income in consumption taxes while the income tax cuts to Mr Foss and Mr Brownlee will be in the hundreds of dollars—[ 
Interruption 
] 
The CHAIRPERSON (Eric Roy) 
: Sorry to interrupt the member. Mr Foss you will either desist or sit in your own seat. 
Hon PHIL GOFF 
: Thank you very much Mr Chair. Mr Foss and Mr Brownlee do not understand that when one is on a high income one gets big income tax cuts whereas the families that Labour talks about whom Stuart Nash is trying to help are ordinary New Zealanders who are finding that the cost of living is going up at a far faster rate than their wages. 
I ask Mr Brownlee what the Budget tells us. It tells us that the rate of inflation will be 5.9 percent by the end of this year. Well more than half of all New Zealanders did not get a wage increase last year. The National Government can spin all it likes but the fact of the matter is that New Zealanders will know when they go through the supermarket checkout and they will know even more in 37 days’ time that they have less in their pockets and not more as the Prime Minister told them. 
Hon PETER DUNNE (Minister of Revenue) 
: 
 As I listened to that speech I was reminded of a comment that Winston Churchill once made about Aneurin Bevan in the House of Commons. He said to him: “One member should not develop more indignation than he can contain.” What we saw from the Leader of the Opposition was extraordinary huff and puff about the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. The only problem with his comments was that they were at direct variance with everything his colleagues had been saying in this Chamber for the last hour and a half. If one had just come into the debate or switched on one’s television or radio one would assume from the Leader of the Opposition’s comments that Labour would vote against this bill. But every single one of its speakers to date has been at pains to point out his or her support for the legislation. 
The attitude of the Leader of the Opposition seems totally at variance with his colleagues. But there were some great gems during his remarks. He objected to forthcoming property taxes that the Government is allegedly about to levy. Well what we are doing is removing the capacity for people to depreciate property under certain circumstances. But we are not doing what every Labour speaker has failed to deny this morning is in their intent and that is bring in a capital gains tax and a land tax to punish investors. We heard the Leader of the Opposition say that there is some dastardly plan afoot on the Government’s side to bring in a property tax although his colleagues are standing here this morning one after the other criticising the Government for having ruled out a land tax and a capital gains tax. He is simply out of touch with the reality of his own side let alone the attitude of the rest of New Zealanders. 
The Leader of the Opposition then complained about the fact that our GST is allegedly the fourth-highest consumption tax in the world. But we heard nothing in his speech and no amendment has been moved by his party to date to give effect to one of the other great policies—taking GST off fresh fruit and vegetables which he has been touting of late. If this is the fourth-highest consumption tax in the world and if people are suffering to the extent that he claims then I thought he would have moved his pet amendment today so that the Committee would have had a chance to consider it—but absolutely not. In fact the professions of support from his colleagues for this legislation continue unabated. 
The Leader of the Opposition cannot have it two ways. He cannot come down here and make a strong and vigorous speech opposing the legislation while his colleagues on the Opposition benches continue to get up one after the other and profess their support for it and for the Government’s amendments as being user-friendly and just what is needed to make the measure work more effectively. 
One can only draw some internal conclusions about the state of the Leader of the Opposition’s party from those remarks. One can also say that they make no contribution whatsoever to the quality of this debate. They make no contribution to the issues that are being put before the Committee today. These measures which have been worked through by the GST Advisory Panel and are in response to submissions received from the general public are positive and beneficial and it is no wonder that they are supported by the Labour members opposite. It is just a great pity that none of the Labour members over there have sought to inform their leader of the position that their party is taking. As a consequence the Leader of the Opposition comes in here stands exposed—wrong speech wrong occasion—and the reality is that his colleagues will continue to support this bill. His colleagues will continue as they have all said during the number of calls they have had to date to profess their support for the bill’s provisions. Maybe someone should tell the Leader of the Opposition where his party stands. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I wonder which Chamber the honourable Minister Peter Dunne was sitting in during the excellent speech made by the Leader of the Opposition. It clearly was not this one. The Leader of the Opposition said as members on this side have consistently said that although Labour will support this bill because hardworking New Zealanders need some relief from the tremendous shambles of the introduction of this tax we will put forward an amendment that will give ratepayers temporary relief and ease the burden this year on ordinary New Zealanders from the oppressive increase to this tax. 
New Zealanders up and down the country know that National is so out of touch. Aaron Gilmore said in the previous speech but one that the amounts were very small—so why would the peasants and the serfs notice? Because they cannot put food on their tables I say to Mr Gilmore. Our constituents are crowded into houses—two and three families are crowded into a house—and that is why $20 of GST a week makes a hell of a difference. If Mr Gilmore had to choose between taking his children to the doctor and putting food on the table paying $20 $30 or $40 a week more in GST would not seem like a small amount. 
That is why Labour is bringing relief in respect of the cost of living with our Supplementary Order Paper which was put forward by Mr Nash. It will ease the adjustment for ratepayers and it is a step that will be welcomed by all New Zealanders. In contrast the Minister in the chair the Minister of Revenue has had in desperation to bring to this Chamber 28 pages of tidy-up Supplementary Order Papers which are focused on all of those little things that went wrong in the drafting of the main bill. 
It is extremely complex to change GST midway through the year and the small businesses up and down New Zealand will be paying another price. Not only do they take the risk and have to collect the tax that the Government is taking from them but they pay the price of the overheads in the system change the staff training the uncertainty and the risk that customers will keep their wallets closed during the so-called aggressive recovery—so called because it is not happening. It is not happening because the New Zealand public does not believe that the Government has a plan and they are right. The Government has no plan for jobs no plan for growth and no plan for leading New Zealand forward. 
If there was any doubt about that the Government’s latest U-turn on savings is proof positive. For the 2 years of this National Government Labour has been saying that New Zealand’s savings gap is critical. Labour has been out front saying that our net international debt at 90 percent of GDP is a killer and that the Government needs to focus on it. After 9 years in Opposition 2 years in Government and two Budgets National has finally set up a committee—a committee. So bereft of ideas is the Government that it is reaching out for others to tell it what to do in the face of this enormous yawning international debt and crucial savings gap and that is instructive. 
It is instructive that in the ACT Party’s Supplementary Order Paper on this bill which gives New Zealanders the option of increasing their contribution rate—in other words going back to what it was under Labour before National gutted it—there is no mention of an employer contribution. So they are putting it back on hard-pressed Kiwi householders who are already facing a rise in GST and they are asking them to save more as well. How will they do that? It will be by compulsion. How do we know that? Because Bill English has said that there will be no new sweeteners no new money; this will be fiscally neutral. So whatever the savings committee comes up with it will have to make it fiscally neutral. There will be no sweeteners; that leaves only compulsion. 
The word around the building for New Zealanders out there is that the Government will almost certainly go the route of compulsion. If it is not why does it not rule that out now? Why do Government members not stand up and reassure hard-pressed Kiwis who cannot afford groceries that they will not force them to take more money off the table in the middle of a recession? There is silence not a word. Silence speaks for itself. 
DARIEN FENTON (Labour) 
: 
 Just for the record I assure the members opposite and the Minister in the chair the Minister of Revenue that Labour supports the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. The work on it started under a Labour Government— 
Hon Member 
: Go upstairs and talk to Phil. 
DARIEN FENTON 
: No Labour supports this bill as does Phil Goff. He was very very clear and he made some excellent comments during his speech— 
Hon Member 
: And by the way why is your leader here at the Committee stage of the debate? It’s bizarre. 
DARIEN FENTON 
: Would National members like us to withdraw our support for this bill? Is that what members opposite would like? Would they like us to spend the next 12 calls criticising this bill? 
The reason we support the bill is because the work started under Labour. We also support ACT’s Supplementary Order Paper which puts back in place some things that were removed by this Government. We support the Government Supplementary Order Papers and we have also introduced an excellent amendment to exempt council rate payments from GST. 
This bill is a hopeful bill. It is hopeful because it hopes that droves of New Zealanders who have gone overseas to live in Australia—those who have gone for a better life because they are not finding it here under this Government and those who are still moving to Australia by the planeload every week as we speak—will come home and bring their savings with them. I ask the Minister and National members opposite why those people would return. Why would they come back from Australia when their GST will increase on 1 October when they will pay more in rates and when this Government has gutted many things particularly for retirees? The Government has made it difficult by cutting support for hearing aid subsidies by cutting home help by cutting elder abuse education by cutting elder driver courses and by allowing ever-increasing electricity bills. Why would people come back from Australia and bring their savings with them? 
There is a good idea behind this bill; retirement savings portability is sensible. We have been told that potentially $16.6 billion in lost contributions from New Zealanders working in Australia could come back to New Zealand under this scheme. The Government hopes that they come back to New Zealand but if even a fraction of lost contributions come back to New Zealand it would have a positive impact. 
It is interesting that the Government in the last couple of weeks has belatedly decided to do something about savings. KiwiSaver is an excellent scheme and the Government has continued with it even though it gutted it at its first Budget when it came into Government. It has had to acknowledge that Michael Cullen Helen Clark and the Labour Government had an excellent idea with KiwiSaver. It has been enormously popular: over a million people have signed up to it. This Government has finally realised that there is a problem with savings and it wants to do something about it. 
Even though it supports KiwiSaver it has of course attacked the Cullen fund. It has stopped the contributions and in typical Government fashion made no decisions. That nice Mr Key has said that the Government will have a committee that will start with a blank sheet. It sounds to me a little like the National plan for the economy—a blank sheet. It will set up a panel of experts who may or may not report back before the next election. As other speakers have said when this Government has no ideas it forms a committee. We have so many committees review groups and so on. I wonder whether one of the first recommendations the committee will make will be to reverse the stupid decisions around suspending contributions to the Cullen fund and to put back the holes that National created in the KiwiSaver scheme when it first came into power. 
Let us think back a little bit about what the Government did under urgency to the KiwiSaver scheme before Christmas 2008. The minimum member contribution rate was reduced from 4 percent to 2 percent and 2 percent became the default contribution rate for new employee members from 1 April 2009. Then of course compulsory employer contributions were capped at 2 percent as well. 
Inevitably we talk a lot about Australia because the Government has no plan for catching up with Australia and we are drifting further and further behind. I cannot help but reflect that the Australians got it right a long time ago. They were smart. They got it right. They got together with the unions and workers— 
Craig Foss 
: They brought in asset testing for superannuation. 
DARIEN FENTON 
: They brought in compulsory superannuation. 
Craig Foss 
: Asset testing. 
DARIEN FENTON 
: That is right. They brought in compulsory superannuation. 
STUART NASH (Labour) 
: 
 I want to make one thing perfectly clear to this Committee that Mr Foss and the Hon Peter Dunne have got wrong. Labour never supported an increase in GST. Labour will never support an increase in GST. This bill is not about an increase in GST. If this bill were about an increase in GST we would be opposing it with every single fibre in our bodies as the vast majority of New Zealanders have done. I want to make that abundantly clear now. We did oppose the increase in GST and we would do it again. 
But we do support this bill and its Supplementary Order Papers and there are three things I would like to comment on specifically. This bill is necessary to ensure the integrity of tax legislation. It is also about doing business and making the transfer of savings funds across the Tasman relatively easy. The second point is what an absolute shambles this whole implementation of GST has been. The third point is to ask where the hell the Government’s plan is. What is the plan for savings and what is the plan for this economy? 
I have a couple of things I would like to say beforehand. Mr Foss stood up and spoke about honesty. I can tell this Committee that Phil Goff our leader would never stand in front of the nation and say as Mr Key did that he would not increase GST then increase GST. It must make Mr Foss feel rather uncomfortable whenever he watches the video and sees Mr Key say to the nation: “National will not increase GST.” Yet National members have the nerve to stand up and lecture Labour on honesty. That is the reason why Mr Key will be a one-term Prime Minister and why Mr Goff will be the next Prime Minister of New Zealand. It is because he has integrity and he is an honest man. 
Then we had Mr Gilmore. He was unbelievable. He stood up and asked why we would take GST off rates as it was only $25 a week. He said: “My household can bear that.” I challenge Mr Gilmore to live on the median wage in his electorate for 1 month. I think it is about $30000. I challenge him then to come back to this House and tell us that $25 a week is not much money. 
Then we had Mr Tremain and Mr Foss from the Bay stand up and shout it down. They are so out of touch that they do not think the people of Hawke’s Bay are concerned about an increase in their rates. I challenge Mr Tremain and Mr Foss to hold a public meeting and explain to the people of the Bay why an increase in GST on their rates is necessary. No one in the Bay wants an increase in GST on their rates. That increase in rates will not go towards the city council’s coffers at all. It will go to the Government. The people of Napier will pay more in their rates but not one single cent of it will go to the City of Napier. It will go to the 6 percent of people in Napier who earn over $70000. So those members should not talk to me about honesty. 
As for Mr Gilmore wow he is one man who is way out of touch. He is on $134000 and he stands up and says that an increase in his rates will not make any difference to his household. I can tell Mr Gilmore that he is one of the lucky few in this country who is on a salary of that level. He is one of the lucky few who is about to get a tax cut of approximately $100 a week. Those people in his electorate who are on the minimum wage will get about $3 a week. Mr Gilmore said that $25 a week means nothing. He should try to live on the median wage. 
I would like to talk about what this bill does and the reason why we support it. The bill introduces changes to the tax rules to allow New Zealanders returning home from Australia to bring their retirement savings. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to support this bill as a Government member. But before I talk about the bill I want to straighten out a few facts that Mr Nash the member opposite who has just spoken did not quite understand or maybe he was deliberately distorting the representations made by Mr Foss and Mr Gilmore. Mr Gilmore referred to rates for a year—not $25 per week. The reference to $25 per week was a reference to our tax cuts. He said that there would be tax cuts of a minimum of $25 a week. I ask Mr Nash not to distort the picture or the representations made by my colleague Mr Gilmore please. 
Secondly Mr Nash said that Labour was not a party that would increase GST. He forgets that Labour was the Government that imposed GST from zero to 10 percent. It was a Labour Government that increased GST in 1989 from 10 percent to 12.5 percent. I do not understand the views of Labour members today. Some Labour members oppose it and some are asking for an increase. I do not know where Labour members stand today. I do not know who is leading the Labour Party today but there is certainly some conjecture and uncertainty on the cross benches. 
We also heard this morning that there was no plan yet in this House Labour members regularly ignore the fact that we have set out a plan for the building of infrastructure we have set out a plan for the taxation mix to promote investment and savings in this country we have set out a plan for increasing the standards in education and we have set out a plan for delivering front-line services in health and other social services. Members opposite choose to ignore the plan. Members opposite choose not to listen to the people. Why is that? 
After 9 long years of a Labour regime when we have export growth that has been negative now for 5 consecutive years I ask how we will get this economy moving. How can we get an economy moving when exports year on year are decreasing? How do we get our real wages moving in comparison to Australia’s when for the last 9 years under a Labour Government we had an average wage growth of 3 percent? I ask Mr Foss how much it was. 
Craig Foss 
: 3 percent. 
PESETA SAM LOTU-IIGA 
: It was 3 percent. Yet in the less than 2 years that this Government has been in charge of the Treasury benches our wage growth has been—I ask Mr Foss— 
Craig Foss 
: 8.7 percent. 
PESETA SAM LOTU-IIGA 
: —8.7 percent. We know that 2 years is not enough time to turn round this economy. We know that we have a job to do as the National Government and we know that we have had to sort out the mess that we inherited from members opposite. 
I return to the bill. The bill is supported across the House despite the protestations from members opposite. The bill opens the way for New Zealanders who have worked hard in Australia to bring their retirement savings home and that is particularly important. They are able to bring their retirement savings home. Of course there is reciprocity in this bill. Australians who live here can take their savings home. But we all know that the benefits of this bill will largely be felt by New Zealand citizens who are returning home. 
The bill is about allowing people who have made compulsory contributions to an Australian fund to return those funds home. The funds are required to be put into KiwiSaver accounts. That is important because it will ensure that in the long term those funds are invested in our superannuation scheme. This bill improves the plight of New Zealanders and obviously I commend it to the House. 
Hon PAREKURA HOROMIA (Labour—Ikaroa-Rawhiti) 
: 
 Mr Chair— 
Hon Gerry Brownlee 
: A rare moment! 
Hon PAREKURA HOROMIA 
: I can hear a gentleman burbling on the other side. He did not even know how to say no twice yesterday so the Minister of Finance took the question off him. That is what is happening with this Government. Its members are not too sure who is steering what or who is in charge of what. 
What is important is to make sure that we get this message across. I listened intently to Minister Dunne’s response. The previous speaker Peseta Sam Lotu-Iiga should be ashamed because he knows what is going on in relation to Pacific people. Let us talk about the wage gap between New Zealand and Australia. It is flattening out at 20 percent. The effort in this bill is needed to ensure that incomes made there come home because since this Government has come into office for the top end of the exodus of people especially working-class people the gap has increased by 26 percent. When Labour was in Government members opposite kept on parroting about closing the gap. They said they would come up with a plan that would mend all of those relevant issues and ensure that people would stay in New Zealand. The group of people going to Australia is the largest in the last 34 years. Put that in your pipe and smoke it! It is a disgrace. 
That member over there has been going on about the increase in wages— 
Peseta Sam Lotu-Iiga 
: I raise a point of order Mr Chairperson. I object to the member telling you to put it in your pipe and smoke it. I think the member should withdraw and apologise for making those comments about you. I believe that you do not even smoke Mr Chairperson. 
The CHAIRPERSON (Eric Roy) 
: The point of order is upheld in terms of the pronoun that the member used. I know that in times of passion members get a bit sloppy about that but the Chair is not to be brought into the debate. 
Hon PAREKURA HOROMIA 
: I withdraw and apologise. Being a non-smoker myself I say thank goodness because the working class in this country is being punished. 
Let us talk about the rate rises. A farmer on the main road gets nothing. Do members know what they are told? They are told they have the use of the library and the swimming pool but nothing else. Worse still for Maori in Porangahau where that member over there comes from and whose family are well known in the sense of building sites and selling sections the rates are going up something unreal. How do we manage that? My colleague and neighbour Minister Tolley knows what I am about to say. In the sense of multiple-owned land Maori get nothing but they pay the same rates. It is an imbalance. I refer to the people in Porangahau who have lived there for years and years and those in Bayview in Napier who have lived there for years and years. That bloke over there says that everybody can afford the increase. Labour’s common-sense notion that we have a freeze until the end of the financial year is something that surely the Minister could support right now. That is the difference here. 
I turn to the increase in GST. Mr Foss argues that there will be an increase in the wages taken home. 
Craig Foss 
: Real wages. 
Hon PAREKURA HOROMIA 
: Real wages. But when we go to the supermarket we find that costs have risen by 18 percent and the GST increase will make costs go up further. There is no rise in the minimum wage. The last time that group was in Government it took the minimum wage up by 52c or it might have been 58c. Labour took the minimum wage up nine times. That was alongside our clear economic plan which stabilised export productivity and ensured that farms on average were coming through at 19.9 percent in the sense of free returns at the top end. We made sure of that. What has happened now? It has jammed. The timber returns are real because of the world uptake. [ 
Interruption 
] This is relevant to GST I say to Mr Foss. He is supposed to be the finance brain. This is relevant to GST. 
Craig Foss 
: Well try and get to it. 
Hon PAREKURA HOROMIA 
: We are at it I say to Mr Foss and he should be ashamed that 40 percent of the people in Hastings are unemployed. How can he sit there pontificate and see people losing their jobs? In Auckland 150 jobs were advertised and 2700 people turned up for an interview. What does he have to say? He should get out to Maraenui get out to Flaxmere and see what is happening to the families. They cannot afford a whole lot of things. That member dared to suggest that this increase was not much of an increase. That is shameful and he knows it is; it is shameful. 
Craig Foss 
: 3 percent over 9 years is a terrible increase. It is a shocking shameful increase. 
Hon PAREKURA HOROMIA 
: But alongside it we had income-related rents— 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I rise to correct some factual inaccuracies that have been conveyed by members of the Government—no one will be surprised about that. There are two in particular I would like to turn the Committee’s attention to. The first is the spurious claim that National has magicked an 8.7 percent wage growth since it came to office. I will just look into those numbers for the benefit of the Committee. 
Craig Foss 
: Real. 
Hon DAVID CUNLIFFE 
: That is far off the mark. The other is that Kiwis are somehow $25 a week better off through paying more GST. Let us look at the first one. I was interested that the National Government seems to be repeating the claim that somehow Kiwis are 8.7 percent better off in real terms since it was elected but that does not feel right does it? Everybody knows that the recovery is not happening everybody knows that the Government has no plan and nobody is feeling better off. Where did that number come from? Well we had the research unit have a bit of a look at it and this is what it has told us so far: the 8.7 percent includes Labour’s tax cuts in Budget 2008. So the National Government has counted the policies of the previous Labour Government as part of the credit for its administration. Well that is the best way I know for National to say that Labour did a really good job that National is sorry it got elected and Labour did not get a chance to keep doing it and that National is going to count Labour’s policies as its gain. 
Interestingly of course it follows that it is not wage growth at all in the context that an ordinary New Zealander would understand it; it is net wages after tax. So if we correct those anomalies and put Labour’s policies into Labour’s total and National’s policies in National’s total where do the numbers go? It is very instructive. 
Chris Tremain 
: This is what matters: if people can buy more next year or the year after. 
Hon DAVID CUNLIFFE 
: The National senior whip might care to listen to this because it will be big in the Hawke’s Bay. When we correct the total National can claim at most only about 4 percent net wage growth but even that seems a huge stretch of the imagination. Labour had at least 6.3 percent. We know there was at least 6.3 percent real growth under Labour and this National Government is nowhere near it. We can talk about slipperiness. My youngest child was just given a book by a friend called  
The 
Wonky Donkey 
. It is a lovely book but every time I see it I see the “Shonky John-Key”. The “Shonky John-Key” is the leader of a party that would take Labour’s tax cuts and count them into National’s wage growth—ridiculous! 
How about the second claim that somehow New Zealanders are $25 a week better off after the Budget? I ask members how that could be true because GST takes $2.1 billion from them and there are about $1.95 billion of tax cuts back of which a third go to the top 5 percent. So what do average Kiwis have? They will be worse off until 2014. We think that they will be from $20 to $50 a week worse off. Why? Because according to the Government’s own Budget forecasts there will be 5.9 percent inflation next year. That means that with 2 percent wage growth and 6 percent inflation people will go backwards. It is not difficult to work it out. In fact on our numbers people will be going backwards until after the 2014 election. 
National is saying that it will put up GST now and that people will pay more but have less to put towards the grocery bill every year until two elections away—two elections away. What are New Zealanders supposed to do in the meantime if they cannot pay the rent the power bill and the rates and buy food? That is why at the very least our amendment gives people relief from the increase in GST on their rates for this year by saying that the increase will not apply until the next financial year. It would reduce the compliance costs of doing funny money changeovers in the middle of the year. They would be funny money changeovers like the other funny money changeovers in the 28-page tidy-up Supplementary Order Papers that the Minister of Revenue has had to bring to the Committee with his tail between his legs in order to beg for mercy today because the legislation is a mess. It was a bad idea it has been badly implemented and it is a shocker. 
STUART NASH (Labour) 
: 
 As I was saying before Labour supports the Taxation (Annual Rates Trans-Tasman Savings Portability Kiwi-Saver and Remedial Matters) Bill. The reason we support it is that it is a remedial matters bill and it also introduces changes to tax rules to allow New Zealanders to return home. Labour always supports sensible legislation that makes it easier for ordinary Kiwis—or extraordinary Kiwis—to do business and work. 
I will talk about just a couple of bits in this bill. The bill brings in trans-Tasman portability of retirement savings. Sam Lotu-Iiga hit the nail on the head when he said that this bill will help Kiwis coming home from Australia. Why is that? It is because they have significantly greater savings than do New Zealanders in New Zealand. New Zealanders in Australia have significantly greater savings because Australia has had a superannuation scheme going for a long time. New Zealand also had a superannuation scheme. It was set up by Roger Douglas but it was cut by a National Government. My colleague David Cunliffe has alluded to it. Can we imagine the size of our capital markets now if that superannuation scheme had been allowed to continue like the Australian scheme? I think the estimation of worth is about $300 billion. The reason we have such a savings deficit at the moment is that a National Government cut the superannuation scheme—National cut it. 
Sam Lotu-Iiga stands up and talks about the necessity of a GST increase. I challenge that member to hold a public meeting in Maungakiekie with the title “Why GST is important”. I challenge him to do that; I know that my colleague Carol Beaumont would come along. Sam would be ripped limb from limb. There is no reason why that increase in GST is important especially when the money has been set aside for tax cuts for the wealthy. It is just not fair. 
I will talk about Peter Dunne’s Supplementary Order Paper. It shows what an absolute shambles this whole GST implementation has been. Mr Dunne talked about Labour’s introduction of GST in 1989 well over 20 years ago and I hoped he might have learnt from that experience and come to the House with a bill that did not need 28 pages of Supplementary Order Paper. In fact Ernst and Young one of the largest accountancy companies is throwing up its hands in frustration and saying that it is a little more difficult than New Zealanders would have thought—“this is not a moderate increase”. Those words were from Ernst and Young not the Labour Party. We agree with that major accountancy company which is highlighting the fact that this is an absolute shambles. 
I have heard stories that Inland Revenue Department staff are being inundated with calls on questions to do with GST that they simply do not have answers to. People are tearing their hair out because the Inland Revenue Department staff themselves simply do not know the answers. Mr Dunne set up a GST commission and that was a mighty fine idea. It has reported back with 23 pages of Supplementary Order Paper but obviously it has not been communicated to the Inland Revenue Department staff on the ground. 
The reason we support Mr Dunne’s Supplementary Order Paper is that its changes have to be made. There is no way we can put through such a flawed bill that leaves so many holes and that leaves taxpayers not knowing whether they are Arthur or Martha. That is what we are supporting—the integrity of the tax system. We are not supporting an increase in GST. We have never supported an increase in GST. We went to the people of New Zealand from Kaitaia to Bluff and none of them supported an increase in GST at all. This is an absolute shambles. 
Let us talk about the savings history time line. In 1974 Labour and the Kirk Government introduced a compulsory superannuation scheme. As mentioned Roger Douglas was the architect. As an aside I think it is quite sad to note that the last speech I heard Roger Douglas give was in support of a rort on workers’ rights. He is a man whose father and grandfather were Labour Party MPs. Labour Party philosophy is in his blood but at some point he turned to the dark side and now he is giving speeches in the House against the rights of workers. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I will talk a little bit about why the Labour Party is supporting the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Amendment Bill. I will also talk about the fact that this Government does not have a plan and about some of the issues to do with GST the rise in GST and its effect on ordinary working people. I will also talk about the importance of attracting people back from Australia to New Zealand. 
There is no doubt that Labour is supporting this bill. We are supporting it because it is based on work that was done by the previous Labour Government not because the National Government has somehow magically created this amazing plan that will create jobs provide incentives for New Zealanders to come back from Australia and close the wage gap between Australia and New Zealand because that is just not the case. The legislation is all based on work that was done by the previous Labour Government. 
I want to talk a bit about the provisions for retirement savings portability because I am one of those New Zealanders who came back from Australia as I know that this is the best place to be. I was really supportive when the previous Government began work on ensuring there would be retirement savings portability because I know how many New Zealanders there are in Australia who have built up savings under the industry superannuation scheme who will benefit from that provision. It certainly is a sensible arrangement. We have been told that potentially $16.6 billion is lost in contributions by New Zealanders who work in Australia and who could under this scheme come back to New Zealand. Even if a fraction of that money was to come back home of course that would have a positive impact and we certainly support that. 
Although it is one positive step for current and future New Zealand superannuitants this Government has ultimately undermined its commitment to New Zealand superannuation and to superannuitants. We had that stunning Budget 2009 decision to undermine the Superannuation Fund by suspending contributions for 10 years. The Minister of Finance has been trying to justify his short-sighted decision ever since. However the foolishness of that decision is plain with the Superannuation Fund gaining by $3.35 billion since last year’s Budget. We have heard Treasury analysis which was released the day after the Budget that showed the Minister of Finance’s plan guts the Superannuation Fund by 50 percent and it will never be able to catch up. The analysis said that the fund will be short by $35 billion. We know that Budget 2010 only made the situation for most superannuitants worse. Bill English said that we could not afford to contribute and that we would have to resume contributions when we got back into surplus. This year’s Budget revealed that we will be back in surplus in 5 years but contributions do not resume for a further 4 years after that. 
Although this bill will make it easier for superannuitants to return to New Zealand and bring their savings with them which is what we want them to do the Government’s most recent Budget will have many questioning whether the move is worth it. If I were in Australia looking at New Zealand at the moment I do not think I would be making the decision to come back right now if I thought that I would be any better off. It would be interesting to get a sense of that from some of the New Zealanders who are living in Australia and looking across the Ditch at this place. For one thing where would they get a job? How would they get a job? It is not exactly a very supportive environment to come back into especially with young children. If people have young children they would be looking at the 20 hours’ free early childhood education and thinking how long it will last and if they get a job there will be a measly tax cut but GST is going up. 
STUART NASH (Labour) 
: 
 We are nearing lunchtime so I will sum up some of the arguments the Labour Opposition has made in the debate on the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. As has been alluded to by Minister Dunne Labour supports this bill. It supports two Supplementary Order Papers one put forward by Minister Dunne and one put forward by the ACT MP David Garrett and we ask Minister Dunne to seriously consider supporting Labour’s amendment. 
One of the main reasons that Labour has put forward this amendment is to give some GST relief in terms of rates relief to good hard-working New Zealanders. The other reason we would like Mr Dunne to consider supporting this amendment is that in principle and in practice it is incredibly similar to the other provisions that are being exempted until the end of this financial year. By that I mean that the rates bills are out. Ratepayers have the bills in their hands they have been in the letterbox and they know what their rates will be. A lot of councils have put on the bottom of the rates notice that if the bill is paid in full ratepayers will pay only 12.5 percent GST but if payment is staggered ratepayers will pay 12.5 percent GST on the first part and 15 percent GST on any payment after 1 October. 
There are two reasons why this is a good amendment. As mentioned the first is that it provides a measure of relief to good hard-working New Zealanders and the second is that it fits into the general practice and the general theory of the other parts of Mr Dunne’s Supplementary Order Paper 157 which Labour is supporting. So we would like the Minister of Revenue Peter Dunne to support this amendment and to look at it with the philosophical and the practical approach taken by his other Supplementary Order Papers. 
There have been other arguments. It has been held up by Mr Foss and Mr Dunne that Labour is supporting this bill and that by supporting it we support an increase in GST. Nothing could be further from the truth. I want to have it on record once more that Labour does not support any increase in GST. Labour has never supported any increase in GST. If this bill were about an increase in GST then we would absolutely not be supporting it. In fact we are supporting amendments that limit GST to 12.5 percent through to the end of the financial year. 
We have talked about savings. We have talked about the complete and utter lack of a plan. Labour is the party that put measures in place to increase the savings of New Zealanders. There was the Kirk Government savings plan which National abolished and there was the Cullen Superannuation Fund which National has stopped making contributions to. We now have a Government that comes out and says that it will set up a committee. It is to set up a committee. Two years after assuming the Treasury benches it will set up a committee. I wonder whether that is what its polling tells it to do. 
Labour has been talking about savings for a long long time. Ever since we assumed Opposition for this brief 3-year period we have articulated clearly the issue of savings. As Mr Dunne will know as Minister of Revenue in the previous Labour Government savings was a big part of Labour’s platform. As the vast majority of Kiwis will attest to in any sort of polling done by any party KiwiSaver was incredibly important and the Cullen fund was supported. 
Again I come back to the Labour amendment because we are talking about savings and we are talking about families. Mr Dunne in fact set up the Families Commission. In the Labour amendment we are asking for some relief for families who are living the dream who own their own home but who will struggle to pay the rates at 15 percent GST. When someone like Mr Gilmore stands up and says that it is only $25 I suggest that that member is a little out of touch. Any amount of money is important to families who are really struggling. They are struggling to budget with an increase in GST anyway. The price of their petrol the price of their food and the price of their clothes—basic necessities—are to go up. We are asking the Minister in the chair the Minister of Revenue to give them some relief along these lines because it is in absolute alignment with the Minister’s own principles about families. It is absolutely in line with the Minister’s principles as set out in his Supplementary Order Paper. 
We support this bill for a whole raft of reasons. It closes loopholes it makes it easier for Kiwis to come home—which we support even though I doubt that many will come home under this Government—and it makes it easier for Kiwis to do business. Thank you. 
CAROL BEAUMONT (Labour) 
: 
 I will pick up from where my colleague Stuart Nash left off and talk about the question of savings. One area of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill that we support is the provisions relating to KiwiSaver. KiwiSaver as we know was introduced by the previous Labour Government. It is a good savings vehicle. It has had huge pick-up by New Zealanders. It is obviously intended to supplement New Zealand superannuation rather than replace it but it is an important vehicle to try to lift New Zealand’s savings. 
The previous Labour Government had a very proud record in terms of savings as Mr Nash has indicated. This is unlike National Governments which we can see have over a period of time worked against the idea of building up savings within our economy to our detriment. That is to the detriment of all of us and our children and grandchildren. We do not have the level of savings we need as a country to move forward and to look at lifting our economic performance. That is a huge mistake and I think we should acknowledge it in this Committee. 
This bill makes some provisions for KiwiSaver that will ensure greater clarity—for example with regard to the enrolment of under-18-year-olds. There is perhaps some emphasis by some of the KiwiSaver providers on looking at that particular demographic and the bill will provide some clarity on who has to enrol people who are under 18. It provides for those under 16 to be enrolled by their legal guardians with those who are 16 and 17 co-signing the enrolment. 
Supplementary Order Paper 158 which is in the name of David Garrett from the ACT Party suggests amendments to KiwiSaver. Again it has the sensible suggestion of providing for additional rates at which workers can save in KiwiSaver. Of course we need to acknowledge that in the current environment that is incredibly difficult because people are struggling. As many of my colleagues have pointed out it is tough out there and the Government is fooling itself if it does not recognise that. We have heard spurious figures about wages increases earlier today. 
Sitting suspended from 1 p.m. to 2 p.m. 
Questions to Ministers 
Question No. 5 to Minister 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I raise a point of order Mr Speaker. Just to ensure that we have a smooth run through question time I notify the House that it is the Government’s desire that Dr Nick Smith should answer question No. 5 but his plane is somewhat delayed. I suggest that if he is unavailable question No. 5 replaces question No. 12 and we shuffle everything up the order. I seek leave for that to occur. 
Mr SPEAKER 
: Is there any objection to that course of action? Did members hear that? If the Minister for ACC is not in the House then question No. 5 would be dropped down the Order Paper to the bottom of the questions. Is there any objection to that course of action? There is no objection. 
GST—Comparison with OECD Countries 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: When he told the House on 9 February that New Zealand taxes consumption at a relatively low rate was he aware that New Zealand had the sixth-highest rate of consumption taxation in the OECD as a percentage of GDP; if not why not? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 When I made the statement that the Leader of the Opposition refers to I was aware that 23 out of 29 OECD countries had a higher rate of GST or VAT than New Zealand. Only Canada Japan Switzerland Korea and Australia had lower rates of GST. My statement was therefore 100 percent correct. 
Hon Phil Goff 
: In calculating the figure in the way that the Prime Minister has chosen to has he taken into account that actually New Zealanders pay more GST because there are hardly any exemptions whereas most of the other countries at the ordinary headline rate have major exemptions? 
Rt Hon JOHN KEY 
: Yes. It is called broad based - low rate and it was designed by Phil Goff and his Government in 1986. 
Hon Phil Goff 
: I seek leave to table the OECD statistics extracts that show that New Zealand before the GST increase has the sixth-highest rate of consumption taxes as a percentage of GDP. 
Mr SPEAKER 
: Can I check? I seem to have a recollection that— 
Hon Phil Goff 
: No it is a different document from yesterday’s. Yesterday’s document was a bar graph showing that; this is the actual extract from the OECD. 
Mr SPEAKER 
: I apologise. It is an extract from an OECD document? 
Hon Phil Goff 
: OECD statistics extracts. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Phil Goff 
: Why did the Prime Minister push consumption tax GST up still further when he had promised not to? 
Rt Hon JOHN KEY 
: As I said some time ago when I was asked whether GST would rise it was in relation to covering deficits. That is not why we are raising GST; it is because we are also lowering personal income taxes. What I do know is that the last time GST was raised in this country—I think it was in 1989—by the then Labour Government there was no compensation for anyone. 
Hon Phil Goff 
: I seek leave of the House to table this document which states “National is not going to be raising GST”— 
Mr SPEAKER 
: Before anything is quoted from the document we need to know what the document is. What is the source of the document? 
Hon Phil Goff 
: The source of the document is actually originally a video of what the Prime Minister said on television. This is from the  
New Zealand Herald 
. 
Mr SPEAKER 
: We are not going to be tabling statements from videos. 
Hon Phil Goff 
: Will the increased rate of GST take more from low to middle income people as a proportion of their income than from wealthy people? 
Rt Hon JOHN KEY 
: I do not believe so no. 
Hon Member 
: What world did you live in? 
Hon Phil Goff 
: Mr Speaker I am sure that is not the world that you lived in; it was directed to the Prime Minister. 
Mr SPEAKER 
: It was the member’s colleague who interjected inappropriately. 
Hon Phil Goff 
: What is the Government’s estimate of how much in dollar terms the increase in the rate of GST will add to the average price of a new home for a first home buyer? 
Rt Hon JOHN KEY 
: I do not have that to hand. If the member wants to put it in writing I can get it for him. 
Hon Phil Goff 
: Would the Prime Minister think that if the average cost of construction is about $300000 the extra price that a new home purchaser will be paying is about $7000 to $8000 extra in tax? 
Rt Hon JOHN KEY 
: That may or may not be correct; we will need to work our way through that. What I can say is that the two most important factors in the affordability of a home for someone are interest rates and his or her after-tax income. Under a National Government— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I think the Prime Minister answered the question by saying he did not know. That was the answer and the rest of his answer is extraneous. 
Mr SPEAKER 
: I do accept the point of order that it was a very very tight question and therefore there should not be further information given on it. 
Hon Phil Goff 
: How many letters has the Prime Minister received recently like the one that I have in my hand which was copied to me but addressed to him saying the relentless increase in Government charges like accident compensation road-user charges and soon GST and taxes on property has put this man out of business and he—Mr Key—is out of touch with the costs facing ordinary income earners in this country? 
Rt Hon JOHN KEY 
: I get about 2000 pieces of correspondence a week so I cannot tell the member exactly. What I can say is that I have never had a hand-delivered note written by a member of my caucus telling me that I am “outski”; that is for sure. 
Hon Phil Goff 
: I seek the leave of the House to table the letter that I have just referred to in which the gentleman concerned said Mr Key has effectively put him— 
Mr SPEAKER 
: Leave is sought to table a letter from a New Zealander apparently. Is there any objection to that? There is objection. 
Overseas Investment Rules—New Zealand - China Free-trade Agreement 
2. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: What constraints if any does the New Zealand - China free-trade agreement place on the ability of the New Zealand Government to tighten the rules governing the sale of New Zealand land to overseas buyers? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 In a number of free-trade agreements as well as in respect of the World Trade Organization New Zealand has committed to not changing the classes of investments that are subject to screening under the Overseas Investment Act. This means we will be able to continue to screen investments in those existing classes set out in the legislation—significant business assets and sensitive land including farmland. Chinese investors are subject to the same rules as everyone else. In all our free-trade agreements New Zealand has preserved the ability to alter some of the criteria and factors against which proposed investments are assessed if that is deemed desirable by the Government. 
Dr Russel Norman 
: Is it the case that rules governing the sale of land to overseas buyers from China in force at the time of the signing of the New Zealand - China free-trade agreement cannot be tightened without breaching the terms of the agreement? 
Hon BILL ENGLISH 
: No I do not think I would agree with the member. He has raised a quite legitimate issue—that is if the Government were to alter the Overseas Investment Act it would need to take account of the undertakings it had made in free-trade agreements. But I do not believe that those undertakings prevent a tightening of the rules. 
Dr Russel Norman 
: In terms of the current review of overseas investment that the Minister referred to previously and dealing with overseas investment in land in particular has he considered the issues in relationship to free-trade agreements and whether those free-trade agreements place constraints on how we can change the Overseas Investment Regulations? 
Hon BILL ENGLISH 
: If the Government were to make any change to the Overseas Investment Act then yes it would certainly be checking that change against the free-trade agreements. My impression is that those agreements do not prevent the Government from altering to some extent the way that it screens incoming investment. 
Dr Russel Norman 
: If the Government were to decide that all sensitive land—defined within the Overseas Investment Regulations as farmland of greater than 5 hectares for example—must remain within New Zealand ownership and could not be sold into overseas ownership would that stay within the terms of the New Zealand - China free-trade agreement? 
Hon BILL ENGLISH 
: Certainly from the Government’s point of view that is a hypothetical question because we would not be considering the option of banning any overseas ownership of sensitive land. Sensitive land is a very broad category of land. It includes farmland but it also includes quite small areas of land next to waterways for instance such as sections with commercial buildings on them. 
Dr Russel Norman 
: How will his Government constrain the ability of overseas investors from China to buy land in New Zealand without tightening the overseas investment rules hence potentially breaching the New Zealand - China free-trade agreement? 
Hon BILL ENGLISH 
: It is unlikely—in fact it is out of the question—that the Government would tighten criteria related to investors from one particular country. I do not think our free-trade agreements or our commitment to the World Trade Organization would allow that; in fact it would not be sensible economically either. We need to keep in mind that any investor coming in to buy say farmland in New Zealand has to pass the existing tests in the Overseas Investment Act. Those tests were laid down by the previous Government when it rewrote the Act. Any application that is in the pipeline now will be dealt with by the tests laid out in 2005 I think it was. If there was to be any change to those tests the Government would signal that ahead of time. 
Hon David Parker 
: What signal is his Government sending to the world when he is on record as saying that we need to relax the rules on foreign investment while John Key has been saying just the opposite or is this merely another example of the Government belatedly agreeing with the Labour Party position as it also seems to be doing on savings? 
Hon BILL ENGLISH 
: No it is another example of the member’s shallow analysis and political manipulation of statements. The Government’s review of the Overseas Investment Act was always aimed at reducing the time cost and uncertainty of the decision-making process and that continues to be an objective of the Government. In fact we have achieved quite a bit of reduction in the bureaucracy associated with that process over the last 18 months. 
Hon David Parker 
: When will the Minister release the long-awaited review of foreign investment which was announced 17 months ago or is this just another example of a Government that has polled itself to a standstill because it has no coherent plan? 
Hon BILL ENGLISH 
: No it is an example of a Government that has been so busy with its bold and wide-ranging plan that this matter of lower priority will appear when we are ready. 
Wages—Real After-tax Growth 
3. 
AARON GILMORE (National) 
 to the  
Minister of Finance 
: Have New Zealand’s after-tax wages been rising faster than prices? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. Since September 2008 real after-tax wages in New Zealand have risen 8.7 percent in less than 2 years since that time. This calculation is based on Statistics New Zealand’s quarterly employment survey data on average weekly ordinary-time earnings. It is the same series that is used for calculating the annual adjustments to national superannuation. Treasury forecasts show that real after-tax wages are expected to grow by around 1 percent per year each year over the next 4 years. 
Aaron Gilmore 
: How does real after-tax wage growth in New Zealand compare with that in Australia? 
Hon BILL ENGLISH 
: As the House will be aware real after-tax wages in New Zealand grew by only 3 percent in the 9 years from 1999 to September 2008. The comparable series for Australia shows that in that same period where real after-tax wages grew 3 percent in New Zealand from 1999 to 2008 in Australia they grew by 19 percent. It was 3 percent in New Zealand and 19 percent in Australia and that record under the previous Labour Government is one of the reasons for the wage gap between Australia and New Zealand. 
Hon David Cunliffe 
: Does his figure that real after-tax wages have grown by 8.7 percent over the past 2 years include Labour’s 2008 October tax cut; if so why is he taking credit for a tax cut he voted against? 
Hon BILL ENGLISH 
: It does include Labour’s tax cut and we have always made that clear. The reason is that Labour did that tax cut only because we made them. 
Aaron Gilmore 
: What has happened to real after-tax wages in New Zealand and Australia since 2008? 
Hon BILL ENGLISH 
: As I said since September 2008 real after-tax wages have grown by 8.7 percent in New Zealand. In the same period real after-tax wages in Australia have grown by 4.8 percent. That is because Australia has had significantly higher inflation than New Zealand and it has had smaller tax cuts than in New Zealand. So the gap has actually narrowed slightly. However we are not getting excited about it. The damage done by the previous Government is so significant it will take a good 10 years or so to really make significant progress in closing up that gap. 
Hon David Cunliffe 
: Can he confirm that based on figures he quoted last week over his period in office real after-tax wages in the private sector have increased by only 1.3 percent and Treasury says that the increase in GST will push inflation to close to 6 percent; if so how many people does he expect will get a 6 percent wage increase next year? 
Hon BILL ENGLISH 
: I cannot confirm whether it is 1.3 percent but if it is then in 18 months we have achieved half of the increase in the real after-tax wage that Labour achieved in 9 years. So 1.3 percent is pretty good. 
Aaron Gilmore 
: What economic policies would put future increases in New Zealand wages at risk? 
Hon BILL ENGLISH 
: The policies that would put further increases in New Zealand’s real wages at risk would be the same ones that did so much damage to them in the last decade—that is soaring Government spending a withering export sector a bloated Public Service excessive borrowing for speculation in housing and an economic policy that undermined the productive capacity of the nation. This Government has turned round all of those things. 
Superannuation—Compulsory KiwiSaver 
4. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Has he ever ruled out compulsory KiwiSaver; if so is that still his position? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I cannot recollect every statement I have made on New Zealand superannuation having been involved as a politician in this issue for 20 years now. The Government has an open mind and it has set up the Savings Working Group to explore all options including Government savings improvements to the tax system and its effect on savings and the development of KiwiSaver. 
Hon David Cunliffe 
: Why then did he tell a constituent less than 1 year ago: “I note your comment that KiwiSaver should be made compulsory or the contribution rate returned to 4 percent. The Government does not support either of these options.”; and when did he change his mind and decide it was an option worth considering? 
Hon BILL ENGLISH 
: The member will be aware that National put together a significant tax package in Opposition which we implemented soon after we were re-elected that included changes to KiwiSaver. The letter to my constituent accurately quotes the Government position and it remains the Government position. 
Hon David Cunliffe 
: If savings options from the working group must be fiscally neutral must increased savings then come from either households or businesses or both? 
Hon BILL ENGLISH 
: There is an iron rule about saving and that is one can save more only if one spends less. That is how savings works. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Taking your advice from yesterday I asked an absolutely straight question: given that the Minister had said that savings options must be fiscally neutral must the savings therefore come from households or businesses or both? The Minister did not address that either/or trade-off at all. He needed either to confirm or not to confirm. It was quite simple. 
Mr SPEAKER 
: Ministers have never been forced to confirm what members might like them to confirm. The member asked whether the policy was for savings to be fiscally neutral and I think the Minister responded to that part of the question. He said that the only way that savings could be achieved was if spending was reduced which seemed to agree with the first part of the member’s question. 
Hon David Cunliffe 
: Point of order. 
Mr SPEAKER 
: I will hear the honourable member further. 
Hon David Cunliffe 
: I appreciate that. The first clause of the question was not the question; it was the presupposition: “If savings options … must be fiscally neutral”. The question then asked whether it must therefore be true that increased savings have to come from households or businesses or both. He did not address the operative part of the question. 
Mr SPEAKER 
: I think the Minister’s answer pointed out that the only way savings can be achieved is if spending is less. I imagine that means spending right across the economy. The member has further supplementary questions to use if he wants. I do not believe that the Minister evaded the question. The answer may not have been exactly the answer the member wanted but he does have further supplementary questions. In fact I will let him ask a supplementary question before I accept one from the other side. No? 
Chris Tremain 
: What impact has KiwiSaver made on national savings in recent years? 
Hon BILL ENGLISH 
: I expect that the impact will be one of the issues debated by the Savings Working Group. There is no doubt that for some individuals it has increased their savings but it is not obvious that it has made an immeasurable difference to national savings. In fact it has become clear that during the period when the New Zealand Superannuation Fund was set up and KiwiSaver was set up New Zealand ended up with record balance of payments deficits averaging over 8 percent of GDP per year and foreign liabilities climbed from $100 billion to $170 billion. That is why we believe that it is somewhat simplistic to think that higher household savings naturally means higher national savings. That is not necessarily the case. That is why the Savings Working Group has to look at national savings—that is savings by Government households and businesses not just households. 
Hon David Cunliffe 
: Can the Minister then confirm that one of his first acts on taking office was to reduce the level of incentives to save with KiwiSaver and can he further confirm that the Government’s very serious net international liabilities are overwhelmingly driven by private dissaving and the building up of housing debt which his Government has done precious little to address? 
Hon BILL ENGLISH 
: We do not claim to have addressed international liabilities directly. Certainly the recession has had the effect of stopping household debt from rising. In answer to the member’s question about our cutting KiwiSaver we have put fewer incentives into KiwiSaver which means the Government has smaller deficits and the net effect on national saving is neutral. 
Hon David Cunliffe 
: If according to the Minister the Government is able to save on the public’s behalf does he now take the position that the level of personal or household savings is irrelevant to the total national international debt? 
Hon BILL ENGLISH 
: Clearly not; as I have said before national savings are made up of the savings of households Government and business. I have made the point a number of times that the Government borrowing from overseas lenders in order to look like we are increasing savings in New Zealand simply does not make any sense. It does not increase our national savings at all. We end up with a bit more household savings but with more debt owed to foreigners. Eventually foreigners will stop lending us money so that we can pretend we are increasing savings. 
Health Services—Minister’s Statements 
6. 
Hon RUTH DYSON (Labour—Port Hills) 
 to the  
Minister of Health 
: Does he stand by his statement “But when you are Minister of Health part of making sure you know what is going on is making sure you are out there seeing things from a patient’s perspective”? 
Hon TONY RYALL (Minister of Health) 
: 
 Yes as Minister of Health I regularly visit rest homes hospitals general practitioners’ clinics and I speak with the public and patients. 
Mr SPEAKER 
: Could I simply ask the Minister to repeat his answer for me because I could not hear it at all. 
Hon TONY RYALL 
: Yes—[ 
Interruption 
] 
Mr SPEAKER 
: I apologise to the Minister. On this occasion I would ask the Opposition though they may be dazzled to please keep the noise down so that I can hear what I am sure is an important answer to the Hon Ruth Dyson’s question. 
Hon TONY RYALL 
: Yes as Minister of Health I regularly visit rest homes hospitals general practitioners’ clinics and speak with the public and patients. 
Hon Ruth Dyson 
: Why did he not consider the perspective of 94-year-old St Kilda pensioner John Currie who says nervous exhaustion through worry about the cuts to his home help have put him in Dunedin Hospital? 
Hon TONY RYALL 
: I am aware of that case. I would say that the district health board has assured me that no one will be unsafe or forced out of his or her home because of the changes made to home support. I understand that the district health board has been in touch with Mr Currie and other facts were revealed in the article today. 
Hon Ruth Dyson 
: Which mental health patients did he seek out for their perspectives on the $5 million cut to community-based mental health services in Wellington this year? 
Hon TONY RYALL 
: I think the people whom I have spoken to who are involved in mental health are very impressed that $174 million extra will be put into mental health services over the next 4 years. 
Dr Paul Hutchison 
: What reports has he had in relation to the patients’ perspective on improved ambulance services? 
Hon TONY RYALL 
: I can inform the House that as part of the Government’s $48 million extra investment over 4 years to support the national ambulance service there are now an extra 100 paramedics on the health front line. This means more communities have 7-day-a-week 24-hour reliance on volunteer staffers for cover reduced and the average number of ambulances available both during the day and at night has increased. We now have extra paramedics in more than 40 centres throughout the nation—from Dargaville in the north to Gore in the south—supporting better and safer front-line services for New Zealand patients. 
Hon Ruth Dyson 
: What children and young people did he seek for their perspective on the fact that South Canterbury District Health Board is cutting its child and youth oral health services by $1.2 million this year—cuts signed off by the Minister? 
Hon TONY RYALL 
: What is quite clear in the South Canterbury area is that they have had additional funding of $11 million in the last 18 months and the district health board is improving front-line services for people in that area quite strongly. 
Hon Ruth Dyson 
: If he is concerned about seeing things from the patients’ perspective will he use his ministerial powers on behalf of Otago and Southland patients to keep their neurosurgical services? 
Hon TONY RYALL 
: As the member well knows all of the South Island district health boards are aware that they have to fix the situation at Otago-Southland. In the last term of the previous Government three neurosurgeons left the hospital. We know that a patient recently explained that she had had three locum neurosurgeons in 4 months. The district health boards cannot agree on the service network across the South Island. They have asked the director-general to arbitrate. An independent panel is looking at this case. I have to say that like the people of Otago-Southland I have to be convinced that they do not deserve good-quality neurosurgical services. 
Truancy—Progress in Addressing 
7. 
HEKIA PARATA (National) 
 to the  
Minister of Education 
: What progress has been made on the Government’s commitment to tackle school truancy? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 This Government is committed to addressing school truancy. I am happy to report that focused action and a boost in funding—that is for the Non-enrolment Truancy Service—have reduced the number of students not enrolled in school from 3416 in January this year to 2192 today. That is a fantastic reduction of 36 percent. In addition the time taken to re-enrol students who have not attended school for the past 20 days has also decreased by 14 percent over the last year. This is a fantastic start. 
Hekia Parata 
: What other work is under way to support schools to manage student attendance? 
Hon ANNE TOLLEY 
: I am pleased to advise that last week the Ministry of Education released long-requested guidelines for schools on the management of non-attendance and where necessary the prosecution of parents who fail to ensure that their children attend school. The ministry will also fund schools to undertake such prosecutions where necessary. Schools have been asking for this for years; this Government has listened to them and acted. 
Defence Associate Minister—Performance 
8. 
Hon PETE HODGSON (Labour—Dunedin North) 
 to the  
Minister of Defence 
: Did he raise concerns about the performance of the former Associate Minister of Defence with the Hon Rodney Hide; if so did he inform the Prime Minister about those concerns? 
Hon Dr WAYNE MAPP (Minister of Defence) 
: 
 In reply to the question may I say this: no I did not have concerns about the former Associate Minister’s performance. However I did have concerns about inappropriate language in two documents generated from the former Associate Minister’s office which I did raise with Mr Hide. It was not necessary to raise those issues with the Prime Minister. 
Hon Pete Hodgson 
: Was he “informed by a National Party activist that ACT Board Member Nick Kearney has a copy of” a Cabinet paper entitled Defence Assessment dated 2010 as the former Associate Minister of Defence wrote last week; if so did he advise the Minister in charge of the NZ Security Intelligence Service? 
Hon Dr WAYNE MAPP 
: I actually have asked Mr Kearney about that and no he does not have such a document. I am absolutely confident that there has been no inappropriate treatment of documents held in the former Associate Minister’s office. 
Hon Pete Hodgson 
: Did he or his staff raise any security issues regarding ACT Ministers or their staff with the Prime Minister or his staff; if so what and when? 
Hon Dr WAYNE MAPP 
: There was an occasion when I was given some information by Mr Hide which is now in the public domain. I ensured that that was raised with Ministerial Services. 
Hon Pete Hodgson 
: What might he have said to his former Associate Minister of Defence that caused— 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I will help the member by saying he surely cannot have a question that asks what a Minister might have said. The Minister either said it or did not say it. 
Hon Gerry Brownlee 
: He could have said “What did you have for lunch today?”. 
Mr SPEAKER 
: I appreciate the assistance of the honourable Leader of the House but this is a point of order. Members these days are entitled under the Standing Orders to ask questions that are speculative like that as long as they are not outrageous. They must not contain any outrageous content and I ask the member to be careful of that. I think we should hear his question. 
Hon Pete Hodgson 
: What might he have said to his former Associate Minister of Defence that caused her to write on a document dated 17 August: “The Minister of Defence believes Rodney Hide has passed this paper on and he is upset that he could not trust a Ministerial colleague to keep a paper he gave him to himself.”? 
Hon Dr WAYNE MAPP 
: Nothing of that nature was said. In fact I received a phone call from somebody else. 
Hon Pete Hodgson 
: Was his former Associate Minister of Defence broadly correct when she wrote on 17 August: “Rodney Hide also told Wayne Mapp that he wanted me removed from my Associate Defence Minister role. Wayne Mapp told me subsequently he protested vigorously about that saying that we (Mapp and I) were an effective team and I was well regarded by his colleagues in the Defence Force.”? 
Mr SPEAKER 
: I simply could not hear that question at all. Because I could not hear the question with the level of interjection on this occasion from National backbenchers I cannot determine whether the question was in order. I have to be able to hear the question. I ask the member to repeat it but I ask him to keep it short and to make it no longer than is necessary to make the question clear. It should not contain further material than is necessary to make the question clear. 
Hon Pete Hodgson 
: Was his former Associate Minister of Defence broadly correct when she wrote on 17 August: “Rodney Hide also told Wayne Mapp that he wanted me removed from my Associate Defence Minister role. Wayne Mapp told me subsequently he protested vigorously about that saying that we (Mapp and I) were an effective team and I was well regarded by his colleagues in the Defence Force.”? 
Hon Dr WAYNE MAPP 
: I have no ministerial responsibility for anything in an internal document from the ACT Party but I can say the Associate Minister and I had an effective working relationship. 
Hon Pete Hodgson 
: I raise a point of order Mr Speaker. Acknowledging that the last part of the question was answered I take issue with the idea that the Minister of Defence has no obligation to address a question about comments made around him by his former Associate Minister. Of course he is responsible. 
Mr SPEAKER 
: A serious and interesting issue has been raised. The Minister has responsibility for statements in respect of defence made by the Associate Minister; there is no question about that. The question here is whether the document that is being referred to contains information written in the capacity of a person as Associate Minister of Defence. Maybe I need to seek a little further advice on that. At the end of the day I have to be guided by Ministers as to whether they have ministerial responsibility but then the balancing issue there is that I cannot allow Ministers simply to claim that they do not have ministerial responsibility for something that they do have ministerial responsibility for. On this occasion I probably have to take the Minister’s word for it at the moment and undertake to look into the matter for the honourable member because I do not want to rule incorrectly on something that has some significance. Ministerial responsibility is important; Ministers are responsible for what Associate Ministers say in their capacity as Associate Ministers. As to what they say in their capacity as ordinary members of Parliament I am not clear about that. I undertake that I will look into the matter further and come back to the honourable member. If in fact I need to come back to the House I will do so; otherwise I will come back to the honourable member. 
Hon Rodney Hide 
: Does he believe that the issues that the Minister raised with me were appropriate to raise with me and does he believe that I handled the issues that he raised entirely appropriately? [ 
Interruption 
] 
Mr SPEAKER 
: A serious question has been asked. This is a matter of some substance and I think the Minister should be given the courtesy of being able to reply on it. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I am very interested in what this answer will be but just so that we are clear I ask you for clarification. Are you ruling that this Minister has ministerial responsibility for the behaviour of Rodney Hide? 
Mr SPEAKER 
: No no—not at all. The Minister was asked about whether he felt that his comments his advice to another Minister had been treated appropriately. As a Minister I think he has certainly a reporting responsibility for that. I do not think that is unreasonable. 
Hon Pete Hodgson 
: I raise a point of order Mr Speaker. I do acknowledge the possibility that the Minister of Local Government has an interest in this or that aspect of defence but it is more likely it seems that in Mr Hide’s conversation with the Minister of Defence Mr Hide was acting in his capacity as the leader of the ACT Party. The Minister of Defence has no responsibility for that. 
Mr SPEAKER 
: I will hear the Hon Rodney Hide. 
Hon Rodney Hide 
: The Minister clearly was acting as the Minister of Defence. The Minister of Defence raised issues with me. I am asking as a member of Parliament whether he believed he did the appropriate thing as the Minister of Defence by raising them with me. And I am asking him as the Minister of Defence whether he believed that my response was entirely appropriate. That is a question from a member of Parliament to a Minister. 
Hon Member 
: We’re not interested. 
Mr SPEAKER 
: I do not care which member of the Labour front bench is not interested; I as Speaker am interested. I think the point made by the Hon Rodney Hide is not unreasonable. What he has asked as a member of the House is whether the Minister of Defence feels that what he said to him as the Minister of Defence was treated appropriately. The Minister is not being asked to comment on something that a member of Parliament has said publicly—that would not be his responsibility—but simply on whether his communications were treated in his view as Minister of Defence appropriately. I realise that there is a fine line with these things and I acknowledge that I am not finding this to be absolutely easy but I think that is a reasonable question for the Minister to be asked to respond to. 
Hon Dr WAYNE MAPP 
: To the extent that they were related to my areas of ministerial responsibility yes they were dealt with appropriately by both me and Mr Hide. 
Hon David Parker 
: I raise a point of order Mr Speaker. In respect of the issue that you may report back to the House on it seems to me that the Minister in response to that question from Mr Hide actually showed that he had ministerial responsibility in respect of the earlier issues. If it was within his responsibility to answer that question from Mr Hide how can that be different from the answers that he was asked to give in respect of Mr Hodgson’s questions about other comments made to him in his capacity as Minister? 
Mr SPEAKER 
: I will hear the Hon Rodney Hide but I do not want to take too much further time on this. 
Hon Rodney Hide 
: I appreciate that. Mr Speaker the questions that I asked were actually about the behaviour of the Minister of Defence and about his opinion on whether he thought the response of someone else was appropriate. The question that the Opposition was asking was actually about a document that the Minister of Defence had no hand in preparing. 
Hon David Parker 
: Mr Speaker— 
Mr SPEAKER 
: No I do not want to spend more time on this. I have undertaken that I will look into the matter. I am satisfied about that last question; I think that the Minister of Defence has responsibility for what he says to other members and that to question him on whether he is happy with the way they have treated that information is not unreasonable. The Minister certainly has responsibility for anything that the Associate Minister says as Associate Minister. What I want to look into further—because this is an important matter—is whether a document being referred to was prepared by the Minister as Associate Minister or as a member of a political party. We well know in this House that there is a difference between a Minister acting in his or her role as Minister and a Minister acting in his or her role as a member—in some cases the leader—of a political party. I think this issue is important enough for me to satisfy myself on the basis of the proper way of looking at it. I do not want to give an incorrect ruling to the House; I promised the honourable member Pete Hodgson I will investigate the matter. If it is important for the House I will come back to the House on it; otherwise I will come back to the member. 
Hon David Parker 
: I raise a point of order Mr Speaker. Thank you for that clarification. I suppose the point I was trying to make is that the point that Mr Hodgson was making was not about the source of the quote that was being put to the Minister which was the subsequently prepared document. He was actually questioning the Minister in respect of the statement as recorded in that document which was a statement put to the Minister in his capacity as the Minister according to that later document. So it is not the later document—that is just the source of the information. 
Mr SPEAKER 
: The member is simply relitigating the issue. I have acknowledged that I need to satisfy myself as to the status of such a document. Whether it quotes anyone is irrelevant if the document does not relate to a Minister. If it relates to a private member especially in respect of political party matters then I suggest that on the face of it it is not a matter for which a Minister can be responsible even if such a document quotes the Minister. If a Minister says he or she is not responsible for what that document contains then that would on the face of it be the end of the matter. But I want to look into it to make sure that my instincts are not wrong. They may well be wrong and I am prepared to accept that I may be wrong. I will certainly come back to the member who asked the question and if the matter has importance for the House I will come back to the House on it. 
Hon David Parker 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I cannot imagine what the point of order is. I ask the Hon David Parker to be careful not to keep wasting the time of the House. 
Hon David Parker 
: Perhaps I did not explain myself clearly. The point I was making with respect was that what I think you have to consider does not relate to the source of the document that Heather Roy prepared which is a subsequent document. The underlying issue that the Minister can be questioned on in my submission is the quote in that document which is a quote of her earlier statement to the Minister of Defence. My submission is that the question for you to consider is whether the statements that Heather Roy said she made to the Minister are within the responsibility of the Minister—not the later document. 
Mr SPEAKER 
: That is precisely what I have indicated I am prepared to look at further. 
Hon Rodney Hide 
: Is the Minister of Defence satisfied that the concerns that he took to Ministerial Services were handled with the utmost professionalism integrity and competence by Ministerial Services? 
Hon Dr WAYNE MAPP 
: I passed them to Ministerial Services. Of course they have their own standards as to whether they are appropriately handled. I cannot actually speak on behalf of Ministerial Services. 
Blue Cod Fishery Marlborough—Reopening 
9. 
COLIN KING (National—Kaikoura) 
 to the  
Minister of Fisheries and Aquaculture 
: What recent announcement has he made about the blue cod fishery in Marlborough? 
Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture) 
: 
 Yesterday I announced the start of public consultation on the Marlborough Sounds Blue Cod Management Group’s plan for reopening the fishery. The fishery was closed in October 2008 for 4 years due to sustainability issues and it is not due to reopen until 1 October 2012. However in March last year I asked the group to develop a sustainable management plan for this fishery to enable it to be reopened sooner if possible. It has now reported back with a number of specific recommendations and it is seeking public comment on these over the next 6 weeks. 
Colin King 
: What were the objectives of the Blue Cod Management Group? 
Hon PHIL HEATLEY 
: I support lifting or relaxing the closure early so that we can start fishing for blue cod again when we know that it is sustainable. It is important to me though that any management plan would see the fishery opening either wholly or partially sooner than 4 years; would be easy for fishers to understand; would be straightforward for the Ministry of Fisheries to police; and would require some sort of reporting so that the success of the opening can be monitored. The members of the Blue Cod Management Group did an awful lot of work and an awful lot of consultation and on behalf of the community I thank them for their work. I look forward to the community’s response to the proposals. 
Labour Department—Statement of Intent 
10. 
CAROL BEAUMONT (Labour) 
 to the  
Minister of Labour 
: Does she agree with the statement in the Department of Labour’s current statement of intent: “New Zealand’s continued wealth will depend on the skills of its workers and how firms and industry support New Zealanders to work to their best potential. This is one of the biggest long-term challenges facing New Zealand’s labour market and economy”? 
Hon KATE WILKINSON (Minister of Labour) 
: 
 Yes. 
Carol Beaumont 
: In the light of that answer has the skills forum launched by the Prime Minister in October of last year held its second meeting yet at which it was supposed to set a work programme; if not is the skills forum likely to meet and set a work programme by the first anniversary of its launch? 
Hon KATE WILKINSON 
: The member may be surprised to hear that it is not always necessary to have regular meetings and lots of strategies. This Government is about action. The skills forum meets as and when required. In fact the Government has refocused the skills forum to deliver some very tangible improvements. 
Mr SPEAKER 
: I ask members to be a little more courteous. It was extraordinarily hard to hear the Minister’s answer. 
Carol Beaumont 
: What message is the Minister sending about the importance of skills when papers prepared for the Cabinet strategy committee discussion about establishing the skills forum noted “an understanding that the Government will not be proposing a significant new work programme or allocating new money to initiatives”? 
Hon KATE WILKINSON 
: I think the message we are sending is very clear especially when one notes that education and skills are one of the Government’s six main policy drivers under our economic growth agenda. 
Carol Beaumont 
: Does the Minister agree that increasing the skills of our workforce is an essential element of improving productivity and closing the wage gap with Australia; if so why is there no skills forum to speak of no new money for workforce skills and training initiatives and no comprehensive Government programme for skills development and workforce training? 
Hon KATE WILKINSON 
: The skills forum as I said before meets as and when required. If the member had read my letter dated 12 August 2010 she would know that a significant amount of work has been and continues to be undertaken across the Government to address issues about the supply of and demand for skills including implementation of the tertiary education strategy; implementation of a targeted review of qualifications; implementation of Youth Guarantee scheme trade academies and new trade academies; implementation of the Youth Opportunities package including Job Ops and Community Max; launch of the Skills Highway website which I note since July has had over 3600 hits; establishment of the Employer Champions Forum— 
Mr SPEAKER 
: Order! 
Hon KATE WILKINSON 
: —etc. 
Carol Beaumont 
: I seek leave to table a letter from Minister Wilkinson to Minister Joyce in which she says: “I aim to hold five further Skills Forum meetings this year which are currently being diaried. The first of these is likely to be scheduled— 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Carol Beaumont 
: I seek leave to table the page from a briefing to Minister Wilkinson that notes: “Cabinet strategy”— 
Mr SPEAKER 
: Is this apart from the briefing to the incoming Minister? 
Carol Beaumont 
: No it is a Cabinet strategy committee discussion. It is a page from a briefing to Minister Wilkinson that notes that the Cabinet strategy committee discussed on 19 October “how much to use the new Skills Forum with Ministers concerned not to raise expectations amongst social partners” and “An understanding”— 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Carol Beaumont 
: I seek leave to table the draft key points and actions from the 17 December 2009 skills forum meeting among which is the suggestion that the forum “should include as an aim higher wages higher skills and a productive economy”. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Alcohol Abuse Reduction—Alcohol Advertising 
11. 
SUE KEDGLEY (Green) 
 to the  
Minister of Justice 
: Is he confident he can reduce alcohol-related harm and youth binge drinking if the liquor and hospitality industries continue to spend $73 million a year promoting alcohol? 
Hon PETER DUNNE (Minister of Revenue) 
 on behalf of the  
Minister of Justice 
: Yes. 
Sue Kedgley 
: Has he seen research that 90 percent of 5 to 17-year-olds in New Zealand see at least one television alcohol advertisement every week and that this exposure predisposes them to drinking well before they are 18 and are not his reforms doomed to fail because they do nothing to reduce the saturation advertising of alcohol? 
Hon PETER DUNNE 
: The Minister is aware of the research the member refers to. He is also aware of international evidence that is remarkably inconclusive on the impact of liquor advertising. With regard to the second part of the member’s question I point out that the Government has adopted stage one of the Law Commission’s recommendations by extending the existing offence of promotion of excessive consumption to off-licences and by making it an offence to promote alcohol in a way that will have a special appeal to those under the purchase age. 
Sue Kedgley 
: Can he confirm that alcohol sponsorship of sports clubs rock concerts and other events helps to embed alcohol brands and products into the everyday lives of young New Zealanders; if so why is his Government doing absolutely nothing to reduce alcohol sponsorship? 
Hon PETER DUNNE 
: No I cannot confirm that. It is a matter for those who undertake such sponsorship to indicate what their motives are. I have indicated in my primary and supplementary answers the steps the Government is taking in response to the Law Commission’s report on the sale of liquor which we believe will have a positive impact. 
Sue Kedgley 
: I seek leave to table two documents. The first is “Creating Intoxigenic Environments: Marketing Alcohol to Young People in Aotearoa New Zealand” published in the journal 
 Social Science and Medicine 
 which documents the exposure of young New Zealanders to liquor advertising. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection? 
Document by leave laid on the Table of the House. 
Sue Kedgley 
: The second document is the “Regulation of Alcohol Marketing: A Global View” published in the  
Journal of Public Health Policy 
 which shows that alcohol advertising predisposes young people to drink. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Sue Kedgley 
: I further seek leave to table a CD that contains a series of recent television advertisements for liquor. 
Mr SPEAKER 
: I do not think we are going to table CDs. 
Metiria Turei 
: I raise a point of order Mr Speaker. I am curious at the ruling that you would not allow MPs to— 
Mr SPEAKER 
: The member may be curious but I have ruled. 
Metiria Turei 
: I raise a point of order Mr Speaker. It is the right of MPs to raise questions with you and to bring— 
Mr SPEAKER 
: It is not the right of members to dispute the ruling of the Speaker. The member will resume her seat. 
Hon David Parker 
: I raise a point of order Mr Speaker. Is it your ruling that it is not permissible to table CDs in this House? 
Mr SPEAKER 
: I will not table CDs like that—no indeed not. 
Hon David Parker 
: Oh! 
Mr SPEAKER 
: I have ruled on that. The member may not like it but that is fine. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. I am just seeking clarification of your rulings. When you say “CDs like that” what is the nature of the CD that makes it not table-able? 
Mr SPEAKER 
: The Standing Orders provide for the tabling of documents not for the tabling of CDs. If members want CDs tabled they will need to change the Standing Orders. 
Hon David Parker 
: Point of order— 
Mr SPEAKER 
: I am struggling to understand the point of order. I say to the Hon David Parker that I have extended the courtesy of listening to his points of order earlier today. I will listen but I want the point of order to be very clear. 
Hon David Parker 
: I raise a point of order Mr Speaker. I ask you to consider carefully whether a document has to be a piece of paper in order to be tabled because that is not my understanding of the Standing Orders. 
Mr SPEAKER 
: It is the way I have interpreted it and that is the way it will be. 
Metiria Turei 
: I raise a point of order Mr Speaker. I would like you to take into consideration your comment to David Parker and that you gave him the courtesy of listening to his points of order but that in my view you have not given me that same courtesy. I would like you to give that serious consideration thank you. 
Mr SPEAKER 
: The reason why I have not is that the member was directly questioning my ruling and that is not acceptable. 
Alcohol Excise—Industry Input 
12. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
 to the  
Minister of Justice 
: What role did the alcohol industry play in ruling out an increase in excise duty bearing in mind the Ministry of Justice analysis notes “a rule of thumb is that a 10 percent price rise results in an approximately 5 percent decrease in consumption”? 
Hon PETER DUNNE (Minister of Revenue) 
 on behalf of the  
Minister of Justice 
: None. 
Rahui Katene 
: Does the Minister agree with this morning’s  
Dominion Post  
that “The Government as it did when deciding not to reduce the drink-drive level has opted for the immediately popular course rather than what is best for a country with too many binge-drinkers.”; if not how will the serious harm caused by binge drinking be addressed? 
Hon PETER DUNNE 
: No I do not agree with the  
Dominion Post 
. I note that the Government has adopted 126 of 153 recommendations from the Law Commission. It is making changes to the laws regarding bar hours off-licence trading liquor advertising and the minimum purchase age. I think those changes would constitute a pretty comprehensive response to the situation. 
Rahui Katene 
: Does the Minister stand by his comment that “the pendulum has swung too far towards relaxation of alcohol laws.”; if so how can the Government justify the continued liquor exemptions for canteens run by the police the Fire Service and the Defence Force permanent charter clubs and Cosmopolitan and Working Men’s Clubs? 
Hon PETER DUNNE 
: I cannot comment on the Minister’s reported comment although I personally would agree with it. With regard to the second part of the member’s question the focus of the Government’s response to the Law Commission’s report has been to deal with those areas that are deemed to be of prime concern in terms of the binge drinking habits of young New Zealanders. The circumstances that she mentioned simply do not relate to those situations. 
Hon Lianne Dalziel 
: Does he agree that a minimum price regime would directly target cheap alcohol which is preferred by heavy and young drinkers without having a big effect on moderate drinkers; if so why did he not include that in the package yesterday; if not why did he say so in the Cabinet paper? 
Hon PETER DUNNE 
: The Government has responded to what is seen as one of the prime areas of alcohol use by young binge-drinkers the ready-to-drink or RTD mixtures with changes to the maximum alcohol content and to the number of standard drinks in a container. We see that as being an appropriate response to the circumstances that the member has outlined. 
Hon Lianne Dalziel 
: I raise a point of order Mr Speaker. The question specifically referred to targeting cheap alcohol which is preferred by heavy and young drinkers. The Minister turned to a completely different subject. My question was on price which was related to the primary question; his answer had nothing to do with price at all. 
Mr SPEAKER 
: I will hear the Hon Peter Dunne. 
Hon PETER DUNNE 
: The point I was alluding to in the answer was that ready-to-drinks are a common drink used by young people. By changing the alcohol content and restricting the size one will have an impact on price which was the point the member was raising in her question. 
Mr SPEAKER 
: I confess that I did not pick up the exact intent of the member’s question. Because the member was serious about her question I will invite her to repeat it so that we can all hear it very carefully. 
Hon Lianne Dalziel 
: Does he agree that a minimum price regime would directly target cheap alcohol which is preferred by heavy and young drinkers without having a big effect on moderate drinkers; if so why did he not include that in the package he announced; if not why does he say so in the Cabinet paper? 
Hon PETER DUNNE 
: No. With regard to the second part of the question a number of international studies are around at the moment—and I refer the member to what is going on in Scotland at this stage—where the jury is still out on the impact of those measures. 
Question No. 11 to Minister 
METIRIA TUREI (Co-Leader—Green) 
: 
 I raise a point of order Mr Speaker. I would like to refer you to  
Hansard 
 Volume 660 at page 8723 where Mr Phil Goff sought the leave of the House to table a DVD in which the Prime Minister was discussing GST. That leave was put to the House there was no objection and the document—the DVD—was tabled under your ruling. 
Mr SPEAKER 
: I am trying to say to the honourable member that the House is getting back into the habit of wasting time on tabling documents. I am trying to get some control over that and I do not want to see the House tabling DVDs CDs or whatever. The Standing Order provides for documents to be tabled for the information of members. If members want to widen that to table other things such as CDs or DVDs they will need in my view to change the Standing Order. That is the way I am interpreting it. If in fact I have today deviated from what I have done in the past I apologise to the House but I believe that I am acting with good intent. 
Metiria Turei 
: Point of order— 
Mr SPEAKER 
: I am happy to talk to the member about it privately but I do not want to take the time of the House on something so trivial. Let me say why. The Standing Orders provide for the tabling of documents on the rare occasion where members of this House would benefit from information being made available to them by the tabling of documents. A practice has developed over the years where members make a political statement in asking a question and when the Minister makes a political statement in return the member seeks leave to table a document to prove that his or her political statement was correct. That is not how question time should be conducted and I am not going to support that kind of approach to question time. I will check for the honourable member exactly when that ruling was made but I do not want to go back to the previous practice. Members will recollect that there have been times when members have sought to table all sorts of things in this House. I have managed to constrain tabling to documents that are not readily available to members. I do not want to see it expanded again with attempts to table DVDs CDs and that kind of thing. 
Hon David Cunliffe 
: Point of order— 
Mr SPEAKER 
: I do not intend to take the matter further. I will hear very briefly from the Hon David Cunliffe and then Metiria Turei and that will be the end of it. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I raise a point of order Mr Speaker. In support of your previous ruling it might assist the progress of the House if in giving further consideration to this matter you consider whether the content of the medium—whether it is a DVD a document or a piece of paper—might advise and inform your ruling. In particular you might consider whether the particular content might not be available to members in any other form—for example a recording or a television clip that might not normally be available to the House. Your consideration might conclude that that would be in keeping with certain legislation that deems that the technology-neutral approach should hold in such matters. 
METIRIA TUREI (Co-Leader—Green) 
: 
 Mr Speaker given that you already have once this year allowed for leave to be sought to table a DVD I would ask that until the issue is considered by you perhaps in discussion you continue to act on your precedent and allow the seeking of leave to table the CD I have given that it has information that it is of use to the House import to members and relevant to the question concerned. If your ruling or the Standing Orders are to be changed we would then do that later but there should be equal treatment by you of all MPs and their right to seek leave to table documents in this House. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I do not want to prolong things at all but I think the Hon David Cunliffe made a good point: it does go to the question of content. The DVD that has been quoted today as having been allowed to be laid on the Table of the House by the Hon Phil Goff clearly involved the engagement of a politician and therefore was of moment to the House. This CD is a collection of television ads and if people want to see them they should turn on the button of their TV. 
Mr SPEAKER 
: I do not intend to take any further time on this matter today. I have ruled on the matter and that is the end of it. I am happy to give consideration to my ruling today but I do make it clear that a document is a piece of paper. If anyone wants to check the dictionary definition of “document” he or she is welcome to do so. What is more if there is information on a video clip it is easy to get a transcript of what is said on it. I do not want to see this House wasting more time on members’ tabling all and sundry. The House wastes quite enough time on the political point-scoring of tabling documents. That is not what this House is about. This House in question time is about asking good questions. 
Accident Compensation—Rehabilitation Rates 
5. 
MICHAEL WOODHOUSE (National) 
 to the  
Minister for ACC 
: What initiatives has the Accident Compensation Corporation undertaken to improve rehabilitation rates and what reports has he received on the success of these programmes? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 Over the last 18 months the corporation has been working very hard to improve rehabilitation rates with more effective triaging of claims; specialist case management such as the Recover Independence Service; and the National Serious Injury Service. New services have also been developed to improve rehabilitation outcomes such as Stay at Work and Better at Work and the comprehensive vocational rehabilitation service. Those changes have delivered a dramatic turn-round in rehabilitation rates across all of the accounts of the Accident Compensation Corporation (ACC) which consistently show improvements at the 3-month 6-month 9-month and 12-month rehabilitation reporting times. 
Michael Woodhouse 
: How do those rehabilitation rates compare with the record of the last 6 years? 
Hon Dr NICK SMITH 
: When I look at the 6-month rehabilitation rate it shows a decline from 86 percent in 2004 to 85 percent in 2005 84 percent in 2006 83 percent in 2007 and 82 percent in 2008. Over the last 18 months we have been able to undo at least 4 years of that trend with a 3 percent improvement in those rehabilitation rates. I point out to the House that a 1 percent change in the rehabilitation rate changes the liabilities by $500 million. That is one of the reasons we have seen such a dramatic turn-round in accident compensation finances. 
Michael Woodhouse 
: How confident is the Minister that ongoing improvements in rehabilitation rates can be achieved? 
Hon Dr NICK SMITH 
: I am confident because the board the management and the staff of ACC throughout New Zealand recognise how important rehabilitation is to both claimants and levy payers. All members of this House should welcome the improved rehabilitation which enables people to get back to work and get their lives back to normal after an accident and that is why I think everyone in this House should congratulate ACC on the significant improvements. 
Questions to Members 
Sale of Liquor (Objections to Applications) Amendment Bill—Report-back Date 
1. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
 to the  
Chairperson of the Social Services Committee 
: When will the Sale of Liquor (Objections to Applications) Amendment Bill be reported back to the House? 
KATRINA SHANKS (Chairperson of the Social Services Committee): 
 The committee’s report on the bill was presented this morning. 
Hon George Hawkins 
: Why did it take over 2 years for the committee to reach a decision? 
Mr SPEAKER 
: That is not a matter for the chair. The decisions of the committee are not the responsibility of the chair. 
Sale of Liquor (Objections to Applications) Amendment Bill—Submissions 
2. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
 to the  
Chairperson of the Social Services Committee 
: How many submissions did the committee hear on the Sale of Liquor (Objections to Applications) Amendment Bill? 
KATRINA SHANKS (Chairperson of the Social Services Committee) 
: 
 Technically the bill is no longer before the select committee but I can inform the House that 10 submissions were heard. 
Hon George Hawkins 
: How many oral submissions were not heard by the select committee and what was the reason for that? 
Mr SPEAKER 
: I am not sure that asking how many oral submissions were not heard can be a logical question. If they were not heard orally they were not oral submissions. The second part of the question is out of order because the reason that the submissions were not heard is not the chair’s responsibility; it is a matter for the committee. I therefore have to rule the question out of order. 
Land Transport (Driver Licensing) Amendment Bill—Submissions 
3. 
Hon DARREN HUGHES (Labour) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: When will the committee hear submissions on the Land Transport (Driver Licensing) Amendment Bill? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee) 
: 
 The committee has not called for submissions on that bill yet so it is not possible to say when submissions may be heard. 
Hon Darren Hughes 
: On what date during the term of the previous Government was this bill to lift the driving age referred to the Transport and Industrial Relations Committee for consideration? 
DAVID BENNETT 
: I would have to refer back to the minutes to see the actual date but the report-back date of the bill is 24 December. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The chairperson did a very good job of repeating my question back to me telling me what I had asked him. I was still aware of that because it had been just a momentary second since I had asked him. I asked him the date on which the bill was referred to the committee. 
Mr SPEAKER 
: I appreciate that the member asked a fair question but the chair of the committee does not have that particular information with him. It is not unreasonable that he does not answer. 
DAVID BENNETT 
: We do have date just reflecting on it. It was 18 October 2007. 
Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill 
In Committee 
Debate resumed. 
Part 1 to 5 schedules 1 and 2 and clauses 1 and 2 ( 
continued 
)  
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 What an opportunity this Government has with the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill which is before the Committee. It has the opportunity to show New Zealanders who are struggling at this time that it cares about them and that it can do something to alleviate the stress and strain that is on the family budget at this time. But I do not believe that the Government is listening to the public of New Zealand. Just one month ago in this Chamber I asked the Prime Minister about the effect that a rise in GST would have on some of the basics that our families purchase. I happened to mention Weet-Bix bread and milk. The Prime Minister said that after GST was increased his understanding is that they would become much more affordable when the tax cuts come in on 1 October. I think that shows people that this Government is out of touch with New Zealanders. It has no idea what New Zealanders are facing and it is not listening to what they are telling the Government. 
I think it is all written in this week’s  
National Business Review 
. There is a very interesting story in the  
National Business Review 
 which is headed “John Key’s ‘Captain Panic Pants’”. Well in this very interesting article which I am sure that we will go into in a lot more depth in the weeks to come this was said by an Auckland business person: “We meet John at business breakfasts and other events and he always seems to say what we want to hear—he understands the issue—and he promises to follow-up with his ministers. But there are no staff there taking notes and no evidence that anything ever does get followed up”. I think that summed up the fact that this Government is not prepared to listen to New Zealanders. 
I would like to share with this Committee a letter that the Leader of the Opposition received today which sets out why this Government is not taking account of the charges it is imposing on New Zealanders—GST is just one of them. This letter came from an Auckland businessman who is the owner of a small transport business. He said “I am a father and a husband. I have two children.” He said to Mr Key that he had voted for him and he had talked to many people and tried to persuade them to do the same. “This is because I truly believed”—believed—“that you were the best man to get New Zealand and the people in New Zealand back on track. I continued to do this until 6 weeks ago. Well up to this point you have proved me wrong.” wrote the businessman from Auckland. “You seem to be forgetting that those of us in business have survived the recession”—it is not over yet—“but we have no cash surplus left to pay your extra taxes such as ACC fuel tax RUC GST etc. etc.” 
The businessman went on to say: “This road-user charge increase has effectively sent me broke. If you had left things alone I would have made it out of the other side. Because you are so out of touch what you have created in my business is two more people out of work two families with not enough income and all this before you put up GST causing food prices to go up and just after you made rents go up and your tax shuffle on rental properties.” He went on to say he had to lay off an employee a person who had a family to feed. He said: “I have spoken to many people over the last 6 weeks. You and your party have made everybody’s life harder. It’s almost impossible to pay the bills.” I ask whether we could have had it put any clearer than that businessman has regarding what this Government is doing to thousands of struggling New Zealanders who are trying to bring up a family and pay the bills. 
There is one small thing that this Government could have done in this bill today. It could have given an exemption to the GST increase on rates over the next 9 months. It would have been only a small relief but it would have shown that this Government did listen to people and did care about the plight that they are in at this moment. We hear from the Government that there has been a tough recession and that it understands what people are going through. Well if it understands that then I ask why it will not accept this amendment to the bill. It is a sensible amendment and it would not cost a fortune for it to be implemented but it would have shown in a very small way that this Government does care about people out there. 
You see if members opposite were listening to what is happening and if they went and visited some of their citizens advice bureaus—in fact I understand that in Wellington today none of those members turned up to listen at the citizens advice bureau meeting; it took Labour members to go and listen to what was being said—they would know that people are feeling the pinch. Those members do not want to hear what the citizens advice bureaus are saying because they know that on the ground people are really feeling the pinch. But if they were to go out and listen to budget advisers at the citizens advice bureaus they would be told that thousands and thousands of New Zealanders are struggling to make ends meet and that they are desperately worried about the increase in GST in 36 days’ time. They are desperately worried about what that will do to their ability to pay for their kids’ uniforms their children’s shoes and their grocery bill. 
But that does not seem to worry the Government at all. It does not believe that the GST increase will be a major problem. In fact Bill English constantly tells us that people will be better off. Well I have to tell Mr English that that is not how New Zealanders feel. They do not feel better off now and they will not feel better off on 1 October because they are realistic about what is happening to them. People have faced rent increases already and that is before GST goes up and goes on to rates which will be passed on to rents. They have seen their mortgages go up. They have seen prices go up even before the GST increase has been put on. So people are feeling the pinch. 
I ask the Minister in the chair the Minister of Revenue who is a Minister who knows a bit about taxation why the Government will not accept the amendment from the Labour Opposition which would give people some relief in terms of their rates. It is OK in this bill to give relief to others whom many would consider to be big business interests in the community—those who have finance leases are able to have a transitional period—but not the people who will have to pay the extra 20 percent that will go on with the increase in GST on their rates. Those people will get a rates demand that comes now and they will have to pay the increase right through to July next year even though GST does not start until 1 October. It is only a small matter I say to the Minister but does the Government not think that it might give a good indication to New Zealanders that this Government listens cares and is prepared to entertain other ideas? No it does not do those things. 
Increasingly we are hearing not just from commentators but also from some of what I would call the more conservative newspapers around New Zealand which are desperately worried about what is happening to their citizens. We can look at the  
Taranaki Daily News  
from last week. We would not say that it is a very liberal newspaper—probably the locals think that it is pretty good but it is conservative—yet this is what it said. It stated: “… it would be … terrible if the Government used the findings” of the Working Party on Welfare to dump on the many at-risk members of our society who have lost a job through no fault of their own and are paying the price for the greed of others.” I do not think that we could have said that better. Those people are paying the price for the greed of others. They have lost their jobs. They have lost their opportunities. They can see no plan from the Government in this legislation or in anything else that we have seen put before this House that will see a single job created for them. They can see nothing that will give them a leg up rather than the kick in the backside that is all that the Minister for Social Development and Employment has promised them. 
We know that a newspaper as conservative as the  
Taranaki Daily News  
recognises that this Government is being punitive towards hard-working Kiwis who have lost their jobs and we know that businesses have closed—like that of the businessman who owns his own transport business and who has had to lay people off because of the charges imposed by this Government. National railed against road-user charges when it was in Opposition. Do members remember the protests on road-user charges under Labour? Oh yes that was a terrible thing then even though there had not been an increase in road-user charges since the 1980s. But this time when this Government has put one on it is OK and people were told not to worry about it even though it is driving a company out of business. 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Now we know what Labour’s policy is: cancel tax cuts and give an exemption for GST on rates. That is the policy. Well I invite Mrs King and Mr Goff to go out to Mana in the by-election and campaign on that—cancel the tax cuts but provide an exemption for GST on rates. Let us see how popular that is. 
Hon Darren Hughes 
: Calm down man—calm down “Mr Angry”. 
Hon BILL ENGLISH 
: Well I think that the former member for Otaki who has lost that seat twice would know what the people in that part of New Zealand will say to that policy. 
Hon Member 
: He’s on a hat trick. 
Hon BILL ENGLISH 
: He is on a hat trick. That is why when we are talking about issues to do with KiwiSaver GST and tax Labour has no credibility. Well it is just politically stupid. It is just a stupid policy. There is nothing to be said for it. 
Where is the wisdom in that policy? From an economic point of view it is nuts to cancel the tax cuts and provide exemptions for one little part of people’s expenditure. It would make almost everyone in New Zealand worse off and that is where Labour’s thinking is up to. It would make almost everyone in New Zealand worse off as they go into Christmas. It would be telling them: “Sorry we’ve cancelled your tax cuts but you’ve got a GST exemption on rates.” The Labour backbenchers must shudder when they see so-called experienced people like Mrs King and “Dazza” coming up with dazzling policies like that. It makes no sense for the economy and absolutely no sense for the people of the Mana electorate. Let us make the by-election in Mana if there is one a referendum on that policy. That is how confident we are that when New Zealanders see the increase in GST alongside their tax cuts they will see that this is the right direction for the economy and is beneficial for their households. 
When Labour members are getting around and talking about GST they need to look at themselves in the mirror. When Labour members read the letter from the man in Auckland they should look at themselves in the mirror. The previous speaker mentioned accident compensation charges and a former Minister for ACC Ruth Dyson is sitting here. The previous Government cost the Accident Compensation Corporation billions of dollars. Rehabilitation rates went backwards entitlements exploded and levies were held too low. We have had to clean up that mess and what a mess it was. When anyone says anything to me about increases in accident compensation levies I just tell them what a good job we have done of turning them round. If they have a complaint they should send it to the Labour Party because the previous Labour Government wrecked accident compensation with politics and incompetence. One of the effects is that accident compensation levies have gone up for some businesses. Labour has been against every measure we have taken to contain accident compensation rises; Labour has opposed them. Labour is in favour of higher accident compensation levies because it wants to expand entitlements further and for us to continue to run the scheme as an incompetent monopoly as Labour did. Labour is in favour of higher accident compensation levies as well as getting rid of the income tax cuts. 
I have a question: can the next speaker get up and tell us whether Labour supports the tax cuts on 1 October? That is what we want to know. We want to know what Labour thinks about this bill and we want to know what it thinks about the tax cuts on 1 October. The way Labour is campaigning on GST it gives us the sense that there are no tax cuts. Whenever Labour members talk about the impact on households they talk only about GST. 
Hon DAVID PARKER (Labour) 
: 
 The Labour Party most certainly does not support 35 percent of the income tax cuts going to the top 5 percent of New Zealand’s income earners. We are clear about that on the record. I ask how Mr English can think it is a good idea when he is running a deficit to give income tax cuts of which 35 percent goes to the top 5 percent of income earners. It is poor economics. It will give us a greater deficit as a consequence and a more unequal society which is also bad. 
In respect of the misrepresentation by Mr English of the Hon Annette King’s comments the record has to be set straight. Never has Annette King suggested that GST should come off all rates. All Mrs King raised was the very good idea that if we are to give some relief to the increase in GST that is coming on 1 October for people who have 5-year financial leases why do we not give some interim relief during the first year for rates? People who can afford to pay those rates for the full year before 1 October—that is wealthy people—will get that relief. They will not pay the increase in GST on this year’s rates but people who cannot afford to pay all of their rates for the full year before 1 October will not get that relief. They will pay the increased rate of GST on the balance of their rates. 
The Labour Party amendment is on the floor of the House and National members could vote for it if they had the gumption to see that this detail would give that same relief from the increase in GST for this year. It does not apply to all GST; it applies just to the increase in GST on rates for the balance of the year. That is what the amendment from the Labour Party says. It does not suggest as Mr English tried to tell the Committee in misrepresenting the amendment that all GST should be relieved from rates. Once again it shows how desperate the National Government is to misrepresent Labour Party policy. 
It is interesting that Mr English is the same man who says that National inherited a bad state of affairs from the previous Government when in fact National inherited some of the lowest rates of net Government debt in the world—it had gone down to zero—and gross Government debt had come down from 35 percent of GDP to 17 percent of GDP under the previous Government. National did not inherit a bad fiscal position; it inherited a good one. The position would have been far worse had Mr English been in charge of the Treasury benches during that period of Government because he opposed every Budget surplus that we ran. We used those surpluses to reduce Government debt and to start the savings into the Cullen fund. Instead Mr English said that there should have been unaffordable tax cuts. If New Zealand had done that we would have been closer to the position of Portugal the United Kingdom and Spain all of which have high Government debt and therefore problems that this country does not face. 
This bill is a lost opportunity in respect of big things like savings. The Government through this bill could have reinstated KiwiSaver and proper savings towards the Cullen fund. This bill does not do that. The Government has set up a Savings Working Group because at long last it has acknowledged that one of the problems in New Zealand is our savings level. That is one of the big differences between New Zealand compared with Australia. We in Labour have been saying that for years. It is why we started Government savings through the Cullen fund and the surpluses we ran. It is why we started incentivising private savings via KiwiSaver. They are both measures that the National Government has undermined just as it undermined the Kirk savings scheme and Mr Peters’ efforts in the late 1990s to introduce compulsory savings. The Government has no coherent plan to bridge the wage gap with Australia. This bill does nothing substantial to bridge that wage gap. It continues to grow ever wider despite the protestations by National to the contrary. 
Once again I reinforce the point that Annette King made. There is one small thing that can be done for Kiwis who at present are pushed on their cost of living in respect of the extra GST—not all GST—that is coming on their rates for the balance of this year. Let us give those people who cannot afford to pay all of their rates for this year by 1 October the same relief from the increase in GST that is given to those people who have already paid their rates. 
The question was put that the amendments set out on Supplementary Order Papers 156 and 157 in the name of the Hon Peter Dunne be agreed to. 
Amendments agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: The amendment in the name of David Garrett has been withdrawn. The amendment in the name of Stuart Nash which seeks to insert a new clause 81B is out of order because it does not meet the 24-hour rule under Standing Order 320(1). 
Parts 1 to 5 schedules 1 and 2 and clauses 1 and 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill be now read a third time 
. We have heard a lot over the last few hours about the contents of the bill as introduced and reported back from the Finance and Expenditure Committee; and one or two other things besides. The main feature of the bill is that it allows New Zealanders who return home permanently from Australia to bring with them the compulsory superannuation contributions they have made while working in Australia. This will include New Zealanders who have already returned from working in Australia and who will be able to retrieve their compulsory contributions and continue to save for their retirement through KiwiSaver. In the same way the reciprocal arrangement that the bill introduces or gives support to will allow KiwiSaver members who move to Australia to transfer all their savings in that scheme to an Australian-complying superannuation scheme including contributions from the Crown and any member tax credits. 
These are very positive developments for all concerned. For New Zealanders who live in Australia it can make the decision to return home easier knowing that they can bring their compulsory superannuation contributions with them and continue to build up their retirement savings. From the Government’s point of view it recognises the benefits that a skilled mobile labour force can bring to both countries. Once these measures pass through our own legislative process we look forward to Australia passing its legislation although the timing of that may have become a little bit more ambiguous given the turn of recent events in that country. Perhaps we should say we look forward to Australia having a Government first and then being able to introduce and pass the relevant legislation. 
The remainder of the bill as reported back to the House sets the annual tax rates for 2010-11 and takes into account the significant reduction to personal income tax rates that come into effect on 1 October this year. It also introduces a number of technical and remedial measures to improve the way the tax rules work and to reduce compliance costs for taxpayers. For example the KiwiSaver enrolment rules for those under 18 years of age are being clarified to give young people and guardians greater certainty about their obligations under the scheme. Similarly the rules around gifting amenities and artwork to local or central government now make it clear that these items are exempt from gift duty. Later this year the Government will be looking towards repealing gift duty altogether if concerns about creditor protection and social assistance targeting can be addressed. But in the meantime the provisions in this bill will give greater certainty to people who wish to gift items for public benefit. 
The bill now incorporates two recently tabled Supplementary Order Papers 156 and 157 which cover the GST transitional issues for 1 October 2010 and a number of other technical changes. The GST transitional measures focus on contracts that span 1 October. Certain successive supplies such as insurance finance leases and lay-by contracts that span the 1 October date are now able to continue at the 12.5 percent GST rate to reduce compliance costs. There is also a range of measures to better align the GST time-of-supply rules with business practices. A further provision extends the remission of late-payment penalties and the associated interest for GST returns to cover the period immediately before 1 October. 
Other measures in those Supplementary Order Papers include measures to assist bank liquidity to remove overreach from what are colloquially known as the “imputation credit shopping rules” and changes to the tax treatment of certain optional convertible notes to ensure they are not inappropriately taxed by a change in the tax rules. A number of arrangements involving these notes are subject to a dispute between the taxpayer and the Inland Revenue Department and as a result we have been very careful with this amending legislation so as not to prejudice these particular disputes as they go through due process. The remaining matters in the Supplementary Order Papers are more detailed and generally remedial in nature. Although I concede that the use of Supplementary Order Papers in this fashion is not ideal all of the items in these particular Supplementary Order Papers are time-sensitive and are either taxpayer friendly or remedial in nature. 
Finally in bringing the bill to its third reading may I place on record my thanks to the organisations and the individuals who have made submissions on the bill; to the officials who have developed the policy and worked their way through it with us as it has gone through its stages since its introduction last November; to the drafters of the bill who shaped the policy into the legislation we now have before us; and to the Finance and Expenditure Committee which scrutinised the measures in the bill to achieve their purpose clearly and accurately and which as usual has done a particularly good job in that regard. With those few comments it is now my great pleasure to commend this bill to the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Labour Opposition rises to support in principle the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill and to acknowledge the need for a range of remedial measures and changes driven by the rush to implement the increase to GST. Before going through the substantive matters in the bill and summarising the discussion during the Committee stage debate may I join the Minister of Revenue in acknowledging the work of officials his staff the Finance and Expenditure Committee and its chairman and staff as well. A great deal of work has gone into this bill under a very compressed time frame. I should say perhaps that it has not been the easiest of processes. The Minister has acknowledged that it has not been ideal and I cannot blame officials for that because they like the rest of us saw the Prime Minister on television saying that he would not raise GST and no doubt they were as surprised as we were when the Government did a U-turn and decided to do that. That has left Minister Dunne hitherto known as the “Minister for Remedial Measures” to bring to the House 28 pages of Supplementary Order Papers that have not had the benefit of a select committee process let alone the benefit of the normal generic tax policy process. It would be my prediction and that of the Labour Opposition that we will be “remediate-ing” the remedials before the 3-year triennium is out. 
The debate at the Committee stage was disappointing from the point of view of the Labour Opposition: Government members like the chief whip Mr Tremain rather than engaging on the substance of the issues seemed determined to use it as an opportunity to spread misinformation about Labour’s record. For example he alleged in debate that the previous Government had not reduced Government debt as a percentage of GDP and I ask him which Government he was referring to because the outgoing Labour Government reduced gross debt as a percent of GDP from 35 percent to 17 percent. We cut it in half and reduced net debt including the assets of the New Zealand Superannuation Fund to zero making New Zealand a net-creditor nation for the first time in over a century. That was quite an achievement I would have thought. At the same time in particular we achieved the world’s lowest unemployment and the longest post-war economic expansion. Ask any New Zealander who is waiting for the so-called aggressive recovery. My goodness how good do those golden days seem now! Then of course we have had to endure the misrepresentations from the Minister of Finance who talked about a so-called 8.7 percent real increase in post-tax income under this Government in which he conveniently included the benefit of tax cuts brought down by the previous Labour Government in its 2008 Budget which he voted against. So when is a policy not a policy? It is when one votes against the other team’s policy and then includes it in one’s own total. Further in his speech at the end of the Committee stage Mr English misrepresented the Labour amendment which of course does not remove all GST from rates and was never intended to do that. It is a small token of recognition that people who are paying GST on rates should not retrospectively face a higher rates bill during the year of transition and thereby this amendment defers the increase for this year as is appropriate. 
It is inevitable and proper that in the debate on a bill that seeks to impose a higher goods and services tax on all New Zealanders the debate should turn to the substance of why that is happening. The stark contrast between this Government and the Opposition has been borne out. The Government is ignoring the real world costs for real Kiwis. It is ignoring the needs of real households that simply cannot afford another $20 $30 or $40 a week because they cannot pay the bills. They cannot pay their power bills in the winter. They cannot pay their rents. They are sharing houses. They are living in garages. Those people do not need a lecture about saving more spending less or being imprudent because they are doing the very best they can just to survive. If there was ever a statement that showed that the Government was out of touch it was from our colleague Mr Gilmore who said that $20 did not matter. Well it matters to too many of our constituents not to mention the real businesses—the ones that are facing the risk the cost and the hassle of having to change all their prices and are bearing the risk of the GST flow-through in the middle of the year. They have been crying out nay pleading for these 28 pages of Supplementary Order Papers that protect a few of them from unintended consequences. But if it is good enough for the Government to bring in remedial Supplementary Order Papers that protect financiers from the cost of finance leases I ask why it was not good enough to protect ratepayers from retrospective increases in rates. I ask why it took the Labour Opposition to protect those Kiwi householders. I commend my colleague Stuart Nash for his far-sighted amendment which is but a small token of the fact that Labour is in touch with heartland New Zealand and it has taken only 2 years for the National Government to get out of touch. 
The same arrogance was shown in the savings component of this bill. The Government is supporting an ACT Supplementary Order Paper—and so are we; it is OK as far as it goes—that introduces more choice in KiwiSaver by allowing individuals to contribute at a higher rate. But it is interesting that in the week that the Government has finally lurched towards setting up a committee to advise it on savings after 9 years in Opposition 2 years in Government two Budgets and not a single new idea of its own there is no mention of employer contributions. The Minister of Finance has specifically ruled out any net increase in Government contributions because it has to be “fiscally neutral”. That means I say to members and New Zealanders that Kiwis will pay for all their own savings. But I ask why they would do that if they are already stretched. The answer is because the Government intends to compel them to. The Government will not provide them with the ability to save through higher wages nor with incentives through a balanced set of contributions by employers and the Crown nor with better tools like easy save savings options; the Government will simply force them. Well the full flowering of the nanny State one might say is the granny State. When nanny State meets savings and superannuation it becomes the granny State and it is apparently here to stay. 
New Zealanders all around the country are asking why they voted for National again. They have already forgotten. They thought that National was going to give them everything they enjoyed under Labour that National would maintain social benefits that National would catch us up with Australia and that they could have everything they liked under Labour and with a nice smiley man to help them do it. His name is “Captain Panic Pants” according to the  
National Business Review 
. “Captain Panic Pants” is a man who has poll-driven his Government to a standstill. The  
National Business Review 
 is no friend in particular it might be said of Labour. We have come to accept over time the slings and arrows of outrageous fortune from that august journal. But when the  
National Business Review 
 amongst thousands of New Zealand business people says that the Government has not just lost its bottle but that it has never even found the bottle then I ask what the game plan is to get this Government out of the stagnant pool and to stop it from losing its way. I ask where the game plan is to bring real jobs real incomes and real hope to real Kiwis. Unfortunately necessary and appropriate as this bill is the game plan is clearly not in this bill. There is nothing here to sweeten savings for Kiwis. There is nothing here to bring relief for higher GST. The bottom line is that in 2011 5.9 percent inflation will eat away any gain people thought they had. This Government said that people would have 20 bucks a week in their pockets when they turned up at Countdown. Yes but they will not be able to pay for the same trolley load of groceries they will be 30 bucks short at the end because the price of everything in the trolley just like the price of rents rates power and everything else will have gone up by 2.5 percent on GST and 5.9 percent inflation and ordinary Kiwis will be worse off until at least 2014. 
CRAIG FOSS (National—Tukituki) 
: 
 We are in the third reading of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill and I acknowledge the Minister of Revenue for the work he has done to get the bill to this stage. It has been a somewhat wide-ranging debate. 
I will make a couple of points. Speakers on the other side of the House keeping talking about a 28-page Supplementary Order Paper. Well like the pamphlet that they gave out that miscalculated the GST increase Supplementary Order Paper 105 has five pages Supplementary Order Paper 156 has 15 pages and Supplementary Order Paper 157 in the name of the Minister has 13 pages. Not one of them is 28 pages long. Those Supplementary Order Papers do not even add up to 28 pages. Maybe the devil is in the detail. Once again it just proves that members on the other side do not really have a grasp on the core issue at all. 
The previous speaker the Hon David Cunliffe also spoke about National voting against a Supplementary Order Paper in the name of one of the members. If Mr Cunliffe was paying attention he would note that that Supplementary Order Paper never even came to the vote. But perhaps I am being a bit picky. 
When Mr Cunliffe started speaking he conveniently forgot as he often does about the Pre-election Economic and Fiscal Update in 2008 which sadly revealed for our economy the decade of deficits a terrible growing debt the revelations in accident compensation and the revaluation of KiwiRail. You name it it was there. He also touched on the growth in real wages under this Government of 8.7 percent. He is quite right in that some tax changes were announced in the dying days of the previous administration. As we all know and the records will show they were poll-driven and when National announced its tax plan after 9 years of waiting suddenly Dr Cullen and the previous Government found themselves able to give out income tax cuts. 
Very quickly I say that the previous speaker also talked a lot about GST. He said that there was nothing in this legislation about GST or administration and he is quite right. Very little about GST is in this legislation because this is the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. GST provisions are in another bill. There is a lot in this legislation to deal with GST because this legislation includes the new tax schedules under which we will see the income tax cuts announced by this Government in the Budget. They kick in on 1 October this year and will see about two-thirds of New Zealanders face a highest marginal income tax rate of 17.5 percent which is half of what it was 3 years ago. 
I acknowledge other speakers and assistants and I commend the Finance and Expenditure Committee members and officials for getting the bill through the Committee stage in spite of the rhetoric over the last few hours. I acknowledge that Opposition members are voting for the bill. Sure they have some reservations and some political points to make but overall good tax policy is coming through here. I thought the process was pretty good. 
I will quickly touch on something that I did not really have a chance to talk about in the in-depth select committee deliberations. I congratulate the committee the officials and the private sector advisers involved in the branch equivalent tax account debits changes. In terms of the bill that came into the House initially and was referred to the select committee the committee’s work brought a lot of fairness and clarity. Some quite substantial numbers are involved as far as obligation potential losses and/or gains for the taxpayer and some entities are concerned and we see in the commentary on the bill that we start to touch on those particular issues. I thought this was a great example of the committee’s cross-party work towards good tax policy. 
I have one final point. I know that a Green member will speak after me but in an earlier speech the co-leader of the Greens Mr Norman talked about the illegal behaviour of banks being prosecuted for tax issues etc. I do not think that the Taranaki savings bank was prosecuted by anyone. Was Southland Savings Bank? I do not think so. My point is that members should be very very careful with the generic terms they use when they are talking about matters that have been before the courts. Members need to get their facts right. I know what the member was trying to say but it would not take much more for him to say that rather than use the terms he is using which are somewhat confusing and do not show this House in a good light. Thank you. 
STUART NASH (Labour) 
: 
 I agree with Mr Foss. I think members should say what they actually mean. I say to Mr Foss that he has made a very good point and that when John Key was the Leader of the Opposition and he stood up on television and told New Zealanders that National would not raise GST he should have meant it. He said: “National will not raise GST” but it did. So I challenge Mr Foss to go and talk to Mr Key and give exactly the same advice to Mr Key—that he should say what he means. 
I rise in support of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill—it is a bit of a mouthful—in its third reading. I also support Supplementary Order Paper 157 put forward by Peter Dunne which deals with major fixes to the increased GST regime that is about to be implemented on 1 October. I also support Supplementary Order Paper 158 put forward by David Garrett—I never thought I would say that—which adds to the available rates that can be chosen by a worker with regard to KiwiSaver contributions. However I would like to make three points in my speech on this bill. The first is that Labour did not support an increase in GST. The second point is that this legislation is necessary and proper. The third point is that the implementation of the GST increase has turned into an absolute shambles. 
I want to clarify one point in this House and it comes down to my first point. Even though Mr Dunne’s large Supplementary Order Paper is about remedial action in relation to the GST increase that will take place on 1 October this year we support his Supplementary Order Paper because it is necessary in order to get this dreadful increase to a stage where it does not bring down the whole economy even if it will bring down the Government. Labour did not support the increase in GST from 12.5 percent to 15 percent. Like the majority of New Zealanders Labour has never agreed with an increase in GST and we would never vote for legislation that was so regressive and so penalised the majority of good hard-working New Zealanders that it gave a tax cut from which 33 percent went to only 5 percent of taxpayers. Labour supports robust legislation that helps New Zealanders to improve business efficiency. 
I also introduced an amendment in the Committee stage. It would have gone just a little way towards alleviating the financial stress imposed by the increase in GST. The amendment would have ensured that GST on rates was held at 12.5 percent for the remainder of the financial year. 
Mr DEPUTY SPEAKER 
: I know that the member wants to debate and mention an amendment but that amendment was ruled out of order. I refer the member to Speakers’ ruling 117/4 which states that a member cannot refer to an amendment that has been ruled out of order in the Committee stage. I know the member proposed the amendment and I am happy for him to mention it but he cannot use it as the substantive basis of his speech. I am happy that the member mentioned it but he must talk about other things: about what the Committee decided on which now forms the basis of the third reading—the bill as it will become the Act. I now invite the member to continue. 
STUART NASH 
: One thing that disappoints me about the whole process is that the one amendment that Labour put forward—the only one; we supported two more Supplementary Order Papers—was turned down. That amendment would have alleviated in just a little way some of the harm felt by taxpayers who will really find it tough when GST increases on 1 October. We did not ask for much—just one amendment. But it was voted down. The thing that really surprises me about that is that my amendment was completely in line with the principles and practices that the other amendments were operating under. 
The major item in this bill allows New Zealanders who are returning home from Australia to bring their retirement savings with them. This is a sensible arrangement. We have been told there is potentially $16.6 billion in lost contributions from New Zealanders who are working in Australia which under this scheme could come back to New Zealand. Although this bill makes it easier for superannuitants to return home and bring their savings home I would suggest that the Government’s complete lack of a plan for this country may in fact be a larger incentive to stay away. But people will have to wait only another 18 months and then we will welcome them home. There will be a plan; they will see it very soon. 
The portability arrangements will allow citizens who have retirement savings in both New Zealand and Australia to consolidate them in one account in their current country of residence. These amendments cover only the transfer of retirement savings between our KiwiSaver scheme and an Australian complying superannuation fund that is regulated by the Australian Prudential Regulation Authority. A person must permanently emigrate to Australia and supply proof of his or her emigration to the provider. To protect the value of savings transfers of savings between New Zealand and Australia will be exempt from any entry or exit taxes. 
The current inability of individuals to streamline and consolidate their personal retirement savings accounts is a real problem we understand to the trans-Tasman labour markets. The current costs undermine the effectiveness of policies aimed at improving retirement standards of living. Under the status quo individuals may transfer their KiwiSaver savings to Australia upon permanent emigration but Australian-compliant superannuation funds may not be transferred to New Zealand. So as mentioned this may well potentially unlock $16.6 billion worth of savings. But even if it is a fraction of that it will certainly be worth doing. 
My second point relates to Peter Dunne’s Supplementary Order Paper which is proof that the whole GST increase is an absolute shambles. Ernst and Young a major accountancy firm stated in a press release that “As we face the harsh reality of the 1 October GST increase to 15 percent many are realising this is not a modest increase and the issues are actually more complex that anyone first imagined.” This is a call of frustration not from the Labour Party but from a major accountancy company involved in interpreting tax legislation. The GST increase is a shambles and I wonder aloud how many more remedial matters bills and Supplementary Order Papers we will see coming before the House before this whole mess is tidied up. I am picking that there will be many. All that I can ask Mr Dunne is why this shambles was not tidied up before this bill even came to the House. If he had consulted before the GST legislation came to this House—if he had talked to the business community and asked whether businesses had any problems and if he had talked to the community—then this mess would not be in front of us now. In fact if he had consulted GST would not be going up at all. That is why I introduced my amendment asking the Minister to consider Kiwi families before the GST increase is implemented. 
The Minister of Revenue is in charge of the shambles. He also set up the Families Commission and I wonder what sorts of families he believes that the increase in GST will benefit—perhaps families earning over $150000 a year or over $1 million a year. Those families are about to get a nice little earner with this tax cut. However they are not the norm. In Napier the median wage is only $30000 a year and those people are about to get around $3 a week extra. The GST increase will ensure that the struggle gets worse for those families. Their budgets will be stretched and their feelings of disenfranchisement will be increased. 
In conclusion this bill is a mixture of the good and the necessary. The good for example is the trans-Tasman portability legislation; the necessary is what is required to tidy up the mess that is the GST increase. I have outlined why the Labour Party supports this bill and why this bill is important. Our support is in no way at all an endorsement of the increase in GST. We do not support an increase in GST. We were astonished—and quite frankly disgusted—when the Prime Minister introduced legislation to increase the GST rate after telling all New Zealanders that “National will not increase GST”. And he did. That is simply not fair. Thank you. 
Hon JOHN BOSCAWEN (Deputy Leader—ACT) 
: 
 It is a pleasure to rise and take a call in the debate on the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. I speak as deputy leader of the ACT Party. The ACT Party will be supporting this bill. 
The last comments we heard from the Labour speaker Stuart Nash were that he was astonished and disgusted that the Government increased GST. 
Stuart Nash 
: No that Mr Key said he would not and he did. 
Hon JOHN BOSCAWEN 
: He said he would not and he did? Mr Nash is astonished and disgusted that GST has increased. 
I absolutely have to laugh whenever I hear Labour members talk about electricity cost rises and people struggling. Every single member of the Labour Party knows that had Labour been re-elected at the last election we would have had Labour’s emissions trading scheme and electricity prices would have risen by 10 percent. 
Hon Member 
: Not that old theme again. 
Hon JOHN BOSCAWEN 
: What do we get from Ruth Dyson? She said: “Not that again.” I remind Ruth Dyson and every single member of the Labour Party—and I will continue to remind every single member of the Labour Party and every New Zealander—that prior to the last election Labour passed an emissions trading scheme— 
Mr DEPUTY SPEAKER 
: I mentioned in a previous intervention that in a third reading speech one can refer only to what is actually in the bill. I remind members of Speaker’s Ruling 117/4 and I will quote so it is very clear about what I said earlier: “On the third reading of a bill a member cannot discuss—(1) Any matter not included in the clauses of the bill; (2) a clause that was ruled out of order by the Speaker; (3) the merits of an amendment proposed by the member and ruled out of order in committee;”—and that was the case with Mr Nash. I bring the member back to the substance and purpose of the bill which is very clear. Material in passing can be mentioned but it cannot form the substantive part of the debate. 
Hon JOHN BOSCAWEN 
: I was not intending my call to be a long one. 
I draw members’ attention to the commentary on the bill which sets out the number of changes being made to the emissions trading scheme in this bill. My understanding is that those provisions still apply. 
The point I wanted to make is that I hear the debate from the Labour members about people struggling under rising electricity prices but no one in this House and no New Zealander should be in any doubt whatsoever that if the emissions trading scheme had not been amended rather than a 5 percent increase in electricity prices we would have had a 10 percent increase. That is a fact. The real issue is why electricity prices are rising at all. Thank you. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 I am taking just a short call to advise that the Maori Party will be supporting this bill. Kia ora tatou. 
DAVID BENNETT (National—Hamilton East) 
: 
 I will take just a short call—probably a little bit longer than the Maori Party call—about the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. 
Hon Ruth Dyson 
: That’s taken longer than Hone’s speech. 
DAVID BENNETT 
: It is longer is it not? Basically this legislation opens up the way for New Zealanders returning home to bring their retirement savings with them. That portability of retirement savings between New Zealand and Australia has been a longstanding problem; we are addressing it now so that New Zealanders will find it easier to return home and will find that they can actually bring those savings with them and enjoy them in their time in New Zealand. 
The bill is part of the plan for the economic growth of New Zealand but it is also part of making it easier for New Zealanders to come home to make New Zealand their future. This bill is important for those reasons and for many others. The remedial matters provisions also deal with KiwiSaver and other areas. We look forward to the bill passing through this House and the success that it will bring as New Zealanders come home under rules that accommodate their return. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to speak in the third reading of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. One of the key elements of this bill—perhaps the major component—relates to the way the bill opens up for New Zealanders who have saved in Australia under that country’s excellent superannuation regime to be able to come back to New Zealand with their nest egg use it to bring capital back into this country and ensure they have a long and secure retirement on the basis of the Australian superannuation scheme. 
I note the way that scheme has come together to provide the capacity for New Zealanders to now come back home with a very nice golden nest egg. That relates to the fact that the Australian Government over 20 years ago decided to put in place a compulsory superannuation scheme. It is funded by a 9 percent employer contribution. Brian Gaynor in the  
New Zealand Herald  
recently commented on the benefits to Australia of that scheme. He said that over the last 10 years “Australia’s total superannuation assets have risen nearly threefold from A$484 billion to A$1257 billion”. That means that New Zealanders who are returning home and bringing their superannuation—as this trans-Tasman portability legislation provides for—will be able to return with an average of around A$56000. The average Australian has been able to generate A$56000 in savings through the scheme that their Government in its wisdom has put in place. 
The good thing about superannuation in Australia is that it has transcended party politics. The scheme was put in place by the Hawke-Keating Government was accepted by the John Howard Government and of course has endured to whichever Government will take shape in Australia over the next few days and weeks. That is a very important thing. Superannuation has to be durable. The tragedy in this country is that the Labour Government has three times worked to try to provide a platform for enduring savings and three times a National Government has knocked it around. The first time was famously with the Kirk-Rowling scheme in 1975 which was abolished by the Muldoon Government and replaced by a “pay as you go” pension scheme funded by the taxpayer. Brian Gaynor in his article in the  
New Zealand Herald  
comments that “This was the worst economic decision by any New Zealand government in the past 50 years”. That is the legacy of a National Government. That is why many New Zealanders went to Australia: because they lost their capacity to save properly in a scheme encouraged fostered and supported by a sensible Government policy arrangement. 
So now New Zealanders under this bill are able to bring their savings back securely and safely to the order of an average savings regime of $56000. But do members know what the savings regime for New Zealanders means? The average savings of New Zealanders are just 10 percent of the average savings of Australian workers. Yes there is a wage gap and we know that it is growing under this Government but none the less we have a factor of 10 in the difference between the average superannuation savings of New Zealanders and Australians or New Zealanders resident in Australia who are now under the sensible provisions of this bill able to bring back their superannuation nest egg to New Zealand to allow them to have a long and secure retirement based on that sensible savings regime. Our savings are about 10 percent of the amount of their savings. 
One of the other things about this bill is its connections to KiwiSaver. Those New Zealanders who have been resident in Australia are able to bring back their money and park it in KiwiSaver which is an excellent scheme introduced under the last Labour Government. I go back to my original comments about the need for durability—the need to not play party politics with superannuation. One of the great tragedies—and I think in future commentators like Brian Gaynor may note this—is that under this Government in the first flush of tax cuts most of the money went to the top third of income earners and that in fact the top 3 percent of earners got about a third of the money from the first round of National Government tax cuts. 
How did National fund those tax cuts? It funded them by cutting the KiwiSaver contribution from a 4 percent employer contribution back to a 2 percent employer contribution. But where are we now? In the last few days the Prime Minister has announced that we need to start looking at a compulsory savings option. So where were we less than 2 years ago? We were cutting a KiwiSaver regime that was giving a million New Zealanders the capacity to start building towards the sort of savings regime that under this bill New Zealanders can bring back to this country—those Australian-sourced nest eggs. We were en route to creating our own savings regime which would have allowed New Zealanders to build their own security in retirement but what did the National Government do? It cut that savings regime in half in a venal way simply to guarantee itself some capacity to win the last election. We know that the funding was cut and that 30 percent of it went to the top 3 percent of tax earners. It was payback time for the National Party’s wealthy mates at the cost of working New Zealanders and their efforts to secure for themselves some form of security in retirement which the KiwiSaver scheme was providing. It was cut in half in a cynical exploitative way by the National Party in Opposition when it was seeking the Treasury benches. 
Here we are less than 2 years later scrambling around trying to forge a new consensus on superannuation and savings. But even as that starts to take effect even before the task force has been formed we had the Minister of Finance say today on  
Morning Report 
: “Oh no we are not going to have any net increase in Government contribution to this new platform for security and superannuation and saving for New Zealanders. That’s off the agenda.” So we have had first cuts to KiwiSaver and second an admission that we need to start saving for ourselves so that we are not wholly dependent on New Zealanders going to Australia to lift our savings regime. Under this bill those New Zealanders are able to bring their savings back so that they can retire comfortably and securely in New Zealand. We now have a Government that is precluding some of the sensible options that at the very least need to be considered if we are to have any prospect whatsoever of an enduring superannuation and savings regime for this country. This Government stands indicted on those points. 
It was interesting to note the comments in a recent  
Trans Tasman 
 about why that has happened. Why has the Prime Minister indicated that we will now have a task force to look at compulsory superannuation? Here is what  
Trans Tasman 
 had to say: “John Key sniffs a shift in opinion since 92 percent of voters rejected compulsory superannuation at a referendum in 1997 and a growing public awareness of the implications of living longer. But his case for compulsory saving is not yet compelling enough for hard decisions. The Government will wait until it considers recommendations from a panel of experts who will examine all the issues around retirement savings.” 
Well yes  
Trans Tasman 
 is right. The Prime Minister has sniffed a change in a public opinion. It is a change in public opinion that reflects the fact that a million New Zealanders have voted with their feet for KiwiSaver. They have opted into the scheme and acknowledged the value of having a scheme that allows an employee contribution yes; an employer contribution yes; and a Government contribution yes. It is a three-legged stool that gives a superannuation scheme some prospect of endurance of stability of being able to be drawn on into the future. But why would the Minister of Finance within days of the Prime Minister indicating that he wants to see a regime on compulsory superannuation given a look over by a task force effectively undermine that and say: “Well you can have that review all right but don’t think there will be any prospect of Government contribution to superannuation and savings. Don’t even think about that.”? Why would that be? Why would he want to pull one of the three legs away from the only way in which we can build an enduring sustainable superannuation scheme that can give New Zealanders the sorts of savings in retirement that this bill provides for? This bill provides for New Zealanders who have opted to spend a portion of their working lives in Australia and who have built up nest eggs 10 times what this nation is able to generate by way of savings. We have a Government with a track record in history that dates back more than 30 years which is that it will play politics on savings. 
AARON GILMORE (National) 
: 
 One would think from listening to the rhetoric from the member Brendon Burns that the Labour Party was not supporting the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill but it is. This is a great bill in terms of putting in place some incentives for those people who have come home since the election to bring their savings that have been in Australia to New Zealand. Thousands of people have decided they want to come to New Zealand under a John Key - led Government. This bill is a little step in the right direction to help enhance that for those people and we think it is a neat thing. 
I will touch on some of the rhetoric from Labour members. They read out a press statement espousing the views of Ernst and Young. I used to work at Ernst and Young. Those views were not the views of Ernst and Young; they were the views of one partner within Ernst and Young. There is a disclaimer at the bottom that says they are not the views of Ernst and Young they are the views of Jo Doolan. I am surprised that that was not mentioned. 
This bill takes some wonderful steps in the right direction. The Minister of Revenue talked about the great provisions in relation to gift duty. People who donate artworks to local authorities can do so free of gift duty and that is a good thing. It is a good thing for wealthy people who want to donate bits of valuable artwork to local authorities because the paperwork and the taxation will be less and that is a step in the right direction. 
The other good thing we talked about was the imputation credit pooling that has been put in place in Supplementary Order Paper 157. That was a good Supplementary Order Paper it was put forward and voted on and I am very supportive of it because it helps some of the financial sector restructuring that is necessary post the recession. Those are all good steps in the right direction. 
Finally I will touch on one thing that seems to be the mantra from Opposition members in relation to KiwiSaver. The Minister of Finance talked about this earlier. KiwiSaver has not actually increased national savings. All that it has led to is a switch in the mixture of national savings. This bill has nothing to do with that. It will help our national savings to increase in terms of the volume of investment that comes from Australia into New Zealand and that has to be a good thing to help our economy grow a little bit better. Thank you. 
Hon SHANE JONES (Labour) 
: 
 Kia ora no tatou. Naturally we support the third reading of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. I would like to acknowledge the new Minister in the House Mr Boscawen. I have not had the chance to personally or professionally acknowledge his elevation. Although there is an adversarial spirit in our politics in the context of our overall parliamentary mission I wish him good luck and I look forward to many a partisan bout. Very few of us make the status of being Ministers and I acknowledge his new status. 
Paul Quinn 
: Did you make him one? 
Hon SHANE JONES 
: Rest assured I say to Mr Quinn those words will not be wasted on him. I mean no personal disrespect but as befits this House the truth must emerge. In that way I say that Mr Quinn may achieve one of three things but the dizzy height that Mr Boscawen’s current status represents and occasionally his— 
Paul Quinn 
: That assumes I want to. 
Hon SHANE JONES 
: The more the member talks the more I am reminded of  
The Muppets 
. An episode of  
The Muppets  
was based on  
The Wizard of Oz 
 and there were three characters: one was looking for his brain one was looking for his heart and the other was looking for his courage. All of those three issues are combined and embodied in one figure—that member. 
I will come back to the bill. Other members have spoken about deeper themes and they are legitimate themes. Although they may stray slightly from the provisions in this bill the themes about savings and KiwiSaver and the refinements made to that scheme are an attempt as a nation to provide an avenue and some products that New Zealand families can put their money into. It was never going to be easy. Dr Cullen in our time created the architecture for this scheme and provided different incentives and the refinements in this bill actually make the scheme work a wee bit better. But the scheme is only as good as the money trickling into it and therein lies the major deficiency in the thinking represented by the Government around this theme and this area of Government. 
Despite having a goal and the rhetoric to deepen the reservoirs of capital—we all know that one of New Zealand’s great economic challenges is the absence of adequate capital and our reliance on overseas sources of capital—it is disappointing that this bill although it scratches at the surface does not signal what we as a nation under the stewardship of this current Government short though its reign may be are doing to deal with this deep structural problem. It may be said that the Government is largely of the view that it is not really a problem provided that the costs of the State can be melted further and further down. Obviously with more and more indiscriminate cuts of the sort that we have seen and heard about the overall position of the nation is not as parlous as some of us think it is in respect of capital accumulation. But that is a very impoverished view to have about future generations of New Zealanders who have joined the many wakas leaving Aotearoa on the bright flight going to Aussie and to other places. Perversely enough this bill is an incentive for some of those people to come back along with their valuable savings. I do not know whether the return of that capital and the return of those people will reverse the fortunes of our nation but anyone who has his or her roots here is obviously welcome to come back home. 
The difficulty with the current thinking reflected by speakers on that side of the House is that they genuinely doubt whether a lot of their nervous energy political capital and intellectual capital in the form of the member sitting at the very rear of the House ought to be exhausted on that issue. But they will find moving forward into election mode that savings will be one of the very critical issues. It goes to the heart of our sense of destiny and our sense of having a claim on the future for our children and our grandchildren in our lives here in New Zealand. I ask whether we can address the issue of savings through these very modest refinements or at a deeper level through supporting the architecture that was established to attract people to make a sacrifice now so that the quality of their lives will be improved in the future and more important so that the quality of our national economic infrastructure can be upgraded. 
On our side of the House it is beyond cavil; there is no quibbling. We are firmly of the view that saving needs to be advanced significantly. We think that these refinements need to be augmented substantially. It has been said that we cannot afford the refinements. But the Prime Minister and the Deputy Prime Minister without any apparent strategy or logic are quickly getting rid of options as to how we can build on the very key vehicles referred to in this legislation—that is the vehicles that are up and running managing Kiwi funds and delivering presumably quite good outcomes on those funds. 
The area that is outstanding and that has not been referred to in any of the speeches from members on the other side of the House is how such funds are to be deployed to meet the development challenges of our own country. How are those funds to be rewarded if they are deployed in our own country to grow the infrastructure? If we want jobs if we want expanded incomes and if we want a reason to keep our graduates and our families from feeling the need to go away from New Zealand then we have to provide the fiscal succour for firms to grow and create jobs and expand their income frontiers and their horizons. That will not happen by lamely scratching around the sides. 
To date beyond this bill but still connected to it there has been a paucity or an absence of any ideas that animate people in our community or even animate us across the House. It is sad that an issue as critical as the future of savings and the availability of capital cannot receive bipartisan support. Our leader on earlier occasions has made those kinds of gestures only to see them repudiated for short-term petty political gain. That is a very sad and disappointing way to advance this agenda but such is life. We will debate those things as we get closer to the election date next year. 
GST is referred to in this legislation. Indeed other legislation that deals with GST is wending its way through the organs of the House. We support the changes here but let it never be forgotten that GST is a consumption tax. Although there are some economic reasons as to why a society may want to move to a consumption tax the difficulty with the decision that the Prime Minister and the Deputy Prime Minister have made is that the shift towards a consumption tax was essentially funded by additional borrowings that have then been rechannelled and are benefiting largely disproportionately those who already have the ability to pay. That is why towards the end of this year there will be not only a wind change—and it will not be a mild zephyr—but a sea change. People will not be able to enjoy the quality of life that they thought they were purchasing when they yielded their votes to the personalities on that side of the House. They will realise not only that they are poorer that their quality of life is diminishing and that the services they took for granted are being cut but that they will face a deep and dare I say it for a number of New Zealanders almost existential problem as they watch more members of each generation move away and leave our country. Those issues we were promised would be arrested. Those issues we were promised would be dealt to effectively and we would see a reverse. The only thing we have seen in reverse is the connection between what National promised and what it has delivered. 
Although Labour members support this bill we will not support as we move forward the very partisan short-term shallow but quite nasty ideas that continue to come on the economic policy front from members on that side of the House. Kia ora tatou. 
A party vote was called for on the question  
That the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill be now read a third time. 
Ayes 112 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a third time. 
Legal Services Bill 
First Reading 
Hon ANNE TOLLEY (Minister of Education) 
 on behalf of the  
Minister of Justice 
: I move  
That the Legal Services Bill be now read a first time. 
 At the appropriate time I intend to move that the Legal Services Bill be referred to the Justice and Electoral Committee that the committee report finally to the House on or before 21 December 2010 and that the committee have authority to meet at any time while the House is sitting except during oral questions 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 187 and 190(1)(b) and (c). 
In April 2009 the Minister of Justice announced a fundamental review of the New Zealand legal aid system led by Dame Margaret Bazley. Dame Margaret’s report released at the end of last year identified failings that posed a serious risk to the future of our legal aid system including the variable quality of legal aid services inefficiencies created by prescriptive legislation and serious service delivery issues. The clear message was that it was time for fundamental change. 
The Government has already moved swiftly to act on Dame Margaret’s findings and this bill forms another part of that response. The bill disestablishes the Legal Services Agency and makes the Secretary for Justice responsible for administering the legal aid system. The bill also establishes the Legal Services Commissioner as an independent statutory officer within the Ministry of Justice to ensure independent decision-making in the granting of legal aid and the managing of cases in the Public Defence Service. 
This bill places legal aid where it should be: at the centre of the justice system. It will ensure that the legal aid system aligns with other Government initiatives intended to enhance access to justice and support the effective operation of the courts. The Legal Aid Review Panel which currently reviews the decisions of the Legal Services Agency will also be replaced by a new improved Legal Aid Tribunal. 
Dame Margaret Bazley praised the quality of many legal aid lawyers. However she also highlighted serious concerns about the variable quality of legal aid services and the inability of the current system to deal with poor performance and lawyers who act corruptly. A new quality assurance framework has been developed in consultation with the New Zealand Law Society to ensure that all providers have the skills to do the job assigned to them and that complaints will be addressed. Current legal aid providers will still be able to provide legal services for a transition period after the new legislation commences. However within that period they will need to apply for approval under the new quality system if they wish to continue to provide services. Selection committees will make recommendations to the Secretary for Justice regarding the approval of lawyers and other providers based on criteria and regulations. A review authority appointed by the Minister of Justice will be able to consider unsuccessful applications. 
The bill also establishes mechanisms to ensure the continued quality of services after providers are approved. A new Performance Review Committee will consider complaints raised against providers and where appropriate will recommend sanctions. The Ministry of Justice will also audit the legal aid services that have been purchased on behalf of New Zealand taxpayers. That auditing may include the disclosure to the auditor of legally privileged information but the bill contains safeguards so that the legal aid client is not disadvantaged by the disclosure which can be used only in relation to the audit. 
Dame Margaret was also concerned that New Zealand’s prescriptive legislative regime was stifling innovation in service design and delivery. That regime contrasted starkly with the approach taken in comparable countries such as Canada and Australia where administering bodies are charged with identifying the best ways to provide services. Flexibility and innovation in service design and delivery are central to this bill. Unlike the current Act the bill does not specify services that can be provided under the duty solicitors scheme and police detention legal assistance scheme. Instead those services will operate under a general provision. This approach allows for services to be provided in the way that best meets clients’ needs and allows services to be responsive to changes in the court system. It will not affect the ability to provide or monitor the quality of those services. 
The Secretary for Justice also has the flexibility to contract with community law centres to ensure that consistent and high-quality community legal services are provided across the country. In addition the bill allows for a streamlined process to assess applications for low-cost criminal cases which will improve cumbersome and expensive administrative procedures. This will mean that lawyers can spend less time filling in forms and more time providing legal advice. 
The bill gives the Ministry of Justice the ability to ensure that providers comply with basic business practices that support the cost-effective delivery of legal aid services. I understand there are currently cases where invoices are submitted a year or more after the work has been done. These business practices are unacceptable. 
Dame Margaret’s report also raised a concern about a potential overlap in the funding provided for settlement negotiation matters by the Legal Services Agency and the Office of Treaty Settlements within the Ministry of Justice. Under the bill legal aid funding will no longer be available for settlement negotiation matters. Instead funding will be transferred to the Office of Treaty Settlements to ensure that claimants continue to receive appropriate assistance for each step of the negotiations process. 
The Legal Services Bill will provide the framework for a new more effective legal aid system in which New Zealanders can have confidence. I commend this bill to the House. 
CHARLES CHAUVEL (Labour) 
: 
 I intend to move that all the words in the Minister’s referral motion appearing after the word “Committee” be deleted 
. 
On that issue there is simply no justification for a referral motion that was phrased in the terms the Minister of Education read out in her prepared speech. If the Minister on behalf of the Minister of Justice has foreshadowed that we are in for yet more meaningless urgency on bills that do not merit it then members on this side of the House protest greatly about that. I think that other members ought to be concerned as well because it is an abuse of the processes of this House to deal with issues as serious as the ones we are dealing with in this session under urgency without proper justification. Although the Minister clearly foreshadowed the use of urgency she did not deign to tell the House why there might be the need for urgency in respect of a bill like this one the Legal Services Bill or in respect of other bills for the rest of the year between now and the foreshadowed deadline for reporting back. 
Paul Quinn 
: The taxpayer wants us to work Charles. 
CHARLES CHAUVEL 
: Well Mr Quinn has interjected with one of his learned interjections again. He says that taxpayers want us to work. Some members on this side of the House work pretty hard I tell Mr Quinn and we are prepared to do that without the need— 
Hon Members 
: Only some! What are the others doing? 
CHARLES CHAUVEL 
: All members on this side—some members of the House and all on this side of the House—work hard. We do not need an urgency motion to tell us that that is what we should be doing. It would be helpful if members on that side actually worked out that doing the business of this House properly did not involve urgency but involved a considered consideration of legislation. That is something they seem to have forgotten because this Government is using urgency more often than any other Government for many many years. It is just not justified. If we look at the programme we see there is no justification for it. It is an outrage especially when we should be doing our job. The taxpayer will not thank Mr Quinn if we are back in here in a year’s time amending shoddy legislation that had been rammed through this House under urgency and—mark my words—if those members on that side of the House continue as they are then that is what they will see. 
Paul Quinn 
: The Opposition agreed to the urgency. 
CHARLES CHAUVEL 
: Mr Quinn says that the Opposition agreed to the urgency motion. I can tell him and his colleagues that there will be no more agreement to such motions if the sort of motion we have just seen from the Minister of Education continues. 
In the prepared speech that the Minister read out she referred to the report of Dame Margaret Bazley. Some aspects of that report are worth having a good look at. It found that there were some serious problems with the current system which was set up in 1991 by the then National Government when Parliament passed the Legal Services Act 1991. That Act merged the civil and criminal justice legal aid schemes. Some members opposite know a lot about the detail of that matter. I look at Mr Borrows in particular and it will be interesting to hear his contribution on the bill. 
Clearly there are some problems with the current system. There are problems in defining the respective relationship between the Legal Services Agency and the Law Society. It has been suggested in the report and elsewhere that the fact that the legal profession asserts control over the legal aid system through the Law Society creates a real risk of there being no independent oversight. Even though the Legal Services Agency can at the moment provide some oversight it is said that it does not have the necessary means in all cases to remove legal aid providers who are found to be performing poorly. 
The other salient structural criticism in the report was some highlighting of how legislation makes the market for legal aid arguably more inefficient than it needs to be. One of the instances cited in the report was that the current law has inflexible provisions for procurement which makes the Legal Services Agency’s processes overly bureaucratic and stops it from procuring services in the most efficient way. An example is the lack of flexibility to choose between the Public Defence Service a community law centre and legal aid. That ought to be an easy choice for somebody in need of legal representation. When public money is at hand one would think there would be room for the relevant authorities to use it as efficiently as possible. 
Dame Margaret’s report made a series of other recommendations and those included raising the barriers to entry so that it was absolutely clear that lawyers working in the legal aid area were absolutely competent and equipped with the requisite integrity. That is obviously something that nobody could argue with. It has been recommended that a mechanism be put in place for the swift ejection of lawyers who do not satisfy those criteria. 
There is a recommendation that there be a clarification on the regulatory side as between the legal services authorities and the New Zealand Law Society and there be an option to use publicly funded services such as the Public Defence Service when those are the most efficient option on the table. That option is not available under the current arrangements but it ought to be. It is good to see some of those matters picked up in the version of the bill that has been tabled for first reading. 
Some important changes are intended to the administration of legal services. The administration of publicly funded services is to be transferred from the Legal Services Agency to the Ministry of Justice. Similarly the Legal Aid Review Panel will be disbanded its function to be carried out by the Legal Aid Tribunal within the Ministry of Justice. The position of Legal Services Commissioner will be created to have an oversight of the operation of the system—an independent eye cast over the legal aid system to make it more accountable. 
Labour will support this bill being referred to a select committee because as far as we can tell those recommendations are good and the bill implements some good and sound policy. But we have some concerns. I have already dealt with the first concern which is the fact that we are dealing with this legislation under urgency and that the Minister has clearly foreshadowed that the Government intends further unmerited urgency throughout the year. 
The second concern relates to Minister Simon Power’s conduct in the wake of his receipt of Dame Margaret’s report and some of the allegations that were made in it. I know that my colleague Lianne Dalziel dealt with this matter publicly at the time. She and I also went up to meet members of the Manukau bar many of whom rely in large part on legal aid to provide access to justice for their clients. They are by overwhelming majority reputable lawyers who work hard in unforgiving situations to provide access to justice when it is needed by ordinary New Zealanders. They are to be praised for the hard work dedication and integrity that they exhibit. 
Unfortunately there were some obviously quite inaccurate allegations in Dame Margaret’s report. She said that up to 80 percent of the bar may be abusing the legal aid system out at Manukau. Clearly that is not right. We have met many of those providers and as I say they are good people who deserve better than that sort of allegation. They deserved for Simon Power to have refuted that allegation rather than simply accepting the report in the way that he did. Surely the principles of fairness would have required that. 
We have some other concerns about the substance of the bill. The area of legal aid in employment disputes needs further attention. Frankly we have some misgivings about whether the wider aims of the bill will be able to be achieved in the wider context of other legislation already passed in this Parliament and in this session. If the whole purpose of the bill is to curb the out-of-control cost of legal aid in New Zealand as it is alleged to exist which is particularly high in the criminal area the Government cannot on the one hand try to achieve that and on the other hand pass the completely misguided “three strikes” legislation which will work directly against that objective. Because of the higher prison sentences that judges will have no option but to bestow in criminal cases under the “three strikes” legislation pleas of not guilty have been positively incentivised. That will inevitably lead to the prolonging of trials and will place extra cost-pressure on the justice system. If the Government had any regard for proper policies working comprehensively let alone fairness that issue would have been looked at instead of using the piecemeal approach that has been adopted. 
We place real value on having a well-functioning legal aid system. It is essential that everybody has proper access to justice and that such access be one of the rights that are guaranteed by the State. We will support the bill going to a select committee but we have the reservations that I have stated in my speech. 
CHESTER BORROWS (National—Whanganui) 
: 
 Mr Speaker— 
Hon Darren Hughes 
: Vote for the amendment Chester. 
CHESTER BORROWS 
: I will not be voting for Charles Chauvel’s amendment to the referral motion. I think it is important in discussing his amendment to remember why this House has gone into urgency on a number of occasions recently and also to have a little bit of a look at the history. This Government has been criticised on a number of occasions for taking a long time to process legislation introduced by the previous Government only to find that the legislation—for instance the Children Young Persons and their Families Amendment Bill (No. 6) which was introduced just a couple of weeks before the House rose—was never taken anywhere during the course of the last Parliament even though the preparation had been done. 
We had another example of that this afternoon when we heard the Hon George Hawkins refer to his Sale of Liquor (Objections to Applications) Amendment Bill which is currently before the Social Services Committee. It was introduced in October 2007 but went nowhere right through until the election in November 2008. With the support of members opposite it had been stalled pending the process initially of the previous Government’s own bill on the sale of liquor which again that Government never processed during the course of its Parliament. That bill goes hand in hand with bills on other domestic violence matters that were not progressed during the previous Parliament either. We heard recently about the Hon Lianne Dalziel’s bill which she spoke about and asked questions about yesterday; that bill was introduced only 2 weeks before the last election yet somehow there is some huge criticism of this Government. 
The other reason this Government has taken urgency on a number of occasions over the term of this Parliament is that on a number of members’ days when members opposite have had member’s bills coming up they have postponed them meaning that if urgency was not called we would have “pulled the pin” at 5 o’clock and knocked off for the rest of the night because those are the conventions of this House. If people on the opposite side of the House wanted to work as hard as they want the public to think they are working then they would maintain the stance they took by putting in the bids they did for those member’s bills. The reason we are voting against Mr Chauvel’s amendment is that we want to see these matters progressed through the House in a timely manner and not being held up by members opposite mucking around with the system. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I too was caught by surprise at the brevity of the contribution of the previous speaker Chester Borrows on the Legal Services Bill. I was looking forward to the opportunity to engage with that member in particular because unfortunately we did not have a justice Minister to present the motion in favour of the introduction of this bill. Although we support the bill’s referral to the Justice and Electoral Committee there are some challenging issues around this particular habit of the Government. I think this was the comment that my colleague Charles Chauvel was making. He simply made reference to the fact that this was occurring under urgency. 
The point that Charles Chauvel was making was to ask why on earth the select committee has to have these obligations thrown on it to meet outside the normal sitting times for select committees thereby missing out on opportunities to participate in debates in the House. We had the ridiculous situation recently where I was sitting on the Justice and Electoral Committee and an electoral bill was before the House. That meant that it was impossible for those who have a particular interest in speaking on the bill to do both jobs at the same time. I think that was a very reasonable point for my colleague to make. If we are going to have requirements on select committees to sit for extended hours either during the course of the sitting of the House or on Fridays as well then it really is helpful if members of the Opposition are consulted. The only reason that I ever get consulted on the Commerce Committee is because I am the chair of that committee and it would be rather foolish of the Government to move a motion like that without telling me about it first although the Government did manage to tell me about it only 5 minutes before it moved the motion in support of such a referral on one occasion. But I have received undertakings that that will not happen as a matter of course. 
It would be useful if we were told that this was an approach that the Government was trying to take on this particular matter. There is no need for it. The reason that there is no need for it is that as I said we are supporting the reference of the Legal Services Bill to the Justice and Electoral Committee. We genuinely want to engage in the process around this. I made a submission to the Bazley review on legal aid. There are not many people in this House who actually did that but I did because I believe it is really important that we engage on something as fundamentally important as this is—that is access to justice. It is an important component of access to justice and that is why I wanted to make a submission. 
I was pleased with some elements of what Dame Margaret came up with but I was disappointed with the allegations in relation to up to 200 lawyers in Auckland and South Auckland—it was identified that 80 percent of the people were working in the Manukau area—and I found that completely unacceptable. I have met with many of those lawyers. Charles Chauvel and I went and met with them. The people whom we talked to were not people who were afraid to raise concerns about those they felt were taking advantage of the system but they felt that their concerns fell on deaf ears. For those deaf ears who failed to listen to them well the consequences are the Legal Services Bill and the disestablishment of the Legal Services Agency. I think it is really important to note if we think about where the complaints were made that if lawyers complained to the Legal Services Agency about the nature of concerns they have about other lawyers ripping off the system and nothing happens as a result then this is what occurs. I believe that some of the proposals within the legislation are perfectly sensible and therefore we need to take some action. 
I make the point that demand for legal aid has been increasing over time. But there are two particular components of the legal aid system where we see marked increases in their requirements and they are in the criminal jurisdiction and in the Waitangi Tribunal jurisdiction. They are the two that have the most increases. I have a personal view and I did express this in my submission to Dame Margaret that the legal aid component of the Waitangi Tribunal work should be funded separately through Vote Justice. It should not be seen as a cost to the legal aid system because it gives an impression of a total blowout in expenditure which is not justified when we think of what the legal aid system is there for in terms of both the criminal and the civil jurisdiction. 
Paul Quinn 
: You had 9 years to do something about that. The problem was there for 9 years. 
Hon LIANNE DALZIEL 
: I know that that member likes to interject really loudly from a seat that does not belong to him. I know that he has moved up close so that he can be close to me to do that. I am getting used to it but ignoring such a loud voice is quite difficult. When I do not find it so loud then I find it very easy to ignore everything that he says. The point I was making is that this is not something that relates to anything other than the public perception of the blowout in legal aid. A big chunk of that blowout relates to the Waitangi Tribunal’s jurisdiction and I believe that should be funded separately. It would be useful from a public perception point of view to get a clear understanding of what belongs to civil legal aid and what belongs to criminal legal aid. 
There is an issue around the questions that have been raised in the regulatory impact statement. In the problem definition— 
Paul Quinn 
: Lianne—Speaker’s ruling 63/1. 
Hon LIANNE DALZIEL 
: I am finding it very difficult as I am constantly being harangued by the other side. Maybe I could look the other way but I am trying to address the Speaker. The options that were put up in the regulatory impact statement relate to a universal system of public provision of legal aid services as implemented in some of the Auckland courts. What they said was that this could generate significant economies of scale and be a low-cost option. But—and here is the phrase; here is the rub—the following statement is typical. I almost thought that this was a Treasury regulatory impact statement because it sounded like Treasury words. But this comes from the Ministry of Justice and I think our spokesperson on the State sector should be worried about this because it states “Public provision has however only been tested in large communities and in criminal cases. As well universal public provision creates a risk of an inefficient bureaucracy over time due to the absence of any competition.” Well I am sorry but one can understand why I thought that came from Treasury. 
The point I make is this: I went to the Croydon Family Justice Centre in London in the UK last year and one of the things that I saw was that it was—I am finding this difficult; maybe those two members who are talking might like to take over—the Croydon Family Justice Centre itself that contracted in the outside legal work to work with the families and if the families did not like working with the particular lawyers then those contracts came to an end. That was a much better system I thought of bringing the local community into the decision making on who will be getting that range of work and it is all tied up with a properly funded legal aid system. It is the best of all worlds. There are the economies of scale that the centralised work can provide but there is also that outside expert input from the private sector from time to time as is required. 
I think that this bill has a considerable amount of work to be done on it. I do not agree with the way the Government has tried to play around with the sitting arrangements of a select committee without consulting with the Opposition but we will support the bill’s referral to the select committee. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Assistant Speaker Roy. We acknowledge some of the concerns raised by the Labour Party and we would also have appreciated some consultation on the select committee process but in looking at this Legal Services Bill we believe we have considered the legislation carefully and we do not feel confident that its provisions provide sufficient protection for those in need of legal aid from undue interference by the Government. We also do not agree with many of the findings in Dame Margaret Bazley’s report on which this legislation is based. Therefore we will not be voting to support this bill at its first reading but we look forward to seeking further information during the select committee process. 
The legal aid system as described in the regulatory impact statement is designed to assist those who cannot afford legal representation when they need it. The legal aid system helps to uphold the principles of and access to justice equality before the law and natural justice which helps to build and maintain public confidence in the legal system. The regulatory impact statement notes that there is a clear relationship between justice sector outcomes and the provision of publicly funded legal aid services. So the provision of publicly funded legal aid is critical and it must be undertaken with the greatest care for natural justice principles. 
The Bazley review came out of concerns raised about the legal aid system including concerns based on rising costs problems with access and the impact of the system on the courts. Her report notes that the Legal Services Agency was established to administer the legal aid system to maintain a list of lawyers who could provide legally aided services and to grant legal aid. As a Crown agent the Legal Services Agency performs these functions at arm’s length from the Government. That is important because it avoids any conflicts of interest that the Government may have when funding legal aid for people who are involved in litigation with the Crown such as when the Crown is prosecuting a crime or when people are suing the Crown. We believe that this is an extremely important principle to uphold. It is not appropriate for the Crown to be the decision maker on what funding is made available to those who are litigating against the Crown. 
The report notes: “The new tribunal should have an explicit requirement to have regard to both access to justice considerations and responsible expenditure of public monies. To this end the Chair of the new tribunal should not be a lawyer.” I find it incredible that the Bazley report should recommend that the chair of any new tribunal should not be a lawyer. This highlights the entire tone of the Bazley review—that lawyers cannot be trusted with public moneys. I wonder whether John Key should perhaps be watching out for Chris Finlayson. 
Reading through the legislation it seems to me that the recommendation to deny anyone from the legal profession the chance to head the tribunal has been dropped and that is a good thing. However the Green Party is an evidence-based party and we see that this legislation will scrap the current Legal Aid Review Panel. We have not seen any evidence that that panel has not been doing a good job but some snide comments were made in the Bazley report and—poof—the panel is gone. I understand that the staff of the Legal Services Agency will be carrying on but it will not be the same for those at the review panel. Once this legislation is enacted they will be gone. That topic needs to be addressed by the Minister of Justice. I ask what the Legal Aid Review Panel did wrong and why it is going. 
It is also worth noting that Ms Bazley’s report was concerned that the Legal Aid Review Panel’s funding was through the Legal Services Agency. Now both organisations will fall under the purview of the Ministry of Justice and I am not sure how that will assist. We already have a breach of this principle when it comes to the Treaty settlement process. That process is clearly flawed because in large part the accused party determines the funding for the aggrieved party. So it is with dismay that we see that the recommendation from the Bazley report states that because the legal aid system is essential to the operation of the justice system it is recommended that the administration of the legal aid system and the procurement of legal aid services be centralised and kept close to the Crown. 
Throughout the Bazley report which was the catalyst for the legislation in front of us today there is an implied suggestion that lawyers cannot be trusted with the public’s money. Should applicants be denied legal aid they can currently apply to the Legal Aid Review Panel to look at the Legal Services Agency’s decision-making process. But Ms Bazley in her report suggests scrapping the Legal Aid Review Panel—which is what this legislation does—and replacing it with a tribunal that will work from and within the Ministry of Justice. This is what Ms Bazley stated about the prospect of a lawyer heading a tribunal that will be assessing legal aid decisions: “In reviewing decisions of the [Legal Services Agency] the new tribunal should have regard to both access to justice considerations and responsible expenditure of public monies. I am not confident that a Chair drawn from the legal profession will necessarily achieve the appropriate balance between these considerations. Therefore I consider that the opportunity should be taken to appoint a non-lawyer as the Chair of the new tribunal.” We cannot agree to this view and we believe that it undermines the legitimate concerns raised within the report. 
We do not agree that the issues raised in the report about the operation of legal services are best remedied by bringing the agency under the purview of the Crown and thereby breaching one of the principles of natural justice. The structural solution being proposed in the wake of the report will end the independence of the Legal Aid Services Agency whatever its faults may be and fold it back into the Ministry of Justice. There will be genuine accusations of political interference in the decisions to grant or to refuse legal aid applications. That will erode public confidence in the legal aid system and it could undermine access to legal aid by members of the public who are concerned about privacy and political interference. 
We are also very concerned that the principles of natural justice are being undermined in an attempt to make administrative savings. Although some of these concerns could be remedied in the select committee process—and we will welcome that discussion—we are not satisfied that this bill as it is promotes and protects public access to justice builds confidence in the legal profession or meets the precepts of natural justice. We will be opposing this bill. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker Roy. Kia ora tatou katoa e te Whare. 
Paul Quinn 
: Kia ora. 
HONE HARAWIRA 
: Kia ora I say to Mr Quinn. Tomorrow marks the occasion of 20 years since the New Zealand Bill of Rights Act landed on the New Zealand judiciary. That is important because the New Zealand Bill of Rights Act together with the 1993 Human Rights Act and the nation’s founding document Te Tiriti o Waitangi provides the framework for a strong and evolving constitutional discussion which the Maori Party will proudly lead over the next few years. Alongside all that of course the Maori Party is also proud to claim responsibility for this nation’s signing up to the United Nations Declaration on the Rights of Indigenous Peoples providing Aotearoa with a set of international benchmarks regarding indigenous people and the law. So as we come to the Legal Services Bill the Maori Party does so looking for the same positive reform that Dame Margaret Bazley noted in her report highlighting a range of deficiencies within the legal aid system including the poor quality of legal aid services and serious service delivery issues. 
Dame Margaret made some far-reaching recommendations including the following: ensuring aid is available equally across the country taking into account geographical social cultural and economic factors; extending social services into the courts to reduce the social deprivation of court users and their families and whanau; and creating a better focus on legal needs for Maori and Pacific peoples and on the barriers they face. Dame Margaret also made the point that if the legal aid system fails Maori then the system fails altogether. 
The stories of delays and deferrals are legendary. I note the situation of 19 people caught in the 15 October police terrorism raids on Tuhoe whose applications for legal aid were not even looked at by the Legal Services Agency for 4 months. All Maori electorate MPs know of people who have made complaints about incompetent and corrupt lawyers dragging out the legal process to maximise their fees or recommending that their clients plead guilty because they are too lazy to do the necessary groundwork to defend their Maori clients properly. So we welcome the proposal in this bill to have lawyers sit competency tests before going on the legal aid roster. 
Mind you I note that comments about bad lawyers at the Manukau court in particular need to be balanced alongside the reality of the huge workload and woefully inadequate resources provided for the high numbers of defendants appearing before that court. I quote from an email we received just after the Bazley report was released: “There’s no doubt that the Manukau Court is known as one of the most difficult courts in the land to work in. This does not mean however that it attracts the worst kind of lawyer. Quite the reverse. One has to be very dedicated to work in this court. Many of our finest lawyers have worked and continue to work in this court—Karina Williams and Eddie Paul to name just two. I was appalled to find that some of Ms Bazley’s findings were based on ‘anecdotal evidence’. In common terms this means gossip. There is so much work in the Manukau Court that I can’t see why any lawyer would even need to be ‘gaming the system’ as she puts it. The majority of hard-working lawyers in the Manukau Court don’t need this kind of publicity.” The Maori Party also supports the right of all people to have access to justice as proposed in this bill. Indeed the denial of that access to justice was one of the main reasons behind Te Hikoi Takutai Moana the birth of the Maori Party and the drive to repeal the Foreshore and Seabed Act 2004. 
One major point of concern that I have comes from a meeting held last year when Maori tribal and legal leaders expressed their concern to the Minister of Justice about the number of lawyers appearing before the Waitangi Tribunal and the consequential loss of tribal control to lawyers acting on their behalf. It was proposed that the Legal Services Agency and the Waitangi Tribunal develop options that retain the benefit of legal aid but place controls on the number of lawyers the cost of lawyers and the domination of lawyers over Maori issues. However I note that much of that will be blocked by this bill denying legal aid to those negotiating settlements with the Crown. In our view that simply adds another problem rather than dealing with the original one. We do not support proposals to deny legal aid to those negotiating Treaty settlements. 
My gut feeling is to not support this bill. Although it addresses general issues that impact on Maori it does little to address the specific needs of Maori. Given the number of Maori appearing before the courts I note that there is nothing in this bill to support the reopening of the Maori Legal Service either. However the Maori Party will support this bill in its first reading to allow time for groups and individuals who have a stake in this matter including Maori legal practitioners Maori involved in the legal aid process people who have worked for the Maori Legal Service in the past Maori who have been ripped off by legal aid koretake in the past Maori involved in Treaty settlements Maori social service providers and others to tell the select committee what they think of this bill and how they think it might be changed to improve services to Maori in the future. Our vote beyond the first reading will be determined by what we hear through the select committee process. Kia ora tatou katoa. 
SIMON BRIDGES (National—Tauranga) 
: 
 Every defendant in the summary jurisdiction and every accused in the indictable jurisdiction has the absolute right to counsel and as I am about to discuss the right to competent counsel who know that the system is not for them but for the players—the defendants and the victims—in the system. 
Firstly I say to Hone Harawira who is inclined to not necessarily support the Legal Services Bill that this bill if it is for anyone is for those Maori he was talking about who at the moment yes do go to prison in disproportionate numbers but who have the most to gain of anyone from having competent counsel in the courts in this country. This bill is very important. As I said everyone has a right to counsel but they need to be competent. 
I am the first to accept that the vast majority of criminal lawyers in this country are competent but there are some—they have been referred to as car-boot lawyers and various other sorts—who are incompetent. I have seen them— 
Hon Darren Hughes 
: Name them. 
SIMON BRIDGES 
: I will not name them; they may vote for me! I have seen lawyers who have had a law degree for 30 years and have not been on a refresher course with the Law Society for 30 years. There is a perception out there that criminal law is easy. Actually it is one of the most difficult areas of law in my opinion to practise in. In the last couple of years this House has passed about 12 or 13 statutes that have made wide-ranging changes to the arena of criminal law. Those things need to be kept up with. They are not simple. If there is anybody who needs to be on top of his or her game in the practise of law it is the criminal advocate who literally has a person’s life on the line. As we put up the penalties—and I think it is right to do so—with bills like our “three strikes” legislation— 
David Garrett 
: Ours. 
SIMON BRIDGES 
: —the stakes increase. David Garrett had something to do with it; I am not sure what. 
The other thing that is important when we are talking about counsel is a system that is not just for their benefit but is also as I said for the benefit of the real players—the victims and the accused. Yes there has been gaming of our criminal justice system. Dame Margaret Bazley talked about the delaying of pleas to maximise legal aid. Certainly I have seen cases where guilty pleas have been put in on the morning of trial when it has been quite clear that the pleas were coming for a long time. By doing that defence counsel is able to claim maximum preparation for the trial as well as obtain the guilty plea. There are top-up payments and retainers from clients. Despite counsel getting their legal aid which is all they are legally entitled to they ask for more from the client. That is a despicable practice which Dame Margaret Bazley found evidence of. 
I have seen and I am aware of defence counsel who come along ill-prepared for cases—again they are very much in the minority—and the first they learn of a case in a jury trial where the stakes are high is what they pick up from Crown counsel when they open the case. That is not good enough. This bill addresses those concerns and will do something very real about it. The bill creates various new agencies and tribunals to ensure that there are higher standards. I commend this bill at its first reading to the House. 
LYNNE PILLAY (Labour) 
: 
 I start by acknowledging all the good lawyers out there who undertake legal aid and represent— 
Paul Quinn 
: Simon. 
LYNNE PILLAY 
: No I do not mean Simon Bridges whom that member has pointed out. I will return to talking about the lawyers who have contributed much to the criminal justice system. As I think Simon Bridges mentioned in one part of his speech the lawyers causing the problems that have been identified by the review are very much in the minority. But if we look at the criminal justice system and uphold very strongly the principle of access to justice no matter how small the minority is we can see that very serious misdemeanours have happened. 
If we look very briefly at the review we see that one of its findings was that some 200 lawyers were seen to be rorting the system. Certainly that matter should be of great concern not only to all members of this House but also to the people who use the system. There were top-up payments from clients over and above what the Legal Services Agency had provided. That is absolutely abhorrent. Access to legal aid is very much designed for the people who are simply not able to afford access to justice. That is the whole principle of the system so to demand a top-up payment is totally unacceptable. 
There was some concern that complaints made to the Law Society about dishonest behaviour were not acted upon and certainly that should not have happened. Unpreparedness was also an issue. Legal aid lawyers have been turning up to represent clients and they have not been prepared. That is unacceptable. A number of other issues were identified. In particular there was no control over the legal aid system in terms of the legal profession and effectively no independent oversight. That is of real concern. 
I hasten to add that those concerns were in the minority but they were still concerns. If we look at our legal aid system we see that everyone in New Zealand wants to see the best bang for the taxpayer buck in that investment and to have that system rorted in any way shape or form is not acceptable. 
I note that Dame Margaret Bazley’s recommendations included raising the barrier for entry into the legal aid system. Only lawyers with competence and integrity should be able to work in legal aid. That is a given. It is really important. Where it is seen that lawyers are incompetent or dishonest or both and where there is concern about the work that they are doing— 
Hone Harawira 
: Or all of the above. 
LYNNE PILLAY 
: —or all of the above as the member said—there is a mechanism under this bill whereby those lawyers will be ejected from the legal aid system. They will not continue to underperform or at worst act dishonestly. 
The bill also clarifies the roles and responsibilities of the two regulators with an interest in this area: the Legal Services Agency and the New Zealand Law Society. Publicly provided services like the Public Defence Service should be used where there are sufficient case volumes to make them an efficient option. This would include places like Auckland Wellington and Christchurch and areas where there are particular problems with quality such as Palmerston North. My colleague Ian Lees-Galloway the very very competent member for Palmerston North has shown concern about the services in those areas and he is very pleased that there will be a lift in the quality of the services in Palmerston North. It was also recommended that there be a streamlined eligibility assessment model for low-cost criminal cases. 
All in all very common-sense recommendations were made. If we look at the background we see that criminal legal aid was established in 1912 and civil legal aid— 
Hon Darren Hughes 
: The year the member was born! 
LYNNE PILLAY 
: That was a nonsensical thing to say and it did distract me for a moment. Civil legal aid came into effect in 1969. That interjection could have come in now actually—1969 would have been far more acceptable. Our current legal aid system dates from 1991 when the Legal Services Act was passed. 
Certainly Labour believes that the Legal Services Bill is very timely. It is a chance to overhaul the legal aid system. The reforms are positive particularly the emphasis on the public defender system and also on community law centres. I will spend a little time acknowledging the tremendous work done by community law centres in our communities. Often in our select committees we have submissions from community law centres on legal aid matters and many other issues. I must say that their focus is very much on access to justice and on getting the best deal for all—the importance of the many not just the few having access to justice. The constructive submissions that community law centres have brought to many select committees focus not so much on feathering their own nests or on their own personal remuneration but on providing the best justice system for all. 
I acknowledge the work of community law centres and particularly the fantastic work of the community law centre in Waitakere. My electorate office and many other west Auckland MPs’ offices often refer people to community law centres for advice. The feedback is that people receive very sound advice that enables them to go further with their concerns or in many cases they receive constructive advice to the effect that they should not go further and that prevents them from going down the line of very costly litigation. Community law centres should always be publicly funded. Labour is very very happy about the new emphasis being placed on community law centres playing a greater part within the system. 
Labour believes that the bill is necessary to restore taxpayer confidence in legal aid which is a vital part of our justice system. Labour is not saying that this bill in its current form is the perfect bill. That is certainly not the case but we believe that the bill should go to the Justice and Electoral Committee. We look forward to hearing the views of New Zealanders. I am a member of that select committee and during that process we will hear submissions not only from community law centres and the Law Society but also from people who have been part of the legal aid system and from lay people who are not necessarily lawyers but have an interest in seeing justice served. We will be very very pleased about that. 
Labour is also pleased that the Public Defence Service will be expanded. I acknowledge Phil Goff our leader who as Minister of Justice at that time launched the Public Defence Service. Without further ado I commend this bill to the House. Thank you very much. 
DAVID GARRETT (ACT) 
: 
 The ACT Party supports the Legal Services Bill. As members of the House will know I always enjoy being able to agree with members on the other side of the House. I commend the previous speaker Lynne Pillay quite genuinely and sincerely for her speech. A great deal of what Lynne Pillay said was excellent stuff. I put on record that the ACT Party too has a commitment to the right of people to be legally represented. I see perhaps a touch of incredulity on your face Mr Assistant Speaker Roy that I am agreeing with Lynne Pillay but it is true. 
The member talked about the valuable work of community law centres. I—and I suspect many other lawyers in the House—have worked at community law centres pro bono. I have never been keen on using my skills to help criminals so one of the things I did was work in a community law centre. Those centres provide a very valuable service for those at the bottom of the heap and frequently people who have a number of different problems other than an inability to pay go there. They often just need someone to listen to them. I remember a man some years back who wanted to sue Bill Birch for $25 million for some perceived slights which of course was totally unrealistic. But he felt he was listened to and treated with dignity. So community law centres play a very valuable role. 
It would be wrong to say that all or even most legal aid lawyers are at the bottom of the barrel—as Simon Bridges said criminal law is a skilled branch of the profession—but it would be equally wrong and naive to say they are all top-notch. If we go to any district court in the country—less so in the provinces I have to say but any metropolitan district court—we see lawyers whose suits need a clean; whose hems are clipped up by staples; who have not seen as Simon Bridges said the inside of a refresher course for a very long time; and who are not up to date with the changes in the law. That is not right primarily for the defendant; it is also not right for the taxpayer. 
Here sadly is where I have to diverge from agreement with Ms Pillay. Unlike the Labour Party I do not agree and ACT does not agree that anyone is entitled to endless legal aid. We live in a society where resources are rationed to some extent. Rationing of resources frequently happens with older people. My mother died a wee while ago. She probably could have been saved with a pacemaker but she was 90. The hospital authorities gently told her that she was not a candidate for that surgery obviously because of her age even if she was strong enough to have survived it. So we reluctantly accept some rationing in the health sector as they say these days. Everything is a “sector” is it not? But why should we not accept that there should be some rationing in legal aid? 
Ms Pillay touched on civil legal aid. As a practising lawyer it used to distress me very greatly to often meet people who had very real and genuine civil claims but unfortunately they were middle class. They were not poor enough to get legal aid—the very small amount of civil legal aid available—and they were not wealthy enough to pursue the case themselves even if we did the work at very discounted fees as we often did. So a whole heap of people go with an unmet need which is the phrase these days. I do not know why we had to invent all these phrases but that is it. Those people had unmet needs because there simply is not the money. 
Of that pool of $160 million or something allocated to legal aid every year the vast majority of it goes to criminal legal aid. I have just addressed the Sensible Sentencing Trust annual victims’ conference. I looked around that hall recognised many faces and knew their stories. Many of those people have been victimised by criminals who have appeared 100 times in court and 100 times the taxpayer has picked up the tab for their defence. Is that sensible? We tell old people like my mother that they could potentially be saved by a pacemaker but they are 90 years old. Although they did not say it to my mother they were essentially saying that that money could be better spent at the neonatal unit. In the ACT Party we say that everyone is entitled to a defence once perhaps twice and perhaps even three times. 
Lynne Pillay 
: Three strikes and you’re out. 
DAVID GARRETT 
: Indeed I say to Ms Pillay. I would like the members on the other side of the House to tell me by interjection if they wish and put on the record whether Labour really believes that someone like William Bell should be entitled taxpayer-funded defence 100 times. Mr Robertson does not have to shake his head. I do not need to use his name; I could use many names that member does not know. I ask whether Labour believes that a career criminal should be entitled to endless largesse from the taxpayer. Well the ACT Party does not. To paraphrase Lady Bracknell just about anyone can have the misfortune of being wrongly accused once—by circumstance by bad luck or rarely perhaps by corruption. It may happen twice but it would not happen 54 times. So it is perfectly reasonable to look at whether people should be entitled to endless legal aid. 
This is a good bill. It makes good changes. But I think we need to look at the whole system and perhaps—Ms Pillay said it as a joke—whether “three strikes” should be extended to the legal aid system. People are entitled to a full and complete defence by a qualified and competent lawyer of their choice three times. But if someone is unlucky enough to be wrongly accused four times then perhaps that person should be on their own. Thank you. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I will start my contribution with an old saying: “Ninety-eight percent of lawyers give the rest of them a bad name.” But the Legal Services Bill seeks to recognise the importance of preserving access to justice in spite of that 98 percent. In fact very few lawyers sail close to the wind when representing their clients. The National Government wants to make sure that all New Zealanders have access to a high-quality legal system. The Government also wants to ensure that taxpayers’ money is well spent. The review undertaken by Dame Margaret Bazley in 2009 identified many challenges being faced by our legal aid system. That review also identifies that there are inadequate mechanisms to ensure quality and serious delivery of services. 
The Legal Services Bill will provide an effective legal aid system that supports the wider justice sector. It will create a system in which taxpayers can have confidence and will also provide high-quality legal service by capable professionals. The legal aid service is very vital to our most vulnerable citizens and the changes made will make proud the users and the providers. This bill shows that the Minister of Justice Simon Power has acted quickly to address the issues identified by Dame Margaret’s report. We are also confident this package of challenge will help build more public confidence that the legal aid system is providing quality service for those who need it while giving taxpayers value for money. I support this bill on its first reading. 
JACINDA ARDERN (Labour) 
: 
 I am pleased to take a call on the Legal Services Bill. Thank you Mr Assistant Speaker for holding my place. I will reflect very quickly on some of the comments that were made by Mr Garrett. I think it is a shame in this debate that although Mr Garrett very nobly recognises points of agreement he also recognises that we descend into some situations that by and large are the exception not the norm. Within our criminal justice system we must organise a system that is still based around the ultimate principle which I would hope he agrees with whereby people are innocent until proven guilty. If Mr Garrett would like to present to this House a methodology where we could maintain that principle which is the fundamental foundation of our criminal justice system and still iron out some of the issues he raised I would be happy to engage with him on that point. But arbitrary cut-offs such as those that were suggested—I assume they were suggested off the cuff granted—do not do that. I am happy to engage in that debate but we must ultimately keep in place that fundamental principle. 
Again I say to Mr Garrett that arbitrary cut-offs do not work. I will expand on that when it comes to the principle of “three strikes and you’re out” because again that is probably the ultimate demonstration of arbitrary cut-offs that remove the very important principle of judicial discretion which is a key part of our criminal justice system. I will come back to that but first I will address the substantive matters in this bill. It overhauls the legal services system in New Zealand as it has sat in its current form since about 1991. Those who have been listening to this debate will know that the set of changes we are examining in the House today were a consequence of a review that was carried out by Dame Margaret Bazley. I think the reason that the review became so controversial was that she pointed out the failings in our publicly funded legal services system. Some quite wide-ranging accusations were made and some of the actors and rogues in the system were a key part of her review. I think she brought that issue to the fore. 
It is right that the review was done but I would be loath for anyone to assume that all of our publicly funded legal services are characterised by some of the individuals that Dame Margaret Bazley highlighted. In Manukau in particular we have seen some incredibly good individuals working in that area have their reputations smeared by the very blanket accusations that were made. I think it is important that ultimately we ensure that public confidence is retained in our system. That perhaps would have been restored had Simon Power as the Minister of Justice spoken to the Bar in that area but unfortunately he did not. 
At the Justice and Electoral Committee we questioned the chair of the Legal Services Agency as to whether he spoke to the Bar in Manukau and he had not at that time either. I would like to highlight that Lianne Dalziel and Charles Chauvel did make that effort but the Bar itself was seeking action by the Minister himself or by the agency rather than just the Opposition who took a key interest in the area. Although it is important that we act in an expedient way on the recommendations made by Dame Margaret Bazley it is also important that we get it right because this is an incredibly important arm of our justice system. 
What are the objectives when examining this legislation? The Government has pointed some of them out. One of them is managing rising costs and that is absolutely understandable. We are looking at a legal aid system that is costing about $130 million per year but most of the increases we have seen have been in the criminal justice area. Some particularly large and high-profile cases have sucked up a considerable amount of that. Also there have been claims to the Waitangi Tribunal. That is one element that the Government is interested in tackling but in my mind ultimately it is secondary to some of the much more important principles of ensuring ongoing accessing to justice and upholding the quality—this was pointed out by my colleague in the Maori Party—of the services that the public access via legal aid. Public confidence in that service is incredibly important. 
Labour will though support this bill’s referral to the Justice and Electoral Committee. There are elements in it that we absolutely support but we do have concerns as well and I want to talk about both those areas. We are pleased that the Public Defence Service will be expanded. That was something that was launched by the justice Minister at that time in 2004 who obviously was Phil Goff. The Public Defence Service demonstrated that we could have a system of salaried public defenders that would standardise a high quality of defence and iron out some of those issues that come with a fee basis and it was a good alternative to legal aid. My reading of what has happened in the transition with the recommendations from Dame Margaret Bazley and what has come through from the Government is that there are a couple of areas that may not have been covered by the extension of the Public Defence Service. I would be interested in Government members clarifying this for me but I understand that the Minister of Justice announced back in April that we would see the service extended to Hamilton Wellington and Christchurch. 
Also I think Dame Margaret Bazley made a recommendation about Palmerston North. I am not sure whether the Government picked up that recommendation but I am happy to hear whether that is the case. Obviously she would have seen some reason for that and I would be interested to see where the Government disagrees with her in that regard. I want to highlight that we are seeing another announcement about the extension of the Public Defence Service back in April—and here we are again talking it up. 
Hon Darren Hughes 
: Just like the Kopu Bridge. 
JACINDA ARDERN 
: It is like the Kopu Bridge. How many times has the Government announced the Kopu Bridge? 
Hon Darren Hughes 
: About eight times. 
JACINDA ARDERN 
: Perhaps we will see the Public Defence Service re-emerge as a Christmas gift given that this Government is such a fan of re-announcements. 
I also want to touch briefly on the fact that the Government is placing greater emphasis on the use of community law centres. I absolutely endorse that but again I flag my concern that it is one thing to acknowledge the good work community law centres do but it is another to demonstrate to them that they will have ongoing sustained funding. The Minister of Justice has continually given us that assurance but as far as I am aware they are still ultimately in the funding framework they are under at the mercy of the Lawyers and Conveyancers Special Fund. Because it is based on an allocation of interest being divvied—I think it is a 60/40 split—between a bank and the community law centres it is not sustainable and consistent. The amount of time and energy that the network of community law centres has wasted on worry about the source of their funding is I think unnecessary. If we are going to acknowledge the good work they do we should give them greater certainty in the way they are funded. 
I want to touch briefly on another of our concerns. Lianne Dalziel has already pointed out that it is one thing to say we want to cut down on the cost of legal aid; it is another to try to incentivise within our criminal justice system the constant use of not guilty pleas. Mr Garrett has to acknowledge that that is perhaps an unintended consequence of his legislation but a consequence none the less—we have actually incentivised not guilty pleas. That will mean that we are likely to see an increase in legal aid. Does Mr Garrett perhaps propose that if a person ends up being on their third strike they then do not get any more legal aid? 
David Garrett 
: No. 
JACINDA ARDERN 
: Well he has suggested that. 
A party vote was called for on the question  
That the Legal Services Bill be now read a first time. 
Ayes 112 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a first time. 
Hon ANNE TOLLEY (Minister of Education) 
 on behalf of the  
Minister of Justice 
: I move  
That the Legal Services Bill be considered by the Justice and Electoral Committee 
 that the committee report finally to the House on or before 21 December 2010 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) 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 187 and 190(1)(b) and (c). 
The ASSISTANT SPEAKER (Eric Roy) 
: The House has received an amendment to the Minister’s referral notice in the name of Charles Chauvel. I will put the question on the amendment first. 
A party vote was called for on the question  
That all the words after “Justice and Electoral Committee” be omitted. 
Ayes 52 
New Zealand Labour 42; Green Party 9; Progressive 1. 
Noes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That the Legal Services Bill be considered by the Justice and Electoral Committee that the committee report finally to the House on or before 21 December 2010 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) 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 187 and 190(1)(b) and (c).  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 52 
New Zealand Labour 42; Green Party 9; Progressive 1. 
Motion agreed to. 
Misuse of Drugs Amendment Bill 
First Reading 
Hon PETER DUNNE (Associate Minister of Health) 
: 
 I move  
That the Misuse of Drugs Amendment Bill be now read a first time. 
 I intend to move that the bill be considered by the Health Committee that the committee report finally to the House on or before 20 November 2010 and that the committee have authority to meet at any time while the House is sitting except during oral questions 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 187 and 191(b) and (c). At the outset— 
The ASSISTANT SPEAKER (Eric Roy) 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Sitting suspended from 6 p.m. to 7 p.m. 
Hon PETER DUNNE 
: Let me return to where I was at about 6 o’clock. I had just uttered the words “At the outset” when the adjournment was called so let me pick up from that point about the Misuse of Drugs Amendment Bill that I had just moved be read a first time. What I was going to say at 6 o’clock was that this bill is not about a comprehensive review of drug legislation in this country because as members will be aware the Law Commission is currently consulting on an issues paper that addresses drug legislation from a first-principles approach. Parliament will have the opportunity to more broadly discuss how we deal with drugs in this country once the Law Commission has presented its final recommendations to the Government. However this bill will achieve several important things. First it closes off the source of precursor substances for the illegal manufacture of methamphetamine. Second it makes targeted changes to the Misuse of Drugs Act that are necessary for the effective administration of drug control. In particular it removes thalidomide as a controlled drug as it is now more appropriately controlled under the Medicines Act. The bill also removes the exclusion whereby a hazardous substance cannot also be a restricted substance it broadens the definition of amphetamine analogues and it allows greater control over drug paraphernalia. 
It is generally widely accepted that New Zealand has a problem with methamphetamine. Methamphetamine is the only illegal stimulant drug that is commonly manufactured in our country. We have high rates of use by international standards. A recent survey showed that just over 2 percent of New Zealanders aged 16 to 64 years had used methamphetamine in the previous year. Methamphetamine is a particularly problematic illegal drug in New Zealand. It causes significant harm to individuals families and communities. It increases the risks of cardiovascular problems convulsions and mental health disturbances including paranoia and violent behaviour. Methamphetamine use is especially concerning in those with mental health problems issues with anger and a predisposition for violence. Gangs and other organised criminal groups are closely involved with the manufacture and the supply of methamphetamine. The trade of this drug is associated with significant crime and violence. 
So it is vital that as a Parliament we take all reasonable steps to address the use of methamphetamine in New Zealand. In September 2009 Cabinet agreed to a comprehensive package of measures to control methamphetamine precursors to break drug supply chains to improve access and routes into drug treatment to improve support for the community to combat this drug and to provide stronger leadership by the Government. This package was announced by the Prime Minister last October when he launched a new Methamphetamine Action Plan which aims to significantly reduce the use of methamphetamine and consequently lead to a reduction of the harms it causes in this country. 
The next logical step that we must take to reduce the harm from this dangerous drug is to restrict the availability of the key ingredients required for its manufacture. These ingredients are the substances pseudoephedrine and ephedrine with pseudoephedrine being the main precursor of choice for drug manufacturers in New Zealand. Members will be aware that pseudoephedrine is currently available over the counter in many pharmacies in a number of cold and flu remedies. However the advice of the Expert Advisory Committee on Drugs and also the Prime Minister’s chief science adviser is that effective alternatives to pseudoephedrine are available. The harms posed by the diversion of pseudoephedrine to the manufacture of methamphetamine outweigh the need for the ongoing over-the-counter availability of preparations containing this substance. 
This bill therefore reclassifies pseudoephedrine and ephedrine as class B controlled drugs under the Misuse of Drugs Act 1975. This reclassification will have the effect of removing the over-the-counter availability of preparations containing these substances from pharmacies and will ensure that they are available only with a prescription from a medical practitioner. This will restrict the availability of these substances and make it difficult for potential manufacturers of methamphetamine to access the key ingredients to make the drug. 
Reclassification of these substances as class B controlled drugs will also give the police and Customs Service increased powers to control supply such as being able to obtain a warrant to intercept communications. 
The penalty for unlawful dealing of class B controlled drugs is imprisonment not exceeding 14 years. The penalty for unlawful possession or use of these drugs is imprisonment for a term not exceeding 3 months a fine not exceeding $500 or both. This reclassification will also require pharmacists and the pharmaceutical industry to comply with additional restrictions associated with a class B controlled drug such as safe storage. In order to give industry time to bring into effect these changes the bill proposes that the provisions relating to ephedrine and pseudoephedrine will not come into force until 3 months following the date of enactment. The bill also establishes the quantity or amount at or over which these substances are presumed to be for supply at a level of 10 grams. 
I acknowledge with thanks the report of the Attorney-General on the New Zealand Bill of Rights Act about the implications of establishing a presumption for the supply of ephedrine and pseudoephedrine. The Attorney-General has raised some concerns that the quantities of ephedrine and pseudoephedrine to be presumed to be for supply are not consistent with the New Zealand Bill of Rights Act 1990. I fully acknowledge these concerns which have also been raised in the past that presuming any substance to be for supply may be in breach of one’s presumption of innocence. So for this reason I support the Law Commission’s review of this matter within the wider review that is under way into the Misuse of Drugs Act. I will take the Law Commission’s recommendations in regard to the presumption for supply very seriously. 
But it is not the intention of this bill to second-guess the outcome of the Law Commission’s review. Under the current Act if a specific presumption for supply quantity is not set then the default presumption of supply of 56 grams will take effect. Possession of that quantity of pseudoephedrine would be the equivalent of taking a full dose of cold remedy every day for 6 months which is clearly excessive and brings with it a real risk of being used to make methamphetamine. The presumption for supply of 10 grams that the bill proposes was that recommended by the Expert Advisory Committee on Drugs following careful consideration. I have accepted that committee’s recommendation. 
In addition to providing for the reclassification of ephedrine and pseudoephedrine the bill also provides an opportunity to address four other important matters that have been awaiting legislative action. First the bill as I said earlier removes thalidomide from schedule 1 of the Act in order to make this substance no longer a class A controlled drug. Everyone in the House I am sure is aware of the tragic circumstances of the 1950s and 1960s when thalidomide was widely and improperly used. But it is not a psychoactive substance and it has no potential to be abused. Its placement in the Misuse of Drugs Act is therefore an anomaly. Thalidomide is actually a medicine with legitimate applications. Accordingly the Medicines Act 1981 is the most appropriate legislative mechanism to control it with strict guidelines being made to prohibit its prescription during pregnancy. A notice in the  
New Zealand Gazette  
to schedule thalidomide as a prescription-only medicine will be issued concurrently with the passage of this bill to ensure that appropriate controls around the substance remain in place. 
The bill will also correct a problematic overlap between the Misuse of Drugs Act and the Hazardous Substances and New Organisms Act 1996 by removing the exclusion whereby a hazardous substance cannot also be a restricted substance. The restricted substances regime is an important mechanism to place robust controls around low-risk psychoactive drugs such as so-called party pills. These substances would otherwise not have sufficient evidence of harm to warrant classification as controlled drugs. But the current wording of the legislation unintentionally acts as a barrier preventing the scheduling of any substance as a restricted substance. So the bill’s amendment proposes to remove this interference and to allow for the continued scheduling of low-risk drugs that would otherwise not be controlled as restricted substances. The bill also makes some amendments to the definition of amphetamine analogues—again a recommendation from the Expert Advisory Committee on Drugs. 
Finally the bill will expand the provisions for prohibiting the importation and supply of utensils used for the purpose of administering controlled drugs. The bill provides for notices to be made to make it an offence to possess utensils for the purpose of sale or supply and prohibits the importation of incomplete utensils that for example require only the addition of a metal cone to burn cannabis to become useable. This will allow police and customs to move more effectively to enforce the utensils provisions in the current legislation and to minimise the visibility and the availability of drug paraphernalia. This bill seeks to address problematic drug use in New Zealand through a number of measures and I consequently commend it to the House. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I begin my contribution this evening by saying that I intend to move an amendment to the referral motion and that amendment is to delete all the words after “committee”. 
I have to say that it is a measure I take out of frustration and surprise because the Minister who has just resumed his seat the Hon Peter Dunne is probably the person who I considered—prior to this evening—as the least likely member of this House to use a process for the consideration of legislation that was unnecessary. 
That Minister has been a stickler for good process in the past. He has prided himself on that and chided others for their abuse of a process that was unnecessary. He has hung out to the nth degree of time in opposition to—and we will not worry about the policy issues—the unnecessary use of urgency and to the extension of select committee sitting times when it was not necessary. But here we have that very same Minister using what I consider to be the proper process of Parliament and the select committee for an exceptional circumstance in what is clearly not an exceptional circumstance. 
Classifying pseudoephedrine and ephedrine-containing medicines as prescription-only drugs changing the classification of thalidomide and extending the controls over drug paraphernalia are not things that need extended sitting time. I am gobsmacked that that Minister has changed his behaviour so quickly clearly at the determination of the National Government. I think it is unnecessary and we should stand up against it. I urge the Minister to do what he has for many years lectured others about doing. He used to be a man of principle but he is now moderating that measure of principle. 
Having said that Labour supports the referral of this bill to the select committee. One of the reasons is that we want to play our part in what I think will be a near-unanimous decision of this Parliament. We want to play our part in doing everything we can to stop the damage done by P in our families our communities and our society. Labour will do everything it can to reduce the use of P and therefore reduce the damage that is done to individuals and their families. I have grave doubts about whether this bill will do that but why not hand it over to the experts who will be able to appear before the select committee and give us the benefit of their wisdom? That is why we want to support this bill’s referral to a select committee. 
The other concern I have about this bill is that there is a real contradiction. We have this great leap forward by asking every New Zealander to get a prescription for over 20 percent of cold and flu medications because of the ingredients they contain and the possibility that they will be used for manufacturing P. But at the same time we know that the majority of P is manufactured from imported ingredients and we are cutting back the resourcing for police and customs to do the job of protecting our borders against the importation of this material. 
Another consideration I urge the select committee members to keep in mind is the additional cost that this measure will impose on ordinary New Zealanders who have done nothing wrong—other than having a bad cold and wanting to get rid of it in a hurry. They want to be like the person in the ad who is sitting at the bus stop and not sneezing while the person next to him has a very bad cold. That is the worst that most New Zealanders will have done. They will have caught a very bad cold and they will want to take some medication to get rid of it in a hurry. But now they will have to get a prescription and because they will need to go to the doctor to get a prescription they will have to pay for the visit as well. So there will be quite an additional financial cost on individuals at a time when more and more New Zealanders are feeling financial pressure. 
More people are out of work and more people are working reduced hours and we have not seen the pay increases we might have hoped for in past days but the Government will load another cost on to people. This measure will clearly be a challenge for some people because in many parts of the country it is very difficult to see a doctor and people have to wait for quite some time. The waiting lists for doctors are increasing. Some people have moved to different parts of the country—Wainuiomata Timaru Levin—where doctors’ books have been closed so people new to town cannot get in to see a doctor at all. I am not quite sure how those people will get their prescriptions. 
Of course the even bigger concern is that one of the significant positive contributors to supporting people who might have drug and alcohol addictions is being taken away from them—our mental health and drug and alcohol treatment centres. My colleague Iain Lees-Galloway who I hope will have an opportunity to contribute to the debate later on this evening has recently asked the Minister about the cuts to the St Marks Adult Drug and Alcohol Treatment Centre in Blenheim the Care New Zealand clinic in Otahuhu and Ashburn Clinic in Dunedin. Those places give support to people who want to get away from their drug and alcohol addictions. Those places are laying off staff because of funding cuts signed off by the Minister of Health. 
So here we have the so-called great commitment from the Prime Minister and the Hon Peter Dunne to wage a war on P. They will ensure that ordinary New Zealanders have to go to the doctor to get a prescription for cold and flu medication but at the same time they are taking away resourcing for police and customs officers and they are cutting the funding for drug and alcohol treatment. How does that package make sense? I do not understand how there can possibly be a serious war on P when the very parts of the picture that actually make a difference are being taken away. 
There are a couple of other things I would like to mention. The first is the concern that the Hon Chris Finlayson has raised. In his view the legislation raises an issue in relation to the New Zealand Bill of Rights Act because it sets out a presumption for supply. The message that Peter Dunne is giving to the good New Zealanders not only in his electorate but in mine as well is that if they go to the chemist to ask for a packet of whatever medication happens to have pseudoephedrine or ephedrine in it then the presumption from the Government is that they are buying that in order to manufacture and supply P. I think that Chris Finlayson’s concerns are justified; most New Zealanders do not do that. 
The final point I want to raise is with regard to the regulatory impact statement. It is coming from a Government that has led the charge on regulatory reform and the Hon Rodney Hide must be a bit embarrassed by it. The regulatory impact statement is meant to set out regulatory options; it is meant to look at all the options and the impact of those regulations. This regulatory impact statement states: “There are no other regulatory options proposed at this time since Government has already decided this course of action.” What sort of regulatory impact statement is it? Its job is to provide all of the options yet it states that it did not bother because the Government has already taken its course of action and made the decision. 
It seems to me that the intent behind the legislation is sound. As I said at the beginning of my speech tonight Labour is 100 percent behind any moves to rid society of the scourge of P and the harm it does in our families and communities. This bill raises more questions than answers and I look forward to the select committee considering it. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank goodness for the National Government for progressing this war against pure methamphetamine! Undoubtedly this bill is part of the five-point plan to wage that war. Pure methamphetamine adversely affects every strata of New Zealand society. It is very interesting to note a recent Business and Economic Research Ltd study which has shown that the cost of non-alcohol financially adverse effects—that is effects relating just to drugs—amount to something like $1.5 billion. 
Clearly the adverse effects emotionally and for family are just absolutely enormous. An example in our community of Pukekohe in the Hunua electorate is that over the last year or two a chemist in his 60s has been caught supplying pseudoephedrine and ephedrine over a long period of time. This man was regarded as a doyen of society—he was a churchgoer—but he was suddenly found to be heavily involved in the supply of those drugs. 
It is important to reinforce the fact that the Prime Minister’s Chief Science Adviser Sir Peter Gluckman has stated that there are safe and effective alternatives to pseudoephedrine and ephedrine; a variety of countries around the world have banned these products in mixtures for colds. This bill among other things classifies ephedrine and pseudoephedrine as class B drugs which carries with it very very significant penalties. As was noted by the excellent Minister Peter Dunne the presumption of supply threshold is 10 grams. 
Hon Lianne Dalziel 
: How much is that? How many pills? 
Dr PAUL HUTCHISON 
: Well that is a very interesting point. Each pill contains about 240 milligrams; the maximum prescription one can have contains about 7.2 grams so two prescriptions would amount to being over the presumption of supply threshold of 10 grams. 
I think it is absolutely right that the Attorney-General’s report has come out and stated that this bill does indeed contravene section 5 of the Bill of Rights. But he cites the Hansen case where he states that the majority in that case “concluded that the control of the supply of illegal drugs is a pressing social objective which might justify limitations on rights and freedoms affirmed in the Bill of Rights Act.” The Attorney-General states with regard to that: “Accordingly … I have concluded that the Bill’s objective is sufficiently important and significant.” 
Just to end up I say that I look forward very much to rigorous and vigorous scrutiny in the select committee process. I commend this bill to the House as a very very important part of the jigsaw in fighting the war against pure methamphetamine in New Zealand. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It is a pleasure to follow the chair of the Health Committee’s surprisingly short contribution on the Misuse of Drugs Amendment Bill a bill important enough to have its first reading under urgency. Like the chair of the Health Committee I look forward to there being a vigorous and rigorous debate on it at the select committee. There are a number of things in this bill and if I get a chance to do so I will cover more than just the question of the classification of ephedrine and pseudoephedrine. But given that to this point that issue has occupied the minds of most of the speakers I will pick up where Dr Hutchison and my colleague the Hon Ruth Dyson left off with the regulatory impact statement. 
Under the heading of “Problem definition” we actually have a problem. It states that the “New Zealand Police has reported that one in three clandestine methamphetamine laboratories detected contain traces of domestically sourced PSE. This does not suggest that 30% of methamphetamine in New Zealand is manufactured using domestic PSE however Police consider that the levels diverted for illegal purposes is significant.” So we know that not even 30 percent of the problem is caused by domestically sourced pseudoephedrine but we know that the domestically sourced amount is significant. We do not know exactly what “significant” means; we do not know whether it is 5 percent 10 percent or 15 percent. We do not actually know the extent of the problem the extent of the question that we are trying to address with this bill. It is perfectly valid to seek out the sources of P and to try to crack down on them but as my colleague Ruth Dyson said earlier on this requires a whole-of-Government approach. We are cutting back on Customs Service resources yet the vast majority of the sources of methamphetamine are coming into the country illegally from offshore. That is where we should focus our attention not on the locally sourced product here in New Zealand of which we do not even know how much actually contributes to the problem. 
Further down in the regulatory impact statement we see that “While a significant amount of PSE currently available in over-the-counter medications is considered to be diverted for non-legitimate purposes the majority of PSE used to manufacture methamphetamine is illegally imported.”—a continuation of the same problem. It goes on to state: “This proposal may have the unintended consequence of increasing levels of illegally imported PSE however Customs is concurrently increasing its capability to deal with methamphetamine and precursor trafficking at the border.” Well the Customs Service may well be trying to do that but the fact of the matter is that the Minister and the Government are cutting its resources for doing that. So although this bill in itself is perfectly reasonable sensible legislation that seeks to address a problem in our communities if we actually look at what the Government is doing right across the spectrum we find that it is shooting itself in the foot. This legislation will be a drop in the bucket in comparison with the cuts that the Government is making to those who are trying to combat the source of the real problem. The fact of the matter is that in dealing with drug abuse and alcohol abuse we need to take a whole-of-Government approach. 
It is interesting that this bill comes up during the period of time when the Law Commission is considering its review of the Misuse of Drugs Act. Of course we all look forward to finding out the results of that review which may actually make this legislation completely obsolete. We could find ourselves back in here to rewrite the whole thing. The Law Commission actually got to the bottom of the problem in saying that harm minimisation requires “a broad and integrated approach” and that there are essentially three pillars to that approach. The first is supply control which is measures that control or limit the availability of drugs and that is what we are talking about here tonight. But there is also demand reduction and problem limitation. Again when we look across what the Government is doing in those areas we find that it is essentially undermining itself and it is undermining the work that it is trying to do here tonight. 
We have seen cuts to front-line services and cuts to community-based alcohol and drug services that actually deal with the issues of demand reduction and problem limitation. We know that the Care NZ clinic in Otahuhu the St Marks Adult Drug and Alcohol Treatment Centre in Blenheim and the Ashburn Clinic in Dunedin have already suffered cuts. They have laid off staff and they have reduced programmes that would actually deal with the other side of the problem. Supply limitation is just one part of it; there is a lot more to it than just that. So while the Government continues to take that approach legislation like this will not have the effect that is sought. We just have to look at some of the other Government decisions: $186 million in low-priority funding has been cut and that includes $12 million from mental health services. 
Hon Ruth Dyson 
: How much? 
IAIN LEES-GALLOWAY 
: Twelve million dollars. There is no longer a mental health target. That is not a priority for this Government. 
Increasing the amount of elective surgery and addressing emergency department waiting times although they are in themselves very worthy are like putting an ambulance at the bottom of the cliff. This Government refuses to take a long-term public health approach to keeping New Zealanders well. If we were interested in keeping New Zealanders well we would be interested in the mental health of our communities and we would be interested in assisting those people who want to come away from drug and alcohol problems to actually escape them. But there is no drug and alcohol treatment target either. This Government is focused on short-term bottom of the cliff measures; it is not interested in real long-term measures that would achieve the outcomes that the writers of this legislation claim to be seeking to work on. 
As I said this bill is not just about pseudoephedrine. Some of the other provisions in it are relatively interesting and worth bringing up. The removal of thalidomide as a class A controlled drug is a sensible move. That seems to be fairly technical but it does reveal some of the problems with regard to our legislative approach to mind-altering substances. What on earth thalidomide was ever doing in that class is a question that is worth asking. Yes it had atrocious effects on those people who were born to women who took thalidomide while they were pregnant and curbing those effects and making sure that that mistake was never made again were absolutely appropriate and very important. But thalidomide is not a mind-altering substance and never belonged in the Misuse of Drugs Act. 
The problem of having an often irrational confused approach to our classification of drugs occurs right throughout our classification of drugs and mind-altering substances. There are some fundamental problems with the way in which we classify mind-altering substances. Again the Law Commission is looking at this issue and I look forward to some serious suggestions from it as to how we can take a scientific approach to classifying mind-altering substances at how we can look seriously at the harm and the addictive nature of different drugs and at how we can look seriously at the appropriate way to regulate and control those substances. 
Another area that looks to be very technical—and I would not be surprised if no other speaker brings this up—is the amendment to the controlled drug analogue provisions of the Act by adding the words “and/or alkylthio radicals” after “alkylamino radicals”. That is designed to pick up on new drugs as they are developing. A particular class of new drugs is developing at the moment and that provision is an attempt to catch them before they are developed. But again we have a fundamental problem with the Misuse of Drugs Act in that a new substance as it comes on to the market so to speak is by definition legal. Before we even know what the effects are—the harmful effects and the effects on our community—the default position is for these substances to be legal. Then we suddenly have an outpouring of outrage and shock from the community that we have new substances on the market. Our reaction is to prohibit them and clamp down on them and that vacuum is then replaced by another substance that comes along. Something new will always replace them. 
The Law Commission has suggested a new approach to this issue whereby new substances are by default deemed to be illegal. Should someone wish to supply or manufacture those substances irrespective of whether it is for profit that person would have to apply for a permit to do that. Those substances would then be considered on their merits again taking a scientific approach to the actual harms and addictive properties associated with them. That is a very good way forward and I hope that that part of the Law Commission’s recommendations which was brought up in its issues paper is not dumped in the same way that some of its other recommendations were by the Government. The knee-jerk reaction that we had from the Government was thoroughly disappointing as there are good aspects of that review that should be followed through on. This is a good bill. It is not the best bill but we will support it. 
METIRIA TUREI (Co-Leader—Green) 
: 
 The Green Party will not be supporting the Misuse of Drugs Amendment Bill. It is inconsistent with the New Zealand Bill of Rights Act— 
Hon Judith Collins 
: Ha ha! Oh that’s right they like drugs. 
METIRIA TUREI 
: The Minister of Corrections giggles but she will not listen to serious issues about this legislation. 
We have problems with this bill in a number of areas and I will briefly go through them. The bill is inconsistent with the New Zealand Bill of Rights Act. We do not agree with the shifting of the onus of proof on to the accused when it comes to questions of supply. Essentially this bill is fiddling around the edges of what needs to be rational and evidence-based consideration of how we manage drug law and of what kinds of drugs we control and in what ways based on the harms that those drugs cause to individuals and communities and on proper scientific evidence. 
The Law Commission has produced its report. The Government has refused to address any parts of that report at this stage. The Government is clearly not taking a rational evidence-based approach to drug law. Instead it fiddles around the edges with legislation like this that will not help and in fact will exacerbate the harm caused by an irrational emotive and politically motivated drug law regime. 
It has been good to listen tonight to other members talking about the issues as to where pseudoephedrine is sourced. The predominant part of this bill is about the control of pseudoephedrine. We know that only a small amount of the drug used in the manufacture of methamphetamine is sourced from pharmacies. This legislation which controls access to the drug through pharmacies deals with only a very tiny fraction of the source of the drug which begs the question of why we would not spend this time on the dominant sources of this drug. 
The fact is that most of it is imported. We know that the recent free-trade agreement with China has provided for looser importation rules. There was significant news reporting around free-trade agreements and their impact on the importation of the source drugs for methamphetamine. Those free-trade agreements allow for less consideration and less investigation of imports from China yet a significant percentage of the source drugs for methamphetamine comes from Chinese imports. Where is the enforcement? Where is the effort to put legislation in place to deal with the dominant source of these drugs? It is nowhere. The Government does not want to deal with the issues around the free-trade agreements; it wants to maintain those economic opportunities. Therefore it will spend valuable time regulating the very tiny fraction of methamphetamine that comes out of pharmacies and it will not deal with the problem. 
We simply cannot continue with drug law reform that refuses and fails to deal with the actual problems that this country faces. In the fight against methamphetamine we need to take comprehensive action. That comprehensive action means looking at both supply and demand. The limiting of pseudoephedrine through this bill is really a very soft option. We need to move law enforcement in relation to the supply of this drug—because there are only so many resources to do this—away from obviously less dangerous drugs to more dangerous drugs and their supply. It is a no-brainer. If we have few resources we need to focus them on the most dangerous drug in order to manage the supply of that drug. 
I want to refer to an incident concerning cannabis. Just a week or so ago there was a news report that Detective Inspector Harry Quinn who retired a couple of years ago after 37 years—37 years—in the police had called on senior police to lead a debate on the cannabis issue. As a police officer he had helped to set up the national organised crime unit and he had been involved in untold cannabis eradication operations. He took flak from the police for writing a report recommending the relaxation of cannabis enforcement so that warnings could be issued to adult users rather than scarce precious police resources being used to enforce the laws on cannabis use and supply when so many other drug issues were pressing on those resources. Why would we not have rational drug law that focuses on what is absolutely needed and take into account the experience of a detective inspector who spent 37 years working at the coalface? He agrees that shifting drug enforcement resources to where they are needed is what needs to happen if we are to deal seriously with the harm from drugs. 
Detective Inspector Harry Quinn has a view on how to point resources at the most significant drugs and move resources away from drugs that do not cause so much harm and I have to say that that model was suggested by the Law Commission. So it was supported not only by the police on the ground but also by the Law Commission in its review. But the Government has put its head in the sand and is refusing even to consider it. The Government is refusing to consider these rational options. 
If we want to look at reducing demand and at reducing the harm that drug use causes to individuals their families and their communities then we must not exacerbate the harm. We should not be criminalising the users of these drugs. These people need help. We know from all the research that is done that users of illegal drugs will not seek help because they fear the effect of the law. It is the single biggest barrier to people seeking help when they need it. Why would we have silly fiddlings around the edges of drug law like this bill when we know that if we could remove that barrier from people and from their families then we would be able to contact those people get access to them and get them into the support and the help that they need? We could provide them with the health services and the drug and alcohol rehabilitation that they need. Their families are not going to dob them in either. Even family members who can see the harm being done from the use of the drug will not contact Government agencies because they too fear the impact of the law on that person. 
Why would any rational drug law put up such an unnecessary unjust and harmful barrier to people who need help? Until our drug laws in this country are looked at from the point of view of harm minimisation of focusing on regulation and control of genuinely dangerous drugs none of this stuff will make any difference. The rhetoric around the war on drug use is just rubbish. Legislation like this and the current drug law regime simply provide a huge black market for a bunch of people to make a heap of money and meanwhile the families on the ground are suffering and nothing changes for them. This law will do nothing for families who are desperately in need of help. 
Pseudoephedrine is one of the areas where we need to take advice from a variety of experts. I have talked about the Law Commission and I have talked about the police. Let us talk about the pharmacies. The pharmacies where pseudoephedrine comes from are already very strict about its sale. The Pharmaceutical Society is against the move in this legislation to further restrict it because the society’s view is that it is very worried that pharmacies will end up dispensing much more potent pseudoephedrine which would likely increase the attacks on pharmacies. This legislation will put pharmacies at further risk. Where is the harm minimisation approach in that? 
I turn to the restriction on utensils covered in the bill. Honestly that has always been ridiculous. One of the things that we know around the use of utensils for the consumption of drugs is that often the utensils help to reduce the harm caused by the consumption of that drug. Further restricting utensils like this is a feel-good measure. It makes the Government feel like it is doing something but actually it causes harm. This legislation will simply do more harm to pharmacies more harm to businesses and more harm to the users of drugs. It will not do anything. It will not regulate the supply of the component drugs of pseudoephedrine because it is not focused on where the drugs mostly come from. The bill does nothing. It is a complete waste of time. 
In the meantime—while we are sitting here wasting time on legislation that will do nothing for families—those families are hurting every day. Children are hurting every day. If we want to invest in our families serious drug rehabilitation needs to be available to everyone who needs it. We need it for every single prisoner who has a drug or alcohol problem. We need to regulate the two most dangerous drugs in this country which should come under the Misuse of Drugs Act. Alcohol and tobacco kill thousands and thousands of New Zealanders every year. [ 
Interruption 
] National members are complaining about this but the fact is that the two legal drugs that are the most dangerous and kill the most New Zealanders in this country are not regulated under the Misuse of Drugs Act. In fact they are treated as a food. 
This country needs rational evidence-based drug laws that will make a genuine difference to families. This Government refuses to put them in place. 
Hon Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker. I will take a short call on the Misuse of Drugs Amendment Bill. The bill amends the Misuse of Drugs Act 1975 and the Misuse of Drugs Amendment Act 2005 by inserting a complex drug vocabulary into the statute. The basic incentive of the bill is to reclassify ephedrine and pseudoephedrine as class B2 controlled drugs remove thalidomide as a class A controlled drug allow hazardous substances to be scheduled as restricted substances extend the definition of amphetamine analogues and extend the controls over drug paraphernalia. The bill prohibits the supply importation or possession for the purpose of sale and supply of a pipe other utensil or identifiable component of a pipe. That is the paraphernalia part. The bill also amends the Land Transport Act 1998 to reflect that thalidomide is no longer a controlled drug. Previously it was an exception to the offences of driving under the influence of schedule 1 controlled drugs. As it is no longer a controlled drug it does not need to be an exception to those offences. 
Let us be clear: the real purpose and value of the bill is to add to the campaign against P. Technically speaking this legislation defines ephedrine and pseudoephedrine as class B2 controlled drugs whether or not they are contained in a substance preparation or mixture. The key point is that the risk of pseudoephedrine being diverted into the manufacture of methamphetamine outweighs the requirement of its ongoing availability over the counter. 
Anyone who has experienced the havoc that P wreaks on families and communities will tell us of the devastating impact this drug has on health and the well-being of a community. We have however done some amazing things in our communities in fighting the scourge of P in our midst. For years besieged communities have run programmes responding to the effects of P and trying to help keep people away from it. The Patua Te Ngangara programme at Hoani Waititi Marae is one such programme. I am proud to say that I initiated that programme and I ran it for 4 years and it is still going now. We took that programme around New Zealand to educate people about P and we stopped at various towns from Kaitaia to Invercargill. We heard devastating anecdotes and we heard of situations from police and people attending those hui. We heard of mothers sending their children out to prostitute for them so that they could get money for their P habit. A little girl tried to hang herself at school and was cut down. She said she was on P but she was not; she was prostituting for her mother who was on P. We heard of a man coming home from work to find a gang in his house with his wife who owed $10000. We heard story after story. We heard of a man who wanted to shoot his son because he had caused such havoc within his family because of his P habit and so on. It is really horrific. P is the most antisocial of all drugs and it attacks society. 
However towns and communities around the country have declared themselves to be P free. There are rahui set up in certain places against P and generally there is a spirit in the community that it is not good to use P. Even amongst gangs there is some work being done on getting rid of P. Denis O’Reilly is leading a lot of that work amongst the community. We know that children as young as 9 years old have been sold P in fruit-flavoured tablets. There are all sorts of different things going on. It is all scary stuff and anything at all that stops the assault of P on our young lives has to be considered. So the Maori Party will support any initiative to curb the underbelly of the P industry. If this reclassification will help towards that end then we will support it. 
I commend the local councils for working together with iwi police and Government agencies to remove the pushers cooks and suppliers of this drug. But I hope that low-income families will not incur additional costs for doctors’ prescriptions for cold medicines that contain pseudoephedrine if those families are merely visiting the doctor to get those prescriptions only. The Maori Party will support this bill and let the korero be had at the select committee. Thank you. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak on the first reading of the Misuse of Drugs Amendment Bill which amends the Misuse of Drugs Act 1975 in order to reclassify ephedrine and pseudoephedrine as class B2 controlled drugs and remove thalidomide as a class A controlled drug to allow hazardous substances to be also scheduled as restricted substances to extend the definition of “amphetamine analogues” and to extend the controls over drug paraphernalia. 
Ephedrine and pseudoephedrine are precursors of P. In the first 7 months of this year 23 kilograms of methamphetamine were seized which is four times the amount seized in the same period last year. Members should make no mistake: this is a huge business in New Zealand and it is worth hundreds and hundreds of millions of dollars. There are close associations with gangs and their clandestine operations in suburban homes and let us not forget that gangs are associated with weapons which they use to protect their operations. 
Tackling P and the drugs trade is a huge priority for the law and order team and I acknowledge the work done by the Minister of Justice and the Minister of Police. We have created a dedicated anti-drug Customs Service task force and we have made it easier for the police to go after gangs and to go after the proceeds of crime. That is why we are restricting access to the precursors of P which are pseudoephedrine and ephedrine. We have heard from Sir Peter Gluckman the Prime Minister’s Chief Science Adviser that suitable alternatives to these medicines can be bought across the counter though pseudoephedrine and ephedrine can still be obtained through a prescription. 
I took some time out today and went to a conference in the Banquet Hall hosted by the Sensible Sentencing Trust. It was incredibly powerful. There was a wall of photographs of people who had been murdered—young men young women and children. Many of those people I would say had been murdered when their assailant was high on P. Susan Couch was present at the conference. Her assailant William Bell was high on P; she was almost beaten to death and he unfortunately killed three innocent victims. There was a picture of Coral Burrows aged 6 who was murdered by her stepfather Steve Williams while he was high on P. 
P is a tragedy of huge proportions in this community so this bill is a step in the right direction and I commend it to the House. 
Hon LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 Kia ora talofa lava and warm Pacific greetings. Thank you for the opportunity to speak on the first reading of the Misuse of Drugs Amendment Bill. As the bill is an attempt to get pure methamphetamine or P off the streets of New Zealand I am very happy to support it going to the Health Committee. However I have a number of concerns which I will discuss later. For now I will discuss some of the effects of P and what it does to New Zealand and New Zealanders. 
As we all know methamphetamine is incredibly addictive—more so than other drugs such as cocaine. The Expert Advisory Committee on Drugs has noted that users of methamphetamine move more quickly from initial use to regular use than other drug users and are more likely to move on to dependency—and we all know the results of that. Even if someone receives treatment and overcomes his or her addiction to P the psychological and emotional consequences are likely to remain with that person for years. The long-term effects of P on the individual have been well documented and include fatal kidney and lung disorders brain damage depression violent and aggressive behaviour and lowered resistance to illness. 
But as we all know the effects on the individual although extremely harmful are only half the story. The impact on the family and close friends of addicted individuals is devastating not to mention the impact and effects on our communities and on wider society. We all know about the links that P and the manufacture of P have with crime. P is hugely profitable for gangs and for many other groups including white-collar criminals and addiction to the substance can spawn criminal activity in itself. 
This bill intends to make the manufacture of P more difficult by restricting access to ephedrine and pseudoephedrine which are some of the active ingredients of methamphetamine. Currently pseudoephedrine is available over the counter in cold and flu remedies from pharmacies. Reclassifying both pseudoephedrine and ephedrine as class B2 controlled drugs will make their availability impossible in the future will hopefully lead to restriction of supply to the manufacturers of P and will help to control the prevalence of the drug. 
I will quote Iain Lees-Galloway my colleague and the spokesperson on alcohol and drugs for this side of the House. He has made an interesting comparison with alcohol and has said that far more people are affected by harmful drinking than by drugs. 
As I said before the bill is an attempt to get P off the streets and that is enough to warrant its progress to the select committee where I hope it can be further deliberated upon. But I have some concerns. Firstly one of the things that my colleagues have emphasised which I hope will be discussed is the possible effect on the availability of cold and flu remedies to New Zealanders. Approximately 20 percent of cold and flu remedies available currently contain pseudoephedrine so attention will have to be paid to securing effective alternatives to those remedies. Certainly it should never be the case that New Zealanders who have never approached methamphetamine or the manufacture of methamphetamine have to pay a doctor’s fee and a prescription fee for cold and flu medicine. If that is what results from this bill then we have a clear case of most of the population of New Zealand being adversely affected by the actions of a small minority. 
Secondly we are not sure as yet how much of the ephedrine and pseudoephedrine used in the manufacture of P is actually sourced in this way. It is likely that the vast majority of it has been obtained overseas and imported separately. Therefore it seems strange that at the same time as the Government is supposed to be restricting P manufacturers’ access to their ingredients it is also cutting funding to the Customs Service and the Police. It is restricting access in one sense and opening up opportunities for criminals in another. To be effective this measure needs to be combined with more targeted border enforcement not a weakened Customs Service. 
Another area that I am concerned about is mental health services where the Government is making huge cuts. That has led over the last 2 years to the restriction of services that would help with addiction and addiction-related problems and provide support for families. Just this year $12 million was cut from mental health services. They were cast as low-priority services and district health board funding was cut. Surely in order to have an integrated and effective plan to rid New Zealand of P and associated problems we need to be funding the services that provide the much-needed support that can help people remove the scourge of P from their lives. 
In short as the bill is a measure to help restrict the manufacture of P I support it going to the select committee. It is hugely important that we do what we can to rid New Zealand of P and associated harms. But I do see a number of weaknesses in the implementation of this plan including the failure to adequately back up this measure with increased border control and increased funding for addiction and mental health services. 
Our leader Phil Goff and our law and order spokesperson Clayton Cosgrove when talking about this issue in October last year said that Labour supported any move that got P off New Zealand’s streets. There is a contradiction in resourcing with most ingredients for P coming from overseas at a time when the Police and the Customs Services have suffered budget cuts. The Police and the Customs Service have been asked to do more with less. 
There is concern that law-abiding Kiwis will be forced to pay doctors’ fees and prescription fees for cold and flu medicine because of the actions of a few. On the face of it the innocent are being whacked with extra costs and we are not sure what effect this bill will have on the perpetrators of crime. We question the depth of the National Government’s plan to wage war on P with cuts to mental health funding in both Budgets and with the closure of addiction and treatment centres under this Government. Thank you. 
NICKY WAGNER (National) 
: 
 I rise to support the Misuse of Drugs Amendment Bill and I thank the Associate Minister of Health the Hon Peter Dunne for bringing it to the House. This is sensible legislation. It is designed as a response to public concerns about the harm of drugs—in particular P—in our community. 
P is a very New Zealand problem as we have one of the highest percentages of P users in the world. This legislation is a first step in closing off the sources of precursor substances for the illegal manufacture of methamphetamine. We know that the ingredients for the manufacture of P come both from the reconstitution of legal over-the-counter cold and flu drugs and from the direct importation of pseudoephedrine. This bill reclassifies ephedrine and pseudoephedrine as a class B2 controlled drug so that it is available only on prescription. That will make it much more difficult to obtain over the counter and therefore it will make it much more difficult for P cooks to get ingredients. Right now our police tell us that local pseudoephedrine is found in one-third of all P labs. 
There has been a lot of debate in the community about the loss of these over-the-counter cold and flu drugs and I have even heard of some families stocking up on these remedies because they cannot live without them. But research tells us—and indeed Professor Gluckman the Prime Minister’s chief scientist concurs—that clinical evidence shows that safe and effective alternatives are available. But generally speaking the public supports this legislation because it will greatly reduce the availability of source drugs. At the same time New Zealand Customs Service officers are working hard to close the door on imports of pseudoephedrine from overseas. They are focusing on tightening border controls and are making it much more difficult for P labs to get imported source ingredients. It is true that many New Zealanders are in the grip of P. This legislation will make it more difficult to obtain this drug. Therefore I commend this bill to the House. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 I welcome the opportunity to speak on the Misuse of Drugs Amendment Bill. It is a very important bill. I guess it is one that the Labour Party supports. Who would not support a Government initiative aimed at reducing the harm from drugs? Parliament does a lot to try to minimise the harm from road crashes and to minimise occupational safety and health issues in the workplace. On all sorts of things Parliament generally in unison does its best to reduce harm. 
This Government initiative is slightly misguided I think. It will reclassify ephedrine and pseudoephedrine. It will make people go to the doctor to get a prescription for what are very effective drugs to deal with colds and flu which seem to be on the rise these days even with flu jabs dare I suggest. People will inevitably get a new strain of flu and on it goes. These drugs have been developed and they are effective. But they have been used—or abused I should say—to make methamphetamine and P in particular. It is a New Zealand problem because smart chemists here have managed to develop these drugs for destructive use quite frankly—one could hardly say “recreational use”. They are a curse and a scourge on our community. I recall that when P first emerged I was flatting with good mates Dover Samuels and John Tamihere and they were both distraught. As the story started to emerge it became apparent that these illegal drugs were a real scourge on our Maori community throughout the country. I do not think anyone would object to any effective initiative taken to try to reduce the harm. 
Of course another drug causes huge harm to society and it is quite topical at the moment. It is called alcohol. It seems as though the National Government is not quite as determined to reduce the harm from alcohol as it is to reduce the harm from P. The harm from P is far more acute but thankfully it is not used as frequently or by as many people across the country. We do want to reduce its usage and there have been some good initiatives. The incoming National Government made a song and dance about what it would do and I commend it for making this attempt but this bill goes only part-way towards dealing with the problem. If we deal with the precursors purchased from New Zealand pharmacies supermarkets or whatever then we might make some progress. 
Australia has been trying to deal with this issue for some time. The precursors have been used to make different drugs. A system has been developed involving the Australian police and pharmacies and it was being developed in New Zealand. I am not sure where it is up to at the moment but it was an initiative whereby pharmacies would monitor the sale of ephedrine and pseudoephedrine products. They would look out for people buying them in bulk and sometimes an odd pattern might emerge of an individual buying a lot. Australian pharmacies started to monitor that. With computers it is quite easy to pick up patterns and pick up individuals and in fact the police there apprehended many people as a result of that process. That initiative was being developed here; I am not sure where it is at the moment. I hope the Minister of Police who is sitting over there will get up and tell the House whether that initiative of monitoring pharmacy sales and contacting the police about suspicious sales is being done in New Zealand. 
The reclassification in this bill and making people go to a doctor to get a prescription in themselves will not stop the problem because we know that a huge amount of precursors is being smuggled into the country from other countries. I cannot say that it is just from China but I know there have been some big seizures there. The point I am trying to make is that of course Labour will support this bill because we want to reduce the harm from P and methamphetamine in this country but let us get some consistency from the National Government. The thing that astounds us time and time again is the Government’s inconsistency. 
There is a view that imposing a tougher penalty and restricting what can be done will solve the problem. Well the harsh reality of P and methamphetamine is that people become addicted very very quickly. What happens if people experiment have access to P or methamphetamine and become addicted? Well there are only three options for that person: they die very quickly from an overdose or harm themselves; they continue to use and become criminals because they need money to buy the drug; or they acknowledge that they have a problem and seek treatment. If the third option occurs where do they go? It is hard to imagine that there will be more places to go when this National Government has allowed the closure of some treatment places throughout the country. I am sure that my colleague Mr Iain Lees-Galloway will point to the fact that the St Marks Adult Drug and Alcohol Treatment Centre has closed. Is that correct? Yes it has closed. It was in Blenheim. The Care NZ clinic in Otahuhu is another example. [ 
Interruption 
] I could go on. That member’s own patch of Dunedin includes the Ashburn clinic. Has it closed? 
Michael Woodhouse 
: Fine institution. 
Hon DAMIEN O’CONNOR 
: Has it closed? 
Michael Woodhouse 
: No—alive and kicking. 
Hon DAMIEN O’CONNOR 
: With restricted funding. Oh I see—ah really. Well there we go. 
Charles Chauvel 
: Service reprioritisation. 
Hon DAMIEN O’CONNOR 
: Oh reprioritisation—low-value spend. Spending money on drug addicts is not high priority. I guess that the community might disagree. The problem is that if we do not spend money on rehabilitation those people continue to be serious offenders and go on to commit what are often serious crimes. My knowledge in this area as a former Minister of Corrections is that many of them ended up being clients of the State. We ended up paying $70000 $80000 or $90000 a year to house them in prison because they had committed crimes to feed their methamphetamine habit. 
The question I ask is whether the Government will commit more money to drug treatment centres and programmes and indeed whether it will support the existing ones. It stood by and allowed through the cuts to district health board funding a number of very valuable organisations to cut back services that we desperately need. Drug use has continued to climb. That is a sad reflection on our society. I am not saying that it necessarily will but unless this Government gets a little braver and does something about alcohol we will continue to need alcohol treatment centres. 
Michael Woodhouse 
: Spurious argument. 
Hon DAMIEN O’CONNOR 
: The member over there does not believe this. He knows full well because I know he has a conscience and because he has worked in the health sector how difficult it is to treat these people what resources are needed and what staff training is needed. When Labour members came into Government we found that although we were committed to doing something about it there were not enough registered qualified drug and alcohol counsellors so we had to ramp that up. I hope the Government has continued that but I am not sure. I do not trust its commitment to things like this. It will take the populist easy option and say that it will deal with P and methamphetamine by shutting down access to the precursors and by making people get a prescription to get pseudoephedrine. 
That may make a difference but it will not make the big impact that we need in this area. We need a comprehensive programme not cuts to benefits a squeeze on accident compensation and the mean-spirited approach that this Government has taken to people who are on the bottom rung of the ladder for whatever reason. They may have been born into poverty or they may have been abused. There are many many reasons why people need support. Unfortunately too many of them end up using drugs for whatever reason. We know that that is a fact. We have a moral responsibility to try to assist them. We have to identify the problem; yes if possible to prevent access to drugs—and this measure is a step in that direction although it is not sufficient in my view—and to allow people access to proper treatment. These addictions are all-consuming. People live for their next fix. Although Labour members support this bill we say that the Government needs to commit more funding to treatment and commit more funding to existing programmes that help people in this country who are addicted to drugs—not just use the hammer. 
MICHAEL WOODHOUSE (National) 
: 
 I am very encouraged by the fact that the biggest criticism the Opposition’s spokesperson on health has of the Misuse of Drugs Amendment Bill is that it is being referred to a select committee that will meet work hard and deliberate in a timely manner to report back to the House. I know members on the other side are a bit puffed at the pace of this Government but I am afraid that pedantry is certainly not the answer. They will just have to keep up. 
I am confused though. We are getting a really inconsistent message from members opposite. On the one hand they support the bill and say that they support every effort to get on top of the scourge that is P but on the other they decry the fact—as Ms Laban Mr O’Connor and Ms Dyson did—that some people may not be able to purchase their pseudoephedrine over the counter. They cannot have it both ways. 
I am afraid though that that is pretty typical of a party that was asleep at the wheel when P came into the New Zealand lexicon about 10 years ago. Do members know what the previous Government did? It developed an action plan. This Government is about action not action plans and the results are already apparent. I looked at the 2008/09 financial review of the New Zealand Customs Service and I was absolutely amazed to see that “the interception of illicit drugs and precursors entering New Zealand became a new priority for the Customs Service in 2009.” 
Dr Jackie Blue 
: It’s been here for a decade. 
MICHAEL WOODHOUSE 
: That is right. The problem has been here for 10 years yet it has only just become a new priority under this Government. The results have been immediate. There was a 41 percent increase in methamphetamine precursor seizures. Last year the service stopped measuring methamphetamine seizures in tablets and began measuring them in kilograms. There were 800 kilograms seized in 2009 and we are heading for a tonne seized this year. Record levels of seizures are being reported. I reject the nonsense of claims by members opposite that cuts to the Customs Service and police exist and that if they do exist they have a consequent effect on their ability to make seizures. 
As my colleague Nikki Wagner has said P is a terrible curse on this country. We are the second-highest users of P in the world. Although we are stopping importation of P a significant amount of methamphetamine precursor is sourced by over-the-counter access. It worked when that access was restricted and this bill will further restrict its use. It will improve things and I commend the bill to the House. 
Bill read a first time. 
Hon JUDITH COLLINS (Minister of Police)  
on behalf of the  
Associate Minister of Health 
: I move  
That the Misuse of Drugs Amendment Bill be considered by the Health Committee 
 that the Committee report finally to the House on or before 30 November 2010 and that the committee have authority to meet at any time while the House is sitting (except during oral questions) 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 187 and 190(1)(b) and (c).  
Mr DEPUTY SPEAKER 
: We have an amendment in the name of the Hon Ruth Dyson. The amendment is to the Minister’s motion. The amendment is to omit all the words after “be referred to the Health Committee”. 
A party vote was called for on the question  
That all the words after “Health Committee” be omitted. 
Ayes 50 
New Zealand Labour 42; Green Party 7; Progressive 1. 
Noes 67 
New Zealand National 58; ACT New Zealand 4; Maori Party 4; United Future 1. 
Amendment not agreed to. 
Motion agreed to. 
Insolvency Practitioners Bill 
First Reading 
Hon JUDITH COLLINS (Minister of Police) 
 on behalf of the  
Minister of Commerce 
: I move  
That the Insolvency Practitioners Bill be now read a first time. 
 At the appropriate time I intend to move that the Insolvency Practitioners Bill be referred to the Commerce Committee for consideration. The law currently provides for minimal restrictions as to who can be appointed as a liquidator administrator or receiver collectively referred to as insolvency practitioners. Insolvency practitioners in New Zealand are not required to obtain any particular qualification or experience to register or obtain a licence or to belong to a professional body. Almost anybody as long as they are not disqualified by limited criteria set out in the Companies Act or the Receiverships Act can—and do—set themselves up as an insolvency practitioner. This has resulted in the situation where there is a small minority of individuals practising as insolvency practitioners who simply should not be. 
The Insolvency Practitioners Bill provides for regulation of insolvency practitioners through a negative licensing regime. Put simply this means that rather than registering all practitioners only those who fall short of expected standards of practice will attract the attention of regulators. The Registrar of Companies will have the statutory power to stop individuals from providing corporate insolvency services if they fail to carry out the duties outlined in legislation in a competent and honest manner. Insolvency practitioners are required to carry out skilled tasks and manage a number of competing tensions. These include striking a balance between investigating and seeking to void a business transaction or to realise an asset at a good price and completing insolvency processes as quickly and efficiently as possible. Winding up an insolvent business effectively requires practitioners to demonstrate sound judgment and good negotiation skills on a range of matters. It also requires knowledge of commercial law investigative skills to quickly assess the financial position of a company often in the presence of inadequate financial management systems and an understanding of the statutory obligations of company directors and practitioners’ own obligations under insolvency law. There are currently a small number of practitioners who are continuously demonstrating incompetence imposing significant costs upon creditors. However beyond competency issues some practitioners are also debtor-friendly failing to discharge their statutory obligations so as to favour the interests of the insolvent company its director shareholders or themselves at the expense of the very creditors practitioners are supposed to protect. For example practitioners may short-change creditors by selling a business or its assets to the directors or shareholders of the insolvent company or a third party related to themselves at less than market value. The asset could then be onsold at a later date at market value putting money in the pocket of practitioners or insolvent parties. 
Such practices could be remedied by introducing a positive licensing regime whereby all practitioners would need to meet a minimum set of standards to be licensed to practise. However the cost of such a system would be disproportionate to the size of the insolvency practitioner industry in New Zealand estimated to have fewer than 200 practitioners. This cost would effectively be passed down to creditors as under insolvency the practitioner becomes the priority creditor and is among the first to be paid for services. This would reduce the money available to disburse to the general pool of creditors. The courts currently have and will continue to have the ability to remove individuals from providing corporate insolvency services. However in an insolvency situation there is rarely enough money to be disbursed to all creditors limiting their ability to challenge—in the courts—poor or dishonest decisions made by these practitioners. 
This bill primarily aims to improve enforcement of practitioners’ duties by providing a lower-cost way for parties to seek prohibition orders. The bill will expand the disqualification criteria outlined in section 280 of the Companies Act and section 5 of the Receiverships Act. These sections list the persons who cannot be appointed as practitioners from the outset such as individuals who are under the age of 18 creditors of the insolvent business and undischarged bankrupts. The bill will also disqualify practitioners who have been banned from taking similar appointments in other specified jurisdictions—for example Australia. It disqualifies individuals who are undischarged no-asset procedure debtors or subject to a summary instalment order under the Insolvency Act accountants and lawyers who have been struck off from their respective professional registers individuals who have been convicted of a crime involving dishonesty under the Crimes Act and close relatives of the major shareholders directors auditors or receivers of the company or of a related company. 
Finally the bill amends the Receiverships Act to allow the court to make a prohibition order against a receiver for an indefinite period rather than the 5-year limit in the current Act. This brings the court’s powers to place sanctions under the Receiverships Act in line with its powers to sanction liquidators and administrators under the Companies Act. The Insolvency Practitioners Bill will therefore not only strengthen measures to remove incompetent dishonest or conflicted practitioners but also make it easier to avoid the appointment of such persons from the outset. I commend this bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am happy to follow on from the Minister and to say that the Labour Party will be supporting the Insolvency Practitioners Bill. In fact I welcome the first reading of the bill. I was involved in the Insolvency Law Review at various stages of its progress. I think it began in 1999 and there were a number of different aspects to it as it traversed its way through the different processes involving a number of discussion documents. The initial discussion document was produced in 2004 and there was a subsequent one in 2006. On both of those we actually sought to address the issue of insolvency practitioners and it was something that I personally wanted to have addressed. I cannot say that I found particular support for the proposition from certain officials within the Ministry of Economic Development but I did think that it was important. What was really pushing back from the officials was the fact that there were such a small number of people involved in this profession that it did seem to be potentially a sledgehammer to crack a nut. I had some sympathy with that point of view but I felt that it was important that we try to consult those who were interested in insolvency law reform generally around this issue of whether we should have some sort of regulatory regime on quality control as it were for insolvency practitioners. 
The two discussion documents that actually raised this as an issue failed to produce a consensus and that left me somewhat red-faced because of course the officials said: “There you go; we were right and you were wrong.” which happened from time to time as it happens to any Minister I guess. I still was very keen to see something tried and we have the same issue around auditors and again it is the numbers the coverage and our relationship with other jurisdictions. It is also about our best practice and where we stand internationally and where we might look with the principles of the International Organisation of Securities Commissions for example in respect of insolvency practitioners. 
The negative licensing option which had not been promoted in either of the discussion documents was my last-ditch attempt to get some traction on the issue and this was the one that we went out and did a targeted consultation on. This did not go out for another discussion document; the consultation paper was sent to the specialist insolvency practitioner stakeholder bodies and they were INSOL New Zealand and the joint insolvency committee which involved representatives from the New Zealand Law Society and the New Zealand Institute of Chartered Accountants. That was back in June 2008 and of course we were coming up against a general election at that stage so it was a relatively tough order to put to people in the lead-up to a general election. But agreement was reached and I think that what really sold the particular model the Government is now adopting by way of the legislation was that it was a cost-effective form of regulation. It was not going to break the bank as it were; it was not going to impose unnecessary compliance costs on a very very small sector but it recognised that there were a small number of people out there who essentially were causing a major problem. The well-respected insolvency practitioners whom we have in this country were the first ones to tell us that they existed and that there was sufficient concern to do something. It was not sufficient to go that step further and bring in a positive licensing regime but the negative licensing regime enabled action to be taken where it was needed to be taken. 
As I say I think the number of insolvency practitioners drove what I saw as a pragmatic response to the issue. They say there are around 50 involved in full-time insolvency practice and around 50 others who take referrals from time to time; so we are not talking about a huge amount of people. I also want to give some public reassurance that this is not an indication of any great crisis in the sector or that we think that the vast majority of insolvency practitioners have issues; it is an absolute minority. But because we are dealing with people who have great responsibility at a time that is very distressing for shareholders for creditors for company management often and for all of those different individuals who have concerns around the insolvency of a company in voluntary administration in liquidation or in receivership I believe we have an absolute obligation to make sure that we have the power to take action should it be required. 
I took the opportunity of the bill’s introduction to grab a copy of the original Cabinet paper that I took through which of course the Ministry of Economic Development helpfully put on its website on a regular basis. This enabled me to look at the regulatory impact statement and refresh my memory around that. I know that I have said this all this year but I will not miss any opportunity to repeat it: it is a huge mistake to take the regulatory impact statement out of bills. It really is much better to have the regulatory impact statement printed with the bills. If that is not done then one has to print them out separately as they contain the information we need to debate these issues in the House. 
I have made the point to the Minister for Regulatory Reform and I know that he has an issue with this. The issue is that the regulatory impact statement is part of the Cabinet paper and by including it in the bill it may not reflect the changes that have been made in Cabinet. Well I think we could have some tweaking here. There is probably a germ of an idea where we could get that resolved. But anyway this regulatory impact statement which I can take some credit for because I was the Minister who signed it off is excellent. I think that everyone would be proud to have a regulatory impact statement of this nature. The reason is that it states the problem. It talks about the status quo and the problem. It talks about the size of the industry. It talks about the objectives. It also talks about the alternative options which were completely missing from the bill that we dealt with before. There were no other options included in that paper because the Government had gone straight to the decision without setting out the options. This paper sets out the first option of voluntary accreditation the second option of mandatory licensing the third option of competitive licensing and then finally the option of negative licensing. 
I think that is absolutely the way that all regulatory impact statements should proceed. We have to state the problem and then set out the different options for addressing that problem while also addressing the status quo. We have to ask ourselves what the cost-benefit analysis is and what the risks and opportunities are in respect of the different options that exist. We then come up with a recommended option and we justify it in the regulatory impact statement. That is why this particular bill is one that I fully support. It will make a difference. 
I make the point that it occurs not just in the instance of a shareholder-friendly appointee. The Minister used that example and it is a very good example of what can go wrong. But I also put it to the House that money has to be left in the company in order to pay the liquidator’s fees. If the liquidator thinks that chasing some money which does not have a certain outcome may not leave enough for the fees to be paid then that may drive a totally inappropriate outcome for the individuals who are relying on the receiver or the liquidator to do the best for the interests of the creditors and the shareholders. I think this is something that we will enjoy looking at in the select committee. I am very confident that in relatively short order we will be able to report back a bill that will gain the full support of the House. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to stand and talk to the Insolvency Practitioners Bill tonight. In fact it is not very often that we get a bill before us that is exactly what the title says it is. This bill is literally about insolvency practitioners and it is good to see the title of the bill reflects what the bill is about. 
This bill is part of the National-led Government’s focus on improving the integrity of our financial systems which is really important. It is important that we boost investor confidence and that investors have confidence in our markets. It is especially important after the collapse of some finance companies that there is integrity and that investors know that if an insolvency practitioner is going to look at a firm they can have confidence that it will be done with integrity. 
I would like to respond to the comments of the previous speaker Lianne Dalziel. She made a couple of really interesting comments and I am really interested to see what will happen in the select committee when we tease out some of the issues that she raised tonight. It was really interesting to listen to the previous Minister speak. She had the commerce portfolio and tried to implement the initiative. She tried to turn it into a bill but she never managed to get to that stage because of advice that she received previously. Now National has this legislation which is in the same form that it was when the previous Minister looked at it and the same issues still sit around it. I am really interested to tease out some of the issues that the previous Minister Lianne Dalziel spoke about. 
Lianne Dalziel talked about why we need legislation for such a small number of people. In effect from my understanding there are only about 100 insolvency practitioners in New Zealand like Lianne said and of those a very small percentage are not particularly good. So if this bill addresses only 5 percent then that works out to be five practitioners which is really interesting. I ask whether the bill is a sledgehammer for a walnut or whether there is more to it. I cannot wait to see the debate within our own select committee when we address those issues and get advice on them. If we are serious about boosting confidence in our companies and in our finance sector we need those types of frameworks in place. 
When I looked through this bill I thought we should just put it through as a regulation instead of creating a bill for such a small number of people. But then we have to ask where the framework would be in order to have that regulation. It would most probably have to be in the Companies Act but it is not in there. So there is a real purpose for having this bill in place—to ensure that we have a type of register in place. 
When we talk about a register it is really a reverse register. It is a register for those practitioners who are barred or are not allowed to practise as insolvency practitioners as opposed to a register to show who is a practitioner which is quite unique. When we look at it we see that it is quite creative. It keeps down the costs for all those practitioners because they do not have to register. It is also very easy to find someone who cannot practise because there will be such a small number of them on the register. 
I am looking forward to the debate we will have at the select committee. I am looking forward to hearing the submitters who will come forward and talk to some of the issues that have already been raised tonight. I commend this bill to the House. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I stand to speak in the first reading of the Insolvency Practitioners Bill. As members have heard Labour supports this bill. I thank the Minister Simon Power for carrying out the work of the fifth Labour Government in strengthening the rights of creditors and I support his assertion that insolvent companies must be handled with integrity. I also commend tonight the work done by my colleague the Hon Lianne Dalziel and her involvement in this issue. 
The bill brings insolvency practitioners up to standard by introducing a negative licensing system that gives the Registrar of Companies the statutory authority to place individuals under supervision in or to prohibit individuals from providing corporate insolvency services for up to 5 years. Insolvency practitioners carry out liquidations voluntary administrations and receiverships. A minority of those practitioners are underperforming; they lack the necessary skills and competence and repeatedly favour debtors at the expense of creditors. 
I think we heard tonight that there are about 100 insolvency practitioners in New Zealand and that a mandatory licensing system would not be cost-effective. This bill aims to make it easier to prohibit or place under supervision practitioners who are unfit to practise rather than to force a creditor or another party to have to go through the rigmarole of applying to the High Court to get a practitioner prohibited from practising. The bill will also give protection against self-interested practitioners who in some cases have put their own interests or the interests of the insolvent company ahead of creditors who may be owed money. 
Labour supports any measure that strengthens and upholds corporate integrity in New Zealand. That is why the previous Labour Government recommended in August 2008 that a negative licensing system be adopted for insolvency practitioners. We are glad to see that the current Minister is carrying on that work. Labour’s concern is that in cases where companies are made insolvent creditors are left wanting; it is the protection of those creditors that is important. The purpose of insolvency law is largely to protect against resource-intensive court proceedings where creditors are forced to compete to recover their debt. We need to ensure that financial failure is dealt with with certainty clarity and a clear set of rules for who gets what and in what order. We believe that this bill goes some way to addressing that. 
As I previously mentioned—and I know that it has been mentioned by my colleague Lianne Dalziel—there are about 100 insolvency practitioners in New Zealand and a lot of trust is put into those few who are charged with carrying out liquidations voluntary administrations and receiverships. Those processes require a practitioner to carry out skilled tasks with sound judgment and integrity and it is important to note that that expectation is mostly upheld. But there are always exceptions and it is the underperformers whom this bill targets. The current law provides minimal restrictions as to who can be appointed as a liquidator administrator or receiver which means that practitioners with very little knowledge of commercial law and of procedures set out in relevant legislation can be appointed to manage or wind up insolvent companies. 
That can lead among other things to the failure of practitioners to discharge their statutory obligations to creditors so this bill establishes a system that targets practitioners who fail to comply with their duties then places them under supervision and/or prohibits them from acting as practitioners for up to 5 years. This negative licensing system is being adopted as a more cost-effective option rather than having it made compulsory for all insolvency practitioners to be registered—a system that if implemented would cost several thousands a year and deplete the funds available to creditors. 
This bill will give the Registrar of Companies the power to take into account failures that have occurred up to 5 years previously and practitioners will be able to appeal to the High Court against a decision of the registrar. This bill amends the Receiverships Act 1993 so that the High Court may make a prohibition order in relation to a receiver for an indefinite period. The registrar is able to fine up to $10000 those practitioners who do not adhere to their terms and conditions under the Companies Act 1993. 
The bill will also require the registrar to maintain a public register of people who are subject to prohibition or supervision which is information about practitioners that will be easily accessible to the public. Last week in the  
New Zealand Herald  
there was the story of Ram Rai a former restaurant owner who got into a dispute with liquidator Gilbert Chapman over the amount he was being charged. Through action in the High Court Mr Rai was successful in reducing the charges from Gilbert Chapman from about $63000 to $25000. In his summary Judge Roger Bell noted the difficulty of the process of challenging a liquidator’s charges saying that most times it is not worthwhile for a creditor to do so which to a certain extent leaves the liquidator in a position of some immunity. So this bill would go some way to resolving that problem by allowing the Registrar of Companies to suspend incompetent or delinquent practitioners from operating in the insolvency industry based on their prior actions or current performance. These reforms will enhance transparency and accountability in the insolvency profession which is important by ensuring that only skilled and competent practitioners are appointed and that returns to creditors are maximised. 
It is important to note that the current lack of regulation means that although the profession plays a crucial role there is no official record of the number of practitioners or of their qualifications. We need to make the financial sector more open and transparent which is what my colleague the Hon Lianne Dalziel strived to do as Minister of Commerce in the last Labour Government and it is good to see that the current Minister is putting partisan politics aside and following in her footsteps. Labour wholeheartedly supports a licensing system that lets creditors know that insolvency practitioners are competent in their specialised areas of work and that they are capable of maximising returns from financially distressed businesses. That is why we are supporting this bill. 
DAVID CLENDON (Green) 
: 
 I am pleased to speak on behalf of the Greens on the Insolvency Practitioners Bill. It has been useful to hear some of the contributions so far and in particular to hear some of the background and the history to this. Clearly there has been a problem here for some time and this is the latest attempt to address that problem. The bill clearly sets out to create a negative licensing system giving the Registrar of Companies the authority to restrict certain individuals from providing or continuing to provide corporate insolvency services. The registrar would be able to take into account failures to comply for the previous 5 years and would be able to move to prohibit receivers from practising for up to 5 years or require them to practise under the supervision of somebody who is acceptable to the registrar. There is also a provision in the bill for receivers to have the right to appeal any move to put them on a negative register which is only appropriate given that it could be a matter of livelihood for some of these practitioners. 
The nature of the problem being addressed is spelt out in the explanatory note of the bill and that is that the process involved in liquidating companies—that is dealing with voluntary administrations or receiverships—requires that practitioners possess a high level of knowledge a high level of skills and an equally high level of integrity to ensure the best outcomes for all the parties affected in these cases. 
Reference is also made to a general consensus among practitioners and observers that a small number of their peers cannot be relied upon to perform or to provide or to exercise adequate care and that the small number of practitioners is constantly and continually underperforming. The law as it currently stands offered only very limited restrictions on who can be appointed as a liquidator as a receiver and it seemed possible and perhaps even inevitable that on occasion practitioners with very limited knowledge of commercial law or the procedures set out in relevant legislation can be appointed to manage or wind up an insolvent company. That general view has clearly been reflected in some of the comments we have already heard. 
Finally it is clearly noted that some practitioners currently appointed repeatedly fail to discharge their statutory obligations to creditors and in ways as expressed by the Minister of Commerce that are certainly unethical and must border on the illegal in terms of the practices that were described. 
The solution proposed in this bill is that practitioners whose work is deemed to be inadequate or who fail to comply with their duties to their clients can be prohibited from acting in this capacity or be obliged to work under supervision. The argument is made that the sector is too small having only a hundred or so—or somewhere between 100 and 200 practitioners—for it to warrant the establishment of a positive upfront accreditation or licensing system and that such an approach would not be cost-effective. The point is made in the bill that setting up registration or some sort of an accreditation system would cost something to the tune of several hundred thousand dollars a year per practitioner to operate and that given that the practitioners are priority creditors in the winding up of a company this cost could further deplete the limited funds available to creditors. I question that view although I would appreciate clarification on it. That would suggest that each practitioner would indeed take funding of several thousand dollars in each insolvency case and surely the practitioner would be registered. There would be cost to maintaining a register so in fact it would not be the case that in each event there would be a cost imposed on the funds available from a dissolution or a receivership. It is also observed that there will be some cost in establishing a register of people who have been banned or suspended from practice. Indeed that cost would be borne by the registrar. 
An appeal to short-term cost savings cannot disguise the key point in our key objection to this bill which is that the remedy proposed is a classic “bottom of the cliff” approach. It waits for a person to demonstrate his or her inadequacy rather than establishing in advance that a person has the necessary qualifications skill ability confidence of his or her peers and integrity to practise and to deal with issues at this level. It is our view that short-term cost savings are seldom appropriate drivers for good policy. Clearly there would be costs involved in the supervision of those who had failed to perform adequately and are deemed to be in suspension or operating only under the supervision of the registrar or somebody appointed by him. So the dollar figure that has been suggested of a few thousand dollars a year to manage a positive accreditation programme is clearly a gross figure and not a net figure. 
The reactive measure of waiting for trouble to occur before responding will simply see costs transferred from the upfront creation management and maintenance of a positive accreditation system and could quite conceivably lead to costly and after-the-fact court proceedings. This would seem to be opening a door creating a possibility that only those creditors wealthy enough to afford to go to the courts will have the opportunity to protect their interests from bad receivers from practitioners who lack integrity in their work. A positive accreditation system upfront licensing and some sort of regime to accredit individuals or companies is commonplace across a range of professions and trades. 
Hon Lianne Dalziel 
: Fifty people? 
DAVID CLENDON 
: Fifty 100 fewer than 200—small numbers admittedly but the principle is such that no one would go to a barrister or a lawyer who was not properly accredited. Real estate agents are required to be accredited; tradespeople plumbers and builders are required to be accredited. Why would this significant area of practice be any different? The scale alone of some of the situations dealt with by practitioners should provide sufficient reason to demand an upfront assurance that the quality and integrity of the service providers have been evaluated. Receiverships are routinely dealing with millions of dollars worth of assets and/or debts. The consequences of inadequate or inappropriate decisions and actions on the part of practitioners can be devastating to the affected parties. 
Clearly no licensing or accreditation system can provide 100 percent reassurance—witness the fall from grace on occasion of lawyers and others involved in accounting and legal practice and the like. Nevertheless it seems perverse to put a reactionary after-the-event mechanism in place in the hope that it will provide adequate protection. 
The receiver’s duties involve significant levels of trust and integrity. A positive licensing and accreditation system would not be out of place for a financial service in a country in which the general public have very little confidence in that industry. It is essential that such confidence is established. The Greens acknowledge that there is a problem to be solved but we do not see the solution in this bill and so will not support its moving beyond this first reading. Thank you. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 First I commend the Minister of Commerce for the work that has gone into introducing the Insolvency Practitioners Bill to the House. I also acknowledge the work that the previous Government did in this area and its recognition of the real need for a more robust framework for regulating insolvency practitioners. I particularly wanted to make a contribution to the debate in the context of my own Nelson constituency where there has been considerable angst about insolvency practice and where the need for this reform is well illustrated. Insolvency work is not top of the popularity charts. Just as there are not many doctors lining up to be undertakers most chartered accountants would much rather have the work of building successful businesses than being involved in the winding up of unsuccessful companies. There are all sorts of tensions that fly around insolvency. Success has many fathers but failure is often an orphan. There are often issues over who specifically owns what relative to directors of a company and what they own personally. There are arguments over valuations and what is fair value and debate over which creditors are owed how much. 
Those problems are compounded by the practical reality that the companies that are in liquidation will commonly have real problems over the accuracy of their records and in their management. The issue of insolvency practices has caused a considerable amount of press attention in Nelson and I have received a considerable number of concerns about a number of insolvencies involving a new practitioner trading as Norris Management Services or NMS. I want to illustrate the examples to the House so that as the bill goes to the select committee we can be sure that we get the detail of this bill right. The first part that causes me concern is that when this practitioner started up in Nelson he advertised himself as being a “highly experienced insolvency practitioner” but it has worked out that he had no previous experience. He had no professional qualifications; he was trained as an auto-electrician. Prior to coming to Nelson his only experience in liquidations was his own spray-painting business in Hamilton which went into liquidation and left over $150000 of debts to unpaid creditors. 
I am further concerned that this particular practitioner was convicted of fraud in Hamilton in May 1999 and was more recently convicted this year in the courts for illegal filming in a private residence. There has been some quite inappropriate goings-on. In the most recent liquidation of Murchison Buses the liquidator effectively sold a bus to his own company for nil value. There are also accusations that his partner is now the owner of one of the other vehicles that was owned by that company. When I met the insolvency practitioner and raised those issues with him on behalf of some of the creditors the practitioner admitted that his company had acquired the bus for nothing and most worryingly could not see that there was anything particularly wrong with that. That is not the only liquidation involving Norris Management Services where there are real concerns over the conduct of the insolvency. 
In responding to constituency concerns about those goings-on I have been quite perturbed about how little protection or checks and balances there are where there are problems over an insolvency. I raise these issues quite deliberately in the House because a number of the parties have come to me incredibly fearful that any attempt to raise issues would simply involve them in more litigation or threats. My greatest frustration with these issues is how little can be done. There are no checks or balances under the current law and an insolvency practitioner is in a very powerful position. We need to be realistic that the directors of companies or businesses concerned will often be broke and they will be in no position either emotionally or financially to be able to legally challenge a decision of an insolvency practitioner. Most creditors take the attitude that they are unlikely to get much; they cut their losses and simply move on. My worry is that disreputable operators are able to burn up most of a company’s assets in their own fees effectively transferring the creditor’s assets to themselves. 
In the case I have looked at in Nelson the insolvency practitioner—and I remind the House that this is a person with no qualifications—is charging himself out at $200 per hour which is $8000 per week and the largest share of the company’s assets end up in the hands of that insolvency practitioner. I also believe there are real issues over the reporting timetables. I have had numerous complaints of creditors and debtors waiting for 6 months 9 months and 12 months to get any idea on the totalling up of the final position in a company. Although I respect the fact that we all want to ensure we do not over-regulate we all have an interest in ensuring integrity in the way business creditors are treated and to ensure the affairs of companies are wound up fairly. 
This bill provides sensible improvements. I particularly welcome clause 5 which disqualifies a person from being an insolvency practitioner where they have a conviction for a dishonesty offence. People convicted of dishonesty should not be allowed to work in this area. I also welcome the provisions that enable the Registrar of Companies to prohibit individuals from providing corporate insolvency services. Those are welcome measures that alongside many of the other changes being made in the area of financial and investment affairs by the Minister provide an increased level of integrity from which all New Zealanders will benefit. This bill will be welcome news to those in Nelson who feel powerless to deal with problems over inappropriate practitioners. I support its first reading and I encourage the Commerce Committee to debate its provisions vigorously so that we can have a fairer and better system of solvency practitioners in New Zealand. 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou. Firstly I stand to support—bizarre though this may sound to be—many of the sentiments expressed by the previous speaker Dr Nick Smith. Indeed as he was on his feet I shared with a colleague of mine the thought that the colleague should observe Dr Smith outlining a case apparently about egregious wrongdoing—of potential criminal liability. One of the virtues of being in Parliament is the ability to outline before colleagues of the House and indeed to the public via the media those cases that warrant the attention of this House. Of course what we should bear in mind upon making those statements is that facts have to be of a high order and that a remedy should follow closely behind them. But the case that Dr Nick Smith has outlined gives a great deal of impetus as to why we should support the Insolvency Practitioners Bill. 
I was reading several days ago about the appointment of receivers to Allied Nationwide Finance the finance company associated with the organisation that—in my view unwisely—sought to assimilate the assets of the two discredited businessmen Eric Watson and Mark Hotchin. They however can wait for another day. This bill is important if we look at a case like that of Allied Nationwide Finance where the actual investors are highly likely to recover most of their money by dint of a Treasury guarantee. It raises a question as to the quality of stewardship that will be shown by the receivers in such a case because there is a balance to be drawn between how much time and energy they exhaust in the pursuit of monies in order to satisfy creditors and ensuring that they do not exhaust time and energy to such an extent that they actually melt down the residue that might be available for the parties injured by the enterprise. Many of us have watched in our small provincial towns as insolvency practitioners and receivers were appointed by virtual associates and virtual friends. They conducted their affairs in such a way that we could see that although they were hiding behind the patina of the reputation of their profession in fact they were also aiding the agenda of the people who had appointed them. 
I remember that several years ago the Inland Revenue Department—if I am not mistaken it was the Inland Revenue Department—and members of the accountancy profession brought forward a proposal that in matters of receivership there should be an unqualified ability for the statutory creditors to zoom in and take everything. I think that this bill lifts up the professionalism required of a receiver. We need to ensure that the people who have this role draw the right balance between the time and money available to pursue monies that are outstanding and also the ability to listen to and treat different categories of creditors with a degree of fairness. Receivership takes place at a time when there is an enormous amount of stress marital discord and—dare I say it—as we learnt in the 1990s even death. We must bring to an end the damage done by dodgy secondhand-car salespeople or by people like the friends of Eric Watson and other discredited members of the business community who have rorted over $6 billion worth of pensioners’ monies through the imbroglio of the finance companies. This bill seeks to do that and it is good that there is a shared level of concern between our former Minister and the current Minister about that. 
Earlier today we were debating the wisdom of expanding savings vehicles and improving the taxation treatment of those vehicles. It is all very well for us to talk about expanding savings but in order for that to occur we need to have professionals whom members of either the business community or the ordinary New Zealand community can trust. Our desire to expand the scope for business to create new trajectories of wealth will not come to pass if the people in society whom we charge to carry out these responsibilities are not accountable cannot be held to be accountable or are unfit for the task. Receivers and liquidators are only one part of that; there are a host of other characters who have not distinguished themselves with a great deal of success or high-quality conduct in the funds industry—the finance industry. I salute the architects of this bill and the people bringing forward the concerns of individual constituents firms and creditors but this is really just a small part of a broader challenge that we have in New Zealand. If we are to ensure that the conduct in our commercial sectors improves then those who have special responsibilities of an administrative nature need to be held to a high level of accountability. 
I have often wondered about the American model which really moves very quickly into criminality. In the way that we have tended to deal with cases of egregious failure of a commercial—a white-collar—nature unless there is a criminal issue then we do not ordinarily think that these people should go to jail. That is a distinction that I have often drawn as I have spoken and thought about these things. In the United States of America people tend not to dither. The wrongdoers the culprits are very quickly arrested and in a remarkably short period of time they are sharing figuratively a cell with O J Simpson. I wonder as we move to improve the quality of administrators whether we ought to think about injecting penalties of that burden of that nature into our law. I have no doubt that had that situation applied many of the people who have acted wrongly or who were dodgy in the period of time of the finance company breakdowns would be facing a wider range of penalties than they face now—although a few of them are going to court and then it is up to our District Court and High Court judges. 
We have heard from various speakers as to why this legislation is very important. I would say that although it is important in terms of the breakdown of a company we should see its importance also in actually buttressing and strengthening the pillars of the commercial community the commercial sector for the benefit of the generations coming through—unsophisticated investors and creditors like a constituent who came to see me recently. A building company went broke and he had not registered or possibly did not know that he had to register his claim to $200000 worth of tiles prior to the appointment of a receiver. Of course the receivers arrived and his ability to—legally—secure the tiles now that the premises are under the control of the receiver is somewhere near zero. That tells me that in a time of economic buoyancy when everyone had a lot of money and there was a lot of cash going around we probably were sloppy—and that constituent certainly was. But he is learning a very valuable—and indeed highly costly—lesson that once a receiver is appointed if the provider of either a service or material has goods that have not been registered then the prospect of that party recovering them is very very slight. 
Not only does this legislation represent a very sensible advance but it is a reminder that we have to lift the quality and the standard of administration right across the commercial sector—certainly in the event of a greater savings development and of a greater level of interest in our economy when money may be put into certain areas where there may be risk in order to grow the economy. I support this bill. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand in support of the Insolvency Practitioners Bill. Tonight we have heard some very interesting comments and it will be good to see this bill progress through the select committee and to discuss it. 
The bill is part of a well-rounded framework of regulation that this Government wants to put in place in the financial and business sectors. When the credit crisis struck $190 million in $100 notes was taken out of circulation out of the banking sector and was simply stored in private deposit boxes or under mattresses. That is all to do with confidence. The previous speaker the Hon Shane Jones commented that our drive for savings depends upon people’s willingness to trust the administrators of those savings schemes. I believe that the Insolvency Practitioners Bill goes well toward shoring up the lack of confidence that has existed through company failures. 
When creditors suffer loss through a company failure the last thing they want is a shonky insolvency practitioner trying to recover their interests. They do not want to go from one injury to another. This bill in its many aspects ensures that the quality and the stewardship of those practitioners are maintained at an incredibly high level. Stewardship is a good word to use in regard to this profession because people are looking after the interests of other people’s assets with skill integrity fairness and timeliness. All of those aspects are incredibly important. It is my pleasure to support this bill as it goes through the House. Thank you. 
RAYMOND HUO (Labour) 
: 
 I rise to take a call to support the Insolvency Practitioners Bill. The bill follows concern that up to 40 percent of the New Zealand insolvency profession might not be up to scratch. Submissions received on a 2004 Ministry of Economic Development discussion paper entitled  
Draft Insolvency Law Reform Bill 
 suggested there might be as few as 50 insolvency specialists in New Zealand and that up to 20 might not meet adequate standards. There are two apparent problems at the moment. Firstly unlike the situation in many comparable countries insolvency practitioners in New Zealand do not need to have any particular qualifications or licences to be appointed as liquidators and receivers. Secondly the lack of regulation means that although the profession plays a crucial role there is no official record of the number of practitioners or their qualifications. Therefore reform in this area is long overdue. The bill results from work done by the previous Minister of Commerce the Hon Lianne Dalziel. My congratulations go firstly to the Hon Lianne Dalziel for such a great initiative and also to the current Minister the Hon Simon Power for implementing those proposals. 
The bill introduces a negative licensing regime for insolvency practitioners—namely liquidators receivers and voluntary administrators. Insolvency practitioners who do not meet the required standards of competence will be banned or placed under supervision. It also empowers the Registrar of Companies to maintain a publicly accessible electoral register of people who have been banned or placed under supervision. The new system is expected to assure creditors that insolvency practitioners are competent to undertake specialist work and capable of maximising returns from financially troubled businesses. A negative licensing system is designed to achieve that goal while avoiding high compliance costs for businesses. Under the existing criteria any person over 18 years with sound mental health can be appointed as an insolvency practitioner; there are no requirements that insolvency practitioners have any particular qualifications or level of education. There is no way for creditors and others appointing liquidators to assess whether the person has the appropriate skills knowledge or competencies. To avoid delaying the bulk of the insolvency law reform process the previous Labour Government’s work on the regulation of practitioners was split off from the main reform process. 
Aside from negative licensing two other options were considered for the regulation of practitioners. The first one was voluntary accreditation which was rejected because it would not deal with the issue of preventing people with insufficient skill and experience from carrying out insolvency work. The second option was mandatory or competitive licensing linked with New Zealand Institute of Chartered Accountants membership. It was rejected due to its high compliance costs and due to the fact that insolvency practitioners do not all come from the field of accounting. The bill also extends the automatic disqualification criteria in the Companies Act 1993 and the Receiverships Act 1993. The following people are prevented from being appointed from the outset: certain family members of a person who has within the 2 years immediately preceding the commencement of liquidation been a shareholder director auditor or receiver of the company or of a related company; a person who has been banned from taking similar appointments in other specified jurisdictions such as Australia; a person who is a debtor participating in a no-asset procedure or who is subject to a summary instalment order under the Insolvency Act 2006; a lawyer who has been struck off; an accountant whose membership of the New Zealand Institute of Chartered Accountants has been revoked or suspended; and lastly a person who has been convicted of a crime involving dishonesty as defined in the Crimes Act. 
Under the bill the new regime will apply retrospectively in that the Registrar of Companies will be able to take into account failures to comply with the duties of a practitioner that have taken place before the negative licensing regime came into effect but only up to 5 years before the date of notice. These reforms will enhance transparency and accountability in the insolvency profession by ensuring that only skilled and competent practitioners are appointed and that the returns to creditors are maximised. The new system will apply to liquidators administrators and receivers and will target those practitioners who lack the requisite skill and knowledge to undertake insolvency work competently or who perform poorly in this field of work. Supporting this new system will be tighter statutory disqualification criteria and wider court powers to replace a practitioner who has a conflict of interest and lacks independence in a particular insolvency case. 
The reform in this area is long overdue although this is by no means a major reform. Many interested parties including practitioners had hoped that a form of licensing would be introduced which could have been grandfathered in. I note that the Government aims to have this bill passed into law and coming in to force in July 2011. I look forward to more debate on this bill in the near future. Thank you. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to take a short call on the Insolvency Practitioners Bill. Having listened to all of the speakers who spoke before me there seems to be a consensus across the House. I particularly liked the turn of phrase that the Hon Shane Jones used—he congratulated the architects of the legislation. I take this opportunity to acknowledge the previous Minister of Commerce Lianne Dalziel as well as the current Minister of Commerce Simon Power. He has done a lot of work and I look forward to the tremendous amount of work that will be coming to the Commerce Committee. 
The overriding focus in the commerce portfolio is to restore confidence in our capital markets after the huge global financial crisis we have had and the collapse of many finance companies in New Zealand so that mum and dad investors in New Zealand can have that confidence back. Insolvency practitioners play a crucial role in mitigating losses to investors when a company hits difficult times. In spite of their important role insolvency practitioners are not required to be licensed or registered. That is hugely surprising to me especially when an insolvent business is wound up. Insolvency practitioners are required to demonstrate sound judgment and good negotiation skills. They need to have a knowledge of commercial law and investigative skills to quickly assess whether the financial position of a company has resulted from the company’s not having had adequate financial management systems. An understanding of the statutory obligations of company directors and of their own obligations under insolvency law is also required and when these people do not have a clue we are in big trouble. 
This bill is part of the National-led Government’s focus on improving the integrity of our financial system. The aim of the bill is to establish a negative licensing system for insolvency practitioners. Earlier speakers have also mentioned this. It gives the Registrar of Companies the power to prohibit or restrict individuals from providing corporate insolvency services. The number of bad seeds in the scheme of things is only small and to set up a licensing system whereby all practitioners have to be registered or licensed and accredited would cost practitioners thousands to operate. This cost would be passed on to people who often do not have the money to pay it. Often the insolvency practitioners take out the money first so that at the end of the day the people who are in financial trouble do not end up getting anything. 
The main change to the Companies Act 1993 applies specifically to the kinds of people who are disqualified to act as the liquidator of a company or as the administrator of a company. Apart from those who are currently disqualified I particularly like it that anyone who is a family member shareholder director auditor or receiver of the company or a related company in the 2 years immediately preceding the insolvency is disqualified. However one class of person who would normally be disqualified has been removed from this legislation—that is a person who has a continuing business relationship with a secured creditor of a company becomes eligible to be appointed as a liquidator of that company. 
The Registrar of Companies gets more powers in this bill. For anyone who in the past 5 years has failed to comply with the Act the registrar has the power either to prohibit that person from practising as an insolvency practitioner for 5 years or to make that person practise under supervision for 5 years. Anyone acting in contravention of such a decision is liable to the maximum fine of $10000. What is really good for the public is that they are able to see a list created by the companies register of the people who are struck off—people who are either restricted or prohibited from acting as insolvency practitioners. 
As I said this is a very short call as I am the last speaker. I look forward to the submissions in the Commerce Committee. I commend this bill to the House. 
A party vote was called for on the question  
That the Insolvency Practitioners Bill be now read a first time. 
Ayes 111 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 4; Maori Party 5; Progressive 1; United Future 1. 
Noes 6 
Green Party 6. 
Bill read a first time. 
Bill referred to the Commerce Committee. 
Limitation Bill 
Second Reading 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I move  
That the Limitation Bill be now read a second time 
. This bill was introduced in June 2009 to replace the 1950 Act that as I noted last year is creaky outmoded and long overdue for replacement. So this is indeed an exciting day for all of us because today we move a step closer to replacing the 1950 Act with a modern clear and comprehensive statute that will set out the general rules for determining the limitation periods for civil claims. Our rules are based on the United Kingdom limitation rules which have been described as a “ghastly network of unreformed legal fossils impervious to natural understanding and intelligence”. 
Simon Bridges 
: Like the Labour caucus. 
Hon CHRISTOPHER FINLAYSON 
: Some people may say that is the Labour caucus but I am an issues politician and I do not like getting into personalities. The current labyrinth of rules can perplex even the most diligent lawyers. This bill will make them easier to understand and to apply. Important reforms are also introduced to avoid the sometimes harsh consequences of the current legislation. This bill implements the Law Commission’s recommendations following its review of the law of limitation defences in 2007. The Law Commission also carried out two earlier reviews in 1988 and 2000. The Law Commission recommended a new Act to simplify and improve the current rules. This bill clarifies the claims affected by limitation provisions more clearly defines the commencement of limitation periods and the exceptions or modifications to those periods and addresses the current unfairness in the law that a limitation period may end before a claimant knows that something is wrong. 
The bill was referred for consideration in June last year to the Justice and Electoral Committee which is chaired by that excellent MP for Whanganui Chester Borrows. The committee has now completed a thorough examination of the bill and has recommended that it be passed with some further improvements and some clarifying amendments. I thank the committee for its work on the bill and for its helpful recommendations. The bill contains some complex rules and the committee’s amendments are consistent with the bill’s purpose which is to modernise and simplify the current legislation to make it more accessible. 
The bill contains 60 clauses and the committee’s recommended changes will affect approximately 18 of those clauses. The committee has also recommended inserting three new clauses in the bill. Many of the changes are of a technical nature to clarify the meaning or the scope of provisions. However some changes are more substantive and are designed to address some problems raised in submissions or identified independently by the committee. 
Clause 16 is a very significant provision. It gives the court the discretion to allow monetary relief in claims arising out of the sexual abuse of minors even though a limitation defence could be established. The committee has recommended extending the court’s discretion to cover claims of physical and psychological abuse of minors by parents step-parents guardians close relatives or close associates. The committee observed that this type of abuse could have the same long-term effects as sexual abuse on a person’s decision when to make a claim. Research suggests that people are more likely to delay or avoid disclosing the abuse if the abuse is carried out in a family setting. The committee has also recommended extending this new discretion to claims for personal injuries that develop over a long time that are not work-related injuries covered by accident compensation. 
The committee recognised that otherwise claimants may be unjustly time-barred by the new 15-year longstop defence which is introduced by the bill. The new general longstop defence will enable a defendant to argue that a claim brought after 15 years is out of time even if he or she did not know about the claim before then. In some personal injury claims harm may not become apparent until much later than 15 years. Although these claims are likely to be rare this will ensure that justice can be done in deserving cases. 
The committee noted that there are divergent views on the length of the new longstop period particularly in light of the 10-year longstop in the Building Act 2004. The Limitation Bill is intended to carry forward the general limitation rules for civil proceedings. Although there are benefits in having uniform limitation periods different rules may be needed to address special circumstances in discrete policy areas. For this reason other Acts such as the Building Act contain special limitation rules if appropriate. 
The committee has also considered how the 1950 Act will continue to apply and there are important changes to the transitional provisions that I am sure members will be very interested in. The new Act is intended to apply only to claims relating to acts or omissions after it comes into force on 1 January 2011. The current Act would continue to apply to claims based on acts or omissions before that date. This means that the current Act could continue to apply for many years which may indeed be confusing. The committee recommended modifying its future operation by applying the new 15-year longstop to claims brought under the Act. There would be exceptions for some rare land claims and claims where the limitation period is extended for disability or fraud. 
The committee recommended that if a claims limitation period has ended before the new Act commences or will shortly end afterwards the claimant will have 5 years after the new Act commences in which to make the claim. The new longstop will not apply to any claim filed before the commencement of the Act. 
The new longstop will affect only those claims where a court applies the reasonable discoverability test. This test was developed by the courts to address the harsh consequence that in some cases a statutory limitation period ends before a claimant knows that the damage has occurred. If this test is applied the limitation period does not start to run until all of the essential elements of a claim are discovered or are reasonably discoverable. Without a statutory long-stop defendants do not know when their potential liability will end. To date the test has been applied only in negligence cases involving building work and personal injury claims. There are differing views on whether the courts will continue to develop this area of law in relation to claims under the 1950 Act after the new Act commences. The committee’s recommendation will mean that the old Act is phased out after 15 years from the commencement of the new Act except in some very rare cases. 
Finally the committee recommended that the new discretion for abuse claims and claims for personal injury caused by a gradual process disease or infection not covered by accident compensation should also apply to claims under the 1950 Act that would be subject to the new longstop defence. This will lessen any unfairness that might otherwise result and it will not revive any claims that are already statute-barred when the new Act commences. 
In conclusion I thank the committee again for its careful and thorough work on some very very technical legal issues. I am confident that the committee’s recommendations will clarify and improve the law and I commend the bill to the House. 
RAYMOND HUO (Labour) 
: 
 For those people who are watching the live coverage of this high-rating not too terribly late-night show via television or the Parliament website I say that there is no need for them to thoroughly understand a recent Supreme Court ruling in order to truly appreciate the importance of this Limitation Bill. The Supreme Court’s ruling is the latest development in long-running litigation by the Commerce Commission against Carter Holt Harvey Ltd relating to the misgrading of timber prior to November 2003. 
The Supreme Court has confirmed that the Commerce Commission is subject to the 3-year limitation period in section 43 of the Fair Trading Act 1986 when it brings proceedings for compensation on behalf of consumers. That issue may sound a bit dry or remote but it is relevant to the Limitation Bill. What does not sound dry or remote is the nature of the case. I guess the mentioning of words such as “misgrading of timber” or “building material” will hit a nerve or push a button. I will come back to that case  
Commerce Commission v Carter Holt Harvey Limited 
 either during the Committee of the whole House or at the bill’s third reading 
Limitation law seeks to balance two interests. The first is that people have the right to bring claims to court when they have suffered an injury or some loss as the result of wrongdoing by another party. The second and equally important interest is that we ought not to let the period in which claims can be brought run indefinitely. We should not let plaintiffs sleep on their rights. The longer a plaintiff waits to bring his or her claim the harder it is for the defendant to defend it him or herself and the harder it is for courts to reach a good decision. Limitation periods allow potential defendants to get on with their lives without the threat of litigation forever lurking. 
The bill implements the Law Commission’s recommendation to replace the existing Limitation Act 1950 with a new and modern regime. The new regime will encourage claimants to make their claims without undue delay and will protect defendants from the unjust pursuit of stale claims. The Limitation Act 1950 is old legislation and it needs to be upgraded. The Labour Party supports the proposed changes in this bill. However although Labour agrees with most of the bill we disagree with the provisions on longstop periods. The bill provides for a longstop period of 15 years for most cases but only 10 years for Building Act cases. The reasons given for the shorter longstop period in the case of the Building Act—the complexity caused by multiparty building claims and failing memories—can also rise in other claims so a shorter period is warranted. It should be 15 years for all claims. Owners of houses with latent defects should have just as long as others to bring forward their claims. 
The bill simplifies the limitation regime by providing a general civil limitation defence to most claims. The new concept of money claims is introduced and it is defined to include any claim for monetary relief. That replaces the haphazard approach taken by the 1950 Act which sets out different limitation periods for different causes of action. The limitation period for most or all claims will be 6 years after the act or omission on which the claim is based. There are exceptions or modifications to this period in cases of minority or incapacity or if there has been an acknowledgment of liability part payment or fraud. A 3-year late knowledge period is being introduced because there might be circumstances where people do not realise they have a cause of action. Currently the limitation period for most claims runs from the date the cause of action accrued; namely the date on which all the elements necessary to establish the claim first came together. That has been very contentious and ambiguous. Under this bill the start date for most claims will be the date when the act or omission on which the claim is based occurred. 
The bill provides that a limitation defence cannot be used in cases of child sex abuse no matter how much time has elapsed since that abuse took place. There is currently no statutory limitation period for claims under the New Zealand Bill of Rights Act; this bill rectifies that situation by bringing that Act under the definition of money claims and the 6-year limit. 
The Limitation Act 1950 contains the general rules for determining the cut-off dates after which it is too late for a plaintiff to bring a civil claim. The most common period is 6 years and applies to claims founded on contract or tort claims for an account or claims in respect of a breach of trust. The current periods are subject to extension in a range of circumstances—for example if the claimant is under 20 years of age or is of unsound mind or because of fraud or mistake the claimant is unable to discover that a claim exists. There are difficulties with both the substance and the drafting of the 1950 Act. The 1950 Act which followed closely the terms of the 1939 Act is incomplete misleading and inaccessible. Judges have suggested that it is flawed and requires a complete legislative overhaul. The courts have made piecemeal attempts to cure the difficulties but the overall result has been a lack of harmony. One major issue with the current legislation is that in some cases claimants can be barred from gaining relief by the limitation period before they even know they have a claim. 
I look forward to more debate at the Committee stage and at the bill’s third reading. Thank you. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to speak in support of the Limitation Bill. It is great to see again some sort of understanding across the House of the validity of this bill and its worth to New Zealand which we are all here to serve. The bill is another product from the Justice and Electoral Committee and the hard-working and efficient team that exists therein. The key message of the bill is that the goal of new limitations is to provide a defence to legal claims brought after a certain period of time. We have found over recent years that what has generally been a standard limitation period of 6 years is no longer applicable and that a limitation can apply in different ways around the country. For instance in Auckland where it rains a lot boards rot quicker so leaky home situations occur a lot earlier than they do in homes in Christchurch for example where new homes are built under the same building regulations but in a different climate. So it is important for purchasers of homes to have some assurance that if for instance it takes longer than usual to discover a defect in homes they have purchased they will still be able to seek some compensation or damages against the parties responsible. 
During the course of the debate in the select committee a point was raised by the Hon David Parker about long-term delayed reaction injuries and the ability of claimants to access compensation or make claims in respect of those injuries. So the select committee worked with ministry officials to include that issue in the bill and it is another very sound aspect in the bill. I look forward to the debate on the Limitation Bill and I commend it to the House. 
LYNNE PILLAY (Labour) 
: 
 It is a pleasure to stand to speak on a relatively uncontroversial bill in this House. That does not happen very often. In the last 2 weeks we have had to sit through debate on bills that were passed with a very slim majority and no real public mandate. The Government has pushed through many bills that formed— 
Chris Tremain 
: It’s called a majority. 
LYNNE PILLAY 
: Well what a funny majority it is when we look at the ACT Party. But it is all about—[ 
Interruption 
] Oh they have woken up now. They have all woken up. It was very sad indeed that we saw workers’ rights—rights that had been hard-fought for that respected workers and gave them dignity and that had been based on trust—decimated by the National Government hand in hand with the ACT Party which is in a terrible mess. But tonight at a quarter to ten under urgency this debate is not one of those occasions. 
Getting back to the Limitations Bill as Mr Assistant Speaker Roy knows I would like to I am one of the many Labour members who will take a call tonight to speak in support of the bill. We are speaking in support of the bill because it went to the Justice and Electoral Committee and we listened very clearly to what the bill was about. 
Hone Harawira 
: Surely not. 
LYNNE PILLAY 
: I ask that member to look at the way in which his party voted on the workers’ rights— 
Hone Harawira 
: On the Foreshore and Seabed Bill? 
LYNNE PILLAY 
: No no on the workers’ rights legislation. That member lay down had his tummy scratched and did exactly what National wanted in terms of workers’ rights in New Zealand. So that is quite enough from that member. 
Simon Bridges 
: This sounds like a Shane Jones movie Lynne. 
LYNNE PILLAY 
: My goodness “Clark Kent” rides again; it is just everywhere. I know that Mr Assistant Speaker would want me to come back to the bill. And I think that he would appreciate other members of the House not creating a diversion from what the bill is about. 
Simon Bridges 
: Tell us about the bill. 
LYNNE PILLAY 
: Never mind the new spectacles—“I look cool.”—and never mind going back to the past. This debate is about the Limitation Bill. We are here tonight to debate the Limitation Bill. 
Clare Curran 
: The National Party’s limitations. 
LYNNE PILLAY 
: Well I will need to take many calls on that one! But we are here to talk about the Limitation Bill. I think we should go back to the bill. I urge the House to do that because there has been a little bit of slippage here. The Law Commission the very hard-working and respected Law Commission recommended that we replace the current 1950 regime with a new modern regime. It is nice to see something modern happening in Parliament is it not? We do not see that very often. This is one of those occasions where we are stepping up and moving forward and the new regime— 
Hone Harawira 
: Yee-ha! 
LYNNE PILLAY 
: —yee-ha—will encourage claimants to make their claims without undue delay and protect defendants from the unjust pursuit of stale claims. I think that is really important. 
I acknowledge Chester Borrows; he is a very hard-working member. He is looking a little bit tired at the moment reclining back in his seat. But we all recognise Chester Borrows for the great chair he is. Even though the members of the Justice and Electoral Committee do not have a meeting of minds at all times Chester Borrows is a very good chair of the committee. A Maori Party member acknowledges that with applause. It is a very hard-working committee. I ask the member how many bills have been before that committee. 
Chester Borrows 
: Oh 17. 
LYNNE PILLAY 
: Seventeen? I think it is more than that. It has been a very hard-working committee. Many members including National members often grieve that we are not referring the Sentencing Council legislation back to that committee. I think that would bring about a bit of passion. One of the sad things about the committee is we have seen piecemeal legislation on victims’ rights stuff instead of the enactment of that very good bill which is languishing on the Order Paper. We get bit by bit from the National Government. At least this bill is going in the correct direction. I will not say “right direction” because most of its legislation goes in the right direction but that is actually the wrong direction because it is a return to the right. But this legislation limited though it is—being the Limitation Bill—is sound legislation. So I am very happy to talk about this bill in the House and I would like to talk about—[ 
Interruption 
] It is not often I am happy in the House. I am actually pretty unhappy most of the time because some dreadful legislation comes through the House. 
The purpose of the bill is to provide clearer more comprehensive law on general civil limitation defences. It balances fairly the right of claimants to have access to justice—and if there is anything that the whole of Parliament should hold dear it is access to justice—with the right of defendants not to be disadvantaged by stale claims. There also is some clarity about the way that claims go. I can see my colleague Carmel Sepuloni who is an incredibly talented young woman nodding in agreement. 
Hone Harawira 
: Hear hear! 
LYNNE PILLAY 
: Exactly. She is nodding in agreement because she is sharp. She not only has picked up her portfolios but is really on to it in terms of justice matters. I will go to the report from the Justice and Electoral Committee— 
Simon Bridges 
: 4 more minutes to go Lynne. You’re all right. You’re doing well. 
LYNNE PILLAY 
: I ask the member to please not distract me. 
Simon Bridges 
: There’s a lot to get through isn’t there? 
LYNNE PILLAY 
: There is so much to say and so little time to say it. Give a guy new glasses and he goes crazy. 
I want to talk about the bill. Many people may think that the Law Commission did a fantastic job and that the legislation put before the House would go to a select committee and come back without being amended. But no that was not the case. I acknowledge once again as I usually do the fantastic select committee staff and officials—and I can see Chester Borrows nodding in agreement—who gave us incredible support and advice. Indeed many changes were made to the bill. They were not particularly controversial; they were more technical in terms of making the bill work better in practice. But there was one controversial change and it related to the defence to a money claim filed after an applicable period. There were a lot of views about whether the 15-year longstop period currently in the law should be aligned with the 10-year period in the Building Act. The Law Commission wavered a little—which is not like the Law Commission but it did do so on this occasion—between the two periods. In its final report in 2007 the commission concluded that a 15-year longstop limitation period struck the appropriate balance between justice for claimants and certainty for the defendants. The main explanation given for retaining the shorter 10-year longstop limitation period for defective building claims was the complexity caused by multiple parties and fading memories. National members will know about fading memories will they not? But that was part of our deliberation. 
The Labour members on the committee believed that those issues are similar for many other causes of action and saw no good reason at all for shortening the longstop limitation period for building cases. We believe that it is more appropriate for the same longstop period to apply to all policy areas for which longstop periods apply. That was one area where there was not necessarily a meeting of minds. Once again the Labour members led the charge in terms of progression and in terms of listening to the submitters who came along on the day—well not on the day; on several days. Unfortunately they did not win the argument in that one area. 
But we support the bill. We are proud of the select committee report and we commend the bill to the House. 
METIRIA TUREI (Co-Leader—Green) 
: 
 I will address the Limitation Bill on behalf of my colleague Kennedy Graham. The purpose of this bill is to encourage claimants to make claims for monetary or other relief without undue delay by providing defendants with defences to stale claims. The bill would repeal and replace the Limitation Act 1950 and it is intended to implement the Law Commission’s recommendation to replace the current Act with a modern regime. Such a regime would encourage claimants to make claims without undue delay and would protect defendants from the unjust pursuit of stale claims. 
In essence three principal changes are envisaged in this bill. The bill would clarify a claim affected by limitation provisions; it would clarify the commencement of limitation periods and any exceptions or modifications; and it would address the unfairness that under the current law a limitation period may end before a claimant even knows that something is wrong. 
The Green Party supports the broad thrust of this bill and will vote for it. Many initiatives in it will improve matters. We agree with the recommendations of the Justice and Electoral Committee pertaining to clarifying several definitions especially extending the definition of “Disputes Tribunal” defining the terms “trust” and “trustee” and clarifying the date for the filing of a claim. More important perhaps we support the committee’s recommendation pertaining to the claims filed under the New Zealand Bill of Rights Act. Clause 11 defined a “money claim” as a claim for monetary relief at common law in equity or under an enactment. That would have included a claim for monetary relief in respect of a breach of the New Zealand Bill of Rights Act. 
The committee was concerned that the bill would apply a limitation period to claims for monetary relief for a breach of the New Zealand Bill of Rights Act. Such claims if time-barred should be subject to discretion. The inclusion of such rights claims in the new limitation regime reflects the recommendations of the Law Commission. It is consistent with international human rights law. A reasonable limitation period needs to apply to such claims. Defendants need certainty as to whether their actions might be challengeable so we are pleased with the recommendation on that matter. There is also the issue of late knowledge. There are certain legal complications attached to this but it was clear that a fraudulent action by another party was one reason that a claim acquired late knowledge and that this should be included as a qualifying factor. 
The main point of debate in the select committee concerned monetary claims filed after the applicable period. There was a range of views over the merit of the longstop period as defined in clause 10(3)(b). There were suggestions that the 15-year limitation period should be reduced to align it with the 10-year limitation period prescribed in the Building Act. The Law Commission concluded after much deliberation that a 15-year longstop period struck the appropriate balance between justice for claimants and certainty for defendants. The argument for retaining the 10-year period for defective building claims was the complexity caused by the number of parties that might be involved and by the length of time during which the memory of events becomes less reliable. The Green Party shares the view of Labour that these issues are similar for other causes of action. There is no good reason in our view for having a shorter longstop limitation period for building cases. It is an odd jurisprudence that would limit legal redress to the subjectivity of personal memory faculties. Having the same longstop period for all claims is more appropriate. 
This is just a short call. The Green Party is satisfied that this bill will improve the law as it relates to the complex area of claims. We are happy to support the bill and we look forward to its further progress through the House. 
SIMON BRIDGES (National—Tauranga) 
: 
 I have been told that my friend Hone Harawira was going to take a call which I must admit surprised me. But I come back to say what a great committee the Justice and Electoral Committee is. It has a fantastic chair in Chester Borrows who does a great job as chair. 
Lynne Pillay 
: Lovely guy. 
SIMON BRIDGES 
: His deputy chair Lynne Pillay is not bad as well come to think of it. 
I pay tribute to Lynne Pillay. Members saw her during her speech tonight. They saw the cool calm academic rigour that she brought to the Limitation Bill. She was a sucker for punishment in the committee on this bill with the way that she drilled down into the detail and kept challenging us time and time again to get into the detail of the Limitation Bill. I take my hat off to Lynne Pillay for her work on the Limitation Bill. 
It is great to be here tonight speaking on this bill. Despite my five o’clock shadow now at a couple of minutes to 10 I am nevertheless really switched on to this bill and the important matters of policy and principle that we are dealing with. I agree with Lynne Pillay. This bill is about access to justice and that is why we are here tonight. 
As the Hon Chris Finlayson said we are here tonight to do a noble thing. We are simplifying the 1950 Limitation Act and we are removing injustice. In the past it could well have been the case that some people discovered their claims after the expiration of the limitation period. Again to come back to that great learned expositor of the law Lynne Pillay that is an access to justice issue. That is not to say that we are not balancing justice issues or the right of a putative plaintiff to bring their case on the one hand and the right of a defendant to finality on the other side. There are those balancing of interests. 
Here we are just after 10 p.m. on Wednesday night doing a noble thing for this country. We are debating important policies and principles. I could talk a lot more about this bill but I say that it is a great bill and I am proud to be part of a Government that is bringing it forward and changing the rules in relation to limitation periods. 
JACINDA ARDERN (Labour) 
: 
 I have to point out the irony from the member who has just resumed his seat. Mr Simon Bridges the lawyer was being somewhat patronising to my very learned colleague Lynne Pillay. He claimed that she did not apply any legal rigour. 
Simon Bridges 
: I raise a point of order Mr Speaker. I take personal offence at that remark that I was being patronising. I normally am but that speech was dead serious. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I say to the honourable member that this is a robust debate. I think he should take on board the words of his own colleagues and harden up a bit. One cannot be that sensitive here. If Ms Ardern had said that the member was being “matronised” it might have been less offensive. 
JACINDA ARDERN 
: I would like to put on record that I think this is the first time a presiding officer has told a member to harden up. 
I point out the irony in Mr Bridges delivering a speech that called on my colleagues to display legal rigour when he the lawyer on the other side of the House gave no analysis of this bill whatsoever. I found that a little bit disappointing because I expected a little bit more from my colleague in that regard. Despite all the comments he made about my colleague Lynne Pillay I would have to say that no one on the Justice and Electoral Committee causes more of a stir in our meetings than Lynne Pillay. I do not think a meeting goes by without her defending the worth of the Sentencing Council. I want to mention the value of the Sentencing Council which Labour will defend to the end. 
I want to come to a number of more serious points on the Limitation Bill. Although there was a lot of agreement on both sides in terms of what this bill needs to achieve there were about three areas of contention that I want to draw on. They will probably be discussed in greater detail during the Committee stage but I want to flag them now. First off I again highlight the fact that we were reviewing legislation that had its origins in the 1950s. Obviously a lot of circumstances are known to us in the new modern legal system and they need to be addressed in any new regime around limitations. 
When we were discussing this bill we weighed up the idea of giving certainty to defendants and reducing undue delay with the idea of building reasonable grounds on which a claimant might have reason to delay the claim that was to be put forward. Before I get into some of the depth of the bill I point out that we continually hear from the Government some criticism as to how long Labour may or may not have taken to put forward various legislation and there has been the argument that we demonstrated undue delay in bringing forward a review of the Limitation Act. When we are discussing legislation from 1950 I think that that criticism could extend to both sides of the House. 
Having said that I want to jump into those three areas of contention which I have already pointed out and about which there was some lengthy and robust debate in the select committee. The first area of contention was the longstop period. I know that some of my colleagues have already discussed it. We had divergent views about a 15-year longstop period as defined in clause 10. It relates to the time limit that would apply to one’s claim whether the claim relates to personal injury or is a civil matter. It could even relate to building houses and therein lies the rub. When it came to claims around the Building Act— 
Chester Borrows 
: Give Lynne another go. 
JACINDA ARDERN 
: I tell Mr Borrows that I flag it again because I believe it was an important point. As chair of the Justice and Electoral Committee he knows that this issue caused significant angst for the Opposition. Inconsistency in the law—as any good policy-maker like the good sir will know—causes some irritation. The Building Act 2004 differs from the Limitation Act in that it sets out a longstop period of 10 years. Some arguments were put before us as to why that was important. Some said that defective building claims the complexity of the issues and fading memories meant that those issues needed to be brought forward within a 10-year period and that they would be known to the claimant within that period. 
The fact that the Law Commission in three different reports extending back as far as 1988 I believe wavered in its view on this issue points to the fact that there is room for differing interpretation. My hope would have been that we err on the side of caution with this particular provision and that we default to the important premise of consistency. That was the view that the Labour members of the select committee brought to the table and during the Committee stage I would like to hear a bit more discussion about the inconsistency in that area and about what is added by having two differing periods. 
The National Government has put forward its package of remedial action around for instance leaky buildings and the main set I guess of cases was brought forth in order to explain why we needed a different longstop period. The Government claims that that is a robust package so I would have thought that nothing would be lost by building consistency between the two. 
The second of the three areas of contention I want to discuss—there were a couple of other areas where that the select committee made changes but from my recollection these were the three on which we made a significant contribution—was the discretion to allow relief for the claim of sexual abuse of a minor. Clause 16 gives the court or tribunal the discretion to allow monetary relief to be granted in respect of a claim of sexual abuse of a minor even when a limitation defence had been or could be established. We recommended specially amending that clause to cover claims of non-sexual abuse of a minor based on the fact that they could have the same long-term effects as sexual abuse. I think this is consistent with where we have been heading in New Zealand in terms of not only sexual abuse cases but domestic violence. We have extended our definitions of violence and of abuse in our domestic violence law. 
I think that there are a number of good reasons why allowing more discretion should extend beyond sexual abuse as well because at the end of the day the question of whether monetary relief should be granted despite there being a limitation defence will be a judgment for the court particularly when we are discussing cases that relate to minors. Those cases because of the many psychological factors that are implicit in them provide even more reason as to why we should look beyond what would otherwise be a longstop period. 
Of course we would not be standing alone in making such a judgment. As a select committee we asked specifically to hear international evidence and good practice in this area. We heard that the United Kingdom and many Australian jurisdictions give similar discretion to disregard limitations in personal injury claims which also include forms of abuse. So we are in keeping with other jurisdictions in this regard and I think we have made the right amendments. 
I want to touch now on the third area which I hope we will have more discussion on later in this debate. I do not know that we have resolved this issue which is about the discretion to allow relief for claims of gradual process disease or infection. Of course limitation applies to personal injury claims and it does factor in the idea of late knowledge but we expressed concern that the proposed longstop period could impose an unreasonable restriction on a person’s ability to claim particularly where gradual process injuries were involved. 
The argument we heard back from other members of the committee—and from officials to be fair—was that because we have a no-fault insurance scheme in the form of the accident compensation scheme we would not see as many cases in this area anyway because gradual process disease or infection is most likely to be covered by that no-fault scheme. We had some level of discomfort that that was taken as a given particularly at a time when there has been so much disruption to what otherwise we would have perceived to be unmovable parts of our accident compensation regime. It has in fact been proved that they are movable. Policies can be changed and people can be denied coverage and then they have no access of redress based on the way that this bill has been drafted. I will come back to that element further on in this debate because I do not believe that it is something we have reached an end point on. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I am pleased to take a call on the Limitation Bill. The purpose of this bill is to repeal and replace the Limitation Act 1950. As the Hon Chris Finlayson mentioned the 1950 Act is creaky and outdated. This Act is based on the English statute of 1939 and that too was repealed long ago. 
The Limitation Act 1950 has been reviewed thrice by the Law Commission—in 1988 2000 and 2007. It was recommended that this Act be replaced with a new Act. The Law Commission identified that the current law is unfair uncertain and outdated. It also identified that some of the important terms are not defined in this Act. 
The Justice and Electoral Committee under the able leadership of Chester Borrows heard submissions which were duly considered and it recommended some changes. This bill makes limitation law more accessible and up to date. This bill achieves a balance between the competing right of access to justice and the right of the defendant not to be accountable for stale claims. In conclusion I say that this bill will make the law more comprehensive and clear. Thank you. 
Hon DAVID PARKER (Labour) 
: 
 I rise with some pleasure to talk on the Limitation Bill. This is important legislation that updates the current Limitation Act 1950 which obviously from its title is already 60 years old. I thank the Attorney-General for his careful consideration of the issues in this bill—in particular in relation to gradual process injuries which is an issue that I will come back to. 
The Limitation Bill is important legislation because it tries to balance two interests. On the one hand we have the public interest in enabling people who have been wronged to pursue through the courts a remedy to compensate them for the wrong that has been done to them. We want them to have that right and for it not to taken off them unduly. On the other hand we have an interest in ensuring that the quality of justice is good by making sure that these disputes are resolved in a timely manner before people forget before witnesses die and before documents are lost because those things are important in making a good decision. 
We also have the important public interest in making sure that the sword of Damocles does not for ever hang over the person who did the wrong; people should be able to move on with their lives after a reasonable period of time if the claim that is hanging over them is not pursued. So the general rule is that people have 6 years to take their claim. If they do not take their claim within 6 years then they lose their rights. That 6-year period currently runs from when the cause of action arises but what that means is complex and I do not have time to go into it. 
That test is changed slightly in this legislation but in changing that test we are also introducing a more clear exceptions policy. There are occasions when the normal 6-year rule would be unfair because people through no fault of their own do not know enough of the facts to ascertain that a wrong has been done to them or to know whom they should sue. So there is an exception when there is a lack of knowledge on the part of the injured person that would prevent them from bringing a claim within that 6-year period. The general rule has an exception that can extend that period for a longer period but that longer period is in itself limited by what we call a longstop date beyond which no matter what one’s rights may have been the rights have been lost because too much time has elapsed. That is how we balance those two interests. 
There are a couple of exceptions to that. An important exception to the normal 6-year rule is in respect of minors who have been sexually abused. Obviously they could be abused at age 3 and still be under the care and control of the person who abused them until they leave home many years later. If a 6-year limitation period applied in that case it would be causing an injustice to the children who were abused in their homes and who would have no effective remedy. So that is one of the public policy reasons why we have an exception in respect of sexually abused children. That exception is in the old Limitation Act and is carried forward into this legislation which is a good thing. 
There is another exception that we in the Labour Party are worried about. It relates to gradual process injuries. People might be exposed to asbestos in the workplace and they might not know that they have been exposed to asbestos in the workplace until asbestosis develops a number of years later. If there was a 6-year limitation period well the illness could happen after those 6 years; if there was a 15-year longstop period it could happen even after 15 years so those people would be without a remedy. 
The bill came to the Justice and Electoral Committee without there being an exception in respect of gradual process injuries. One of the justifications for that was that if the injury was work-related or even if it was not work-related but accidental the claimant would have cover under the accident compensation scheme. But when Labour members reflected on that at the select committee we thought: “Who’s to know what future accident compensation rules will be? Who’s to know whether some of these things will or will not be outside the cover of the accident compensation scheme?”. It was notable to us when we looked back at the old 1950 Act that that Act had not been amended by the Accident Compensation Act of 1972. It sat alongside it so that if people had cover under the Accident Compensation Act and it was stated that those people had no rights outside that Act then that was covered in the Accident Compensation Act and not in the Limitation Act. 
It became clear to us that from a principled point of view we needed to do in New Zealand what they had done in Canada which was one of the comparisons we had. We needed to have an exception in respect of process injuries and if those process injuries were long term and they were covered by the accident compensation scheme then that scheme would take care of them and no one would have any other risk because their claims were settled under accident compensation legislation. But if they did not have cover under that legislation then they ought not to lose their rights because of the provisions in the new Limitation Bill. We took that to the Attorney-General and the Attorney-General looked at it. I thank the Attorney-General because I thought he showed wisdom and open-mindedness in being willing to look at that and then in agreeing to that as an exception. 
There is one other issue that I will deal with because although Labour will be backing this bill because it is a good bill I disagree with the Government in respect of having a longstop liability period for non-building claims that is different from the period for building claims. We are saying that we will have a longstop liability period for 15 years except for some of those rare exceptions relating to sexual abuse of minors and gradual process injuries. After that 15 years even if people did not have knowledge to bring their claims earlier they will lose all of their rights. But in respect of building cases we are saying that we are sorry but people will not get the same longstop liability of 15 years; they will get only 10 years. 
The first point I make is that this is irrelevant to the leaky building issues in Auckland because the Limitation Bill that we are considering will apply only to causes of action that arise from the date the bill is passed so it will not apply to those leaky buildings that we already have in Auckland. So the difference between the 10-year and 15-year period in respect of building cases is irrelevant to the problems that we already have in Auckland and elsewhere with leaky buildings. But I see no difference in principle between a building claim a professional negligence claim and a claim where someone acting as my agent could without my knowledge defraud me of some of the money that was due to me the principal from that agent. In that case if an agent is defrauding me I have 15 years to pursue my claim—up to a 15-year longstop period—if knowledge has not been reasonably available to me that would have enabled me to bring my claim earlier. Yet we say in respect of a building claim that we can have only 10 years; I do not understand the logical reason for the difference. A failure in the foundations of a house can happen after 10 years but not be apparent before that and after that 10-year period it will become the problem of the building owner because the longstop liability period will click in at 10 years. 
The justification we were given at the select committee for the difference was that building claims had complexity because multiple parties were involved. We have the architect the engineer the builder and maybe the concrete layer or someone who has put the steel work into the foundations inappropriately so it is true that there are multiple parties. OK that might add a bit more complexity than would be the case in respect of a simple action between a principal and a single agent but there are plenty of cases where there is complexity as to fact and if someone cannot prove a case on the balance of probabilities—in a case of complex facts such as a building case—in that period between 10 and 15 years that person’s case will fail. I cannot see the reason in principle for having a different longstop liability period for people who suffer a failing building. That could be the loss of the most important asset in their lives; the foundation of the house could fail and the house could be largely worthless. 
The other argument we heard was that in Building Act cases we have fading memories. But we have fading memories in all old cases so I do not see a difference in principle there. I am not sure whether it will be in the scope of this bill because that is something I will need to check with the Office of the Clerk but assuming it is within the scope of this bill I will be promoting at the Committee stage an amendment to have the same longstop liability period applying to Building Act cases as to all other cases because I do not see the difference in principle. We can argue that the periods should all be 10 years: that Building Act cases should have a 10-year longstop period and that other cases should too. But we say that they should all be consistent; they should all have either 10 years or 15 years as their longstop period. Thank you. 
HEKIA PARATA (National) 
: 
 Tena koe Mr Assistant Speaker Barker. Huri noa i to tatou Whare tena koutou katoa. I am pleased to stand to take a short call on the Limitation Bill. Indeed I was motivated to rush to the House once I realised that the Attorney-General was as usual giving his comprehensive and incisive rendition of this bill’s coverage its heritage and its legacy. It is important that we have the opportunity to hear that kind of leadership in the House— 
Chris Hipkins 
: There are no Cabinet jobs going at the moment. 
HEKIA PARATA 
: —and to inspire that response from Mr Hipkins. Our backbench members were motivated to get here as soon as possible to support the passage of this legislation through the House. 
This is an important bill. As my colleague Simon Bridges said earlier and as members opposite have reiterated the bill sets out to balance the rights of both the claimant and the defendant. The allocation and management of rights is an issue that continues to vex Parliament after Parliament and this bill takes the opportunity to clarify the area of legislation that allows claimants to bring their causes of action before the court and allows defendants to know that they will not be subject to claims long past the time when one might say it is fair for them still to be heard. 
As previous speakers have noted the Law Commission has reported on this bill three times: first in 1998 then in 2000 and again in 2007. The 1950 Limitation Act has exercised the Law Commission somewhat in that it has taken such a long period of time to finally bring the bill to the point where it is now at. Legislation is imminently to be passed and it will give greater certainty to people who are engaged in the process of having their rights heard balanced and judged. 
Far be it from me to continue to rehearse the technical detail that our Attorney-General has covered so well. I congratulate the chair of the Justice and Electoral Committee Chester Borrows who has shepherded the bill through the process in the careful and cautious yet comprehensive way that characterises—she said alliteratively—all the work that has to be done by the chair. The chair also carries a significant body of work. I think we have heard tonight that 17 bills are before the very hard-working Justice and Electoral Committee to the membership of which I have only recently been promoted. 
Chris Hipkins 
: Promoted! 
HEKIA PARATA 
: Of course other members too if they try hard enough could also find themselves one day on the Justice and Electoral Committee although that possibly does not apply to everyone in the House tonight. 
I also acknowledge the deputy chair who stands ready to support at a moment’s notice the work the chair has done. As we have noted in the House earlier we are constantly challenged by the diminutive Ms Pillay who has a giant concern for and commitment to the Sentencing Council. Of course we also have the incisive Mr Quinn and his rapid thrusting and razor-sharp interventions which continue to keep us on our toes and each thrust is parried by the inimitable Mr Parker. It has been an absolute joy to be a part of that process and I look forward to further debate on the bill this evening. Thank you. 
Bill read a second time. 
In Committee 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for the Committee stage of the Limitation Bill to be taken as one question with multiple calls. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought that the provisions be taken as one debate—that is Parts 1 to 4 the schedule and clauses 1 and 2. Leave is sought for that purpose. Is there any objection? There is no objection. 
Parts 1 to 4 schedule and clauses 1 and 2 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I will not speak at any length on Part 1 which simply outlines the preliminary provisions but I do want to say something about Part 2 which is in many respects the core of the bill and sets out that there are to be defences to money claims. 
People will have 6 years from the events on which a claim is based to bring their claim before a defendant can argue that the claim is time-barred. If the claimant did not know about the claim within this time he or she has an extra 3-year late knowledge period in which to make the claim. However and this has been referred to by a number of speakers in the second reading debate after 15 years from the date of those events the defendant can argue that the claim is time-barred and money claims are defined in clause 11. 
I hear what Mr Parker said in his second reading speech and I indicate to him that I was grateful for the very useful discussion we had about clause 16 which I think improved it. But I do take issue with him over the different periods. It all depends at the end of the day on the policy considerations governing a particular piece of legislation. This bill sets out the general rules of limitation. 
There are nonetheless specific limitation periods in specific statutes for particular policy reasons. So for example in the Fair Trading Act the period in which one can bring a claim is 3 years. In the Commerce Act there are as I recall a number of different periods because of the requirements of that legislation. In the Family Protection Act there is a particular limitation period that differs from what is contained in this legislation. So uniformity I think is to be encouraged and it is one of the reasons why we have dealt with this legislation. Although it may seem to be rather boring technical legislation it actually has very real consequences for people when they seek to bring claims in court. But in my opinion there is a difference between the 10-year period set out in the Building Act and the 15-year period here. As I say this is a statute of general applicability. 
The second point I want to address concerns clause 16 which is a very important clause. Mr Parker has accurately outlined the way in which this legislation has developed and in particular the way in which clause 16 was amended by the Justice and Electoral Committee. In one of the early drafts of the bill clause 16 was not there at all and then it was decided to provide a clause that gave discretion to allow relief for a claim of sexual abuse of a minor because of the particularly horrific nature of that kind of proceeding. But it has been broadened out and a number of changes have emerged as a result of the select committee’s deliberations. 
Importantly—and this is brought out in new clause 16A—there is the omission of the requirement that the strength of the claimant’s case is to be a matter to be taken into account in exercising its discretion. As Mr Parker said that widens the scope of clause 16 to include physical and psychological abuse of minors by parents step-parents and close relatives or associates and it extends the discretion to allow relief for claims for personal injury caused by gradual process infection or disease that is not covered by accident compensation. So it is a very important change and I agree with speakers who contributed during the second reading that it does improve the legislation. How many claims will there be? Well who knows but this is a particular form of harm and it is appropriate that we provide for it in this legislation. 
Hon DAVID PARKER (Labour) 
: 
 I thank the Attorney-General for those remarks particularly in respect of the different longstop liability periods. I agree that we do not have nor ought we to have the same limitation period applying to absolutely all causes of action. I would say in respect of the two examples that the Attorney-General used that the Family Protection Act of course has a shortened period because one needs to distribute the proceeds of a will and let people spend it or use it for the purchase of a house or use the assets they inherit after a period. Of course when someone dies one generally knows whether one is in the class of people who can make a claim under the Family Protection Act and they are essentially close relatives of the deceased. They know that the deceased has died and therefore they know that if they are going to challenge the will they have a cause of action as a consequence of the death of their relative. So I do not see that as being a good reason or a good comparison with the Building Act. 
In respect of the Fair Trading Act similarly I would have said that most of the claims are things that will be known to a party within that period and if they did not have a right under the Fair Trading Act they would normally have a contractual right or claim which under this legislation would have a longstop liability in case of a lack of knowledge on the part of the claimant or the person who is injured which would actually be the 15-year longstop period. 
Although I accept the proposition that there are some areas where one does have a shorter limitation period I do not see the examples the Minister has given as being good justification for having a different rule from the general 15-year longstop period for building cases. I think those building cases are more similar to the other cases where we do have the 15-year longstop liability period than they are to the likes of the Family Protection Act or the Fair Trading Act cause of action. I again note that under the Fair Trading Act one generally has a contractual cause of action if one did not want to rely upon the Fair Trading Act cause of action. I see it as being more akin to general claims in tort or contract. 
I continue to be of the view that the longstop period for building cases ought to be the same as it is for other cases. There should be alignment. I encourage the Committee to consider seriously the amendment that will be appearing on the floor of the House. 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I wonder whether there is a way through the issue raised by David Parker that would satisfy everyone. The Building Act was enacted first I think in 1991 and re-enacted in 2004. It is under review at the moment and it could well be that those arguments could be made in the context of the Building Act review so that we do not get into a debate about whether the member’s proposed amendment is within scope or whatever. It could well be an issue that is deserving of careful consideration when the Building Act review is concluded. I simply offer that not as a peace offering but as sensible way forward. 
Hon DAVID PARKER (Labour) 
: 
 That is a very kind offer but I like to have two bites of the cherry. 
LYNNE PILLAY (Labour) 
: 
 It is an absolute pleasure to come down to the Chamber again and speak on the Limitation Bill. I was in my office catching up on a bit of work and I thought: “No—enough. I have to get back to this bill.” 
I heard with interest the comments in terms of the waiting period in the bill and I acknowledge the very good contribution of David Parker. That was something on which the Labour members showed a lot of leadership and I am only sorry that all our very valid arguments were not brought into effect. What I do know is that this bill is long overdue. As I said earlier in terms of the Government we have seen a lot of things we are not happy with come before the Justice and Electoral Committee but especially before this House. But on this occasion this has been a common-sense bill if I can use that term. It has clearer more comprehensive law on general civil limitation defences. The bill is not all about defendants being disadvantaged by stale claims. It is also about having some clarity in terms of the whole system. 
I acknowledge the work of the Law Commission. I note that under the previous Labour Government more Law Commission reports were implemented than were implemented under any other previous Government. Although I acknowledge Chester Borrows who is a very good chair of the Justice and Electoral Committee I also take this opportunity to acknowledge the former chair who was me. During my time as chair of the Justice and Electoral Committee there were many bills that came before— 
Hone Harawira 
: You were just wonderful. 
LYNNE PILLAY 
: I thank the member very much. Kia ora. If we really want to remember that committee the member will remember when we went to look at victims’ rights in Victoria. It was a very constructive meeting. Unfortunately the National members wanted to take advantage of the adjournment and go on international holidays but those of us in Labour and indeed in the Maori Party went on that select committee trip. The member was very helpful in the time that he was there but he then felt a need a very— 
Hone Harawira 
: To sneak off. 
LYNNE PILLAY 
: I would not put it that way. He felt a need to go and investigate some concerns. 
Hone Harawira 
: For a walkabout. 
LYNNE PILLAY 
: He went walkabout in Australia but that is past history. What I will say is that that member put in the time and effort to accompany us on that trip. I can see Minister Finlayson looking and thinking “Oh I wish I had been there.”! I know that it is something the Minister has always regretted just a teensy bit. The trip was crucial in terms of Labour enacting some very very good legislation on victims’ rights which the National Government has been a little tardy on building on. We hope that in the future it will do so. 
I come back to the Limitation Bill because I know that all of us on the committee found it particularly interesting. Even though it is an update it seemed quite technical and some quite substantive issues came out that needed quite a bit of consideration and discussion. My good friend David Parker has talked about sexual abuse claims and why the limitation period should not apply to them because of the very nature of longevity of when those claims may come into effect. It would be really remiss of me not to acknowledge that and at the same time acknowledge what a dreadful dreadful job the Minister for ACC has done in terms of providing support for survivors of sexual abuse in New Zealand. I know that it is not appropriate to digress and very few members have tonight but that is one of the things that would have to be a real blot. Where do we draw the line? Where do we stop counting all the terrible things that this Government has done? But that has to be up there with the worst. 
I mentioned before—just in passing of course—the assault on workers in New Zealand. I also want to mention the Sentencing Council because I know the Minister would be very upset if I did not mention it. I know that other members have also mentioned it tonight. If the Minister could somehow enrapture the Sentencing Council into this bill he may wish to take a call. If we are talking about access to justice—[ 
Interruption 
] Ah I see the Minister is jumping to his feet. Thank you very much. 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 Hearing the dulcet tones of Lynne Pillay takes me back to those very happy days between 2005 and 2008 when we were getting ready for Government and she was the chair of the Justice and Electoral Committee. How we enjoyed working collaboratively and positively together on the electoral finance legislation! It was one of the thrills of my life! I regret to say that I was the one who was responsible for pulling the National members out of that select committee visit to Australia because we do not believe in trips like that which are primarily vacations. I remember receiving the itinerary from Ms Pillay and I was so disappointed. I think there were two or three meetings a day and she and her colleagues were going to be holed up at the Park Hyatt. They were going to be travelling business class but I believe that people should fly economy class across the Tasman. I said: “Well I am sorry but the National members are required at home to serve the people.” and we pulled out of the trip. But nonetheless I do acknowledge the honourable member and I say that the Sentencing Council which was an appalling edifice designed to straitjacket judges into giving particular sentences is now consigned to the trash heap of history just like the electoral finance legislation. 
I want to say something about Part 4 of the Limitation Bill because Part 4 contains some very interesting general provisions that relate to claims made in arbitration limitation defences and other enactments contracting out of defences and the pleading of defences. I refer honourable members to clause 41 which is one of the more fundamental principles of the bill. It says that if a defendant establishes a defence against a claim under the Limitation Act then the court or tribunal cannot grant the relief sought but the claim itself is not extinguished. So one is prevented from bringing the claim but the claim is not extinguished. That is at the very heart of what this limitation legislation is all about. 
The other interesting part of Part 4—and I do not know that I have ever seen it before—is that the 1950 Act will be with us for many years so the 1950 Act is amended and then repealed. The Acts specified in the schedule are consequently amended and these are the important transitional provisions that officials work very hard on to knock into shape. I do not think I have ever seen a situation where an Act is amended and then repealed but it will continue to apply to claims relating to events before 1 January 2011 and it will require claims to be brought by the latter of 15 years of the date of the act or omission or 5 years after the new Act commences. That is why clauses 23A to 23D are included. They bring across provisions to the 1950 Act relating to the longstop period and the discretion to allow relief for example for an action of abuse of an infant or the gradual process injury that we have been talking about. 
The only other point I make—and it is good that the law finally is clarified in this country—relates to clause 53. That will provide that the clause will apply to a civil proceeding before a New Zealand court or tribunal whenever the substantive law of a foreign country is to be applied in that proceeding and it provides that the limitation of that foreign country is part of the substantive law of the country and must be applied accordingly. For many years there was academic debate about whether limitation law was procedural or substantive. The Choice of Law (Limitation Periods) Act 1993 of New South Wales and the Foreign Limitation Periods Act 1984 of the UK clarified the point for those jurisdictions and it is now clarified here. I note also in clause 54 the public policy exception for limitation law of foreign countries is to apply except in relation to Australia. Part 4 as I said contains some very important transitional provisions. The reason for that is that the 1950 legislation will be with us for many years to come. 
Hon DAVID PARKER (Labour) 
: 
 I am somewhat disappointed that the Attorney-General was not quite as excited about clause 8. Clause 8A of the Limitation Bill was another notable addition as a consequence of Mr Corry’s submission to the Justice and Electoral Committee which raised the issue of equitable claims. 
Of course equitable claims are not common law claims so the Limitation Act generally does not apply to them and neither does the Limitation Bill. But the position has grown in the equitable courts that they apply analogous limitation periods to equitable claims. So although the common law or the statute law relating to limitation does not directly apply to equitable claims the courts by analogy apply similar rules because they want to properly balance these interests between people having rights to pursue redress for their injuries against a duty of people to pursue their claims with alacrity once they have the knowledge that enables them to do so. 
Mr Corry submitted to the select committee. He is very learned in those matters and he might have been one of the authors of the Law Commission report. I am not positive about that though I see the Attorney-General nodding there. He made the suggestion that we clarify that through this legislation we were not stopping through new legislation the courts by analogy applying Limitation Bill provisions to equitable claims. In order to clear up that possible unintentional consequence clause 8A of the bill was introduced. It states: “Nothing in this Act prevents it from being applied by analogy to a claim in equity to which no defence prescribed by this Act applies.” I hope that I have given the Clerk enough time to decide whether my amendment is in scope. I will not say anything further for the moment. 
RAYMOND HUO (Labour) 
: 
 I acknowledge the contributions made by my colleagues and by the Attorney-General. The Limitation Bill introduces the new unifying concept of a money claim—namely a claim for monetary relief whether in common law in equity or under an enactment. Part 2 sets out the regime relating to the defence to money claims. There is the general civil limitation defence to a money claim if the defendant can prove that the date on which the claim is filed is at least 6 years after the date of the act or omission on which the claim is based. This is known as the primary period. 
The 6-year period does not apply if the claimant has late knowledge of the claim. In the case of late knowledge it is a defence of a claim if the defendant can prove that the date on which the claim is filed is at least 3 years after the late knowledge date or if the claim is made 15 years after the date of the act or omission on which the claim is based—namely the longstop period. This provision set out in Part 4 is designed to prevent indeterminate liability and applies to non-money claims. 
The late knowledge date is defined by clause 13 as the date on which the claimant gained knowledge or if earlier the date on which the claimant ought reasonably to have gained knowledge of all the certain specified key facts that the claimant must know in order to make the claim. The requisite facts are set out accordingly. The primary period is 2 years and not 6 years for defamation but the late period might apply in certain circumstances. 
Earlier in the bill’s second reading I cited the 2009 Supreme Court case  
Commerce Commission v Carter Holt Harvey Ltd 
. The issues are relevant to this particular bill and particularly relevant to a late knowledge period. According to Bell Gully it is relevant to this bill in respect of reasonable discoverability. As drafted the bill does not define knowledge nor does it specify the degree of knowledge required before the claimant is taken to know or ought reasonably to know the specified facts. I quote: “It is therefore likely that in the absence of amendments to the Bill the Supreme Court’s decision in the  
Carter Holt Harvey 
 case will influence the application of the Limitation Bill once enacted”. So I wish that the responsible Minister the Attorney-General would take a call and enlighten us on this particular issue. Thank you. 
JACINDA ARDERN (Labour) 
: 
 I want to come back to an element of the Limitation Bill that I raised in my first reading speech. It was an issue that has been discussed at great lengths within the Justice and Electoral Committee and I would not mind hearing the Minister’s view on this. This was the discretion to allow relief for claims of gradual process disease or infection. Obviously when the bill first came to us it had a 6-year primary limitation period for monetary claims for personal injury claims to which of course the late knowledge requirements and the 15-year longstop period would also apply. Many submitters presented to us during the select committee process that that might be an unreasonable limitation particularly if a person was seeking to obtain relief for a latent personal injury caused by gradual process disease or infection. As I mentioned in my previous speech one of the many arguments we heard was that New Zealand is different from some of the other jurisdictions we heard about based on our no-fault accident compensation scheme. We did however seek advice on this issue so that we could consider how this rule applied in other jurisdictions particularly when it came to gradual process disease or infection. The UK and Australia seemed obvious jurisdictions for us to examine. We noted that in those countries courts were given the discretion to disregard limitation defences when it came to physical or mental conditions. 
Hone Harawira 
: Just fascinating Jacinda just fascinating! 
JACINDA ARDERN 
: It was even better at the select committee; that was the live unedited version. I admit that this is somewhat watered down and I apologise for that but if the member wishes to sit in the select committee I can tell him that it is tickets only. But that was where it came to physical or mental conditions. When it came to the range in those countries ours was somewhat constrained comparatively. Those countries included personal injuries caused by gradual process at their discretion. 
We had some discussion about this. One of the discussions that came up as I recall was on cases that some of us have seen in our constituency offices. One that I raised was a gradual process claim which was initially covered by accident compensation. It was several decades ago so it would have been outside this legislation. The Accident Compensation Corporation (ACC) had originally acknowledged the individual to have a gradual process injury and had covered the claimant for many years because of that fact. In fact ACC had prosecuted the workplace in question and received damages to cover the long-term payment for the claimant. However somewhere down the track ACC decided to reassess that case decided that in that instance it no longer believed it was a gradual process injury and instead declared it to be a degenerative disease. So in that situation we had originally had a gradual process injury which was covered by ACC and therefore it was one of the cases that understandably we would say was outside the limitation and was already covered by the State insurer. But then when ACC changed its mind there was no point of redress for that individual. Even going back to ACC to try to claim for a gradual process injury meant a very lengthy litigation period. That person would not be covered by the limitation because of being outside the scope. 
That was the kind of discussion we had at the select committee. Then we come to what we decided. Collectively the select committee decided to give the courts the discretion to allow monetary relief to be granted for a claim in relation to a personal injury caused by gradual process disease or infection when the Accident Compensation Act does not stop the claim being made or relief being granted. So there is still an interesting rub when it comes to the way that ACC chooses to define the case in question. I think it is very important to make sure we have the interaction between accident compensation and this legislation right because I do not think we can assume that all things will necessarily remain equal when it comes to accident compensation. 
LYNNE PILLAY (Labour) 
: 
 I will follow on from Jacinda Ardern. The member’s last words were that we cannot assume all things are equal— 
Jacinda Ardern 
: All things will be equal with accident compensation. 
LYNNE PILLAY 
: Yes I think that is a very valid point. In terms of the Limitation Bill that certainly was the view of the Labour members on the Justice and Electoral Committee. 
I am very pleased that our amendment put forward in the name of David Parker is on the Table and I urge the Government to consider it. Although there was a good working relationship and good chairing at the committee I think that from time to time the Government members although they were listening a lot better than they do in other circumstances did not listen enough. I see that the Minister in the chair the Hon Chris Finlayson is listening intently now and nodding I think just a little. No he is not nodding. Do Government members change their colours? No they do not. 
I hope that there is some support for the amendment that David Parker is putting forward in terms of extending the limitation period with regard to building cases to make sure that all bases are covered and that there is fairness and equity in terms of longstop periods in the bill. We on this side of the Chamber are not being stupid—we will not oppose the bill completely if that amendment does not go through—but we urge the Government to listen to consider carefully to think about what was said to think about the arguments and to think about what the submitters put forward. I think it is important for members to put their egos aside; it is not about who is right or wrong. Members should put their egos aside and consider the amendment that we are putting forward. 
I have said it before but again I acknowledge all the work that has gone into a bill that could be seen and described as quite technical and probably to some boring though certainly not to me. It was never boring under the leadership of Chester Borrows on that select committee but it was not perhaps the most gripping bill we have had. That would be a fair comment would it not? It was not the most gripping bill we have had before the select committee. Having said that this bill makes a difference to people in terms of fairness and the delivery of justice. 
This bill is fair and it is common sense. It is good to stand in this Chamber and speak about this Government putting a bill before the House that has some common sense attached to it. 
Grant Robertson 
: It doesn’t always happen does it? 
LYNNE PILLAY 
: It very seldom happens. It very very seldom happens but in this instance it has. 
I see that Grant Robertson has come down to the Chamber. He is not on the Justice and Electoral Committee. He was up in his office doing some work and he thought: “Oh my goodness it is the Limitation Bill!” and he was off like a robber’s dog to come down to the Chamber and speak on the Limitation Bill. I am really proud of my colleagues who are committed to having their say. So often the debate is negative. So often we go home with knots in our tummies about what has happened and about all the dreadful things that this National Government has done but this is not an occasion like that. Although we want our amendment to be carefully considered we know that this is not the time for argument. We could simply sit back and say: “Who cares? We support it so we will not speak on it.” but we are not a party like that OK? We believe in giving credit where credit is due. 
I tell members that on the Limitation Bill the National Government has excelled. The rest of its record is rubbish but on this bill— 
Simon Bridges 
: Woo hoo! 
LYNNE PILLAY 
: That is right you have done it. You are Superman and Superwoman as far as we are concerned. We are very pleased to support this bill. I cannot think of much else I have to add. 
The CHAIRPERSON (Lindsay Tisch) 
: I just remind the member that I am not necessarily Superman but that helps.  
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is true that I was sitting in my office wading through various piles of paper—which is a great thing to be doing during the urgency period—when I saw that the Limitation Bill was being debated and thought that I needed to be in the Chamber. As my colleague Lynne Pillay said it is unusual for us on the Labour benches to see a Government bill and say that it is practical and common sense. It was probably a bill from the previous Labour Government that was inherited by National but in this case we have to give credit where credit is due and say that this bill has come through with the Minister in charge Chris Finlayson leading the way and breaking new ground in this Chamber. That is what the Minister is doing with the Limitation Bill. 
I am pleased to take a call in the Committee stage and I draw further attention to David Parker’s amendment. It is important that in a common-sense bill like this one we look for consistency. If we provide something like the longstop period and if we say it is important and useful then we should try to apply it consistently. The problem with this bill as I understood it while I sat up in my office listening intently to the speeches—particularly those by David Parker Lynne Pillay and Jacinda Ardern—arises when it comes to the Building Act and for the very people whom the National Party has come to Parliament to represent. Perhaps those people are leaky building owners and I ask why they should not get the ability to have a 15-year longstop period in a case that involves the Building Act. That is precisely what David Parker’s amendment is designed to do: to extend the period from 10 years to 15 years. 
I think that we all know particularly those of us in metropolitan areas and have dealt with people who have had leaky buildings and leaky homes. There is no overestimating the seriousness of that problem for those people. The effects of leaky buildings take a period of time to become obvious. In my electorate of Wellington Central there has not been an end to the claims. More and more people have become interested in the issue. Building products that were used in the 1990s are becoming less and less durable and people are concerning themselves about this problem. The Limitation Bill has the opportunity to help address some of those issues and it is important to look at what the Justice and Electoral Committee said in its report to Parliament about this issue. It stated that there were divergent views about the question of the longstop period. That is significant in a bill as important as the Limitation Bill which perhaps for some people is a technical bill but which for many people has a very very practical provision for them if they have an issue under the Building Act. 
In three separate reports on the issue of the longstop period—in 1988 2000 and 2007—the Law Commission changed its mind about whether the longstop period should be 10 or 15 years. In 2007 the Law Commission concluded that a 15-year longstop period struck the appropriate balance between justice for claimants and certainty for defendants. It is a difficult balance to strike ensuring that people have the ability to have their say and have some kind of redress for what has occurred to them but not extending that opportunity out for ever and a day making providers feel like they have a liability for their whole lifetimes. 
David Parker has put forward an amendment and I think it is well worth reading out. It would insert a new clause 60 after clause 59 which is a good thing—making sure it is sequential is important. Clause 60 would read: “Notwithstanding any other provision in this Act or the Building Act 2004 the longstop period under the Building Act 2004 is hereby amended to 15 years so as to align with the general longstop period provided under this Act.” That is it in essence in a nutshell to make sure that we actually get some consistency and some ability for those people who have been affected by issues relating to the Building Act to know that they have that longstop period of 15 years. 
So I really do ask the National members to take a call and explain to us why they do not believe there should be this kind of consistency. I know that the Minister is a person who takes his responsibilities seriously on issues such as these. The Limitation Bill is one that he would have pored over for hours and hours in his office going through each clause word by word to make sure that it is precise and accurate. 
Chris Hipkins 
: He’s the New Zealand legal system’s greatest mind. 
GRANT ROBERTSON 
: That is right and we are trying to make sure that this bill is improved to the extent that it can be. [ 
Interruption 
] I am sorry I could not quite hear Clark Kent. 
Simon Bridges 
: Lynne Pillay did a lot of the detailed work as well. 
GRANT ROBERTSON 
: That is right she did and to give credit where credit is due so did the whole of the Justice and Electoral Committee. I have had the privilege of sitting briefly on the Justice and Electoral Committee from time to time. I am a great admirer of the chair Chester Borrows. He does an excellent job on that committee. 
Hekia Parata 
: Aren’t we all aren’t we all. 
GRANT ROBERTSON 
: We are and I think it bears saying again and again that this has been a good process. This is a bill that does a lot of common-sense things and here is an opportunity for one more common-sense approach that the Minister could take. It would be good if he could take a call and explain to us here in the Committee whether the National Party will be supporting David Parker’s amendment. It is the opportunity to get a 15-year limit across the board. The Law Commission itself was wavering and here is a chance for Parliament to give a clear direction. Our job is to give people a clear direction not to set up inconsistency within law but to make sure that people who want to make claims under the Building Act know that the longstop period applies to all of them. 
I will not delay the Committee much further on this bill. I see that a number of its clauses deal with laws in respect of which people need to make claims over a period of time. We have already had some discussion about things like gradual process and the role of the Accident Compensation Corporation within that. I am sure that my colleagues on the Justice and Electoral Committee would have ensured that all of those provisions are useful accurate and helpful for the people who will be seeking redress under the accident compensation scheme. The longstop period is an important part of this bill and it is one in relation to which the Labour Party has seen fit to put forward an amendment. My colleague David Parker who is a lawyer in his own right takes these matters very seriously and he has put it up. 
I really do call on the National members to make sure that they give serious consideration to this amendment. Sometimes amendments come into this Chamber that I know Government members see as perhaps time fillers or as amendments that we are not serious about but in this case that is not so. We are deadly serious about the fact that we think this will be good for New Zealand and good for the people who use the Building Act. It is timely that when we are in urgency that the Government says that this bill is important for it to pass. The Limitation Bill is one of the bills that it urgently wants to pass and we say good on the Government for wanting to pass a common-sense bill urgently but we ask it to look at the amendment in the name of David Parker to insert a new clause 60. I look forward to a contribution perhaps from the Minister now on whether he will accept this amendment. 
The question was put that the amendments set out on Supplementary Order Paper 159 in the name of the Hon Christopher Finlayson be agreed to. 
Amendments agreed to. 
The question was put that the following amendment in the name of the Hon David Parker to Part 4 be agreed to: 
to insert the following clause after clause 59: 
59A 
Notwithstanding any other provision in this Act or the Building Act 2004 the longstop period under the Building Act 2004 is hereby amended to 15 years so as to align with the general longstop period provided under this Act. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand Labour 42; Green Party 6; Progressive 1. 
Noes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Amendment not agreed to. 
Parts 1 to 4 the schedule and clauses 1 and 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I move  
That the Limitation Bill be now read a third time 
. As I stand to speak on the third reading I reflect on how lucky we are as members of Parliament to be debating limitation law at 11.15 on a Wednesday night. 
Grant Robertson 
: Hear hear! There’s nowhere else I’d rather be. 
Hon CHRISTOPHER FINLAYSON 
: There is nowhere else I would rather be. I have to say with respect that I thought the discussion in the Committee was excellent. I particularly note the contribution of my friend Ms Pillay and I say “my friend” advisedly because we enjoyed working together she as chairperson and I as deputy chairperson of the Justice and Electoral Committee even though we disagreed on everything and she took the Labour members off on a wonderful jaunt to Australia and I pulled the National members out because I thought that they should be at home working. The one substantive point raised in the course of the discussion came from Mr Parker who I thought made a substantive contribution to improving the bill with the amendment to clause 16 and I acknowledge the discussions we had. He wanted to amend the Building Act longstop period. It could well be that there are very cogent arguments for so doing and that there are benefits as he said in uniform limitation periods but I think this is an issue that needs to be canvassed in the context of the current Building Act review and his proposed amendment which was a very serious amendment with very serious consequences would really need to be consulted on. That was the proposal I put in the Committee stage. It was not accepted but I do think that that is the best way to move forward. 
I am very pleased to be able to move that the bill be read a third time. It replaces 60-year-old legislation. It is very important because as Ms Pillay says it addresses the problems that have been identified with the current Act’s substance and drafting. It clarifies and improves general limitation rules although there are specific limitation rules in other statutes. These rules determine how long people have to bring a civil claim before defendants can argue that the claim is time-barred. The justice system gives people access to the courts to settle disputes they cannot otherwise settle themselves but these kinds of rules are needed—and I think Mr Parker alluded to this on a number of occasions in the Committee stage—as it is unjust for people to have to defend claims about something that may have occurred many years earlier merely because the claimant has delayed bringing the case. These rules are designed to strike a fair balance between the conflicting interests of claimants and defendants. Without these rules people could face potential liability for an indefinite period for which they would need to maintain records professional insurance and so on. Importantly the rules address the important public interest in the timely resolution of claims. 
The path to the reform of the 1950 Act has not been entirely straightforward. I acknowledge the work of the Law Commission over many years. It started with a preliminary discussion paper in 1987. There were then further discussion papers and reports in 1998 2000 and 2007. It is a tribute to the Law Commission—and Sir Geoffrey Palmer took a very special interest in this reform—that we are where we are now. An exposure bill was published in 2008 submissions were received on the bill and the Law Commission then convened a working group of interested persons to consider these changes. The then Minister of Justice gave permission for me to be on that working group—I thought that was very sporting of Annette—and this further work resulted in some significant restructuring and refinement of the bill before its introduction in 2009. 
I conclude by thanking the Law Commission for its work and I also thank the Justice and Electoral Committee for its good work. I think that what we have now is very sensible legislation that will stand the test of time although I hope it is not another 60 years before this Parliament takes another look at this very important area of law. The primary 6-year limitation period is carried forward. We have this new 3-year late knowledge period which is introduced to address the problem identified by the courts and other experts whereby people sometimes discover they have a claim only after a limitation period has ended. Then we have the 15-year longstop that has been the subject of quite a lot of debate tonight. The new periods will not apply if there is fraud or if a claimant is incapacitated. As has been canvassed tonight in some rare cases where minors for example have been abused or where the evidence of a personal injury develops over many years the court will be able to exercise a discretion to grant monetary relief. I think all speakers have noted that limitation law can be complex— 
Grant Robertson 
: But fascinating. 
Hon CHRISTOPHER FINLAYSON 
: It is truly fascinating. I say to Mr Robertson that if he wants a riveting read he should go to the transitional provisions of this bill. They are very very interesting. I know that he will enjoy that more than anything he has done in recent times. I echo the words of Lynne Pillay. This bill is a major achievement in ensuring that the rules are fairer and easier to understand and apply. I thank everyone who has played a part in the debate and I commend the bill to the House. 
Hon DAVID PARKER (Labour) 
: 
 I rise to speak in support of the third reading of the Limitation Bill. I agree with just about everything that the Attorney-General said in his address. 
Amy Adams 
: This is so boring. Find something to describe. 
Hon DAVID PARKER 
: Amy Adams says that this is so boring. 
Amy Adams 
: No you’re agreeing that everything is so boring I’m afraid. 
Hon DAVID PARKER 
: Oh I am being boring. 
Amy Adams 
: Yes. 
Hon DAVID PARKER 
: Well Amy Adams’ contributions have been riveting tonight have they not? 
I will recount the policy balance that Limitation Acts try to achieve. They try to balance the rights of injured parties to pursue through the courts those who have caused them injury in order to get redress for the injury that they have suffered through the wrongful actions of a wrongful party. We want to empower people to do that. We want to encourage them to use court processes rather than gangs or fisticuffs because we live in a civil society. But we want to make sure that if they have rights they exercise them promptly. The reason for that is that the longer one leaves it the greater the chance of injustice. Memories fade witnesses die and documents are lost. In addition there is the need to let people even the wrongdoer get on with their lives eventually and not have the sword of Damocles hanging over their heads for ever. 
We balance those rights by saying that if people have rights they generally have to exercise them within 6 years. But we make some exceptions. We make an exception if people do not know enough to know that someone has wronged them or do not know who it was who wronged them. So we have an exception that says that if a person does not know enough within that 6-year period he or she will be given another 3 years. If a person has late knowledge that person will be given another 3 years. But even that has to come to an end sometime so we have a longstop period of 15 years. That is essentially what this bill does. It has a number of exceptions because there are exceptions to be made to those general rules. 
The exception that the Attorney-General has raised in respect of sexually abused or abused young people is a case in point. A young person could be abused within his or her family at a very young age could still be under the care and control of the very people who abused that young person and could have no effective way of bringing an action partly because the young person is not of a contractual age and does not know how to go to a lawyer and partly because he or she may still be living at home. We do not want those people to lose their rights. They should have some prolonged period in which to exercise their rights because that is fair and so we have an exception for them. 
There was another exception that the Attorney-General agreed to following some overseas precedents including precedents from Canada. A person might have a process injury such as asbestosis or some other workplace injury that takes a long time to arise and there should be an exception in respect of that person. The logic around that provision was slightly confused at one stage as a consequence of accident compensation. People thought that if process injuries were covered by accident compensation then the Government would not need to provide for them under the Limitation Act. But that logic was not quite right. The accident compensation scheme speaks with its own voice. If someone has an accident compensation remedy it is covered by accident compensation and he or she does not have the right to a non - accident compensation claim. The accident compensation claim trumps that and says that those people do not have any residual tortious right. But there are cases that may fall outside accident compensation cover either because of the current rules covering accident compensation or because those rules may change in the future. So it is important that the Limitation Bill provides for gradual process injuries in the event that they are not covered by accident compensation. So that is another exception. 
The general rule in respect of the limitation period should also apply by analogy to equitable claims. Equitable claims are not claims under statute or under common law; they arise using the equitable jurisdiction of the courts. None the less the courts apply periods that are limitation periods by analogy to equitable claims. They apply similar rules to those that apply to common law claims. An amendment was made at the Justice and Electoral Committee to make sure that that is carried forward under this legislation. 
I do not want to give the impression that there will no longer be disputes about whether an action is within time. Although this legislation does simplify things somewhat and attempts to minimise the number of disputes and the injustice that can result from them we will still have disputes about when people had sufficient knowledge so as to be properly informed of their rights and were therefore obliged to bring their cause of action before the courts if they wanted to pursue it. There will be claimants who say they did not have enough knowledge when the other party to the claim will say that that the claimant did know enough and sat on their rights for too long lost their rights and can no longer sue the other party. There will still be disputes as to when people did or did not have sufficient knowledge to trigger the 6-year limitation period or indeed the 3-year late knowledge period. Not all disputes will be avoided and perhaps speaking as a lawyer that is a good thing. 
Amy Adams 
: Ha ha! 
Hon DAVID PARKER 
: Amy Adams liked that. She is a lawyer too. 
The one area where I remain a little disappointed is in respect of the inconsistency that we have for Building Act claims compared with non - Building Act claims. The general 15-year longstop period is not being applied to Building Act cases and the 10-year longstop period is being left as it currently is. There is a genuine and fair debate as to whether the longstop period should be 10 years or 15 years. Indeed the Law Commission initially recommended a 10-year longstop period for everything. It modified its position in its subsequent report and said it should be 15 years. But we have this exception introduced for Building Act cases that says it should be only 10 years. I still am not convinced as to the logic that lies behind that. I think it is a pity that that was not cleared up in this bill because we had the opportunity to fix it up now. 
There will of course be pressure from the building industry to keep it at 10 years. It is in the industry’s self-interest to have a shorter period because it limits its liability. But I am not convinced that it is right. I think that if we have a 15-year longstop liability period for other breaches of contract or tortious claims I cannot see why it should be different for Building Act claims. I again make the point that this is not of any import in respect of the current leaky home problems in Auckland because this new bill applies only to wrongs if you like or causes of action that accrue from the date after the passage of this bill rather than things that have already happened before that date. But none the less that principle should have been consistent in my view for buildings as well as for other claims. 
Perhaps the most valuable asset that most people own is their house. If they lose a substantial portion of the value of their house because of a latent defect they do not know about which does not become apparent for more than 10 years—and that does not happen often but it does happen sometimes; foundations might fail after a period of time because they were not appropriately taken down to hard fill—then under this legislation they will have only 10 years to pursue their claim because of the longstop liability under the Building Act. That is unchanged. However if it were a claim in contract and a claim for something less serious that did not involve their biggest asset they would have 15 years to pursue it. I am not convinced of the logic of that and I am not convinced that the complexity of Building Act cases is so different because of the multiplicity of parties. I agree that it is a relevant factor but there is already a built-in protection whereby it is for plaintiffs to prove their cases on the balance of probabilities. If they do not do so because the effluxion of time means that they are not able to bring to the court sufficiently good evidence to prove their case then they lose. So the other parties to that litigation have that level of protection in any event. 
Having said all of that I say that the Labour Party thinks this is a good bill. I thank the Attorney-General for the consideration he showed for some of the issues that Labour raised in respect of gradual process injuries and I commend the bill to the House. 
CHESTER BORROWS (National—Whanganui) 
: 
 I take it as a privilege to be able to take a call on the third reading of the Limitation Bill. I am pretty fired up about it at half past 11 at night. I have had a coffee and a wine gum and I reckon I could talk for hours about this bill. 
I would like to commend the contributions of those in the House. In the course of my cousin’s dissertation in the third reading he transported me back to studying civil procedure at Victoria University. I know that in hindsight he would prefer to have given me a grade higher than 51 percent. I find it incredible that someone who can be so eloquent has yet to discover the noble art of voice modulation. I do not know whether the rest of the House feels that way but I am just stating the way it is. It reflects that in the time that he was our lecturer on civil procedure he went off to Rome to do a course on conversational Latin. Does that explain why we are here debating the Limitation Bill at half past 11 at night? 
I also commend other contributors such as the honourable member Lynne Pillay who struggled to the top of the beer crate and managed to look over the top. She towered over Carmel Sepuloni! Carmel looked up at Lynne Pillay and asked her how the weather was up there. Lynne Pillay was thinking “Boy if only Pansy Wong could see me now!”. 
This bill is a wonderful piece of legislation. As I understand it the Minister of Justice who is in charge of this legislation was away and the Attorney-General the Hon Christopher Finlayson was sitting in his chair. After he had eaten all of the Minister’s peppermints and had found his pencils and given them a wee sharpen he started looking in the Minister’s bottom drawer for something to read. He came across the Limitation Bill and thought “Ah this is what I’ll do. While the Minister’s away the cat will play.”—or the mouse in this case. And away it went. The Limitation Bill came before our hard-working and efficient Justice and Electoral Committee and tonight it is at the zenith of its long career in the House. I know that Ms Pillay who was in form 1 when the first Limitation Bill went through is only too pleased to see this one overtake it before she steps down and hands the mantle over to somebody else. Congratulations. 
LYNNE PILLAY (Labour) 
: 
 As members have said it is not often there is a bit of camaraderie in this rather sad place. Despite the very good control of the Speaker we see some terrible things happening in this House—things that would bring tears to a glass eye quite frankly. But this is not one of those occasions. I am pleased to acknowledge that the Limitation Bill is a bill that everyone on all sides of the House supports going forward. There were some amendments that Labour members would have liked to see. Time will tell; often we on this side of the House have to say to the Government: “We told you so; we tried to tell you.” 
Grant Robertson 
: Almost every day. 
LYNNE PILLAY 
: Actually every day if we are being really honest. Every day we have to say “We told you so.” I believe that my colleague David Parker put up a very good amendment. If we had extended the time and had given more consideration to it perhaps we could have had a full house on it and got full support for it. But we are not a petty party—certainly not. I will not comment on other parties because I do not want to get niggly at this time of night. We are not petty and if we look at the bill in its entirety we know that even though common sense did not prevail on one small part it will as many members have said provide a lot of certainty and enhance our legal system. Indeed that is what Parliament is about even though it does not happen all the time. I had not picked up that it is 60 years to the day—is that the case? 
Grant Robertson 
: What else in here is 60 years old? 
LYNNE PILLAY 
: I do not think we need to go on to that. But I know that 60 years is very very special. 
Grant Robertson 
: It is a special time. 
LYNNE PILLAY 
: It is a very special time for many many things and people and I want to acknowledge in this House how important 60 years is. I think we should all acknowledge that. In going back to the bill Mr Deputy Speaker I say that I think that the reference to people’s height given that you are sitting in the Chair was most inappropriate. I think a few feathers will be flying in the National caucus next week with those sorts of comments from Chester. It was completely out of character. Perhaps it was a case of his showing off at the last— 
Grant Robertson 
: One too many wine gums! 
LYNNE PILLAY 
: That could well be the case. But goodness me if we all took offence at personal comments in this House we would never get anything done would we? So I will let that one go. 
Hon Clayton Cosgrove 
: Wayne Mapp would be a basket case! 
LYNNE PILLAY 
: That is exactly right. So I will let that one go and go back to the Limitation Bill. This is a third reading speech and tempted as I am to go into the detail and all the technical stuff I will not do that. 
Simon Bridges 
: I’ll remember you for this speech Lynne! 
LYNNE PILLAY 
: I thank that member very much. I do not have cool glasses for people to remember me by so I have to rely on referring to the bill. This is a third reading speech and all nonsense aside third reading speeches are a time to acknowledge the work that has gone into the bill. 
I will start with the Law Commission which made the recommendation and has done so much work. Most of its work was enacted under the previous Labour Government. In fact if we look at the previous Labour Government’s record we see that so much work was done. Sadly all of the work that was done on the Sentencing Council was not enacted. We on this side of the House the Green Party and I am sure many National members who have a bit of knowledge of the good that the Sentencing Council would have done are rather disappointed at that. But notwithstanding that the Law Commission has done a lot of good work and I acknowledge that good work in this House. 
In an earlier speech today I acknowledged—but I will do it again because it cannot be done often enough—the hard work that the Justice and Electoral Committee’s clerk and his hard-working staff put in. He has to manage many different people on that committee. We have acknowledged Chester Borrows as a very competent chair which was pretty predictable. We cannot say that of Paul Quinn. Paul Quinn is a difficult member to manage. Even the National members will say that. So I acknowledge the select committee staff who look beyond members’ quirky little ways and manage to keep things running pretty smoothly. 
I also acknowledge the hard-working people from the Ministry of Justice who give us advice. We always listen to that advice but in this situation there was very little controversy. That advice was appreciated and most of it was taken. 
As we have said before—and I do not want to be churlish—the bill provides that a defence of limitation cannot be used in cases of child sexual abuse no matter how much time has elapsed since the abuse took place. That is really significant. We cannot extend that goodwill to such cases. I do feel a bit bad about doing this but I cannot miss the opportunity to say what a dreadful Minister for ACC we have and how much damage has been done to survivors of sexual abuse in this country. It is certainly good to know that those cases are exempt from the provisions of the Limitation Bill. There is no limit under the New Zealand Bill of Rights Act. This bill matches that situation. Money claims under the New Zealand Bill of Rights Act are covered by the 6-year limit. 
As my friend and colleague David Parker said the only matter of any disagreement in the select committee was the longstop period. Although Government members listened to many of Labour’s arguments on the bill and improvements were made it was very sad that that disagreement occurred. I know that Grant Robertson spoke on this matter as did David Parker and indeed Jacinda Ardern. Jacinda Ardern will probably speak about it again because I know she has much to say on this bill. I know she will want to take a call on it. We believe that it is appropriate for the same longstop period to apply to all policy areas for which limitation periods apply. The reason for the shorter period for building cases could apply equally to all other types of cases. As I said earlier the problem of fading memories—I am quite blessed in that I do not suffer from it—does happen. Also with regard to the complexities of having multiple parties we firmly believe that owners of houses that have a latent defect should have as long a time to bring their claims. The one little teensy black mark in terms of the goodwill and camaraderie around this bill’s progress is that that limitation period was not extended to 15 years. 
However as I said we on this side of the House are not petty-minded. We are supporting the bill. We are looking forward to its enactment. Goodness me! I do not think anyone in this House has spoken about when the bill will be enacted and I think it is something we all really want to know. Oh yes it was to commence on 1 July 2010. Well that date is no longer feasible because we have clearly gone past that date but the hard-working select committee picked that point up and recommended that the bill come into force on 1 January 2011. That is really fitting. We will start the new year of 2011 with a fresh start to limitations. On that basis I commend the bill to the House. Thank you very much. 
SIMON BRIDGES (National—Tauranga) 
: 
 Lynne Pillay is absolutely right—there is no fading memory there. She remembers Woodstock like it was yesterday. She talked about the current Limitation Act having come into force 60 years ago I think it was—I feel like listening to Chester Borrows more than her—and her 60 years have passed by very quickly indeed. I talked in my first reading speech I think about the 5 o’clock shadow that I was developing. It has now turned into a quarter to 12 mild mildewy moss. 
We have had some good speeches and like Lynne Pillay I will do a bit of backslapping. I agree with all the comments that she has made about the people who deserve thanks. She did not actually mention—or maybe she did but only in passing—someone who deserves a lot of praise in this process: Paul Quinn. Paul Quinn asked quick-fire questions in the Justice and Electoral Committee because of the rapid way that his mind works. He quickly got to the heart of the matter in the select committee and we need to keep that on record. Despite being quite a diminutive character who does not like to cause confrontation he cut through things very quickly unlike Hekia Parata whom we could not shut up! She just could not stop talking about this bill and raising important questions. 
I will very briefly in my last 30 seconds pick up on the issue that David Parker raised. I agree with what Chris Finlayson said when he was the Minister in the chair not long ago. He said that uniformity in limitation periods is to be encouraged. I would say that it does not need to be overly encouraged. As he pointed out there are many different pieces of legislation with different limitation periods. If we think about criminal law then that is obviously quite a different area of law with different policy considerations. In that area there is no longstop period at all. The best that one can hope for if one has been accused of a crime even 40 or 50 years down the track is a stay of proceedings and that would be in a case where one simply could not get a fair trial. So there are different longstop periods. There are different policy considerations at play. I do not think that we need to be afraid of that. Although uniformity is to be encouraged because it adds certainty to some extent it does not always need to be the case. 
JACINDA ARDERN (Labour) 
: 
 I state for the record my disappointment that during this debate the Sentencing Council has not been mentioned because I always find it to be a key part of any discussion by the Justice and Electoral Committee. I also begin my remarks by acknowledging the chair of the select committee Chester Borrows. It has already been mentioned in the House that Chester Borrows deals with a diverse select committee which has robust debate within it. 
Although some of the difficult members have been named tonight I have to say that Lynne Pillay is not one of them. She is a picture of politeness she has an inquisitorial mind and having been a select committee chair herself she knows the difficulties of managing a select committee. But it would be remiss of me in this debate not to mention Paul Quinn as my colleague Simon Bridges has because Mr Quinn always makes a robust contribution. If Chester is to offer courses in the noble art of modulation I say for the record that I will offer courses on the art of using one’s inside voice. Paul Quinn has never mastered the art of the inside voice in the select committee nor has he mastered it in the House. I think that all the members in this place would benefit from the use of the inside voice not only in terms of tone and volume but also perhaps in terms of the art of thinking before one speaks. 
I acknowledge the work of the Attorney-General Chris Finlayson. In his defence I would ask who needs modulation when one has mastered the art of the personal attack. I know that Minister Finlayson would like to claim that he never makes things personal but he is so good at it that sometimes we do not even know that it is happening. I also acknowledge the fact that he has worked for a number of years on this legislation. I will go over a little bit of the history of this bill in my remarks but before I move on from my notes of thanks I also acknowledge the work of the officials. At every point during the discussion on this bill whenever we raised the need to go back for instance and look at some additional jurisdictions to see whether we were in keeping with what was happening overseas the officials were always more than willing to bring forth not only what we asked for but also more again. I want to thank them for their assistance. 
To go back briefly to some of the history of this legislation I start with the Law Commission report which is really where it all began. There were reports in 1988 2000 and 2007 but this was probably the one that substantively triggered the work that we see before us now. It was the Labour Government at that time that asked for a substantive review by the Law Commission as we did with many other more controversial errors than this. One that may spring to mind is the Law Commission’s extensive work on alcohol reform a piece of work that is the most comprehensive work we have seen in this House probably in our lifetimes no matter what age members in this House may be. It traverses every element of our alcohol legislation. I note for the record that it is a shame that not all of those recommendations were put before a select committee for it to decide on. 
Going back to the Law Commission report it is one of many that Labour instigated. In December 2007 it became the basis for which a draft bill was sent to stakeholders for consultation but that was not the end of it. There was a reference group and I think that Minister Finlayson may have referred to it. It was set up in 2008 and was chaired by Justice Blanchard. It included representatives from the New Zealand Law Society the Bar Association the Ministry of Justice and the Parliamentary Counsel Office. As Minister Finlayson acknowledged the goodwill of the Minister of Justice at that time the Hon Annette King meant that she included Chris Finlayson himself who at that time was an Opposition MP in that reference group. I think that that again demonstrates that limitation legislation is incredibly important within our justice system. It sets the boundaries and it seeks out the balance between giving certainty to defendants in access to justice for claimants. I think that that is a particular area that goes beyond political boundaries and that was acknowledged by Annette King. I acknowledge her in this final reading. 
In this final reading I will go over some less controversial elements of the bill that we did not touch on in the Committee stage but that were picked up on in the discussion in the select committee. That means that they were slightly more substantive. I believe that we have talked a bit about equitable claims. The committee recommended inserting new clause 8A into the bill to clarify that the court will not be prevented from applying statutory limitation provisions to equitable claims for which no limitation defence is set out in this bill already. There is a limitation there that exists for the court so an element of discretion applies. 
We have already discussed at some great length one of the areas and this is a significant one where disputes still lie around longstop periods. I think that it was the right thing to do for the Hon David Parker to put up an amendment to try to bring consistency between what is in the bill and the Building Act. It was disappointing that the Government chose not to adopt that amendment. Only time will tell as to whether we will see people’s access to justice limited by the fact that the Government has chosen not to adopt this element of consistency which we advocated for. In particular there will be areas—Auckland probably most significantly so—affected by the leaking building phenomena. I remember distinctly when it arose. Maurice Williamson himself will be the one who ultimately will have to relook at cases if we find that the limitations that have been set are not working. Again only time will tell but for the record I say that Labour believes in consistency in setting a 15-year longstop period in limitations and in the Building Act. 
There was not much discussion from my recollection on the New Zealand Bill of Rights Act. From memory the select committee only very briefly looked at claims under that Act and whether they should be subject to discretion similar to the discretion that we looked at in terms of time-barred claims for sexual abuse of a minor. We decided against including discretion in that area. Again we were erring on the side of certainty in that regard. 
Defamation is another area that I recall us touching on a lot in the discussion but it is worth flagging again that there was discussion on it. We heard concerns that the late knowledge period for defamation is 3 years as set out in the bill as it was introduced and given to us. Anomalies might arise so our recommendation was that the late knowledge period should be shortened to 2 years. I think that that is in keeping with the types of claims we are likely to see under that heading. We have already discussed claims of sexual and non-sexual abuse of a child and I touched on the claims of gradual process disease or infection. I wish to flag that it was Labour that pushed quite hard that the exception for the gradual process claim be inserted into the bill and I am proud that we did that. I still have ongoing concerns around the interaction between accident compensation and the limitation requirements predominantly because of the changes in policy and practice we have seen within accident compensation. Any constituency member of this House will know those all too well. 
The final amendment is on actions based on acts or omissions around the late knowledge exception. I believe that my time is about to expire so I will not dwell on that. This was a useful discussion with good cooperation between the members of the select committee. It is an important bill. 
Hone Harawira 
: Fabulous speech. 
JACINDA ARDERN 
: I call that a standing ovation from Hone Harawira as he is literally standing whilst applauding. I note for the record and for some viewers who gave me feedback that I need to reduce my airline-type gesturing that I hope they saw some improvement in that last address. Kia ora koutou. 
KANWALJIT SINGH BAKSHI (National) 
: 
 In this third reading of the Limitation Bill it is great to see that the bill has support from all parties which is very uncommon. This bill is part of the process that this Government took over to simplify the judicial system. The Justice and Electoral Committee has dealt with more than 17 different bills since the Government took over in November 2008. Members of this Government have been working hard to make sure that New Zealand has the best judicial system. This bill is an example of the important work Parliament can do in improving the quality of legislation in order to make it more accessible and less confusing to the public. I would like to acknowledge the hard work of the Justice and Electoral Committee and the officials who have been providing excellent support during the hearing of this bill. It is my privilege to be part of the select committee which is led by Chester Borrows and I acknowledge the Hon David Parker and other Labour members for their contribution. I commend this bill to the House. 
RAYMOND HUO (Labour) 
: 
 It is a great pleasure to take a call. We heard the Attorney-General describe the day that the Limitation Bill passed its first reading as “a great day for black-letter law”. That reminded me of a 2007 Supreme Court case where the Supreme Court observed: “What is required in New Zealand and has been required for some considerable time is a complete legislative overhaul of the Limitation Act. … The surgery now required is beyond the proper province of the courts.” So this bill implements the Law Commission’s recommendation to replace the current Limitation Act 1950 with a new modern regime. The new regime will encourage claimants to make claims without undue delay in order to protect defendants from the unjust pursuit of stale claims. The Limitation Act 1950 is an old piece of legislation and it needs to be updated. The Labour Party supports the proposed changes in this bill. The bill simplifies the limitation regime by providing a general civil limitation defence to most claims. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Thursday)