Volume 607 Week 20 - Tuesday 1 April 2003(continued on Wednesday 2 April 2003) 
Volume 607 Week 20 - Tuesday 1 April 2003(continued on Wednesday 2 April 2003) 
[Volume:607;Page:4619] 
Tuesday 1 April 2003 
( 
continued on Wednesday 2 April 2003 
) 
Counter-Terrorism Bill 
First Reading 
Hon PHIL GOFF (Minister of Foreign Affairs and Trade) 
: 
 I move  
That the Counter-Terrorism Bill be now read a first time. 
 This bill reflects the need for New Zealand in a new more dangerous era of international terrorism to ensure that we have a comprehensive legislative framework in place to help to prevent and to deal with terrorist offending. This bill complements the Terrorism Suppression Act which came into force on 18 October 2002. That Act put in place legislative powers enabling New Zealand to ratify international conventions on the suppression of terrorist bombing and the financing of terrorism and to implement Resolution 1373 of the United Nations Security Council passed following the World Trade Center bombing on 11 September 2001. 
This bill allows New Zealand to ratify the final two of the twelve conventions on terrorism passed by the United Nations that were not already implemented by New Zealand. Those conventions relate to the physical protection of nuclear material and the marking of plastic explosives. The bill makes it an offence to improperly deal with or obtain nuclear material or to threaten to use such material to cause death injury disease or damage. It also makes it an offence to knowingly possess use manufacture import or export unmarked plastic explosives. The aforenamed offences carry maximum penalties of 10 years’ imprisonment and a $500000 fine. The bill provides for extra-territorial jurisdiction extradition and mutual assistance requirements to the extent necessary to meet the requirements of the nuclear material convention. 
The bill also creates a number of new terrorist-related offences and penalties deemed necessary by an extensive review of existing law and of potential gaps that might be exploited by terrorists. It becomes an offence to infect animals with disease intending to cause serious risk to the health or safety of an animal population or major damage to the national economy. The maximum penalty for that is also 10 years’ imprisonment. A similar offence and penalty is created in relation to contaminating food crops water or other products intended for human consumption. Threatening harm to persons or property or falsely communicating information about danger to persons or property intending to cause significant disruption to commercial or Government interests also becomes an offence with a maximum penalty of 7 years’ imprisonment. 
It becomes a crime to harbour or conceal a person with the intention of enabling that person to avoid custody or conviction knowing that or being reckless as to whether he or she intends to carry out a terrorist act or has already done so. It becomes a crime to import acquire or possess radioactive material with the intention of using it to cause injury or threaten violence. Both of those offences carry a maximum penalty also of 7 years’ imprisonment. Terrorism becomes an aggravating factor under the Sentencing Act. That will attract higher penalties for crimes committed for terrorist purposes. And the crime of murder carried out as part of a terrorist act will carry a minimum non-parole period of at least 17 years. 
The third set of changes introduced by the Counter-Terrorism Bill gives new powers to the New Zealand Police and the New Zealand Customs Service. The bill provides a statutory regime for the use of electronic tracking devices as an investigative tool. It requires police or customs officers to obtain from the court a warrant authorising the use of such devices. In circumstances where it is not reasonably practicable to obtain a warrant an emergency procedure is provided for. The bill ensures that effective enforcement measures can be carried out and that evidence lawfully obtained using those measures will be admissible. The judge before issuing a warrant authorising the use of an electronic tracking device must be satisfied that there are reasonable grounds to suspect an offence is being or will be committed that information relevant to the commission of the offence can be so obtained and that it is in the public interest to issue a warrant taking into account such matters as the seriousness of the offence and the likely intrusion on privacy and property rights. The select committee may wish to consider closely submissions on that issue including those of the Privacy Commissioner. 
The bill also creates powers for the police to require assistance from a person in the execution of a search warrant. Where assistance is necessary such as providing a password in order to allow the police to access a computer system a court order may be sought for that purpose and will be granted if the assistance required is both reasonable and necessary. Failure to assist in accordance with an order will be an offence if the individual could have reasonably been expected to do so. 
The Customs Service’s powers are also enhanced by the bill. The Terrorism Suppression Act last year allowed the freezing of the property of designated terrorist entities. This bill expands on that allowing the Customs Service to detain property cash or cash equivalents intercepted crossing the New Zealand border if there is good cause to suspect that the owner is a designated terrorist entity or an entity that may be eligible for designation. There are safeguards to ensure that the exercise of those powers is done in a reasonable way. 
Finally the bill amends provisions of the Crimes Act and the Misuse of Drugs Amendment Act 1978 so that evidence obtained under an interception warrant may be used in court so long as it relates to an offence for which an interception warrant is properly given. The definitions of security and terrorism in the New Zealand Security Intelligence Service Act are amended to make them consistent with the Terrorism Suppression Act. 
In conclusion the bill allows New Zealand to ratify the last remaining United Nations conventions on terrorism not already implemented under New Zealand law. It closes potential gaps that may be exploited by terrorists by creating new terrorism-related offences and penalties. It gives necessary powers to the Police and the Customs Service to investigate and prosecute those offences. I intend to refer the bill to the Foreign Affairs Defence and Trade Committee to hear submissions from interested parties and to move that the committee finally report on the bill by 31 July 2003. I commend the bill to the House. 
Dr WAYNE MAPP (NZ National—North Shore) 
: 
 The Minister’s exposition on and explanation of the bill is certainly laudable. He has thoroughly gone through all the tenets of the international fabric of law that protects our citizens from terrorism. I guess that reflects the whole tone of this Government does it not? It places absolute confidence in the fabric of international law as being the sole means of our protection. That is how it seems to me. The Government will always see the United Nations rubric as the altar of excellence and believe that all pronouncements from there must be obeyed implicitly and explicitly and that New Zealand can never exercise independent judgment. Yet anyone who has any knowledge of international law will know that it is an incomplete and an imperfect system. There is no global police force. Nation States individually and collectively have to enforce international law—and there is some recognition of that on the Minister’s part. 
Our dilemma is that when faced with the great challenges of our time this Government is unable to see clearly where our interests lie. It puts its complete faith in the network—important though it is—of international treaties but will not do the heavy lifting along with our friends and allies that is needed to defeat the centres and sources of terrorism. We have heard in this House of the importance of Operation Enduring Freedom. We understand that; it is important. That was an example of New Zealand working with our friends and allies but naturally it had to be under UN authorisation—as indeed this whole bill is about implementing international conventions. But I will ask some fundamental questions of the Government. Does the Government place all its faith in the network of international conventions to secure our freedom or should we work alongside like-minded allies as the final protectors of the law to do so? We are talking about the final protectors of our freedoms. 
I say that when faced with that clear choice—and we have been faced with it over the last few months—we need to understand where our protection ultimately lies. It does not lie solely and completely with the United Nations; that would have to be a truly false hope given the state of the world today. We have seen—and it is right for me to talk about—the importance of the coalition that is currently defeating terrorism which is one— 
Mr SPEAKER 
: The member will come back to the bill please. 
Dr WAYNE MAPP 
: I appreciate the importance of the bill and this is actually a discussion that is related to the bill. The bill sits in a context and that context is about States working together to defeat terrorism. But New Zealand at this stage has opted out of doing that. We have heard our Prime Minister— 
Mr SPEAKER 
: There is no problem about using some arguments as the member has been doing up to now but this debate is not a general discussion of foreign policy. The question in this debate is that this bill be now read a first time. 
Dr WAYNE MAPP 
: Indeed it is about the bill on counter-terrorism. That is why the diplomatic efforts that the New Zealand Government makes are so central and so crucial to what this bill is about. 
I say that when a Prime Minister says that we prefer someone else to be the President of the United States other than the duly elected President then a gross breach of diplomatic etiquette has been made. The whole point of this bill is to support and defend a fabric of relationships and conventions. So when the Government cannot even understand that under international law countries are supposed to respect the decisions that other countries freely make how can we then trust the faith that this Government puts in this bill? I appreciate your injunction to stick closely to this bill Mr Speaker and I will but that matter is a key issue that confronts this nation. 
Mark Peck 
: What are you saying? Tell us what you’re saying. 
Dr WAYNE MAPP 
: I will answer that interjection because I believe that is my right having been challenged. The member asked me what I am saying. I am saying our Government has turned its back on our traditional friends and allies—the true ultimate ability for New Zealand to defend itself and its interests—and has placed all its faith in a UN system of protection. That is wrong and this nation will pay for it because that is not the way to deal with security matters. So in answer to Mr Peck that is specifically and clearly what I am saying. 
More to the point I say that if the Prime Minister cannot understand that she is supposed to recognise the duly elected President of the United States this nation will suffer badly because of that. Mr Peck knows that which is why he asked that question; he wants that matter to be put on the record. That is apparently what he wants; he wants that to be put on the record. So is that a kind of betrayal by Mr Peck of his own leader? One has to ask that question. 
I accept that the measures in this bill are important naturally. Obviously New Zealand has a responsibility to work in the United Nations to implement counter-terrorism measures. I commend the Government for its work in Afghanistan on Operation Enduring Freedom. But I say defeating terrorism and its source cannot lie solely in supporting international conventions. That is where the Government has made such a serious mistake in its foreign policy and this country will suffer for it. 
I have read this bill carefully and I note that one of the key provisions is about the trafficking in nuclear material. Although I see it as important that New Zealand does implement these conventions I guess in reality New Zealand will not be particularly affected by that issue. I have noticed also the amendments to the Crimes Act. 
But I just say in conclusion that I taught international law for a number of years. While I understand its importance in the international framework I also understand it is an imperfect system. There is no global police force. The enforcement of international law actually depends on nation States lending their sovereign forces to implement the principles of law. Today we are seeing a coalition of our most trusted friends and allies doing precisely that in Iraq. New Zealand is not there. We will pay a price for that because we have said we put all our belief in the United Nations. 
I just want to make a final point— 
Jill Pettis 
: Dead sons are an awful price too. 
Dr WAYNE MAPP 
: No one has suggested that— 
Hon Mark Burton 
: What’s your policy. What’re your underlying principles? 
Dr WAYNE MAPP 
: The ethical issue is that international law has to be defended by States willing to work together and New Zealand opted out of that 2 weeks ago. We will pay a price for that with our friends for a long time. 
Hon PETER DUNNE (Leader—United Future) 
: 
 It was not possible to distil a great deal from that speech but what it was possible to distil amounted to this: the member on the one hand criticised what he saw as the Government’s reliance on a UN-led rules-based international system saying at the commencement of his speech that that actually compromised New Zealand’s sovereignty and freedom to make its own choices and then on the other hand he said that because we are not with our traditional friends and allies in Iraq we have somehow left ourselves in the international lurch. I say to that member that he cannot have it both ways. If as he said at the conclusion of his speech based on his vast international law experience the issue is all about States working together to resolve international crises and that we have put our faith in international law then I say to him that he needs to sort out very clearly where he actually stands. At the moment he stands desperately astride both camps and as they move further apart all that I can say to the member is that he will find that becomes an extremely uncomfortable position to try to sustain for very long. 
I want to return to the provisions of this bill that is before the House at the moment. I say that the Minister in his introduction—and I think even the member who preceded me briefly conceded this point; he used words like “exposition and explanation” although I thought they were broadly the same thing—talked about the scope of this bill. It is certainly true that it does broaden the net in terms of our ability to respond to particular terrorist situations. It is certainly true that it enables us to complete the implementation locally of a number of international agreements that we have been party to over the years. It is certainly true that in the context of the war against terrorism however it is defined this legislation better positions New Zealand to respond. But having said that there are some issues in the bill that I believe the select committee will want to pay particular attention to. I speak as the chair of the Foreign Affairs Defence and Trade Committee which will be hearing submissions on this bill. 
I will tell the House what issues I see as being of potential concern. In part I base what I am about to say on our recent experience with the legislation regarding the Kyoto Protocol where similar types of issues about the protection of individual rights at the expense of the broader rights of the community came into play. Let me explain what I am talking about. There are provisions in this bill regarding the evidence of private communications that have been lawfully intercepted for one purpose being used for another. Although on the one hand it is arguable that we are codifying a situation that has previously not been properly explained on the other hand there will be some significant issues about the scope of the changes that are proposed here and about whether in fact there is the prospect of people who are genuinely innocent being caught up in this network. I refer specifically to the bill’s provisions to overturn what is known as the Aranui case which will “ensure”—and I quote from the explanatory note of the bill—“that evidence of a private communication lawfully intercepted under an interception warrant will be admissible in court if it discloses evidence of any offence for which an interception warrant may be issued”. 
In other words under this bill evidence obtained on one point can now be extended to include other points if in other circumstances a warrant could have been obtained to watch over that particular circumstance. The select committee will want to work its way through that very carefully. On the face of it in the context of this bill that is probably justifiable. But we need to be careful that in broadening the net to deal with terrorism issues we are not broadening it unreasonably in respect of a number of other citizens. 
I make a similar comment in respect of the provisions regarding the repeal of certain sections of the misuse of drugs legislation concerning the use of tracking devices. A point that does need to be stressed is that at the moment there are actually no specific provisions regarding the use of tracking devices. Their use is virtually uncontrolled in that respect. Again on the face of it this bill will for the first time introduce some limitations on that. But thereby hangs the problem: defining adequately what those limitations might be and whether a number of people who are innocent in terms of terrorism charges may well be caught up in that particular net. I think we will want to work our way through that very carefully. 
The third area that comes into this category relates to the provisions concerning the accessing of computer data. I say to the House that during the hearing of evidence on the Kyoto Protocol legislation that particular issue arose very strongly in terms of what might be held on someone’s computer regarding the emission levels of the animals on that person’s farm. Very heated evidence was presented about the level of the test being applied for access to that data and about the rights of entry to property and the rights of seizure being greater than those applied in many other cases. I think it will be important when we look at this issue at the select committee to ensure that the balance is struck at about the appropriate level. We need to ensure that we do not create a situation where there are higher tests than those that apply in many other cases. 
The fourth point—and I support this because I had some discussions with the Minister about this—is that the select committee will be asked to report back on this bill by 31 July. That is a good objective because it strikes me that it would be somewhat ironic to pass counter-terrorism legislation in response to an international terrorism crisis in a rather leisurely way. That would belie the urgency of the subject. Having said that given the range of submissions likely to come forward and the timing of this bill in terms of other priorities that are before the committee at the moment I sound a warning to the House that it may well not be possible to complete the hearing of evidence within that time though we will certainly give that every reasonable chance of succeeding. 
In the broader context—and I will not stray as widely as the previous speaker did—I make these comments: it is clear that we live in an age that is unparalleled in terms of the way in which traditional relationships have broken down and terrorism has become very much an unfortunate norm. The old style of conflict between and among States has changed for ever and we see that portrayed on our television screens constantly at the moment. Therefore a number of the old rules no longer apply. I do not think that that is an argument for saying we should no longer put our faith in a rules-based system and should revert to the “might is right” argument—and there seemed to be touches of that in the speech made by the member who preceded me. 
Dr Wayne Mapp 
: I did not say that and the member knows it. 
Hon PETER DUNNE 
: He may not have said it explicitly but certainly the inference that could be taken from his speech was that if we put our faith in a rules-based system we on the one hand surrender our sovereignty and on the other hand— 
Dr Wayne Mapp 
: I did not say that. 
Hon PETER DUNNE 
: The member did. He cannot deny what he said. The member said at the commencement of his speech that this Government had placed its faith in the United Nations— 
Dr Wayne Mapp 
: Solely. 
Hon PETER DUNNE 
: —solely and that as a consequence of that our freedom which is I think the phrase the member used has been compromised. 
Dr Wayne Mapp 
: That’s right. 
Hon PETER DUNNE 
: Well the inference to be drawn very clearly from that is that that is a compromise of our sovereignty. The member cannot argue that on the one hand and then on the other hand say that the only way of preserving that balance is for us to automatically—and this is my word not his—join the so-called “coalition of the willing”. The two points are contradictory. 
The terrorism issue is part of a broader framework and it needs to be addressed in that context. We need to get law that is sustainable not only in terms of the immediate set of crises that we face but also beyond that into the future. I think that this bill sets us down that path. It will need to be carefully considered by the select committee to ensure that we properly assess the balance between the rights of New Zealanders and the protection of our overall security. Then the bill can be passed later in the year into law. 
DAIL JONES (NZ First) 
: 
 One of wonderful things about having been away from Parliament for 18 years is that one understands how ineffectual Parliament can be and how highly Parliament thinks of itself. This bill is probably one of the classic examples of that. Here we have the Labour Government trying to legislate away our problems. This legislation will in no way resolve the problems that New Zealand faces today yet somehow the Labour Government thinks that if it puts up a bill all our problems will go away the terrorists will go away and everything will be sweet and rosy. What a load of nonsense that is! 
Whether or not this bill is passed—and New Zealand First will support it—we do not have the means to counter terrorism in New Zealand. The Labour Government has made sure that our defence forces have been run down so severely that we could not prevent an incident like September 11 from happening in New Zealand. We do not have a plane fast enough to catch up with any plane that may be flying into the Beehive and we do not have a plane capable of shooting down a plane that may be attacking the Beehive. What a load of nonsense this legislation is! The public of New Zealand want action not just another Labour Government piece of paper saying that the Government will legislate terrorism away and there will be no more problems. Is that not the typical Labour way of doing things! If we have a problem Labour legislates for it and believes that is the end of it. That is absolute nonsense. 
This bill has been lying around since 17 December 2002. It has no real link to the present state of affairs. This bill came out of the events of September 11 2001 did it not? That is going on 18 months ago and finally we are getting some more legislation on this issue. That shows the importance the Labour Government gives even to its usual stance of trying to legislate away a problem. This bill refers to the benefits that it will give us. On page 12 of the explanatory note of the bill I see that the benefits include “the safety and security of New Zealand and its citizens”. We are talking about safety and security and the problems that New Zealand would face if it were the victim of a terrorist attack. 
I would suggest that the statements made by the right honourable Prime Minister that a Gore presidency in the United States would have had a different consequence for Iraq— 
Mr SPEAKER 
: The member will come back to the bill. 
DAIL JONES 
: That is very important because I believe that that statement is more dangerous to New Zealand in a terrorist sense than would be a suicide bomber. That statement has caused more damage to New Zealand than any suicide bomber could possibly cause. It has damaged New Zealand’s international standing and its relationship with the United States the United Kingdom and Australia more than any suicide bomber could possibly do. In that sense in that verbal smart academic sense the Prime Minister has been more damaging to New Zealand than any suicide bomber could possibly be. She sits there smugly thinking that was a nice slick remark to make the type of thing that one could say with a glass of Chardonnay in one’s hand at Auckland University but really it is more damaging than a suicide bomber would be. The consequences of that comment will last longer than anything we are trying to protect ourselves from with this legislation. The Prime Minister does not understand that and Mark Peck did not understand it. Wayne Mapp quite correctly made that point. We have to watch what we say not just try to legislate away a problem. 
We do not support the situation in Iraq of course. We take the view that if we get rid of Saddam Hussein—he might even be dead already but the Iraqis are still fighting—we must ask what we will get in his place. We will get another dictator not democracy in Iraq. Democracy in Iraq is impossible. One has to live in the Middle East or in South Asia as I did—I was born and brought up there—to know that we will not get democracy in Iraq. The best that will happen in Iraq will be the replacement of Saddam Hussein by another type of dictator at someone else’s behest. We will not get anything decent in Iraq so we just have to remember whom our friends are. Although we are disagreeing with the United States and Britain at the moment we have to look to the future and that is what the Prime Minister has failed to do. She has the responsibility to make sure that her smart alec words do not do us future damage. But she is doing that. Anything that is in this bill is totally destroyed by the way in which the Prime Minister has behaved in terms of her smart alec remarks recently. 
Some of us have links with what is happening in Iraq. My grandfather was in Basra in 1917 and my maternal grandmother was on many hajj trips so I have close links with the Middle East and with the situation there. New Zealand First has made it quite clear that we do not want to see the United States Australia and Britain going in there to try to find weapons of mass destruction that do not exist. Such weapons do not seem to have been found there yet; we will all wait and see whether the coalition ever finds any. But I say the smart alec remarks of the Prime Minister defeat the purpose of this legislation. 
This legislation highlights the way in which we are moving away from our traditional ties. I well remember the lectures on foreign affairs given by Professor Sinclair in 1961 in his course on the history of New Zealand. We did not have much in the way of foreign affairs in 1961 and he was always trying to comment on whether we were breaking away from Britain. I think the events we saw in the House last week were probably the final cutting of the umbilical cord with the United Kingdom and the Labour Government does not recognise that. The Minister of Defence does not recognise that; he cannot see that we are definitely now an isolated nation. We have to be careful what we say and I say we do not have to start attacking the President of the United States. We all have our views as to whether George Bush should be re-elected but those should remain our views. We should not especially at the highest echelon make the type of remarks that the Prime Minister was making which were totally inept. 
We have to look ahead to the future. This bill is just part of what we are looking at for the future of New Zealand. I see nothing from the Labour Government that tells us where New Zealand will go from here. Are we just to rely on the United Nations? New Zealand First is looking ahead; we have given close consideration to our view on Iraq. But New Zealand must take the next step and I think Wayne Mapp was trying to ask where we are to go to from here. There has been no response from Labour to that. We have had the Minister of Defence chipping away and making smart remarks similar to those of his leader. We have had Mark Peck asking what Wayne Mapp meant. What Wayne Mapp said was very very clear. We say that we should not go around attacking the United States—or Britain for that matter. All of us might say that Tony Blair is playing a very close game in a difficult situation. 
This legislation is just a counter-terrorism bill. I note the comments from the leader of United Future that the Foreign Affairs Defence and Trade Committee will look at it very closely. The bill is just symbolic of the state of affairs New Zealand faces today. When I studied international law one thing that became very clear to me was that international law supports winners. All that international law does is to support winners. If Hitler had won the Second World War the Germans would have somehow found a way of justifying what they did. International law is all about supporting winners and we have to be very very careful of where we go in this very difficult world. 
This bill does nothing for the future of New Zealand in the very difficult state in which we find ourselves. The Labour Government would not have a debate on the Iraq situation in this House. It was forced into a debate. It would not put up a motion to the House; it was forced into the debate. This Government has no regard for the future of New Zealand. It was a minor Opposition party—I am sure the member concerned will not mind my saying that because it highlights the fact—that forced a debate on Iraq. It was ironic though that a member of that minor Opposition party whose ancestor fought so valiantly in the Second World War did not have a vote cast on her behalf in that debate. I thought it was quite ironic that ACT which put forward the motion did not put forward the vote of the descendant of that former soldier who is I believe a member of the ACT party. 
Mr SPEAKER 
: I ask the member to come to the bill please. 
DAIL JONES 
: I will just get back to the point. I appreciate the Speaker’s indulgence. New Zealand First will support this bill but let us not exaggerate its significance. The bill is just a piece of paper. It will not stop a suicide bomber who wants to— 
Dr Wayne Mapp 
: Commit suicide. 
DAIL JONES 
: Commit suicide yes. I am pleased that we have some improved security arrangements in this building. I look forward to more of them. 
GEORGINA BEYER (NZ Labour—Wairarapa) 
:  
I rise to speak in support of the first reading of the Counter-Terrorism Bill. The misguided burblings of the member who just resumed his seat may have confused some members and indeed the listening public so I would like to clarify the purpose of the bill. The bill implements in domestic law the requirement of two international conventions the Convention on the Physical Protection of Nuclear Material and the Convention on the Marking of Plastic Explosives for the Purpose of Detection. As the commentary on the bill states it does so “by providing for: offences involving the use and movement of unmarked plastic explosives: offences involving the physical protection of nuclear material: extra-territorial jurisdiction extradition and mutual assistance requirements in respect of those offences”. 
Other matters that the bill will pursue which people may be interested in include infecting animals with disease for which a maximum penalty of 10 years’ imprisonment is suggested; contamination of food crops water or other products intended for human consumption for which a penalty of 10 years’ imprisonment is possible; threatening or falsely communicating information about harm to persons or property; harbouring or concealing terrorists; and dealing with radioactive material. Also terrorism will be an aggravating factor for sentencing purposes under the Sentencing Act. I hope this information has been helpful to members and listeners. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I rise on behalf of the ACT party to say that we support the Counter-Terrorism Bill. I say to the previous speaker that just reading out some notes is not actually participating in the debate. It leads me to believe that that member has not read the bill and I am wondering whether the previous speakers have read it either. Although I accept the point made by Mr Jones—that it seems counter-productive to be passing a counter-terrorism bill at the same time that we are breaking the relationships New Zealand has with other security organisations—let us look at the bill itself. Of course we need to pass legislation with regard to nuclear materials. I do not think that any MP—although one never knows what the Greens are going to say—is in favour of the importation of plastic explosives. So one can see that we need international cooperation to track down that sort of material and yes we need to pass laws to make sure we can do something about it. But when I look at the bill I realise that there are serious civil liberties issues involved which no member has bothered to discuss. 
I see that the bill is going to the Foreign Affairs Defence and Trade Committee. Our foreign affairs committee is not known for its knowledge of the law or for its industry or for looking after the interests of New Zealand citizens. It has for example had a petition from the Chinese community sitting in front of it for months and it has not bothered to look at it. It does not care about those sorts of issues. It is normally the committee that puts forward an argument as to why it should travel yet again to Australia. I do not believe that that committee under Mr Dunne’s chairmanship is a fit and proper committee to be looking at these serious issues. 
I want to draw the attention of the House to some of the clauses. I do not know whether the Greens have read the bill but I think they would be very wise not to vote for it because it would appear to me that under this bill they are in danger of going to jail for 7 years. That is a very attractive proposition I guess for many of us. 
Hon Member 
: What does the bill say? 
Hon RICHARD PREBBLE 
: I will read it to the member. I am referring to new section 307A “Threatening to do harm to persons or property’ which is inserted by clause 7. Subsection (1) of that new section states: “Every one who intends to cause significant disruption to commercial interests or government interests is liable to imprisonment for a term not exceeding 7 years if without lawful justification or reasonable excuse that person—“(a) threatens to do an act to cause harm to persons or property: “(b) communicates information about harm to persons or property.” Members should read the Greens’ website. I had it checked again this morning and if members go to it they will see that there are links to international organisations that boast about the damage they have done to various commercial interests. 
Indeed there are Green members of Parliament who have a string of convictions for causing damage to property and to commercial interests. The Green Party has boasted about how its members have pulled up genetically engineered (GE) crops or crops that they thought were GE. I believe that the Greens would also be caught by the clause about contaminating food crops water or other products. There is no doubt in my mind that that provision as it is read would have a grave effect upon the Green Party and its friend Greenpeace. It would appear to me when I look at the description of a terrorist organisation that even though the Government itself may not have decided to call the Greenpeace organisation a terrorist organisation it fits the description. There is no doubt about that. The Green Party has broken the law. It has tromped all over commercial interests. Members of the Green Party frequently state that they do not think the law should apply to them and that they are able to put their political causes ahead of the law. 
There is another interesting little provision in clause 7. Section 307A(2) inserted by clause 7 states: “To avoid doubt the fact that a person engages in any protest advocacy or dissent or engages in any strike lockout or other industrial action is not by itself a sufficient basis for inferring that a person has committed an offence under subsection (1).” That is very interesting. It appears to me that the Government is saying that people who cause any property damage are liable to 7 years’ jail but that if those people say they are on a protest then they are not. It appears to me that if people want to do a terrorist act in New Zealand they can just shout: “Long live Saddam Hussein!” as they throw their hand grenades at the Devonport naval base and cause damage. Then when they go to court they can say: “Well I was just making a protest.” Is that the purpose of the clause? The clause is an absolute nonsense. 
I ask the House whether anybody thinks there is anyone on the Foreign Affairs Defence and Trade Committee who is capable of telling us what those two clauses mean. Tim Barnett would not have a clue. I say to the House that yes we need to look at the question of terrorism—and the ACT party is probably stronger on defence than any other party in Parliament—but that we have concerns. [ 
Interruption 
] The member—I think her name is Georgina Beyer—just made a contribution to the House. She did not once comment on this clause. I do not think she has even read it. I ask that member as she wants to interject whether she is concerned about the civil liberties involved in that clause. There is a great silence now. I suspect that when the bill went to caucus she did not ask Mr Goff: “Well what does this mean? Are we going to send Green MPs to jail for 7 years?” I know that that is a fairly attractive proposition. I realise that the cost of keeping a Green MP in Parliament is about $90000. If we put one of them in prison the cost would be $60000 so we would make a $30000 saving. But the trouble with MMP is that we would just get another one so what is the point? 
Sue Kedgley 
: What about your MPs? 
Hon RICHARD PREBBLE 
: The member asks about my MPs. 
Mr SPEAKER 
: Order! 
Hon RICHARD PREBBLE 
: I do not mind answering the interjection Mr Speaker. My party is actually in favour of the rule of law and property— 
Mr SPEAKER 
: I am sorry to interrupt the member but there will be no interjections from that quarter. That is the rule. 
Hon RICHARD PREBBLE 
: I do not mind handling them Mr Speaker. 
Mr SPEAKER 
: Well I do. 
Hon RICHARD PREBBLE 
: Righto—no interjections. I was looking forward to being able to reply. When I look at clause 15 I wonder what the House thinks about it. I am referring to the ability of customs officers to seize property including cash without any court order at all. Customs officers can seize cash and cash includes cash equivalents including bearer bonds gemstones money orders postal notes precious metals and travellers cheques. The bill further states in new section 47D (3) which is also inserted by clause 15 that: “ the Customs need not return the goods as provided in subsection (2) and may continue to detain them pending a direction by the Prime Minister under section 48 ...”. Do we really want to pass a law that allows the Prime Minister of New Zealand to hold and detain cash that has been taken from citizens? Do I trust the Prime Minister? The answer to that question is no I do not. As Mr Jones has said I think that our Prime Minister is capable of making extraordinary errors of judgment. I think that she has made great errors of judgment in the last week. Now we are passing a law stating that our Prime Minister can decide whether cash or material will be returned to citizens. Is the Foreign Affairs Defence and Trade Committee going to look at that provision? Obviously it is not because not a single member of that committee has mentioned any of those clauses. Now that I have drawn them to the attention of Green Party members I suspect that they might start to realise—because they are in danger. I do not think that they ought to be deciding this issue. We cannot have the terrorists deciding whether they want a counter-terrorism bill can we? We know what their answer would be. 
I believe that this bill has serious civil liberties issues in it. If we pass measures to protect liberty and if those measures so strong that they take away our liberty then the bill—which states that it is a counter-terrorism bill—might be a counter-liberty bill. I think that there are serious issues in the bill and I am disturbed that it is being passed under urgency. I make this final point. Probably the people who cause the most terrorism in New Zealand are the gangs. They also cause most of the drug problems. We have been told by the police for years that they want to have the drugs classified as class A drugs and this Government cannot get around to it. Yet here we are in urgency rushing through terrorism measures. We are able to act in this area but we are not able to act on the gangs. This bill should be looked at very carefully and it ought to go to a better committee. 
TIM BARNETT (NZ Labour—Christchurch Central) 
: 
 I must say that I am deeply wounded by Mr Prebble’s suggestion that I am incapable of understanding the words in legislation. I can assure him that the Foreign Affairs Defence and Trade Committee has such towering legal minds as Matt Robson’s and Wayne Mapp’s to advise us on those matters. I also point out that ACT did have the opportunity when deciding which select committees to go on to be on the Foreign Affairs Defence and Trade Committee and it chose not to do so. 
I want to make three quick comments. Firstly that committee has dealt with other bills in this range of legislation that we are agreeing in order to make sure that we can effectively translate United Nations conventions into workable domestic law. It is a vital task that we are doing and we are doing it well. Select committees take an increasingly muscular and rigorous approach to legislation and I can assure the House that our committee will be inviting and receiving comments from right across the spectrum. I was pleased to hear the Minister say in his introductory comments on the bill that when he prepared the legislation he ensured that proper safeguards were in place to ensure that civil liberties were not unduly impinged on. I commend the bill to the House and I look forward to further debate and to select committee consideration of the bill. 
KEITH LOCKE (Green) 
: 
 The Greens will be voting against this bill despite some good clauses in it because it is a fraudulent bill. It is a fraudulent bill because although it is called the Counter-Terrorism Bill much of the bill has nothing to do with terrorism or counter-terrorism. I am referring to the many amendments to the Crimes Act the Misuse of Drugs Act and the Summary Proceedings Act which have nothing to do with terrorism. They have been sneaked into the bill because the Government knows that if a counter-terrorism label is put on amendments members will be more reluctant to oppose them. 
Let us go into some of those amendments. Clauses 8 and 26 amend the Crimes Act and the Misuse of Drugs Act but not because of anything to do with terrorism. The explanatory note makes it clear that those provisions are to overturn part of the Court of Appeal’s decision  
R 
 v  
Aranui 
 4 years ago. An element of that Court of Appeal decision was that one could not use interception warrants for fishing expeditions because they are an intrusion on our privacy. However the two amendments in the bill before us will mean that warrants obtained to gather evidence on something like theft will be able to be used to fish for evidence on things not specified in the warrant like drug offences or vice versa. 
Other amendments are to the Summary Proceedings Act and they also extend police surveillance powers with no special reference to terrorism. These involve giving the police broad powers—generally after a warrant is obtained—to use tracking devices to follow people. Most people will think that that is about tracking devices on cars but it can be tracking devices secreted on any “thing”. Those “things” could be people’s clothing or their bags. Electronic devices are now so small that that is feasible and the devices could be easily linked up with the global positioning system so that a person under surveillance could be tracked everywhere he or she goes. This is a very intrusive provision which up till now has been generally restricted to drug offences and has now been generalised to cover police investigations into virtually any crime. We have to be very careful about giving police extra powers to invade the privacy of suspects in this way even if they have to produce a good case before or after the fact to the judge handing out the warrant. We have not heard a good argument for granting this extension of police powers. 
An extra search power is also being granted under the same Summary Proceedings Act. A constable executing a search warrant will be able to demand help in getting any information off any computer located on the premises being searched. Unlike what Phil Goff said the police do not have to have a specific court order for that. If a person does not cooperate he or she could be up for 3 months in jail. In practice they will have to give over any encryption devices to the police or get around any firewalls. Normally people are not supposed to be forced to incriminate themselves. Here they are being forced to participate in perhaps their own incrimination. It is a big intrusion on our privacy to give constables that generalised power because a large part of our lives is often on our computers. 
One of the Green Party’s concerns with the Terrorism Suppression Act passed last year was that legitimate protesters might be convicted as terrorists because the definition of a terrorist act was so broad. Under that bill terrorism could involve causing serious economic loss or seriously destructing an infrastructure facility in a way likely to endanger human life. This new Counter-Terrorism Bill confirms our fears that protesters are a more likely target of such legislation than terrorists. Clause 7 which amends the Crimes Act has an even more general provision that could apply to protesters without any specific relevance at all to terrorism. To be liable for a term of up to 7 years one only needs to intend to “cause significant disruption to commercial interests or government interests” and communicate “information about harm to people or property” in that regard. Surely that provision would cover many—perhaps most—cases of non-violent civil disobedience like we saw in the 1981 protests against the Springbok rugby tour. It could also apply to those anti-GE citizens currently talking about taking action against GE crops—the planting of which in New Zealand would so endanger our health and economic future. 
No one is saying that people involved in civil disobedience should not be subject to the law but why do we need this broad harsh new provision governing what people say? None of the provisions I have mentioned have anything specifically to do with terrorism but they do represent a serious undermining of our civil liberties. They challenge a number of provisions in the New Zealand Bill of Rights Act. The provision on communicating information on harm to property conflicts with a freedom of expression provision in the New Zealand Bill of Rights Act. That provision states: “Everyone has the right to freedom of expression including the freedom to seek receive and impart information and opinions of any kind in any form.” 
The New Zealand Bill of Rights Act provision against unreasonable search and seizure should also restrain unreasonable demands that constables will be able to make on people as regards people having to disclose all the contents of their computers. The provision should also mean that we want to limit the very broad and loose use of search and surveillance warrants. The clause in the current bill whereby police can get an interception warrant for say drugs and then use that warrant to fish for evidence on other crimes is not compatible with the spirit of the “unreasonable search” provision in the New Zealand Bill of Rights Act. It could also be used in some cases to persecute people—to keep them under surveillance until the police have something on them allegedly for some crime. It also challenges our right to privacy under the Privacy Act. 
That said Part 2 of this bill has some good features. This is the part that amends the Terrorism Suppression Act with regard to New Zealand’s adherence to some good international conventions—such as the Convention on the Physical Protection of Nuclear Material and the Convention on the Marking of Plastic Explosives for the Purpose of Detection. The Green Party does not quarrel with those conventions. We are a nuclear-free country so of course we should be implementing legislation controlling the importation acquisition possession or control of radioactive material. We are also clearly against the use and movement of unmarked plastic explosives. These are practical measures against criminal behaviour using plastic explosives and nuclear materials. It is important that New Zealand is at the forefront of the international campaign against the smuggling of nuclear materials and adhering to all the appropriate treaties. 
However other clauses in Part 2 amending the Terrorism Suppression Act only reinforce the bad provisions of this Act which the Greens opposed last year. If the wrong people or groups—that is genuine political activists—are designated as terrorists then the harbouring and related provisions in this bill will only reinforce the injustice that could flow from the existing Act. These result from the overly broad definition of terrorism in that Act. There is also the political nature of the process of designating terrorists and terrorist organisations and the lack of full due process in the appeal system. People can be designated as terrorists without in subsequent appeal situations even having the right to see all the information being used against them—if it be deemed to be classified and secret. 
I have focused on the problems with Parts 1 and 3 of the bill that do not relate at all to the Terrorism Suppression Act. The problem with this bill is that it is using people’s revulsion against terrorism to justify a serious undermining of our civil liberties. The Government should think again. If it wants to get us adhering to international treaties on plastic explosives and nuclear materials it should do that in a separate bill devoted to them and the Greens will support it. If the Government wants to do a completely different thing relating to general surveillance and search it should do that in a separate bill amending the Crimes Act the Summary Offences Act and the Misuse of Drugs Act and let us have a proper discussion free of any scare talk about terrorism. We have to wake up to the fact that the so-called “war against terrorism” is being used as an excuse for a serious infringement of our human rights. That is particularly true under the Bush administration in the United States but it is also happening in other countries including New Zealand. The problem should not be made worse as is being done in this bill. This bill is a compendium bill that mixes up the good bits relating to real dangers with bad bits. 
RUSSELL FAIRBROTHER (NZ Labour—Napier) 
: 
 I rise in support of this bill. I have listened to the various speeches and the complaints about the civil liberties aspects of the bill but it is easy to criticise without advancing positive suggestions on how we balance the civil liberty interest with the overall attraction of having a bill that addresses the evils of terrorism. 
The major aspect of this bill is the evil of terrorism. The mechanical processes may need refining but we need suggestions not criticisms built from ideology and vague dreams. I support the bill; it should go to its second reading. It is a bill that this whole House in honesty must support. The select committee is where those criticisms should be raised and addressed because the overall purpose of the bill is one that this country longs for and needs. 
GERRY BROWNLEE (NZ National—Ilam) 
: 
 The National Party supports this bill progressing to the select committee for further consideration. It is with a degree of sadness that we do so. The need in New Zealand for a bill like this tells us that society as we have known it has definitely changed and no New Zealander should be comfortable with that. 
We have had some very good speeches in the House this morning. In particular I refer to the speech of my colleague Dr Wayne Mapp and to the very fine speech from the Hon Richard Prebble. I found myself agreeing with his speech in great substance. I also would like to make a few comments about the speech that we heard previously from Keith Locke of the Green Party. One of the things that I find amusing about the Greens’ position is that at times it seems to be exceptionally libertarian. The point the Greens do not understand is that every time someone commits an illegal act threatens someone or does something to disrupt society it causes a place like Parliament to enact a law to counter that. What we then see on each occasion is a shortening shrinking or closing up of the liberty that we as citizens all experience and that is part of the sadness I have in seeing this bill come before the House. 
Georgina Beyer from the other side decided to give us a reading of the bill rather than offer any particular thoughts on it. However in so doing she highlighted some of the extraordinary situations that do exist in New Zealand. For example it would appear that right now there is no law against infecting an animal with a disease and sending that animal out into the community presumably to spread that disease. For example anthrax could be spread through the community by infecting dogs. Rabies is another example of a disease that could be spread through the community by infecting dogs. We are told in the preamble that right now that is not illegal. It seems to me only sensible that there should be some restriction on people doing that sort of thing. The next part says that it would appear that it is not illegal at the moment to contaminate food crops water or other products intended for human consumption. That seems also somewhat awry and is certainly something that we do need to correct and I am pleased that this bill does so. 
I want to tell the House about a small incident that happened in my own Christchurch electorate where householders who turned on their taps were able to smell kerosene in their water. That caused a degree of angst and upset. 
Hon Damien O'Connor 
: What’s that got to do with the bill? 
GERRY BROWNLEE 
: The slow member from the West Coast asks what that has to do with the bill. I simply say to him to stay with it keep his eyes open and listen. I know he had a late night. 
It is not a silly thing: people in my electorate recently experienced contamination of their water supply. When the investigations were done it was discovered that a diesel pump had been serviced in the pump station a small amount of diesel had spilled on the floor and there had been some seepage through a very fine fissure in the concrete floor above the holding tank. The alarming thing about that is that it shows how very easy it would be for someone to put some very nasty stuff into water supplies throughout this country and we should have legislation that stops that. As Mr Locke suggested even if some of the provisions of this bill do not deal directly with terrorism that would have to be to say the least a seditious act—if not a terrorist act by itself—and we should have that cover inside the law. The problem we have with bills like this is that it is very hard to define what terrorism is. If it were easy to define what a terrorist was we would not have to put up with the sort of nonsense that the Greens put in front of us suggesting that all sorts of liberties are being curtailed because of a bill like this. 
I now turn to some of the other benefits claimed for the bill particularly the one that suggests that by being seen to cooperate fully in global attempts to combat terrorism New Zealand will be able to maintain its international reputation. At the present time we are seeing from the Government a complete obfuscation of the role that New Zealand should be playing in the Middle East. In international terms I think the Prime Minister has let New Zealand down with some of her recent outbursts described variously today as “ill-considered” or “smart alec”. For a bill like this to come before the House claiming that it is about New Zealand maintaining its obligations although we have a Prime Minister who gets us out of them at every opportunity certainly seems to me—we are not allowed to use the word in the House and I will not—to be presenting a view in one place that is ignored in another. 
I conclude my remarks this morning by simply saying that the National Party supports this bill. We do so because society has changed and New Zealanders are at risk. One final point I want to make in which I am in total agreement with Richard Prebble is that it seems sad also that we are able to put a bill like this in front of Parliament that deals with a problem that might or might not exist but a real problem like gangs in New Zealand that—as Richard Prebble quite rightly said—does cause a lot of harm in society seems to escape the legislative net quite easily. 
On that note I simply say that National looks forward to the select committee process and it will be supporting the passage of this bill. 
DAVID PARKER (NZ Labour—Otago) 
: 
 I rise in support of the bill and I shall focus briefly on two issues that were also addressed by the prior speaker—that is the importance of controlling those who might otherwise be interested in spreading disease particularly amongst our animal herd. In reality that is probably the biggest terrorist threat that New Zealand would face. For example if foot and mouth disease were to be introduced into New Zealand and we suffered the loss of exports as a consequence not only would the New Zealand economy be brought to its knees but we would also suffer an environmental catastrophe in that millions and millions of litres of milk would flow into our rivers. That would be very serious. To the extent that those things can be prevented by law it is prudent that we take the appropriate legislative steps and we are proposing to do just that with this legislation. Legislation alone cannot stop those things but it may act as a deterrent. Certainly if such a terrible event ever did come to pass it would be good to know that there were appropriate laws with which to punish those convicted. 
A party vote was called for on the question  
That the Counter-Terrorism Bill be now read a first time. 
Ayes 110 
Labour 52; New Zealand National 27; New Zealand First 13 ACT New Zealand 8; United Future 8 Progressive 2. 
Noes 9 
Green Party 9. 
Bill read a first time. 
Hon GEORGE HAWKINS (Minister of Police) 
 on behalf of the 
 Minister of Foreign Affairs and Trade: 
 I move  
That the Counter-Terrorism Bill be referred to the Foreign Affairs Defence and Trade Committee for consideration and that the committee finally report on the bill by 31 July 2003. 
 referred to the Foreign Affairs Defence and Trade Committee 
Motion agreed to. 
New Zealand Symphony Orchestra Bill 
First Reading 
Debate resumed from 20 February. 
DAIL JONES (NZ First) 
: 
 This bill was introduced by the Government some 4 or 5 weeks ago—I have lost track of the time—and I have been waiting patiently for the opportunity to continue my speech. 
When the bill was introduced the Minister Steve Maharey conducted the introduction. In his speech of which I have obtained a copy he makes some comments that I think I should bring to the attention of the House so that we know precisely what we are talking about. He made it clear that currently the New Zealand Symphony Orchestra has its own Act of Parliament under which it is established as a limited liability company. It is the intention of the Crown to change the form of ownership to a Crown entity. The Minister indicated that “the bill signals the Government’s expectation that the New Zealand Symphony Orchestra will provide the public of New Zealand with performances of symphonic music of an international standard. It will be required to seek to contribute to the development of a distinctly New Zealand cultural environment and to encourage New Zealand musical composition.” In his speech he said on the one hand that “Nothing in this legislation diminishes the New Zealand Symphony Orchestra’s artistic independence or integrity.” and in the next sentence he stated it “will continue to act without ministerial or indeed parliamentary direction in artistic matters”. But he had indicated earlier in his speech that it must seek to contribute to the development of a distinctively New Zealand cultural environment. Indeed clauses 8 and 9 of the bill make it quite clear that the orchestra must act within certain legislative confines. 
I do ask why we are changing this New Zealand Symphony Orchestra structure from a limited liability company to a Crown entity. Why are we wasting the time of the House in urgency on this legislation? What is so important what is so necessary and what is the mischief currently being undertaken that requires us to get rid of the New Zealand Symphony Orchestra Act? There is absolutely no reason whatsoever other than a whim of the Prime Minister. There seems to be no point in it at all. The orchestra is carrying on perfectly well. It is doing its job brilliantly and there is no need for the Government to interfere. But here we are being forced in urgency at 10 past 10 on a Wednesday morning—and being deprived of question time on Wednesday and Thursday—to look at a totally unnecessary restructure of the New Zealand Symphony Orchestra. 
Why must we have yet another Crown entity? Many years ago I ranted and railed against quangos—quasi non-governmental organisations. There is a cause out there for someone to rant and rail against Crown entities. These things are being set up with a view to not having any governmental ministerial responsibility on the one hand but then the Government sets up Acts of Parliament that say they virtually must do what Parliament wants. 
I enjoy the New Zealand Symphony Orchestra. I actually do attend its performances. I read with interest its Wellington season programme for 2003 of which I have a copy here. In my last speech I read out some of its work. Of course in the bill there is a requirement that the orchestra have New Zealand performers and New Zealand performances. We had one David Farquhar’s third symphony just last week. But apart from that we seem to be struggling to get any New Zealand performers of any note. I know that in this year’s programme there are meant to be four performances of New Zealand work—work of people who won a prize in a local competition. But what happens if the winner happens to be from overseas? Will we limit the people who take part in New Zealand competitions? If the winner happens to be an overseas person will that person’s work get the opportunity to be played or will the performances be limited to work by a New Zealand person? Will we restrict in effect the development of classical-type music and of music generally in New Zealand? 
The New Zealand Symphony Orchestra programme for 2003 is a wonderful one a varied one. I noted the report on Monday 3 March of its programme  
A Great Orchestra A Great Journey 
. I listened to the radio programme where Peter Walls from the New Zealand Symphony Orchestra was talking about the wonderful programme the orchestra has this year. We are all looking forward to attending. 
One must not forget that there are other orchestras around the country. In the overall scene we must not forget that they also have needs. I will not go too much into the question of how they will be funded—for example through the Responsible Gambling Bill—or how controls will be imposed on how that money is used. That will be a debate in another area. But I notice that a press release from the Christchurch City Council compliments on the 30th anniversary of the Christchurch-Kurashiki sister city relationship the work of the Christchurch Youth Orchestra and the Kurashiki Junior Philharmonia of which 19 members were to be in Christchurch. We want to be sure that we continue supporting development of such orchestras in Christchurch the Waikato Auckland Dunedin or wherever they might be. 
We in New Zealand must at this point also express our indebtedness to Klaus Heymann and his Naxos label. We all know the recent Lilburn work which was put out by Naxos and won great praise in the United Kingdom—I think it was top of the charts. The New Zealand Symphony Orchestra’s work is now receiving international fame. I recall also that the New Zealand Symphony Orchestra will be funded to go Japan—fully funded I believe by the Japanese. We must all take great pride in its work. 
But again as I say we must not forget orchestras such as the Auckland Philharmonia and its wonderful Royal and SunAlliance series of 2003 which many of us will be attending and groups such as Bach Musica with its 2003 subscription series which is held from time to time at St Matthew’s in the City in Auckland. It is attended invariably by a full house. 
When we are passing this bill we must not ever overlook the fact that the New Zealand Symphony Orchestra owes its existence to a large extent to all those young girls and boys who go along to their piano practice their violin practice their cello practice and suchlike and work their way towards being in an orchestra. 
This bill also talks about the development of New Zealand performing art. I understand that once upon a time Dr Bruce Gregory a former member for Northern Maori gave us an exposition on an instrument called the nguru. It is an instrument that is inserted in the nostril; as the name implies snoring or snorting through it gives a whistling sound. I wonder whether today’s Minister of Maori Affairs would give us a demonstration on the nguru so that the development of this fine New Zealand instrument is continued by yet another member of this House. Maybe with the size of our Minister of Maori Affairs we might have a double concerto from the nguru—one from each nostril. 
STEVE CHADWICK (NZ Labour—Rotorua) 
: 
 I rise in support of this bill. I would like to clarify that this bill is setting up the New Zealand Symphony Orchestra as a non-company Crown entity. That is what the orchestra itself has asked for. I make the point that this orchestra was one of our languishing icons. All the cultural devotees flock to the House to talk about their knowledge of the orchestra and the arts but the orchestra was one of our icons that was floundering until we came into Government in 1999 with our cultural recovery package. We put $1.4 million into making a stable financial footing for the New Zealand Symphony Orchestra to move on. I think this Government needs to be applauded for that. And it is remembered for that as we go out in support of our cultural institutions. The bill simply gives clarity to how the orchestra wishes to perform and takes away that driver of it being a commercially driven entity. For that I support this bill. 
KATHERINE RICH (NZ National) 
: 
 I would first like to make a couple of points about the previous speech given by the Labour member. I totally refute that the New Zealand Symphony Orchestra is or was a languishing icon. The New Zealand Symphony Orchestra has always been an icon of this country. It remains an icon and it will always play a very important part in the cultural heritage of this country. 
In terms of the creative process however I argue that it is not the role of the State to codify the creative process. We have a 31-page bill here that basically tells the orchestra how to suck eggs how to play its instruments. It basically says that the orchestra’s job is to play symphonic music. Well I say “Hello?”. I think we have always known that that is its role since it was first established. I think the orchestra has always been pretty clear that that is its role. We do not need the extension of regulation and legislation into these sorts of areas. 
This is nothing more than a piece of symbolism. The Government is aiming to demonstrate its commitment to the arts. But I say it is not our role to stand here in Parliament and pass legislation to make a certain part of a sector feel good. We are here to pass laws that are necessary and useful and have a role. The role of passing legislation is a very expensive one. The Parliamentary Library tells me that a piece of legislation can cost anywhere between $300000 and $800000; some estimates are up to $2 million. That is a lot of money to spend on passing legislation that is actually unnecessary. 
If the Government wants to put its money where its mouth is why not take that money and give it straight to the Symphony Orchestra? At least the money then could be put into performance into something that would make a difference to New Zealand people. The money that will be spent discussing this very large bill which basically tells the orchestra to play music should be put into a national tour by the orchestra allowing it to play in some of the far-flung areas that it may not have been to in the past. That is a far more useful and far better use of scarce taxpayer resources than standing up here and talking about things that we already know. 
I do not think the Symphony Orchestra has any concerns about what its role is because it is stated in its statement of corporate intent: to play live orchestral concerts to the highest international standards; to contract top-level international conductors and performers within budget limitations; to promote and support New Zealand artists and composers in both concerts and recordings; and to perform regularly in communities throughout New Zealand. Those are very important objectives but they are already there. The orchestra already knows what it is doing. The Government is not fixing any problem here; it simply wants to demonstrate to a group that it is doing something for the arts. Well I say that is not our role. We are here to pass laws that are necessary and will make a difference. The orchestra is doing an extremely good job in following the legislation that is already in place. 
The next aim of the bill is to change the orchestra’s structure. Well the approach of the orchestra could be changed without our putting through this legislation. I do not think the organisation has been run in a totally commercial sense. Yes it does some popular things like playing the music of Split Enz but if one looks at the orchestra’s schedules for last season and this season one sees there is a fine mix between the popular and the particular between playing some well-known pieces and supporting some less well-known artists and in particular supporting New Zealand music. 
It is very interesting that this Government continues to talk about supporting New Zealand music when among the key groups that do not support New Zealand producers and music are not the commercial network but Concert FM and the orchestra itself. I think the orchestra could do a better job of presenting and producing more New Zealand works rather than just tried and true pieces from around the world. It seems that the Government is intent on imposing local content quotas to which I say it should have a look at Concert FM. The last time I looked at that radio station’s annual report I saw that between 3 and 4 percent of what it currently plays is New Zealand - produced music. 
In addition I do not think one can codify parts of the creative process. It is very difficult for any organisation to measure things like quality. Most New Zealanders already know the role of the New Zealand Symphony Orchestra. They know the part that it has played in our culture. They know what it is there to do. We do not need to waste parliamentary time or the money involved in our doing this just to tell the Symphony Orchestra that its job is to play music. The orchestra knows its raison d’être; it knows why it is there. When one looks at the costs of putting this bill through the House one has to ask why the Government does not just give the orchestra that money for it to put it into performances. 
Steve Chadwick 
: But you didn’t—that’s the reason. 
KATHERINE RICH 
: I ask that member why the Government does not put the money into a performance in Rotorua. The orchestra should tour more places in New Zealand than just Wellington and Auckland. Yes it does make a fine attempt at going to other places but one could take the orchestra to a lot more New Zealand places with the millions of dollars that will be spent on this legislation which we do not need. 
Jill Pettis 
: We know you’re better than this. 
KATHERINE RICH 
: I say to that member that I bet she thinks  
Pachelbel’s Canon 
 is something being used by the Iraqis right now. When was the last time that member went to hear the Symphony Orchestra? In terms of a love of music and a love of the orchestra I think the members who are speaking about this bill are the ones who really know how important cultural aspects are. We do not need a bill to tell us the role of the orchestra. We do not need 31 pages which basically give a blow-by-blow account of what the orchestra is there to do. Most of us know that this is nothing more than a bill to make the Government feel good. It wants to hold this bill up and say: “Look what we did for the orchestra.” 
New Zealanders are not thick. They do not need a bill that tells the Symphony Orchestra that its role is to work with the New Zealand ballet and opera companies. We do not need legislation to set out the role of the Auckland Philharmonia. We do not need legislation to tell the Dunedin Symphonia what to do. We do not need legislation to set up pipe bands or brass bands around the country or to tell them what to play or what the quality of their music should be. This is just absolute silliness. I think it will switch a lot of New Zealanders off because they will be able to see through this 31-page bill. 
Here we are in urgency and this bill is supposed to be the urgent order of the day but I think there are many other bills on the Order Paper that we should be focusing on. If the Government wants to put its money where its mouth is it should pull this bill right now. It should take the money that will be spent on putting the bill through the select committee process and give it to the orchestra so that it can use the money to take itself on the road and do more performing because that is its job. 
MARC ALEXANDER (United Future) 
: 
 Contrary to the previous speaker United Future believes that art is important and a necessary ingredient in the well-being of our country and culture. United Future supports the general thrust of this bill and what it aims to do. We are therefore very happy to support this bill through its first reading to the select committee stage. We agree that although New Zealand’s top orchestra certainly has commercial obligations it is not really a company. To reconstitute it as a Crown entity is therefore entirely appropriate. However in supporting this bill we do so with a note of irony given the arm’s length at which the New Zealand Symphony Orchestra was kept by a Labour Government in the late 1980s; but having now changed its ideological pants and its musical tune it is funnily enough a Labour-led Government that is reconstituting the orchestra’s status to become a Crown entity. 
In terms of the previous legislation the shares of the company were held by the responsible Minister and the Minister of Finance. The function of the orchestra is set out absolutely nowhere in the 1988 Act. It had responsibilities only in respect of the Companies Act. Its status as our national orchestra did not even warrant a mention. It is therefore conceivable that we could have had an orchestra company that ceased to function as an orchestra at all. 
This legislation is necessary to protect our national orchestra as one of our cultural treasures. This bill provides exactly for that and in terms of the orchestra’s survival and stability it is vital that we do that now and into the future. United Future’s election policy also supports providing for the orchestra to be put on a sure footing for the long term. We are therefore glad to see steps being made toward that. However we flag our concerns regarding the accountability of the tax money spent and what the taxpayer will receive. The orchestra has made a $538000 profit in the year 2001 and that is its first surplus since 1997—although it was helped by the Government’s cash boost in 2000 as part of its arts package—compared with the loss of $1.5 million in 1998-99. 
Should there be a tighter definition of financial viability so that the orchestra is more able to live within its means? We think so. On a related topic some feel that the New Zealand Symphony Orchestra already gets too much at the expense of regional orchestras and other arts. The New Zealand Symphony Orchestra has the biggest budget of the professional arts organisations and is the only one to pay directors’ fees. The concern is that by drawing the New Zealand Symphony Orchestra so close to the State’s bosom it will continue to suckle without restraint. 
There are also suspicions in the music world that the orchestra is managerially top-heavy. The bill creates a new board which is appointed by the Minister but it is not clear whether it will be larger than the existing governing body of the New Zealand Symphony Orchestra. A cynic would suggest that this might create more opportunities for political appointments. 
However contrary to the older legislation this new bill provides some principal objectives for the orchestra including the provision of performances of symphonic music performed to an international standard and the provision of an orchestra that is highly skilled and has strong community support. More important the orchestra is to take a leading role in the performing arts industry in developing New Zealand’s cultural environment. It will encourage composition in New Zealand and it will provide opportunities for the development of our own musicians. United Future supports the promotion of and the long-term provision for our New Zealand Symphony Orchestra and therefore is proud to support this bill. 
HEATHER ROY (ACT NZ) 
: 
 I stand today to address the first reading of this bill with some surprise as to the speed with which it has leapt to the top of the Order Paper. If members look at the Order Paper they will see several other bills many of which have been languishing on it for some time—bills of some importance such as the Intellectual Disability (Compulsory Care) Bill. But this bill has leapt to the top of the Order Paper. 
As much as I love listening to the New Zealand Symphony Orchestra and attending its performances I cannot help but feel like my colleague in the National Party who spoke earlier that there are matters of greater gravity to be debated in the House at this time. Internationally we have a war. Domestically we have seven district health boards under intensive monitoring which means they are in such strife that they need to work very closely with the Ministry of Health in order to function on a day-to-day level. The New Zealand education system allows one in five of our children to leave school without basic numeracy and literacy skills. The recent Catching the Knowledge Wave conference had speakers of international note who are experts in their fields but because their recommendations are not what the Prime Minister ordered she has declared there to be nothing resulting from the conference that cannot be put to the side of her desk. Instead we have before us a matter of such international and domestic magnitude that it must be addressed promptly: the New Zealand Symphony Orchestra Bill! 
The explanatory note to the bill tells us that the bill’s primary purpose is to change the status of the New Zealand Symphony Orchestra from a limited liability company to a non-company Crown entity. Minister Maharey in his first reading speech told the House that it is to ensure the orchestra’s financial viability. This in fact is code for “The Prime Minister won’t let it go broke.” One does wonder whether she knows something that we do not. As Mr Jones pointed out in his speech many other orchestras around the country are performing well and to a very fine and high standard. The Auckland Philharmonia Orchestra and Wellington Symphonia come to mind. The Wellington Symphonia is so well regarded that it frequently plays for the New Zealand Ballet when it comes to town. 
In times of doubt it is often instructive to examine a company’s annual report and I have here the New Zealand Symphony Orchestra’s annual report for the year ended June 2002. The chief executive states in his overview: 
“In most months of the 2001-02 year we recorded better than budget income and lower than forecast expenditure. This reflects sound management underpinned by sure-footed artistic decisions that have resulted in significant increases in audience numbers through the country.” We wonder then why change is actually necessary if this is to be believed. 
However the chairman’s preface was not quite so rosy and if we turn back a page and read what Sir Selwyn Cushing has said we will find it very informative. He said: “The outlook for sponsorship has remained far from encouraging. The difficulties for arts organisations in attracting and retaining significant corporate support are even more obvious now than they were 12 months ago. The economic downturn exacerbated by the effects of September 11 has promoted many businesses to retrench in this area. It is with particular chagrin that we accepted the decision of both Telecom and Air New Zealand not to continue their longstanding and greatly valued support for the orchestra.” Why was it possible for the New Zealand Symphony Orchestra to achieve adequate sponsorship under the previous Government but not this Government? 
Patrons will recall the BP summer pops concerts that played in packed venues around the country. Did they stop because the music was not of an international standard? The reason I contend was much more to do with corporates being subject to higher taxes and therefore not being in a position to support such ventures. 
If we look at the principal objectives of the orchestra and its functions we find that they too are quite instructive. Clause 8 “Principal objectives of Orchestra” states: “The principal objectives of the orchestra are—(a) to provide the public of New Zealand with live and recorded performances of symphonic music performed to an international standard:”. What will happen to the violinist whose vibrato is not vibratory enough or the pianist who accidentally confuses his upper and lower mordents? Will the individual musicians be held responsible for not upholding the international standard to which they are required to play? If so how will they be punished? What of the conductor who fails to execute adequately the rallentando or the ritenuto markings on his musical score? Presumably he will be expected to pass on his baton. 
We read further down in the objectives and see that paragraph (d) states that the objective is: “to encourage New Zealand musical composition:”. Again if we go back to the annual report we read on page 7 that our commitment to New Zealand music is reflected in the inclusion of works by our own composers in our main subscription concerts. It is already happening. Why do we need a change? The orchestra thought it had already achieved this objective. 
Another objective is to provide an orchestra that is highly skilled and artistically imaginative. I think the Prime Minister has discovered new resources in central planning undreamt of heretofore. Let us explore artistic imagination for a moment. Artistic imagination is not something one can legislate for. We in ACT believe that artistic imagination is a gift a talent—something a person is born with and that can be developed with hard work. However if the bill is passed the Labour Government must be expecting a springing up of musical talent among the general populace. Imagine the boom— 
Dail Jones 
: The unemployed ones. 
HEATHER ROY 
: Absolutely—good work for them! Imagine the boom in the arts if the Royal New Zealand Ballet were also subject to legislation for artistic imagination. 
This bill stresses that in all artistic matters the orchestra will be at arm’s length from ministerial direction. Again I suggest that that is code for something else—perhaps for “close enough to be told how to operate”. 
One of the functions of the orchestra is to carry out any other functions consistent with its principal objectives as agreed to by the Minister after consultation with the orchestra. However clause 9 spells out the Prime Minister’s intent. It states that a function is to carry out any other functions. Will we perhaps be seeing a guest appearance one wonders. 
Given the central control the legislating for artistic imagination and the attitude pervading this bill that artistic talent is safest in the hands of this authoritarian Government ACT New Zealand cannot support this bill. We want to see the New Zealand Symphony Orchestra there and we want to see it do well. We want to see it compete on the world stage. We want to encourage creativity and the orchestra’s popularity within New Zealand but this bill will not achieve that. To legislate for artistic imagination is an intellectual conceit that for sheer gall takes the breath away. We have an international crisis domestically things are not looking rosy but today the country can rest assured that the band plays on. 
DIANNE YATES (NZ Labour—Hamilton East) 
: 
 All I can say is what a miserable and negative Opposition we have! This bill is to change the New Zealand Symphony Orchestra into a non-company Crown entity. It is to put the New Zealand Symphony Orchestra on a positive financial footing. I find that the speeches made by the Opposition are entirely negative totally uncreative and totally unartistic. This is one bill that the Opposition could get behind and show a bit of spirit and patriotism towards New Zealand and New Zealand artistic endeavours. 
I also take this opportunity at this stage to both note and to pay tribute to Ted Carr who I understand died last week and thank him for his contribution to New Zealand music. As the chair of the Government Administration Committee I say that we look forward to having this bill come to our committee to return it back to the House to get it passed and to put the New Zealand Symphony Orchestra on a firm and stable footing to serve members of both the adult community who attend the concerts and also members of the young community who benefit from their educational performance and instruction. 
MIKE WARD (Green) 
: 
 I rise to support this bill on behalf of the Green Party. I would like to compliment the Government on its support of the arts. It has been brilliant and the arts are doing very well as a result of it. The bill does not provide an excuse for sloppy management nor does it suggest that management should be less than businesslike or that it should not grasp all reasonable opportunities to increase public patronage. The legislation does remind the orchestra that despite almost two decades of market-led decision the orchestra’s prime job is to make music. All New Zealanders can take considerable pride in the New Zealand Symphony Orchestra. Over many years it has established itself as one of the world’s great orchestras. The New Zealand Symphony Orchestra has been an important component in ridding this most talented country of the cultural cringe that for far too long saw us apologising for the quality of our artistic endeavours on the assumption that the important products were superior. 
So if the orchestra has achieved so much under the existing law why do we need a new law? I suspect that the existing law is a bit of nonsense anyway and getting rid of bad law makes good sense. What did the current law expect of the New Zealand Symphony Orchestra? It expected that it should act in a commercially responsible manner. That is not an unreasonable expectation. Clause 10 still expects the orchestra to operate in a financially responsible manner and to maintain financial viability. But its principle objectives are—and I will not read them again because they have been read several times—basically to provide the public of New Zealand with live and recorded performances of symphonic music and to be a leading New Zealand performing arts organisation with a role in the development of a distinctly New Zealand cultural environment. 
Why do we have to spell it out? I suspect in spite of 15 years under the old Act the orchestra never stopped acknowledging those responsibilities; it has continued to bring great music to New Zealanders and the world. While Lilburn may not be the top of the pops for most New Zealanders our orchestra has ensured that his music can be purchased and listened to throughout the world. It is the music of Lilburn the New Zealand Symphony Orchestra the work of Kiri Te Kanawa the Colin McCahons the Peter Jacksons and the Boyd Webbs the Kapahakas and Neil Dawsons that has let the rest of the world know that in addition to being producers of fine wool great food talented athletes and sailors ours is a remarkably cultured little country. 
While for many New Zealanders their taste in entertainment and enlightenment might lie elsewhere we all benefit from being considered as a consequence of the activities of our artists. Our products have an added spice when it is known that they come from a country that has more than beautiful scenery and great rugby players. New Zealand is a more eagerly sought destination because of its rich culture. 
The bill establishes the orchestra’s independence on artistic matters. This is important. It was this independence that was potentially threatened by the expectation that it would operate in a commercially responsible manner. There is always the chance that a more conservative Government may expect it to turn a profit. I like to think that under this bill the orchestra will not succumb to the temptation to neglect its responsibilities to New Zealand composers and the cutting edge in pursuit of the popular and the more accessible that market forces might decree. 
To those who begrudge the modest sums of money spent on our arts and label them elitist I would remind them that never before have the efforts of our orchestra and artists been so accessible. Performances in parks playing fields and stadia have seen vast crowds turning out and thanks to the leadership of the New Zealand Symphony Orchestra many more young New Zealanders are aspiring to be musicians and can look forward to careers as professional musicians here and overseas. I refer to Dail Jones’ comment: “What about the other orchestras—the orchestras in Auckland Christchurch Nelson or Wellington?”. 
Heather Roy 
: Nelson is very good. 
MIKE WARD 
: Indeed they are very good and because of the New Zealand Symphony Orchestra these smaller orchestras provide a stepping stone for something greater and for a professional engagement as professional musicians. 
We spend much too much of our time producing more and working harder. The Green Party believes that what we most need to do is to make life better and to enrich the ordinary moments of our lives as well as the special occasions. The arts have the capacity to make our homes our workplaces our schools and our towns and cities as well as the important events and occasions richer and more fun and uniquely us. This bill goes some way to ensuring that our orchestra will continue to contribute to that richness and uniqueness. I am aware that the orchestra the creative communities the creative audiences and the artistic audiences in this country will have something to contribute to this bill. The Greens are happy to see it progress to the select committee process. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: 
 I ask the question: what is it in the genetic makeup of the Greens and the Labour Party that just causes them to want more and more State control? The National Party absolutely wants to see the New Zealand Symphony Orchestra flourish. We also want to see far greater freedom of artistic direction of the New Zealand Symphony Orchestra. We also want to pay tribute to the musicians and the incredible depth of talent discipline and creativity that surrounds the New Zealand Symphony Orchestra under its present legislation. The National Party does not support Helen Clark’s absolutely unnecessary New Zealand Symphony Orchestra Bill. 
One thing that Helen Clark cannot help herself on is just putting a little bit more State control into everything that she can get her tentacles on. This is a perfect demonstration of it. I for one celebrate the increased funding of the arts in New Zealand and I do not underestimate the huge contribution the arts make to our cultural spiritual and for that matter economic life. Here is a bill that has been brought in under urgency the stated purpose of which is to change the status of the New Zealand Symphony Orchestra from a limited-liability company to a non-company Crown entity. One might ask what on earth that is. I certainly do know that it inherently does mean more State control and given the success to date of the New Zealand Symphony Orchestra I wonder why that is needed. 
I learn that the Government’s desire is to move to a non-company Crown entity to enforce better lines of accountability. It sounds great on paper but in actual fact it just means more blank cheques of money. It means probably that that is at the expense of other artistic organisations and orchestras around New Zealand. Undoubtedly important tensions—and Clayton Cosgrove sitting across on the Government benches surely must agree—are created by a limited liability company which bring a reality check to those directly involved in the organisation. I understand that there is absolutely no other country in the world where the Government enshrines one particular orchestra over all other orchestral organisations. 
It is interesting to have a look at the general policy statement at the beginning of the bill because it states: “The New Zealand Symphony Orchestra Act 1988 does not prescribe the Orchestra’s purpose and functions nor government’s expectations of it. As a limited liability company the Orchestra operates within the requirements of the Companies Act 1993. Consequently it is expected to carry out functions that are commercial in nature.” Well what is wrong with that? Some of the world’s greatest orchestras which have been heralded as demonstrating the highest artistic performances the greatest professionalism and quintessential creativity have organisations that owe their existence to obeying commercial disciplines. 
These are not State-controlled orchestras enshrined by a non-company Crown entity. I can think of the London Symphony Orchestra—independent since 1904—the London Philharmonic Orchestra the Cleveland Orchestra the Berlin Symphony Orchestra and not to mention the Chicago Symphony Orchestra. Here in New Zealand we have the Auckland Philharmonia Orchestra operating extremely successfully with no legislation and at about a quarter of the cost of the New Zealand Symphony Orchestra. 
Some of the world’s finest orchestras are certainly in the United States of America and this is the prescription that encapsulates them: “… an organisational structure that canonises the musical director a volunteer support system that creates serious tension between the art of music-making and the business of orchestral management in a reliance on community sponsorship that juxtaposes popular taste with the moral virtues of serious art.” 
There are some utterly confused diametrically opposed control-freak “Helen-speak” characteristics to this bill. Its general policy statement opines that: “The New Zealand Symphony Orchestra Act 1988 does not prescribe the Orchestra’s purpose and functions nor government’s expectations of it.” The new bill however does prescribe quite specifically five objectives and seven functions. That is followed by a brilliant cadenza of State-controlled prestidigitation because in the general policy statement it states: “… in all artistic matters the Orchestra will be empowered to operate independently and without ministerial direction.” I would ask anyone how it is possible—with five new specific objectives and seven new specific functions one of which is “to carry out any further functions consistent with its principal objectives as agreed to by the Minister after consultation with the Orchestra:”—to be free “in all artistic matters” when there are five prescribed objectives and seven prescribed functions? 
Helen Clark’s New Zealand Symphony Orchestra Bill is sophistry. It does not allow greater artistic freedom; it brings in unnecessary measures of State control and underpinning and it is a waste of money. 
The annual report of the New Zealand Symphony Orchestra contains a clear statement of objectives. Those objectives do not need special legislation. Under the 1988 Act the orchestra can be much more responsive fluid and creative in its objectives than it can in having them enshrined in Helen Clark’s legislation. 
A bill such as this as my colleague Katherine Rich mentioned probably costs from half a million to a million dollars to go through the parliamentary process. That money could undoubtedly be far better used on art and performance. That money could certainly make a huge difference to the Auckland Philharmonia Orchestra which has no Government backing. That orchestra makes a superb artistic contribution serving the largest population in New Zealand at about a quarter of the cost of the New Zealand Symphony Orchestra—while having no legislation let alone becoming a non-company Crown entity. 
Today undoubtedly the New Zealand Symphony Orchestra is highly regarded and revered throughout New Zealand. As far as I know its existence and sustainability are supported by all political parties and it travels throughout New Zealand. It prides itself on high-level artistic achievements it inspires and educates hundreds of thousands of ordinary New Zealanders it provides a priceless pool of talent to teach and help the budding musicians of the nation and it supports ballet and opera. Mr Clayton Cosgrove might not know about that. However the New Zealand Symphony Orchestra does not need to be shackled by a bill that if anything will only constrain it to a prescription of objectives and functions ordered by a highly control-conscious megalomaniac leader of a minority Government. I end by saying that about 20 years ago I went to a concert in Auckland by the Shanghai State Orchestra. The first half of that concert was awful! 
A party vote was called for on the question  
That the New Zealand Symphony Orchestra Bill be now read a first time. 
Ayes 84 
Labour 52; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Bill read a first time and referred to the Government Administration Committee. 
Statutes Amendment Bill (No 3) 
First Reading 
Hon DAMIEN O'CONNOR (Minister of State) 
: 
 I move  
That the Statutes Amendment Bill (No 3) be now read a first time. 
 It is intended that the bill be referred to the Government Administration Committee. The bill amends 39 Acts administered by 11 different departments and is a yearly vehicle for making technical non-controversial amendments to a number of Acts. It is important tidying-up legislation that allows for amendments to be made that would not usually receive sufficient priority to be progressed. That is achieved with the support of all parties in Parliament. This year’s bill includes amendments to legislation governing a wide range of areas such as coroner’s coinage and even courts-martial. 
Two of the more interesting amendments include those to the Ngati Turangitukua Claims Settlement Act and the Tokelau Act. Very briefly the amendments to the Ngati Turangitukua Claims Settlement Act seek to remove the marginal strip from a piece of land gifted back to Ngati Turangitukua as a part of the deed of settlement and replace it with a statutory public pedestrian right of way. The amendment to the Tokelau Act arises as a result of similarly unusual circumstances—the making and issuing of commemorative coins as a significant economic opportunity for Tokelau. But in moving to recognise and implement that as a result of an oversight two coins have been made and issued prior to authorisation being granted. The amendment will have retrospective effect to validate the making and issuing of those coins. 
I conclude by reiterating that although the amendments proposed in this bill may be technical and non-controversial they are also important responses to international and domestic developments. This year’s bill like others before it illustrates the value of the Statutes Amendment Bill as a vehicle to advance those types of amendments. I commend this bill to the House. 
RICHARD WORTH (NZ National—Epsom) 
: 
 National supports unsurprisingly the Statutes Amendment Bill (No 3) and as the previous speaker has said it is in 39 parts. What he described as the interesting parts of the bill however are perhaps not the most interesting parts. There are good reasons in my view for taking the position that there should be strict constraints on omnibus-type bills such as this. The Standing Orders give expression to that view by starkly limiting the circumstances in which omnibus bills may be introduced. Basically there are five classes of case: finance bills or confirmation bills; local legislation bills; Maori purpose bills; reserves and other lands disposal bills and Statute Amendment bills. This is Statutes Amendment Bill (No 3). I suppose one of the most striking things about this bill is that it just shows the incredible range of Government activity from the Armed Forces Discipline Act to the Legal Services Act. 
In the short time I have available I just wanted to pick out some aspects of interest touching changes that are being made by this bill. But as I say it shows the incredible range of Government activity and—I suppose as a counterpoint—it raises the question as to whether the Government should be involved in that range of activity. It also shows the need for care in parliamentary drafting and the significant number of occasions when oversights in the drafting process occur. Finally it shows the undesirability in some cases of placing in primary legislation issues that should more appropriately be found in secondary or tertiary legislation. 
The first illustration I would like to refer to is evidence of that last proposition. In the Administration Act we have provisions that prescribe the rate of interest payable in certain cases on a legacy or on arrears of an annuity and in the primary legislation a rate of 11 percent is fixed. That follows practice that was in legislation like the Judicature Act which fixed interest rates on money judgments at specific levels and shows the undesirability in fluctuating economic conditions of fixing interest rates in that way. The rate of interest in the Administration Act has now been reduced to 7.5 percent per annum but there is also an important provision for a different rate to be fixed by the Governor-General by Order in Council. 
The second bill I want to refer to amends the Legal Services Act. It is an illustration of the proposition that in drafting legislation care must be taken and care is sometimes not taken. A raft of changes are being made to the Legal Services Act but suffice it for me to comment on just two of them. The first deals with section 10 of the principal Act and the uncertainty as to whether legal aid can be granted in respect of all the immigration processes that confront aggrieved migrants. That process starts with the involvement of the refugee status branch leads on from there to the Refugee Status Appeals Authority leads on from there to issues of deportation review leads on from there to the possibility of action in the High Court and then finally leads to the discretions vested in the Minister. In reading the current legislation it is quite clear the rights of migrants seeking legal aid have not been well-thought-out and this particular bill seeks to deal with that. Significant criticisms can be levelled at the Legal Services Act; but it is beyond the scope of the comments I seek to make to do that. But I would say that where this Government has had an opportunity for innovation in the delivery of legal aid services it has lamentably failed to take advantage of that opportunity. 
I would like then if I may to turn to an illustration of old legislation that should have been taken off the statute book years and years ago. 
Hon Chris Carter 
: What is that? 
RICHARD WORTH 
: I am grateful for the close attention Mr Carter is paying to my comments. The legislation I have in mind is the War Funds Act of 1915. 
Hon Mark Burton 
: It has come in handy in recent times. 
RICHARD WORTH 
: The Minister says it has come in handy in recent times. It is quite true that there was some tampering with that legislation in the 1980s. If that is “recent times” in the Minister’s mind so be it. But in 1980 there were some minor changes made with the updating of references to the High Court and the District Court. What is more significant about that legislation is that it was passed for a very specific purpose. The War Funds Act made provision for the administration and control of moneys raised wholly or in part by private subscription for the purposes of what was described in the title as the “present war”. That of course was the Great War of 1914-18 reflected in this debating chamber by the wooden wreaths of honour commemorating such events as Egypt Gallipoli and Messines. 
What I would like to focus on just for a moment are the purposes of the Act and the definition of “war funds”. The Government of the day was concerned to raise substantial amounts of money for the relief of distress occasioned by the war; for the equipment of the military forces; for what was called the supply of comforts or conveniences; for the acquisition of sports grounds and the like. There is a provision in the War Funds Act for an annual audit of accounts and since that legislation was enacted in 1915 one wonders whether the auditor has been diligent in carrying out—as he was required to do year by year—the necessary audit function. 
Finally I would like to refer to the Tokelau Act. Part 36 deals with that specific statute. The purpose of the bill is to amend the principal Act by inserting a new section that validates the making and issuing of two coins. What are the lessons that we can learn from legislation such as that? I would say that they are these: first the wide scope of governmental activity which raises the issue whether the Government should be involved in the full raft of activity that it is; second the errors made in the drafting process by parliamentary counsel which for a number of years are not noted; finally the fact that we have on the stocks—and the War Funds Act is a really good illustration of that—much legislation that should not be there and should be promptly repealed. 
BERNIE OGILVY (United Future) 
: 
 I stand to recommend this bill to the select committee. This omnibus bill covers many requirements for updates and changes and for just making things tidy. I recommend that this bill go forward with approval from United Future. 
STEPHEN FRANKS (ACT NZ) 
: 
 On behalf of the ACT party I also commend this bill to the select committee. The use of an omnibus bill like this to collect up minor and non-controversial amendments is a handy way of getting rid of anomalies and fixing drafting defects—as Mr Worth from the National Party has just said. It is way also of encouraging people to take an active interest in the quality of the law and to feel that things can be improved without having to wait for a specific bill on a particular matter. 
I think that the concerns some have about omnibus bills have been proved over time not to be justified. There are attempts from time to time to put into them things that should not be put in. In this particular bill I am very pleased to see that there are several things that it does not have. In Part 14 which deals with the Flags Emblems and Names Protection Act there is an amendment that does not have the provisions that the Government tried to push through in December relating to the silver fern and the All Black emblem. I had of course looked very quickly to see whether there was anything there and it is an assurance of the integrity of the statutes amendment process that because ACT raised an objection the Government is not now trying to deal with the matter by way of a statutes amendment bill. In other words the statutes amendment process relies on acquiescence or agreement by all members for it to proceed which is why it is a handy process. 
I am a bit surprised that the bill does not include some of the business law amendments that business has been waiting for for so long. I am not sure whether there is a reason for that—perhaps the Minister in charge of the bill will be able to explain when it gets to the select committee. I know that there is a business law omnibus bill that has stalled. I think it is a shame that the same rules that have proved so useful with this Statutes Amendment Bill should not apply there but I wonder why the things that have stalled were not then brought into the Statutes Amendment Bill (No 3). Maybe there is a different criterion and I should catch up with that. 
The amendment to the Bail Act draws attention to the fact that a bill passed just 2 years ago to deal with something as fundamental to the administration of justice as bail has now had to be amended. It draws attention also to the relatively narrow set of amendments here. The Hon Phil Goff had started the bail reform process as a member in Opposition. He put a reasonable amount of energy into making sure that it proceeded and the Bail Act was passed in 2000. That contrasts very unflatteringly with the lack of progress in other equal—or more important—areas of the administration of justice. There was a lot of data on breaches of bail and on the offences that were being committed on bail. The Bail Act was calibrated to deliver about the number of remand prisoners that the Minister felt he could get the resources to cope with. What this amendment is now proposing probably does not change that but it enables a variation of bail conditions to be made without necessarily getting the consent of sureties. I hope that the select committee look very closely at that because I have a concern that the obligations of sureties are not actually taken as seriously as they should be. I am concerned that we are not using sureties in the way that they are used for example in some states of the United States where bail bondsmen do most of the work that has to be done by the police here to make sure that people turn up for their trials. 
As I understand it the bail bondsmen system in most states that use it is far more efficient and effective in ensuring that people turn up than using the police. The police naturally can see that as a low-priority function especially if they think that the court is just going to slap the offender with a non-custodial sentence or in some other way frustrate them so that they end up seeing the offender simply rotating again through the justice system because the penalty is not effective. I am sorry that this bill deals with sureties in a way that goes in the wrong direction. I am satisfied that it is suitable for this amendment to be in the Statutes Amendment Bill (No 3) and that it goes to the select committee for consideration but I believe that this bill would have done a better service if as far as section 57 of the Bail Act—which deals with the conditions of bail and requires the consent of a surety to a change in the conditions—is concerned the Government had instead put that amount of attention or more into giving bail bondsmen a better role. 
It could also have looked at clause 9 which amends section 59 and allows the police to treat drug defendants who are picked up while on bail and deal with them without a warrant in the same way that most others can be dealt with without a warrant. It raises the question as to why parole offenders are not treated similarly and why there is much more rigmarole for recommitting people who breach parole. I am sure that the select committee will not be able to get into that but it is a great shame that this whole area is dealt with under the Bail Act which is reasonably firm. The initiative for it came from by Mr Goff before he became the Minister of Justice and now that he has been the Minister of Justice for nearly 4 years the Parole Act and the Bail Act are out of step. The bail system is simpler and more rigorous than the parole system. 
There is a matter of some curiosity to which there is probably a simple answer but Part 9 which amends the Coroners Act seems to give the Privacy Act more weight than it has had in the past. If a request about a coroner’s data is made by the individual to whom the information relates then it must be dealt with in terms of the Privacy Act. That obviously cannot be intended to apply very often because plainly for the coroner to have reported much or all of the information will presumably relate to the person who is dead and that person will not be asking for the information in terms of the Privacy Act. Presumably there is a ready answer and the select committee will get to explain why that provision is significant. 
In Part 12 which amends the Domestic Violence Act there is a proposed amendment to allow regulations that would facilitate the screening of programme providers. Again I am sorry that that amendment is so limited. I have had correspondence with a number of people around the country over the last several years that suggests to put it at its most polite that the providers of restorative justice programmes around the country are variable to say the least. I have had uncontradicted information from one court that a programme provided in its area had given incorrect statements to the court and on being challenged on those statements the judge was given a false reassurance. On writing to the Minister about it there seemed to be nothing—and no one was accepting responsibility—for vetting programme providers for restorative justice purposes. The particular case I mention involved a trust that said it would offer a work programme under the supervision of a particular person. The court was prepared to make a sentencing decision that reflected the availability of that trust. 
What actually happened was that the person they had nominated was dead and had been dead for a year. It seems that the programme provider might simply have been running the photocopier or the word processor and not really paying attention to the obligations he or she was accepting from the Court. So it seems to me that Part 12 should apply not just to programme providers for domestic violence programmes but also to programme providers for any of the justice processes where there is a need to vet deregister or disqualify some of the providers. 
I see the Speaker moving as if to tell me my time is up so I will not start on the Injury Prevention Rehabilitation and Compensation Act. 
DAIL JONES (NZ First) 
: 
 I was slightly provoked into taking this call. I have enjoyed the process of this legislation for New Zealand First. The member who preceded me though started to talk about the business law reform bill and that provoked me. There are five short sections in that bill that I have suggested to the Minister of Commerce should have been inserted in this legislation. Perhaps they will come in as a Supplementary Order Paper. The other eight items were very lengthy some of them going to two and three pages and would clearly not be suitable for this legislation. From a New Zealand First point of view they should be matters of separate legislation because even the New Zealand Law Society in the information that has been made available to me—for which I am grateful—indicated there were errors of drafting and errors of understanding of the legislation. I just make that point in a brief reply and trying not to be too controversial about it. 
Bill read a first time and referred to the Government Administration Committee. referred to the Government Administration Committee 
Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill 
First Reading 
Hon JUDITH TIZARD (Associate Minister of Commerce) 
: 
 I move  
That the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill be now read a first time. 
 I give notice that I intend that this bill should be sent to the Commerce Committee. 
This bill will introduce a ban on the parallel importation of films and make changes to the onus of proof in civil proceedings concerning the importation of specified copyright works particularly films sound recordings and computer programs. This bill amends the Copyright Act 1994 and gives effect to the Government’s commitment signalled in the Speech from the Throne in 1999 to support strongly our creative industries particularly music publishing and film. 
The Labour-Progressive Government has a special interest in the promotion of arts and culture and we believe that New Zealand as a small country in a globalising world has to work hard to maintain and develop our own cultural identity. We also believe that our creative industries have much to contribute to our economy to job growth and to the promotion of our country. Worldwide the cultural and heritage sectors are amongst the key growth areas for the 21st century. Creativity is at the heart of innovation and creative industries have input into many other sectors. This is why we have made creative industries a target sector of our growth and innovation framework along with biotechnology and information and communications technology. Within the creative industries screen production design and music are key sectors with the potential to generate a great deal of further growth. 
Our commitment to nurture our creative industries has been realised through the cultural recovery package of May 2000 and many other measures. This is one of them. We established the Film Production Fund to fund the next level of New Zealand films and the benefits of this investment are already proven with the first Film Production Fund film  
Whale Rider 
 currently sitting at No. 1 at the New Zealand box office and second only in box office sales to another New Zealand film  
Once Were Warriors 
. We established the New Zealand Music Industry Commission and increased funding to New Zealand On Air and many other programmes. Our concern is to have a vibrant active creative industry where New Zealanders can tell hear and see their own stories and make a living from jobs doing that. We must have the environment in which New Zealanders can express themselves and pursue satisfying careers in the creative sector. 
This bill follows a very extensive review and consultation process which considered the impact of parallel importing on creative industries. We were very disappointed when the National-led Government in 1997 removed the ban on parallel importing under urgency and with no select committee process and after a New Zealand Institute of Economic Research report had stated there would be no effect on creative industries. The institute was wrong. As part of this Labour-led Government’s creative industries strategy we undertook an extensive review of the impact of parallel importing on creative industries. The objective of the review was to determine whether parallel importing was having an adverse effect on investment in New Zealand film music book-publishing and software industries. We carried out two rounds of consultation with those sectors. Some industry representatives made it clear that they did not like parallel importing and that their businesses were often marginal in New Zealand terms and in international terms. However we found no clear evidence that parallel importing was the central issue affecting investment in all creative industries. The consultation also made it clear that there were some benefits to consumers in the form of lower prices and greater availability. 
Our consultation did however show up specific problems in relation to film. It appears that parallel importing might be harming the orderly and cost-effective distribution of motion picture films. Not only do the people who put a huge investment of time and money into films need to be able to manage the release of those films for the best return but they are entitled to do so because it is their property. Parallel importing meant that copies of major film titles were becoming available for rental in advance of the films’ theatrical release. Cinema owners were also concerned that this was contributing to a decline in cinema audiences. This in turn could threaten the availability of movie theatres particularly in small and rural communities. The Government believes that it is important that these communities continue to enjoy access to film facilities. 
We therefore agreed to introduce a ban on parallel importing of films for a period of up to 9 months from the titles’ first release. The 9-month ban will provide the necessary window of opportunity for theatrical release in New Zealand before copies become available for rental. The ban is specifically targeted at films made primarily to be shown in public. This is consistent with the Government’s policy objective of ensuring that the widespread cinematic release of films is able to continue. The ban will apply regardless of the format of such films including videos and DVDs. The ban is intended to prevent the parallel importation of films for commercial purposes—that is importation for the purposes of showing to the public or sale or rental. It does not prohibit importation for a person’s private or domestic use. Private individuals who wish to import a copy of a film for their own use ahead of the New Zealand theatrical release will still be able to do so provided of course that they get it from a legal source overseas. 
The bill provides for the ban provision to remain in place for a period of 5 years. This will enable the effects of the ban to be assessed in a changing environment. The Government has also announced that it intends to keep the effects of parallel importing on creative industries under review in the near future. This will enable us to determine whether our policies are working as intended or whether they need to be expanded or changed. 
I also wish to describe the provisions of the bill that deal with the onus of proof. The theft of intellectual property is a matter of increasing international concern. The Government has on many occasions stressed the importance of measures to combat the theft of intellectual property. We have already introduced a number of measures to deal more effectively with this issue; for example in the Trade Marks Act 2002 new offences and increased penalties were introduced to deter the counterfeiting of trademarks and the pirating of copyright works. The bill I am introducing today contains further measures to constrain copyright infringement. It is targeted at those works that are most vulnerable to piracy—namely films computer programs and sound recordings. Digital technology is making it easier to produce perfect copies of these works very cheaply simply and in large quantities. 
The measures in the bill are intended to make it easier for copyright owners to uphold their rights through civil proceedings. The Copyright Act currently requires copyright owners taking civil proceedings for infringement to prove that the goods in question were pirated and to prove that the defendant knew or had reason to believe that the goods were pirated. Our consultations indicated that copyright owners felt it was difficult to establish this level of proof. They indicated that it can be expensive and time consuming to do so and as a result there is a risk that civil enforcement action will not be taken. 
The bill therefore shifts some of the burden of proof to the defendant. It establishes a presumption that specified imported copyright works are infringing copies and the defendant will be required to rebut that presumption. It is not usual practice to require a defendant to be a part of the onus of proof—it usually falls on the plaintiff. We considered that matter very carefully and agreed to the changes to the onus of proof as we believe that importers rather than the rights holders are more likely to have access to information about the goods that establishes whether they are pirated or legitimate copies. That information generally relates to such things as the origin of the goods and the lines of supply. Because importers are more likely to have this information as a matter of good business practice we believe that the bill will not impose undue additional costs on defendants nor require onerous changes to current parallel-importing practices. 
We have considered other risks—for example the risk that copyright owners might take legal action against legitimate parallel importers in order to identify then cut off lines of supply. The bill aims to prevent that type of harassing action. It provides that the court must not require any person to disclose any information concerning sources of supply if it appears to the court that it would be unreasonable to do so. That provision will protect commercial confidentiality of information required to prove a defendant’s goods are not infringing copies. This amendment provides for an objective knowledge test which aims to help address the problem of piracy. 
I will now turn briefly to the issue of rental rights. Under section 9 of the Copyright Act of 1994 the copyright owner has the right to issue to the public copies of sound recordings and films. That includes the rental of copies of those works in public. A recent court case  
Video Ezy New Zealand Ltd 
 v  
Roadshow Entertainment 
 confirmed the question of public rental rights for both films and sound recordings. This amendment confirms that. It also deals with trademarks. 
I look forward to this bill going to the Commerce Committee. I hope the committee will consider it carefully listen to the public and proceed quickly with it. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 The National Party in Opposition strongly opposes this bill. That is because this Minister and this Government know that this bill will do absolutely nothing to fulfil the promise that the Prime Minister made to the people of New Zealand in her Speech from the Throne in 1999. This Minister and this Cabinet know that this bill is anti-business anti-competition and anti-choice. The National Party in Opposition says very clearly that we think consumers should have maximum choice. We are not going to be party to denying consumers the choice they would expect. 
I want to take the House back to the genesis of this bill. In the Speech from the Throne in 1999 only days after the Government had dished out tens of millions of dollars to the arts sector— 
Stephen Franks 
: $80 million. 
Hon TONY RYALL 
: —$89 million of taxpayers’ money—the Prime Minister stood in this House and made a promise to the arts community. Let us hear what the Prime Minister promised she would deliver the arts community. She said that she would prohibit for 2 years the parallel importing of CDs videos films books and software. Well let us look at this bill. Is the Prime Minister’s promise of a 2-year import ban on software in this bill? No. Is the Prime Minister’s 2-year ban on the importing of books in this bill? No. Is the Government’s 2-year ban on the importing of films in this bill? No. Is the Government’s 2-year ban on the parallel importing of CDs in this bill? No. Is the Government’s promise of a 2-year ban on the importing of videos in this bill? No. The only thing this Government wants to ban is DVDs. It wants to limit the choice of New Zealanders to have DVDs until 9 months after their release overseas. 
What we know is that this Government has been told time and time again in official documents that we have managed to prise out of the Government on this matter that the parallel-importing bans will not work and they will not achieve any of the Government’s goals. The Prime Minister stood up and said that banning parallel importing would expand job opportunities and wealth creation based upon the arts. That is what she said yet at the time her own Deputy Prime Minister’s department concluded that the parallel-importing bans would not achieve the Government’s goals and although they might increase the profits of local operators would have a negative effect on retailers and consumers arising from increased prices and reduced access to titles. That is what the department of the Deputy Prime Minister at the time told this Government. 
One of the reasons that the National Party is opposed to the bill is it just does not work. The evidence from Australia is absolutely clear that parallel-importing bans do not assist in the development of the arts industry. It has been estimated that as a result of the parallel-importing ban consumers in Australia pay A$6 more than American consumers for musical recordings. That means that A$1.15 billion more has had to be paid for those CDs than would have been the case if the ban had not been in place. It is clear that there has still been a significant lift in investment in Australian musical culture. One needs only to look at the New Zealand pop music charts to see that there is very strong representation of Australian performers and the CD ban there simply has not worked. 
What is more these Ministers were told by their Government’s own adviser—by the Deputy Prime Minister’s adviser—that there was a very real risk that no extra jobs would be created that the ban would not meet the Government’s goals and that it would just put up the prices for consumers. We have pages and pages of official information where the Government tried to meet the Prime Minister’s promise to the House but it just could not do it. The Government was in such a lather that at one stage we had the previous Minister of Commerce Mr Swain proposing that there would be a parallel-importing ban on all books excepting those for libraries and textbooks for universities and polytechs. So there was going to be a little group of exceptions there but everybody else would have to pay more for their books and their videos. 
What has the Government come up with now? In this bill it is proposing that there be a ban on the importation of DVDs and videos for 9 months after the titles’ first international release. The Government is so committed to the ban that it has a sunset clause. The Government thinks it is such good public policy that it is proposing that it will eventually be phased out in 5 years’ time. Well if it is such good public policy why will it be phased out? There is an internal contradiction there. 
Apparently the Government is proposing to have a ban to protect provincial cinemas from being put out of business as a result of people getting DVDs of the latest films. That is the logic of it. The Government will keep the picture theatre at Whakatane going because it will not let DVDs come in. I tell members that DVDs have been coming in for at least 4 or 5 years and the Whakatane Gisborne Tauranga and Rotorua picture theatres are still showing the films that are being shown in Auckland about a week after they are released in Auckland. There is absolutely no evidence that cinemas in the provinces are being put out of business by the fact that DVDs are coming into the country at the same time that the films are being released internationally. In fact the evidence is quite the contrary. Open up the back pages of the provincial newspapers and members will see the exact same movies being shown in the provincial areas that they can see in the main metropolitan centres. 
This is about protectionism for a very small group of cinema companies and it has absolutely nothing to do with consumers having a choice about where they watch films. This is a slippery slide that the Government has got itself on. Parallel importing has lowered the cost of software books videos DVDs and films in a way that New Zealand consumers want. This is another anti-business move by this Government that will do nothing to increase choice for consumers. All it will do is deny choice to consumers. It will deny the opportunity for New Zealanders to import or buy a DVD that they could whip across to some other country and bring into the country anyway. It will be like the days when people could not buy a cheap transistor radio in New Zealand but could go to Singapore and bring three of them back. That is the sort of protectionist anti-business nonsense being proposed in this bill. 
The Government knows—its own advisers have told its members—that this bill will not work. The Prime Minister was foolish to make her promise in the Speech from the Throne in 1999 to have a parallel-importing ban for 2 years on all these sorts of imports when in fact she has failed to deliver a 2-year ban on any of them—and I say “Thank goodness!”. New Zealanders should have the choice. This bill is opposed by the vast majority of business interests in New Zealand. It is opposed by the vast majority of consumers and when consumers have to pay more— 
Georgina Beyer 
: Where’s the evidence? 
Hon TONY RYALL 
: Read the official documents that we had to prise out of the Government. Read the official documents it did not want to release. We had to go trawling for these. Read the official documents from the Ministry of Economic Development and its consultation from Treasury and from the business community and the Government will know that its ban will not work. It is anti-business and anti-competitive. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future to support this bill. To a large extent this bill endeavours to ensure that those who have produced films sound recordings and with certain restrictions computer programs are able to receive a fair return on their investment. In many cases such as the film industry we are talking about substantial investment. 
With the removal of the restrictions on parallel importing in 1998 some ambiguity arose with regard to the application of rental rights. This led to the High Court case in November 2001 that confirmed that Parliament had never intended that the scope of the rental rights under the Act should not apply to parallel-imported copies of works protected under New Zealand copyright law. This court case confirmed that rental of the parallel-imported DVD copies of two recently released film titles infringed the rental rights of the owner of the copyright in those films. This bill will now amend the principal Act to make clear the intended meaning of this provision as confirmed by the High Court and remove any remaining uncertainty concerning rental rights. 
The purpose of this bill is therefore to introduce a ban on the parallel importation of films which includes DVDs and videos made primarily for public showing in cinemas for 9 months after a title’s first international release. It is important to note that this primarily affects those who import films for resale or hire. It will not affect the ability of individuals to import single copies for private use. 
United Future agrees that where people invest substantial amounts of money as in the film industry then plan a global release of their film they should have protection to enable them to release the film throughout the world in a manner that allows them to receive the due return on their investment. One reason for this ban is to address these concerns as the parallel importing of videos and DVDs could threaten the financial viability of widespread cinema release of films in cases where videos and DVDs of major films are imported from say the United States ahead of their New Zealand release date. United Future believes that this is a valid concern and this bills protects the intellectual property rights of the copyright owners of these films and their rights to market their product as they see fit. It is refreshing to see legislation that recognises that people who invest also have the right to protection of that investment. If we fail to do this investment would stop and the world would be a poorer place for us all. 
United Future as a true centralist party recognises the importance of maintaining a good balance in the legislation for our nation of caring for those who are unable to care for themselves but also of appreciating where we receive the funding from to give the care and that is from the income producers. Profit and protection of profit centres for those who are prepared to take the risk to earn will always be appreciated supported and protected by United Future. 
This bill also amends the Copyright Act to clarify its meaning with regard to the scope of rental rights granted under the Act. The amendment makes it clear that Parliament never intended for the Copyright (Removal of Prohibition on Parallel Importing) Amendment Act to apply to parallel-imported copies of works protected under New Zealand copyright law. 
The ban on the importation of DVDs and videos for 9 months after their cinema release date in New Zealand has a 5-year sunset clause. This will provide an opportunity to assess whether the ban should be continued in the light of developments in the digital distribution of films and cinema projection technology. We all live in a rapidly changing world especially technology-wise so this is a sensible clause. 
Another important feature of this bill is that it shifts the evidentiary onus in respect of whether the goods—that is the films DVDs and computer software—in question are infringing copies from the plaintiff to the defendant in civil proceedings concerning the act of importation. This is to help reduce piracy in these areas. This reversal would ordinarily be considered a breach of the fundamental rule of civil procedure that the onus of proof for an action lies with the plaintiff. In this case however this very limited reversal of the onus of proof complete with consequential safeguards I might add is justifiable because amongst other things legitimate importers will almost always have ready access to information concerning lines of supply that can establish whether goods are infringing copies—for example receipts and proof of purchase certificates. 
Consequential amendments are also made to the Trade Marks Act 2002 to ensure that registered trademarks cannot be used to frustrate legitimate parallel importing in line with the Government’s parallel-importing policy. 
Therefore United Future is pleased to support this legislation going to the select committee. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First will be supporting this bill’s referral to the Commerce Committee. We believe that this is a way of encouraging New Zealanders who may be affected to take an active interest in this matter and to have some input. The bottom line is that we must ensure that all New Zealand audiences continue to have access to a wide range of films videos and DVDs. This is the type of environment that we must have here in New Zealand. We do not want to see that we are facing a loss of entertainment choices. We believe that we should continue to benefit from a wide availability of major film titles. We believe too that the people of New Zealand must have a say in this legislation. New Zealand First will support this bill going to the select committee. 
RUSSELL FAIRBROTHER (NZ Labour—Napier) 
: 
 I am pleased to support this bill. It meets a commitment made by the Labour-led Government in 1999 and it follows a very extensive review and consultation process. The bill is in the hands of my very good friend the Hon Judith Tizard and I commend it to the House. 
MIKE WARD (Green) 
: 
 We are a country of movie-goers. I recall speaking to a friend of mine who started a cinema in Nelson. He said that Nelson was exceeded by only one other city in the world as far as attendance at movies is concerned and that was Singapore. So Nelson is probably reflective of much of New Zealand. We like going to the movies. In fact we are a particularly cultured country in all sorts of ways. We are great consumers and producers of culture and as such we should respect that and take all reasonable steps to protect the cultural property embodied in those cultural experiences. 
Most of the time we have little difficulty recognising that value and accepting that there is a reasonable expectation that copyright and ownership will be protected. Usually copying is less than straightforward for most of the arts and that in itself offers considerable protection from copying and it is a deterrent to copiers. Clearly with films and modern technology reproduction is possible by a range of means that is easily accessible to do-it-yourselfers and even more accessible to the sophisticated and the greedy. With most art forms the initial production—be it music the written word or fine art—is a relatively simple and inexpensive process. They are difficult to copy but easy to do. But movies are extraordinarily expensive to produce and extremely easy to copy. When it comes to movies even the most modest titles are likely to be costed in the millions or at least in the hundreds of thousands of dollars and making money on movies is a fraught business at the best of times. However pirating movies does not just deprive the investors and movie makers of the value of the pirated products. If those pirated products come on to the market before the movies have been released—and not just into the metropolitan cinemas but into the provincial and rural movie houses—then the viability of those provincial and rural operations is undermined and the opportunity for people outside the major cities is threatened. The likelihood of people making money out of their movies is undermined as well. 
Although many New Zealanders will still prefer to see their flicks on the big screen there is a minority who would given the chance hire the video take it home and skip the trip to the movies. They are likely to represent the difference between breaking even and making a loss. Does it matter? Well if it means that some films may not get made it matters. If it means that some New Zealanders are deprived of the cinema experience which is as much a part of the New Zealand culture as Saturday morning netball or meat pies in baches at the beach then it matters. 
Is it reasonable that the onus is on the importer to prove that the imports are legit? I think so. The legislation is thin on detail as to what form the proof should take but I do not imagine that copyright holders will have too much difficulty devising appropriate documentation and authentication procedures. The alternative runs the risk of yet another layer of bureaucracy. We Greens will be supporting the bill because a trip to the movies can be a magic experience and a magic experience cannot be replicated on the box in the corner of the living room. It needs the space the crowds the popcorn and the ice cream. It is an experience that the folk in Motueka and Masterton are as deserving of as the folk in Queen Street and Courtenay Place. It is an experience in an industry that ought not to be threatened by the greedy and the dishonest who would seek to steal and profit from the creative endeavours and experiences of others. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 Like my Labour colleagues before me I too rise to speak in support of this bill. It is a good bill that addresses issues that have needed attention for some time. Indeed the bill does meet a commitment made by the Labour-led Government in 1999 and I am pleased to support its hopefully rapid passage through Parliament. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise on behalf of the ACT party to oppose this bill. It is important that we define what we are talking about because we are not talking about movies and breach of copyright or things that are pirated and imported illegally. We are talking about the banning of parallel imports. The United States hated our open policy on parallel importing and in 1999—[ 
Interruption 
] Yes this Government did offer that up to the United States as a sort of suck-up to it. Well this Government may as well not bother now because the Government has made our relationship with the United States totally irrelevant. Nevertheless the United States wanted a ban reinstated and that is what this Government has come out with. 
There is absolutely no doubt that parallel importing has served New Zealand consumers really well. It has lowered prices for the New Zealand consumer for everything from underwear to cars. When the Government came out with its media release I think in June 2000 Mr Anderton said that he thought the parallel importing ban would make New Zealanders pay more for creative industry goods thus allowing Kiwi artists to charge more for their work. When has it been the Government’s role to make New Zealanders pay more for creative industry goods? That is a typical example of going back down the road of bestowing privilege on certain sectors of the community that effectively lobby Cabinet Ministers and are good at employing public relations consultants and lobbyists to visit Cabinet Ministers’ offices and argue for the protection of their various industries. 
The explanatory note states: “The availability of parallel imported copies of new release films for rental before or during the release of those titles in New Zealand threatens the viability of cinemas and the ability of local distributors … ”. I do not know whether people in this Government have noticed but all around the country in the last 5 to 10 years cinema complexes have been growing rapidly. Cinema owners have responded very swiftly and effectively to demands from consumers in supplying smaller and more consumer-friendly customer-friendly cinemas. There is one in Auckland that I go to all the time where one can buy wine book in advance and have a big wide seat. It is a great place to go. Having said that why should consumers not have choice? Why should people not be able to rent a DVD if that is what they want to do and watch a movie in the comfort of their own home? That is what this bill is all about. It is about removing choice for the consumer. 
Parallel importing goes something like this: a producer or manufacturer of a DVD or a video will produce that product so that it can be sold in Australia for $40 in New Zealand for $30 and in China for $10. So a parallel importer can go to China buy the product quite legitimately for $10 bring it back to New Zealand and pass on those savings to the consumer. There is absolutely nothing illegal or wrong with that. In fact it benefits consumers because they have the choice to buy something. 
Hon Judith Tizard 
: Who cares about property rights? Not ACT. 
DEBORAH CODDINGTON 
: There is no propery right breached in that. 
Hon Judith Tizard 
: Are you serious? 
DEBORAH CODDINGTON 
: The Minister is terribly confused as is the speaker from United Future because a rental right is not the same as a copyright. The owner of the copyright is quite different from the owner of the rental right. I own the copyright on several books. Libraries have the right to rent out those books. Libraries do not own the copyright. Libraries cannot republish those books. There is a difference between rental rights and copyrights—[ 
Interruption 
] I might be a new member but I thought that running commentaries were out of order. 
As the Hon Tony Ryall pointed out quite correctly when the Government came in it said that it would reintroduce parallel importing on books videos CDs and DVDs. Now we have this bill that deals only with DVDs and videos and introduces a ban that applies for 9 months after a film’s international release. Why has the Government restricted this ban to only DVDs and videos? We would have to ask that question of ourselves would we not? If we look at certain rumblings that are happening out there we see that this legislation gives an opportunity for this Government to have plenty of lovely photo opportunities with its friends in the film industry. The Minister might laugh but why has she not applied this ban to books? Will books be next? I think people who go to the Warehouse to buy books at $10 when they would otherwise have to buy them from somewhere else at $35 or $40 should be very worried that although this legislation applies to DVDs in the future we could see it applied to books. 
I come back to my point that this Government is anti-business. It has brought in this legislation as Jim Anderton said to force New Zealanders to pay more for creative industry goods—and that will do absolutely nothing for the economy. But I suppose this Government does not care about that anyway because it has already signalled that it is abandoning the goal of getting back up to the top half of the OECD. Parallel importing was one of the good things done in the last few years and here we see us going down the old road. 
I come back to this matter of changes to the onus of proof. The Minister has actually admitted that that is a bad precedent. She stood up and said the Government was advised against that. Official information papers show that the Government was cautioned about going down that road. None the less it has decided to go down the road anyway—where the onus of proof is now placed on the defendant not the plaintiff. We saw yesterday in the provision for the seizure of cars under the boy racer legislation that the onus of proof is now on the defendant not the prosecutor. If this Government was really interested in protecting copyright which it professes to be and which the Minister was giggling about why does it not look at its National Library legislation which I see on the Order Paper? Why does the Government not consult newspaper owners about what that will do to their copyright in terms of their websites? I see the Minister reading her newspaper but she is not interested in the copyright rights of the owners of those newspapers. 
I support what the Hon Tony Ryall said. This bill reduces choice for consumers. It will raise the price of DVDs and videos. It will not allow people who want to see a movie at the same time that it is released in the cinema to rent a video and take it home for viewing. It will not allow them to do that. The bill seeks to protect one sector of strong lobbyists and we are opposed to it. 
DAVID CUNLIFFE (NZ Labour—New Lynn) 
: 
 That was a particularly disappointing speech even by ACT standards. It dealt firstly with some absolute contradictions of fact. Let me demonstrate several of them. The member who has resumed her seat said that this bill is anti-business. It is not. It upholds intellectual property rights. The member tried to squirm out of that contention by drawing a distinction between a rental right and a copyright. That is splitting hairs. No members of the public really care about that particular definition or term; they care about the big point. The big point is this: an intellectual property right rewards the producer of the intellectual property for his or her labour in producing that property. In that it creates an incentive for the production of further intellectual property just as this Government has successfully done through the film fund that produced the smash hit  
Whale Rider. 
The second point the Opposition got wrong was that a 9-month parallel importing ban would somehow restrain the ability of the public to access parallel-imported films or DVDs. Plainly it would not. The whole point of that ban is to allow an orderly dissemination of products through the industry through retail chains and through cinema chains in a way that is compatible with the legitimate interests of the producers of those films and the orderly management of the industry itself. 
Thirdly that member suggested the Government has been too far-reaching in this bill in direct contradiction to other members of the Opposition who say we have not gone far enough. Well the Opposition cannot have it both ways. We have either gone too far or not far enough. We cannot have done both. The fact is that we consulted widely on this bill. We took soundings and commissioned independent economic research and it suggested a very moderate and incremental approach to this protection measure. It is only a 9-month parallel importing ban which just allows the industry the time it needs to get itself in order. This is a moderate sensible pro-business pro-growth pro - creative industries pro - New Zealand bill and it is time this House passed it. 
JOHN KEY (NZ National—Helensville) 
: 
 I rise on behalf of the National Party to oppose this bill. I am absolutely delighted that David Cunliffe used the words he did at the end of his speech about pro-growth pro-business and all the rest of it. Those are the sorts of words that come out of the Labour Party—certainly not the National Party or the ACT party. They are fundamentally wrong—just plain wrong. I find the logic of Labour supporting this legislation quite perverse. When I look at this legislation I find that it smacks of one thing and one thing alone. 
David Cunliffe 
: Common sense! 
JOHN KEY 
: It is not common sense as Mr Cunliffe said. I look to United Future for that and unfortunately I look away pretty quickly when I look there as well. So no it is not about common sense. It is about looking after the fat cats—a couple of fat cats who own the movie theatres around the country. It is about a couple of cronies up in Whakatane or somewhere who somehow got into the ear of the Prime Minister. She must have been up there opening a bird bath or something. They had a chat to her and said: “Could you just slap a ban on this for a while. Don’t worry about the 4 million consumers in New Zealand. They really won’t mind. It’s OK.” Well it is very interesting. Who benefits when one puts a quota a subsidy a tariff or a ban on anything? It is the fat cats—the people who own the quotas. They are the people who benefit not the consumers of New Zealand. The consumers of New Zealand currently as we speak are probably rushing down to the local Blockbuster outlet to get their parallel-imported video or DVD because they know that “Time is up!” as Betty Boothroyd used to say so vigorously in the British Parliament. Time is up for them to have choice and reduced prices. 
Let me talk for a moment about why this legislation is so fundamentally flawed. Under this system choice will diminish. Prices will go up and product availability to the consumers of New Zealand will go down but not to all consumers. There is a group of consumers who are less likely to be affected when a ban is put in place. I put it to this House that that group comprises the wealthy young New Zealanders. They are the New Zealanders who shop on the Internet quite comfortably and happily and who are happy to bring in a parallel import. But far more important they are the consumers who are quite happy to buy a DVD. The people who will be really affected by this legislation are the consumers of New Zealand who like to rent a video at the same time as a movie comes out in their local movie theatre. They are the people who will be affected. They are the people who will not be able to get their rental. The fat cats who own the cinemas will be able to watch it. They will not be affected; nor will the wealthier people around New Zealand who are happy to pay $49.99 to import a DVD over the Internet. No it will be the poorer people who will be affected. 
We have heard some very contradictory things in the debate on this bill. The member for the Greens Mike Ward got up and said: “New Zealanders like going to the movies. It is all about the popcorn and the ice cream.” I like going to the movies and I thoroughly enjoy taking my family with me—my two young children and my wife. If it is raining on a Sunday afternoon in Auckland there is nothing nicer than to wander down to the movie theatre and watch a movie. 
Gerry Brownlee 
: It rains up there most Sundays. 
JOHN KEY 
: The member for Ilam is quite wrong. It does not rain on most Sundays in Auckland. It rains on a lot of Sundays but not on most Sundays. Parallel importation has been in place in New Zealand since 1998. It has not stopped me from going to the movies or from taking my two children to the movies. But it has allowed two markets to develop. There is the market for people who like to rent a movie on a Saturday night because their kids are aged 2 and 1 and they cannot afford a babysitter or to go out to the movies. They want to enjoy a movie that is current and not wait to see it in 9 months’ time when it has gone from being fashionable to unfashionable. They are not interested in watching a movie that has already been bagged by movie critics on radio stations and television. Who wants to see  
The Lord of the Rings 
 2 years after it has come out? People know the punchline by then. It is like  
King Kong 
—who wants to see it 2 months after it comes out? People want to see movies when they are fresh. 
I will touch on another argument that Mr Cunliffe raised in his blistering speech in the House in defence of this bill. He talked about the idea of more money going back into the local industry. I will quote from a Treasury document which we virtually had to remove with a crowbar from the Government’s large filing cabinet. Through the Official Information Act and the diligent work of the Hon Tony Ryall we have obtained that document. I feel like Chamberlain because I have in my hand a piece of paper that signifies why this is a very bad idea. I will relay for members Australia’s experience of parallel importing. It is estimated that Australians paid $1.15 billion more to listen to music than they would have paid if parallel importing had not been in place. Yet there is no evidence that the Australian industry benefited from that at all. What Mr Cunliffe is talking about is a very interesting argument called cross-subsidisation. The argument goes a little bit along these lines: if multinational copyright-holders are able to catch a higher return—let us say they can charge $5 more for the importation of the Harry Potter books—they will use those funds to cross-subsidise the local development of creative arts in New Zealand. 
Apart from holding the Treasury document—fortunately I have two hands—I also have a document from the Ministry of Economic Development which is scathing about this legislation. It states that there is absolutely no evidence at all that more money will go back into cross-subsidisation. If the Labour Party thinks the way to develop the creative industry in New Zealand is to slap on a quota or a ban or to have parallel importing and to go back to the old days when one had to know a Cabinet Minister before being able to bring in anything then I would like it to explain just one thing to me: in the 4 years since the parallel importing legislation has been in place in this country why have we seen a continued growth in our creative industry? 
Why is it that Peter Jackson and those wonderful people down at Weta will now have the opportunity to turn  
King Kong 
 into a major movie? Is it because when the Prime Minister was opening the bird bath in Whakatane a local movie theatre owner came to her and said: “Excuse me Prime Minister could you possibly slam a 9-month ban on parallel importing so that I can carry on?” Is that the reason? No. The reason that Peter Jackson the producer of the  
The Lord of the Rings 
 trilogy and Weta are able to produce  
King Kong 
 is because they are very very good at what they do. They are world-class at what they do. Make no mistake about it: more money will flow into the creative industry in New Zealand if we are very good at what we do. That will not happen if we slap some arbitrary ban on things and decide that there is one set of rules for one person and one set of rules for another. It will not happen if we have legislation that protects the fat cats at the cost of the consumers. 
Before I finish my speech I will just touch on one other issue relating to the argument on pirated products. One of the arguments put up by the industry is that parallel importing will make it more difficult to stop those who pirate goods and that it will actually help such people. As I read the report issued by the Ministry of Economic Development I found no evidence that that has any impact at all. Nor was there any evidence that rental rights were diminished as a result of parallel importing. 
The basis of my speech is simply this: I believe there are two forms of markets opening up in New Zealand. There is a market for those who wish to go the movies and who enjoy doing so because the movie theatres are tailored around their expectations—maybe the theatres are local or have bigger seats or maybe it is just a day out for those people. That is an industry that has carried on and flourished ever since National was wise enough to reform this legislation some years ago under the stewardship of John Luxton. That has done wonderfully. Equally an industry has grown up around those who wish to watch a movie on DVD the Internet or video as soon as it is available—not when the movie is 9 months old or when the fat-cat owner of the local picture theatre in Whakatane determines it is the right time to watch it. I favour the free-market choice and the development of all industries. I oppose this legislation. 
Hon CHRIS CARTER (Minister of Conservation) 
: 
 I rise to support this bill. It meets the commitment made by the Labour-led Government in 1999. It follows a very extensive review and consultation process which considered the impact of parallel importing on the creative industries. It is an excellent bill and I support it. 
GERRY BROWNLEE (NZ National—Ilam) 
: 
 This bill does none of the things that Mr Carter has just claimed it does. However it is the crowning glory of the “Ministry of Judith Tizard”. To prevent people from seeing videos in a timely fashion is the summit of her achievements so far. It is a draconian bill of the worst kind and it typifies what this Government is all about. This is a Government that wants to send New Zealand back to somewhere into the mid-1960s when New Zealand was heavily regulated and controlled and lulled into some sort of docile sense that the Government knew better than anybody else. 
We should not underestimate the signal that this bill sends about the way this Government wants to operate. How can it be fair to anybody in this country to say that we need to be locked off from the rest of the world being unable to access the sort of at-home entertainment that we would like to choose for ourselves? 
I think back to those times when New Zealand was a heavily regulated country and when that sort of thing was commonplace. At that time anybody who had a bit of a business idea simply got to know his or her local member of Parliament and then got to know the member’s colleagues. The person would build up a bit of a lobby and sooner or later he or she would get some little sinecure somewhere because of the high level of Government-initiated protection around his or her business. Those days in this country were not good. I can remember an example that I think some people here might find strange. There was a time when children in this country could not get felt pens unless they were brought in from Australia. Mr Key will remember this. Felt pens were amazing things and the only way to get hold of them was if a person was lucky enough to know someone who was travelling overseas who could buy those things in the duty-free store when leaving another country. We are going back to that. 
Simon Power 
: Bread was like that too. 
GERRY BROWNLEE 
: No it has never been quite like that. There was a time when bread was rationed in New Zealand—there is no doubt about that—but that was certainly not in Mr Power’s lifetime. 
Hon Pete Hodgson 
: When was bread rationed in New Zealand? 
GERRY BROWNLEE 
: In asking such a simple and silly question the Minister is showing what a vacuum of knowledge he works in. I am not giving the Minister an answer to something like that because I know that what he is really doing is sitting there thinking “Perhaps that can be my idea of the week.” 
In the Labour caucus we first had Annette King coming along and saying: “Right I can really annoy New Zealanders by saying I’m not going to let them smoke in public bars Returned Services Association bars casinos or working men’s clubs—that will brass them off. That is a good bit of regulation that I can bring in.” Then she got outdone by Judith Tizard who has come along and said: “I’m going to stop New Zealanders seeing videos and listening to DVDs and other recordings for the first 9 months that they are available—that will really brass them off.” Then we see Pete Hodgson sitting there thinking: “I’ve got one that’s even better. Not only am I going to turn out the lights on this country—not only am I going to enhance my reputation as ‘blackout Pete’—but I’m now going to bring in a bread-rationing measure.”  
[Interruption]  
The Minister of Conservation is going to save bread in New Zealand! 
The whole point about the bill is that it is typical of what this Government likes to do—control control control. I do not doubt that once the Smoke-free Environments (Enhanced Protection) Amendment Bill is passed we will see a return to 6 o’clock closing for all hotels and other hostelries around the country. I was going to say “hostilities” but that would be too reflective of the Government. Not only will we see that sort of thing happen but I make a prediction that if that particular bill goes through this House in 10 years’ time we will see a move to have alcohol-free bars. Members laugh but 10 years ago no one would have said we would have smoke-free bars. They would have said: “No that will never happen. You’ll get cigarette smoking out of all sorts of places in New Zealand but you’ll always be able to have a smoke at the RSA and the working men’s club.” But the Labour Government has said: “No we’re going to get rid of that.” Members should not doubt that in 10 years’ time the Labour caucus will have whipped themselves into such a stupor—of course they will be in Opposition by then and they will have been there for a long time—as to say that they want to have alcohol-free days. That is the sort of thing that comes out of this type of legislation. 
One of the most interesting things I have noted here is that some of the provisions we have around parallel importing annoy the United States. It does not like us having parallel importing available on many things. It does not like the protections we have around Pharmac. Those are things that we can discuss and work our way through. It seems to me that this bill is a pathetic little attempt to say: “We don’t support you in international relations. We don’t think you’re doing a good job on behalf of the world. We will however try to get a free-trade agreement with you by bringing in pathetic little bits of legislation that limit New Zealanders’ rights to freely choose the entertainment they wish to see—films videos and DVDs—in a timely fashion.” This is a terrible bill and I am very proud that the National Party is not supporting it. 
A party vote was called for on the question  
That the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill be now read a first time. 
Ayes 83 
Noes 35 
Bill read a first time and referred to the Commerce Committee. referred to the Commerce Committee 
Labour 52; New Zealand First 12; Green Party 9; United Future 8; Progressive 2. 
New Zealand National 27; ACT New Zealand 8. 
Radio New Zealand Amendment Bill 
First Reading 
Hon PETE HODGSON (Minister of Energy) 
 on behalf of the 
 Minister of Broadcasting 
: I move  
That the Radio New Zealand Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Commerce Committee. Under the Radio New Zealand Act the Radio New Zealand charter is required to be reviewed by the House of Representatives at 5-yearly intervals. The previous Minister of Broadcasting my colleague Marian Hobbs invited the Commerce Committee to undertake the first review of the charter on behalf of the House. The review process was begun in December 2000 and the select committee tabled its report the  
Review of the Radio New Zealand Charter 
 on 21 December 2001. I am grateful to the committee members for their work and to the individuals and groups whose submissions informed the considerations of the committee. 
The select committee’s report was supportive of the charter in its present form and proposed only a few minor legislative enhancements to assist Radio New Zealand to engage fully with the spirit of its charter. In proposing those amendments the select committee acknowledged that the changes needed to be phrased in broad terms so as to remain relevant and useful to the charter. The legislative amendments recommended in the report reflect the consensus reached by the select committee. Following the select committee process the proposed amendments to the Radio New Zealand Act were originally drafted for inclusion in the Statutes Amendment Bill (No 3) 2002. However after consultation with the other political parties represented in Parliament support for that course of action was withheld by four of those parties. The purpose of this bill therefore is to make minor amendments to the charter in terms of the select committee report. The provisions for amendment in this bill cover three key areas and with one exception reflect current practice at Radio New Zealand. 
The first two provisions expand the wording of the charter to ensure that it more effectively conveys the needs of New Zealand society. The bill modifies the charter to require our public radio broadcaster to provide programmes that contribute towards spiritual and ethical development in addition to the contribution to intellectual scientific and cultural development required at present. It also requires the broadcaster to include programmes for a full range of age groups confirming the need to provide for the needs of children. The third provision refers to Radio New Zealand’s unique broadcasting service in the South Pacific region. The bill acknowledges the operations of Radio New Zealand International which was provided with additional funding by this Government in 2002 through Vote Arts Culture and Heritage and currently provides effective short-wave radio broadcasts to the South Pacific region. 
The remaining provisions of the bill ensure that Radio New Zealand will continue to be assisted in fulfilling its public broadcasting role by undertaking formal surveys and reporting on those survey results and on consequent action to shareholding Ministers. Those surveys will assess the views of Radio New Zealand’s audience on the organisation’s fulfilment of its charter. This bill also requires Radio New Zealand to survey for the first time the views of non-listeners to Radio New Zealand to inform its future programming decisions. This process of reviewing Radio New Zealand against its charter has now been under way for 3 years. The review has involved a lengthy submission and consultation process along with a slow but steady passage through governmental and parliamentary processes. I am now hopeful that the considered review of the charter provisions of the Commerce Committee agreed by the Government can be enacted as soon as possible for the benefit of Radio New Zealand’s audience. 
KATHERINE RICH (NZ National) 
: 
 The Radio New Zealand Amendment Bill is a mere 2 pages in length and that is another indication of how obsessed this Government is with charters. In terms of legislation this is nothing more than a feel-good bill. I remind members that we are here under urgency and although we have important things to do and although important things are going on in the world—wars etc.—we are here to talk about the spiritual and ethical guidance that we are supposed to get from National Radio. It is a sad day when we expect or in fact think that radio can deliver programming that aims to give New Zealanders spiritual and ethical guidance. I question the role of radio in doing that anyway given that it is State-owned. 
The whole point of this bill is to insert the words “spiritual and ethical” into the charter and to apply them to programming. However I question whether those words have been applied to the management of Radio New Zealand. I wonder whether the spiritual needs of Sean Plunket for example were considered in the handling of a number of issues at Radio New Zealand or whether there was actually ethical practice. There has been just been an out-of-court settlement of some tens of thousands of dollars. I question what is really going on with Radio New Zealand right now in terms of morale and in terms of the way the organisation is being managed. The organisation is in crisis. That fact should be the real focus of the discussions today not this esoteric piece of legislation that is designed probably to do very little. It is not often that I find myself agreeing with the engineers union but its delegate Brent Edwards had the following comment to make about report after report which have been done to try to get to the bottom of the problems within Radio New Zealand. He said: “As soon as we heard there was going to be a report we said: ‘Don’t do it it’s a waste of money because you ought to know what the problems are’.” We know what the problems are at Radio New Zealand. We know that the problems relate to morale. Top political editors like Al Morrison do not leave Radio New Zealand for no good reason. I do not think it was a love of polar fleece and sandals that led Mr Morrison to leave Radio New Zealand. I do not think it was an enjoyment of the environment that made Mr Morrison leave. I imagine that there were some pretty significant reasons and the dysfunction within the newsroom is one of the very dire situations that have occurred within Radio New Zealand. 
Members of the management of Radio New Zealand appeared before the select committee. I put the question to the management of Radio New Zealand. I asked them how many cuts had been made to the newsroom. The answer given was $68000 in terms of cash but I now understand that that answer was very economical with the truth. The real cuts have been in the non-replacement of staff. I come from Dunedin and one of the key areas where staff have not been replaced is in Dunedin. If a big story were to happen south of Christchurch—it could be another Aramoana-type massacre or another Bain murder—Radio New Zealand is now in a position where it does not have a person on the ground. Radio New Zealand will probably have to put someone on a bus—no doubt that person will have to pay for himself or herself—to Dunedin in order to cover that story. That is not good enough. 
Time after time we have seen Radio New Zealand in the news. I say that it is the job of Radio New Zealand to present and to report the news. It is not its job to be the news. The absolute dysfunction that has been occurring within Radio New Zealand has caused a number of high-profile stories—be they about Sean Plunket Lynn Snowdon or other key staff members—to hit the news. Those staff members are extremely unhappy because they cannot do the job that they are there to do. A Deloitte’s report has described staff as being at breaking point—and they have good reason. People who work within the news are usually very passionate about the stories that they want to tell. If they do not have the resources to do that then morale is one of the first things to deteriorate. It is not about money either. The chairman of Radio New Zealand sat in front of the select committee and said: “It’s because we don’t have enough funding.” The amount of money that Radio New Zealand receives is over $23 million per annum. I say that it is not about the amount of funding but the way it is being spent and we can see that if we look at the number of consultancy reports that have been done to identify problems within the newsroom alone. Again I agreed with the engineers union delegate when he said that they know what the answers are and do not need a consultant. He said that they do not need some butt-covering consultant’s report to tell them what the real problems are. 
The real problems are at the top. One of the key things that the present management has to consider is what its future is within Radio New Zealand. It has certainly had enough time to improve things within the organisation. I am a great believer that there does come a time when no amount of navel-gazing and reports will make any difference. Eventually management has to consider its options. Even the Minister had some comments to make when he first became involved with Radio New Zealand. He said: “I think it could do better. I would like to see Radio New Zealand being an exciting compulsive piece of media and I don’t think it is right now.” He then backed off from those comments at 100 miles per hour. But I think that that was probably one of the most telling comments made about Radio New Zealand. When members opposite were in Opposition they made a huge song and dance about newsroom cuts as just one example. Now those members are into their fourth year in Government and they are doing more to damage the newsroom—deliberately—than has ever been done in the past. 
One of the ways we can measure the performance of Radio New Zealand is by the number of people who listen to it at any given time. I was shocked to see the number of listeners who had switched off their radios in just 12 months. In 2001 535000 people were listening to National Radio and 502000 in 2002. There was also a dramatic decline in Concert FM listeners. That figure went from 160000 to 145000. That is a significant number of people who have turned off their radios. Actually I do not think they have turned off their radios; I think they have turned the dial and started listening to other radio stations. The management has to accept that what has been going on over the last few months has had a dramatic impact on the quality of programming and the sorts of programmes that have been put on air. The management has as one of its performance targets the rather “Eeyore-ish” objective that “the audience for the period under review will not reduce by more than 10 percent when compared with the previous year’s corresponding survey of listeners.” If we take that as being the objective over the next few years or so there will not be any listeners. If we are saying that a reduction in 10 percent every year is OK then it sort of becomes a bit of a self-fulfilling prophecy. 
Things quite simply have to change. This issue is not about money; it is about accepting that there are problems within the organisation itself. It is the role of Radio New Zealand to present the news not to be the news. Reporters need the resources to be able to present the news in an effective way and decisions need to be made about whether the present management stays. Quite clearly things are not working. The Minister knows that he has a very dysfunctional organisation but he has done nothing to fix it. No amount of consultancy reports will make one skerrick of difference. As described in one of the latest news reports staff are at breaking point and I can understand why. In terms of the Dunedin part of the operation it is absolutely shameful that there has not been a reporter there since September. How does Radio New Zealand expect to cover stories from around the country if it does not have people on the ground? The whole point of funding National Radio is so that it can tell stories. If these issues are not sorted out then no amount of pontificating about a 2-page bill will make any difference. 
MARC ALEXANDER (United Future) 
: 
 I rise on behalf of United Future to support this bill with however some deep concerns. This piece of legislation arises out of the required 5-yearly review of the Radio New Zealand charter performed by the Commerce Committee. If we look at some of the amendments we can see that the bill amends Radio New Zealand’s charter in a minimal fashion. Clause 3(2) requires Radio New Zealand to provide programming that caters to a full range of age groups. This will ensure that Radio New Zealand provides programming that is specific to child listeners who do require extra considerations and protections with regard to their specific needs. 
Clause 3(1) amends the charter so that Radio New Zealand must provide programming that contributes towards New Zealand’s spiritual and ethical development. It ought to be noted that this amendment makes the Radio New Zealand charter consistent with the recently enacted Television New Zealand charter which requires it to feature programmes that contribute to New Zealand’s spiritual and ethical developments. 
 But as woolly as some of these ideas are they are indicative rather than prescriptive and they should be treated and regarded accordingly. Radio New Zealand is now statutorily obliged to provide an international radio service to the South Pacific. Finally the bill allegedly sets the requirement for annual surveying of audience numbers and satisfaction meaning that Radio New Zealand will not shirk its responsibilities of remaining responsive to its listeners and taking into account their feedback. I will speak more on that a little bit later. 
It is clear from the report of the Commerce Committee and other sources that the charter itself is fundamentally sound in terms of what it requires. It is equally clear that there is general satisfaction from the public regarding Radio New Zealand’s delivery of charter obligations. I note from the 2002 ACNeilson survey of Radio New Zealand’s listeners that nine out of 10 listeners considered that Radio New Zealand provides fair and balanced information and 85 percent of listeners thought that it broadcasts programmes not found on other radio stations which is a key part of the organisation’s charter requirements. Eighty-three percent reported being satisfied only 3 percent were dissatisfied with the mix of programming on the network. Fifteen percent of listeners perceived National Radio to have improved over the last 12 months 15 percent thought that it had become worse and the remaining 70 percent thought that the station had stayed pretty much the same. 
Conclusively the overall performance of Radio New Zealand is pretty good. It seems that the relatively minor changes made by the Commerce Committee are evidence of that fact. Although the survey figures mentioned paint a glowing picture of Radio New Zealand’s performance United Future is none the less left with some serious concerns. Those concerns include the fact that Radio New Zealand does not have to subject itself to rigorous comparison with other stations in terms of its listener numbers through taking part in regular listener surveys as all the commercial radio stations do. The ACNeilson survey conducted in 2002 found that one in five radio listeners listened to either National Radio or Concert FM—the latter occupying a considerably smaller part of that listenership. It would be very interesting to see whether a comparison with the monthly commercial radio surveys showed a consistent listenership of Radio New Zealand. However we do not know that because Radio New Zealand has decided not to take part in industry standards surveys. I note that that issue is essentially an operational one and I am aware that practical reasons were apparently given for Radio New Zealand choosing not to take part in the comparative survey. But if a select committee can go as far as specifying that Radio New Zealand must undertake its own annual surveys of a qualitative and quantitative nature of its audience it would not have been too much—in fact it would have been easier—to specify that Radio New Zealand take part in industry-wide radio audience surveys. After all the taxpayers of New Zealand are the shareholders of Radio New Zealand and they have a right to know how it performs in comparison with other broadcast providers. It is regretful that the process of select committee review occurred before the last election because United Future’s contribution at that stage would obviously have been in that regard. 
Finally any debate on Radio New Zealand can hardly go by without considering some of the current rumblings emanating from the organisation itself. Amidst budget blowouts and requests for an emergency funding bail-out of $2.5 million we note the managing editor of news Lynn Snowdon apparently having to go so far as using the Protected Disclosures Act to communicate to the board of directors that all is not well in the engine room. Furthermore a report from consultancy firm Deloitte pointed to widespread dissatisfaction among Radio New Zealand’s 93 news staff. It also expressed and exposed serious problems in the news division and consultants said that the Auckland newsroom was in danger of breaking down because of pressure of work. It quoted staff as enduring constant crises and journalists as saying that something serious was about to go wrong and that they were in a state of siege and worn down. A common theme was that the news operation was about to implode. Needless to say we look forward to seeing the Government rectify some of those issues—in particular the accountability that would go along with having open survey results putting Radio New Zealand on an equal footing with all other broadcasting providers. We do believe that this bill should proceed but with reservation. I look forward to its returning to the House for further scrutiny. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First will not be supporting this bill. This bill is a backward step for broadcasting just like the Television New Zealand Bill which was recently passed. Radio New Zealand has not been able to provide a balanced service since the introduction of the charter so New Zealand First would like the Minister to explain to the House how writing down the words “spiritual and ethical” in a charter will reverse the disastrous ratings for Radio New Zealand. The charter appears to be of no real value to Radio New Zealand. Instead it has been totally counterproductive. The inclusion of the words “spiritual and ethical” is another example of the “Big Brother State” syndrome of knowing best. Those same words were written in the Television New Zealand Bill so we must have them in the Radio New Zealand Bill! 
This bill is just another example of State control. The State controls our life at work it controls our life at home and now it wants to control the life of our souls. It wants to control what is hidden in our heads and our hearts—our personal spiritual and ethical beliefs. How many variations of spiritual and ethical beliefs will we hear from Radio New Zealand? To be fair to the many cultures in New Zealand all people’s views must be met. But the reality is that our spiritual and ethical beliefs are so diverse that it will be an impossible challenge. It will not be possible for Radio New Zealand to meet the needs of all people. Is there no end to this Government’s almost fanatical desire to control our lives with a charter? 
Mark Peck 
: Ha ha! 
BARBARA STEWART 
: I know I am hitting home because I can see signs of opposition from Mark Peck. That usually means that we are on the right track. What have we seen? We have seen a revolt. People do not want to be told what they can listen to and they have voted with their feet. They have got up out of their chairs and they have turned off that politically correct radio station that they have been listening to. The bottom line is that they can change what they listen to when it does not meet their needs. Radio New Zealand and this politically correct Government cannot stop people from thinking their own thoughts. There are a lot of thinkers out there and they are thinking with their fingers on the radio dial: “Change the station!”. 
Hon Tony Ryall 
: And change the Government. 
BARBARA STEWART 
: That would be another example. Like Katherine Rich has done we had a look at the ACNeilson survey. It shows that between 2001 and 2002 the number of National Radio listeners fell from 535000 to 502000. The Concert FM listenership declined by 15000 and the average time spent listening to that station dropped by just under 2 hours a week. That represents a significant number of listeners. It is a really appalling state of affairs to lose such a vast number of listeners. If that were a private radio station heads would roll. Indicators of audience loss of that magnitude would inspire some action on the part of the directors—but do we see any action? No there is nothing. What do we see? We see a key performance target that does not inspire the confidence of any thinking New Zealander. Radio New Zealand has a goal of losing no more than 10 percent of the previous year’s listeners. If it sticks with that type of target then its audience will dwindle away really really quickly. There will not be anybody listening to Radio New Zealand. 
The loss of listeners is the first indication that there is something very very wrong with the programmes that this radio station is playing. Even Radio New Zealand considers that the loss of listeners was due to the charter-directed programming changes. And what are we doing in this House? We are twiddling with it a little bit more all the time. What did we see in the  
New Zealand Herald  
on 21 March? Radio New Zealand was asking the Government for $2.5 million more in the May budget to avoid “cutting into the bone”. The article states too that the State broadcaster now gets $22.3 million from the Government. The article also states that the chairman of Radio New Zealand said that the request was realistic and conservative although $3.5 million would be needed to return Radio New Zealand to its pre-1995 level of support. So what do we have? We have here a Government radio station in bad shape. It is coming to the Government for money so that it is not forced to cut into the bone. What does that leave the way open for? I can tell members right here in this House. It leaves the way open for more State interference in broadcasting—total control of what we hear and think and even control of our spiritual and ethical souls. That is not a good state of affairs. It is a really sad state of affairs too if we have to listen to the radio for our spiritual and ethical beliefs. That is not good enough. We are always reading about Radio New Zealand and the problems it is having with staff morale—some of them directly due to this charter. No amount of money will make any difference to the situation within Radio New Zealand. We have solid proof that the changes to Radio New Zealand are not working since the introduction of the charter and New Zealand First will not be supporting this bill. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I am delighted to take a very short call on this bill. I have listened to two most extraordinary speeches. I congratulate Marc Alexander on what I thought was a considered contribution to the debate but Katherine Rich and Judy Turner— 
Opposition Members 
: Not Judy Turner; it was Barbara Stewart. 
MARK PECK 
: I do apologise to the member. These things happen. I am sure people forget my name from time to time. 
Hon Tony Ryall 
: That’s right Robbie. 
MARK PECK 
: That’s all right Gerry! I do apologise to the member. 
This shock-horror-conspiracy theory has just got me stumped. I have had a look at the bill. The bill is 2 pages long. The explanatory note is longer. The bill emanates from the Commerce Committee work on reviewing the charter which it must do once every 5 years. It recommended in the immortal words of one of our former colleagues the Hon Stan Rodger some minor technical changes to the bill that probably could have been much better dealt with by way of a Statutes Amendment Bill. But no there is shock and horror because we have changed two or three words— added “spiritual and ethical” broadened “varied interests” and things of that ilk. There is no conspiracy in this. This bill should take no time at all to work through the select committee. We should do it as a matter or urgency because the second 5-yearly review is due very soon. We should waste no more time of the House on this bill. Let us get it to the select committee. 
I do not know who we will ask to make submissions to be frank. The people who have already submitted on the bill are probably the only ones who will be interested at any rate. We look forward to it being referred on and we will process it quickly. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 I want to be quite clear that the National Party in Opposition is strongly opposed to this bill. We do not believe that this Government has earned any right to change the charter of Radio New Zealand. The National Party believes that Radio New Zealand is currently in breach of its charter and we believe that this organisation is overly secretive and heading in the wrong direction. 
Every day we read of the financial mismanagement of Radio New Zealand. I was Minister responsible for Radio New Zealand when the previous National Government put in excess of $6 million of additional funding into Radio New Zealand over a 3-year period. We were assured that that would fix Radio New Zealand’s financial problems. They were not fixed; they have got worse. While Radio New Zealand is skimping to find the money to pay for a quality news service as we speak the board and management of Radio New Zealand are spending its valuable resources on expanding its FM coverage around New Zealand—duplicating its signal. Frankly the money would be better spent on trying desperately to maintain current standards than on expanding the FM network. The FM network expansion should be put on hold if this company is in such financial straits. We do not need FM National Radio in the Bay of Plenty if there is no money to pay for decent reporters; we can wait. So it is a waste of taxpayers’ money that the board and management of Radio New Zealand are continuing its expansion programme—duplicating the signal—when it is completely unnecessary and the money could be spent somewhere else. 
I think money is being misspent by Radio New Zealand. It is commissioning audience surveys that it will not release to elected members of Parliament. Mrs Katherine Rich has sought time and time again to get the ACNeilson annual survey of listeners released for full public scrutiny. Neither the Minister nor the board will release it; neither will release the survey. Why will they not release it? Because that information is damning of the performance of the board and the management of Radio New Zealand. We know that in the period we are considering most recently Radio New Zealand lost 33000 of its listeners to National Radio and it lost over 10 percent of its listeners to Concert FM. It is so resigned to losing listenership that it says that one of its really good achievements will be if it does not lose 10 percent in the next year. That is no way to run a company at all. 
The National Party in Opposition is also concerned that the spa pool liberals who dominate this Government are seeking to insert the words “spiritual and ethical” into the charter of Radio New Zealand. Well what does that mean? What does inserting “spiritual” values of New Zealand mean? What about the spiritual values of Radio New Zealand? Would Mr Sean Plunket say that his spiritual values were being served well by that company when we consider the way that he was treated? Allegedly he was offered Linda Clark’s job then after some intervention he was “dis-offered” the job? What about “ethical”? Who in Radio New Zealand is going to stand up and say he or she will set the standard for ethical behaviour not only in the company but also on the airwaves? Who in Radio New Zealand is going to set that ethical benchmark? The Government is silent and I am not surprised because this is just nonsense. It is absolute nonsense that these non-secular ideas of spirituality should be included in this charter. 
I have to say this to the House: when the Government changes in less than 2 years’ time this charter will go out of the window. This board of directors of Radio New Zealand would have to consider their role in the future because they cannot run a company. They are not delivering what New Zealanders want. They are making wrong financial decisions. They cannot get enough money to employ a reporter in Dunedin so they are in breach of the charter but they are spending hundreds of thousands of dollars duplicating Radio New Zealand’s transmission signal around the country. That is a waste of money. That is the wrong decision and we oppose it strongly. 
This little 1-page bill also includes more nonsense that Radio New Zealand will be required to have programmes that cater to a “full range of age groups”. What does that mean? What is Radio New Zealand going to do for 6-month-old children? My wife would tell us we have Concert FM for 6-month-old children to send them off to sleep. That is probably about right. But what has it got for 2-year-old children? Nothing! What has it got for 3-year-old children? Nothing! 
Debate interrupted. 
Sitting suspended from 1 p.m. to 2 p.m. 
Visitors 
Speaker of Legislative Assembly Victoria 
Mr SPEAKER 
: I have much pleasure in informing members that the Hon Judy Maddigan the Speaker of the Legislative Assembly Victoria Australia accompanied by Mr Ray Purdy the Clerk of the Legislative Assembly are present in the gallery. I am sure that members would wish that they be welcomed. 
Radio New Zealand Amendment Bill 
First Reading 
Debate resumed. 
PANSY WONG (NZ National) 
: 
 I wonder why the House is in urgency to debate this bill. Is it not amazing? 
Hon David Carter 
: It’s April Fool’s Day. 
PANSY WONG 
: The bill was introduced yesterday on April Fool’s Day. Why do I question that? It is because when the Minister of Broadcasting the Hon Steve Maharey first took up his post on 15 September 2002 he was described as media savvy. He actually said that Radio New Zealand could do better. He said that as the Minister of Broadcasting he would like to see Radio New Zealand being an exciting and compulsive-listening piece of our media and that he did not think it was doing that right now. Well I looked at the performance measurement of Radio New Zealand since the Hon Steve Maharey took over and I have to say that a survey of the Radio New Zealand audience—not a rating of how large the audience is; just a survey—showed that the number of people who listen to Radio New Zealand for 8 minutes and over decreased by 6 percent and that the Concert FM audience level decreased by 10 percent. 
The sad fact is that reduction in audience level of 10 percent is actually a target set by Radio New Zealand. It is interesting to see that a Government agency has a performance measurement that means it has only to do well enough to reach 90 percent of the previous year’s target. In effect Radio New Zealand was authorised by the Minister to say every year that it will try to achieve 90 percent of the previous year’s performance. I do not think any private organisation would submit a budget plan to its shareholders that says its aim is to achieve a target that is only 90 percent of that of the previous year. That organisation would be budgeting for a 10 percent decrease every year. 
Against that background I thought that the Hon Steve Maharey might have introduced the Radio New Zealand Amendment Bill to try to change that. I thought that maybe this bill would consist of some miracle some exciting target or some funding provisions that would enable Radio New Zealand to achieve what the Minister says it should be—an exciting compulsive-listening piece of media. But let us look at what this bill actually tries to do. 
First of all apparently it is going to introduce two more words into the charter the mission statement of Radio New Zealand so that the organisation should aim to develop programmes that reflect “spiritual” and “ethical” values. Those words have been added to its objective. As the Minister has introduced through this legislation the words “spiritual” and “ethical” I wonder where the guideline is. I have looked through the bill which consists of only 2 pages but there is no definition no parameters for the meaning of “spiritual”. Also I did not know that Radio New Zealand had not been adhering to ethical standards in the past. As far as I am concerned our media in New Zealand have a peer review system whereby the public can complain if Radio New Zealand fails to live up to the community’s standards. 
Another provision of this legislation is that the organisation should try to aim to cover “a full range of age groups”. We need to explore that further. The Chief Executive of Radio New Zealand Sharon Crosbie was reported as saying—she actually comes before the Commerce Committee every year for the financial review—that the audience consists mainly of the 35-plus age group. When the Minister wants Radio New Zealand to extend its audience to a full range of age groups I presume he wants to see Radio New Zealand catering more for the youth market. But many times when I sat on the Commerce Committee we received independent reports and submissions from other sectors convincing us that the youth audience is very well served by the variety of private radio stations available. In fact there are about 300 radio stations in New Zealand and a lot of them have been very successful in targeting the youth audience. So why are the Labour Government and the Minister of Broadcasting hell-bent on channelling taxpayers’ money towards targeting in particular a youth sector that is very well served by private radio stations? Young audiences have been able to receive a service from the whole range of radio stations currently provided in the community. I think the Minister should front up and explain why he intends Radio New Zealand to enter the highly competitive market of youth listeners. What specifically does the Minister want youth listeners to receive from Radio New Zealand? What does he think they are deprived of in terms of what is provided by private radio stations? 
To be fair to Radio New Zealand I would have thought that if its master so to speak the Minister of Broadcasting wanted Radio New Zealand to turn itself into a dynamic exciting compulsive-listening piece of media then he should be realistic in terms of funding Radio New Zealand well. But we found that Labour after criticising the previous funding level of Radio New Zealand actually in last year’s Budget cut $225000 from its funding. The Government cannot on the one hand demand that a radio station perform and attract high-quality personalities and journalists then on the other hand reduce its funding and its ability to attract those high-calibre personalities and staff. Ultimately we have to accept that to be able to appeal to the audience it has to have quality programmes and quality presenters. 
As the Radio New Zealand Amendment Bill is being debated under urgency I would have thought that it had an urgent mission to fulfil and that it would provide some exciting initiatives like a generous funding commitment to Radio New Zealand. But this bill is nothing more than another piece of politically correct legislation that will not enable Radio New Zealand to obey its master’s command to become exciting and compulsive-listening radio. The National Party will be voting against this bill. 
HELEN DUNCAN (NZ Labour) 
: 
 I am pleased to rise to support the Radio New Zealand Amendment Bill which puts into effect the few minor amendments that have arisen from the review of the Radio New Zealand charter. It is a pity that a more expeditious legislative process that of incorporating them into a Statutes Amendment Bill could not have been followed but unfortunately the Opposition voted against that. I commend this bill to the House. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 The ACT party opposes the Radio New Zealand Amendment Bill. The ACT party was one of the parties that objected to the use of a Statutes Amendment Bill to include amendments to Radio New Zealand’s charter. We did not object lightly to this. I am aware that a Statutes Amendment Bill enables Parliament to function efficiently and smoothly but it should be used for issues that are non-controversial and this issue is definitely not non-controversial. Just because a Labour member said that the bill is only two pages long does not mean it is minor or non-controversial legislation. 
I wrote to the Minister of Broadcasting at the time and I repeat now that ACT does not support an undefined instruction that would become a licence to use money raised from taxpayers to promote religious and ethical beliefs which should be obliged to compete in the marketplace of ideas on their own merits using resources provided by their supporters. 
This legislation is a dangerous attack on the important principle that the State should be secular. Several people have already described this legislation and the commentary on the bill states that the select committee proposed only “a few minor legislative enhancements”. This bill is definitely not minor. One of the major themes of State radio is that it should not just be independent and unbiased but that it should actually bend over backwards to be so. I will come to that issue later in terms of the charter. But more important than that is that the State should be secular. There is a clear separation of powers. This is constitutionally extremely important and a vital element of a liberal democracy. This amendment along with the one we passed recently for the Television New Zealand charter starts us on the slippery slope of fudging the separation of those powers. 
If we look at the charter we will see that there are only a few pedantic changes but those words are loaded. We should look at what is being changed. We will be changing from having programmes that contribute to intellectual scientific and cultural development to those that contribute to intellectual scientific cultural spiritual and ethical development. I have already spoken strongly on this. State radio has no business promoting spiritual development. Why should some taxpayers be forced to fund the promotion of the spiritual development of someone else whom they might personally find abhorrent? Taxpayers should not be forced to fund State broadcasting at all in these times. 
The State does not own newspapers; neither should it. The State should not own broadcasting either. But while we do have State radio we should all be opposing this insertion of the promotion of spiritual development. Whose spiritual development are we promoting here? Are we going to promote the spiritual development of Christians more than Buddhists? We already have private radio stations that more than successfully provide spiritual programmes. Why should they have to compete in the market against a State-funded broadcaster? 
We are also going to insert into this charter the provision of programmes that contribute to ethical development. This is a real worry too because this signals a continuation of the relativism regarding ethical values that is already permeating our education curricula. This relativism is where we say that no ethical values can be regarded as being more relevant or more important than other ethical values. Ethical values can mean all sorts of different things to different people. Do they include someone whose ethical or spiritual values embrace and support stoning women to death in public for the sin of adultery? There are ethical values that say that young girls should be circumcised. People believe in those ethical values. I suspect that most rational New Zealanders would argue that this is not ethical development at all but barbaric and uncivilised and that these beliefs have no place with a State broadcaster. But under this charter this is what taxpayers could be forced to fund. 
Radio New Zealand recently fronted up to the Commerce Committee and asked for more money from taxpayers—nearly $3 million—because it had blown its budget. At the same time that it turned up at the select committee to ask for this money it also announced that its listenership had plummeted in the last 12 months. Radio New Zealand National Radio listeners had gone from 535000 to 502000. That is a loss of over 30000 listeners in just 12 months. So what does Radio New Zealand do? It fronts up and asks for more taxpayers’ money because its listeners are turning off the radio. Another 15000 switched off from Concert FM. 
I am not surprised that people are turning off from State radio. What does public radio mean? It means broadcasting to the public. It does not mean as it used to when all the news service had to come out of the Prime Minister’s office that it is promoting the policies of the current Government whatever Government that might be. At the moment all we get on public radio is Labour Party policy being promoted. We get no voice from the market liberals. Just one promoter of freedom would be good but no Radio New Zealand is totally incapable of mentioning the f-word. 
When did anybody last hear “free markets” “individual liberty” or “classical liberalism” mentioned on State radio? Instead on Saturday mornings we get endless interviews with women called Kate and on Sunday mornings we get middle-aged hippies masquerading as youth culture. If members listen to the current coverage of the war in Iraq they will confirm that National Radio has totally sold out to the Government’s position on that. I am not surprised that people are turning off from Concert FM either if one listens to the noise that masquerades as music. It is a return to Manuel and the Music of the Mountains and some of us are old enough to remember those days. 
Let us take a look at the briefing to the incoming Government. The briefing is very interesting because it states that on current performance Radio New Zealand has a secure income stream and that it will continue to remain so with income exceeding expenses. That did not last long either. It is always very interesting to look at the outlooks of State-owned enterprises and Crown-owned companies in their briefings to incoming Governments because those outlooks signify what their plans are for the next 12 months. In this one the outlook states “Information withheld under the Official Information Act.” So where will that go? 
I support the fact that under this charter the Radio New Zealand board will be required to inform the shareholding Ministers of the results of surveys it will carry out. Previously these have been preciously kept secret. However what is the point of that? Why should the board waste money doing that? The charter states that after the board has provided the results of those surveys as part of the annual report it must report on “the measures if any it has taken in response to those results.” So why waste money doing those surveys when the Government lets Radio New Zealand totally off doing anything about the results anyway? 
Finally I have to agree with one of the National Party members—I cannot remember who it was—who said that Radio New Zealand is already in breach of its charter. If members read the charter they will see that Radio New Zealand is required to provide comprehensive independent impartial and balanced national news services and current affairs. I have no problem with the news services. Yes they are independent balanced and impartial. Current affairs? I do not think so. As I said the commentary on the bill states that the bill will ensure that the charter “reflects more accurately the needs of New Zealand society.” I would say that the need of New Zealand society is to have more money in its pockets. Radio New Zealand should look at selling some land in Auckland for which it was recently offered $8 million. It would not then have to go the Government cap in hand. 
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am pleased to have the opportunity to rise in support of this legislation. 
SUE KEDGLEY (Green) 
: 
 We have heard a lot of disparaging of and indeed clobbering of Radio New Zealand in this House today so I would like to start by saying thank God we have Radio New Zealand; thank God I am able and many others are able to listen to a radio station that is not interrupted every few minutes with commercials; thank God we have a radio station that is not dominated by commercial interests; and thank God I can listen to Worldwatch at night when I have not found any other radio station that has international programmes consistently like Worldwatch on Radio New Zealand. 
Thank God we have a radio station that has a specific charter to provide comprehensive independent impartial and balanced news services and current affairs etc. Thank God we have one radio station that before the last election sat down and worked out how it should provide impartial and balanced coverage. I find it extraordinary that some persons here are even trying to suggest that Radio New Zealand might not be balanced and impartial. I think it is one of the mediums of communication in our land that actually is balanced and impartial. So thank God we have Radio New Zealand! I am not speaking just for myself either. Its annual report states that almost half of the listeners who listen to Radio New Zealand have been listening to it for more than 20 years. 
We have also heard a lot of disparaging remarks about a couple of amendments in the bill. One amendment in particular that has generated a lot of sneering in the House is the requirement that Radio New Zealand should amongst other things promote programmes that contribute to the spiritual and ethical development of life in New Zealand. What is so incredibly problematic about discussing spiritual and ethical issues? Excuse me but do we not have whole radio stations devoted to sport and endless programmes on money? Why should we not have some programmes that examine ethical and religious issues? Is there some kind of great sin in that? I am surprised that the National Party is so opposed to that provision. Maybe some members have noticed that religion seems to be a rather dominant force in the world today and it might be helpful if we had programmes that contributed to our understanding of religious and ethical issues. To try to suggest as the previous speaker did that that is somehow undermining the secular state of New Zealand is utter nonsense. Hopefully what that requirement will do is contribute to our understanding of religious and ethical issues which are very dominant in the world today. 
That said we think the charter is a wonderful document. We agree with the chief executive of Radio New Zealand who said that it provides Radio New Zealand with a clear set of guidelines that are flexible and not too prescriptive. We strongly support the charter and the modest amendments in the bill to require Radio New Zealand to look at all age groups—in particular children and young people—to look at religious and ethical issues and to have regular surveys. We strongly support that but we are concerned that there seems to be something of a parallel here with TVNZ. On the one hand we are giving Radio New Zealand this charter with its lofty ideals and imposing new obligations on it in this bill; on the other hand we are not providing Radio New Zealand or for that matter TVNZ with the funding they need to implement their charters. In my view that is the main issue we should have been addressing in our review of the charter in the Commerce Committee. It is slightly ironic that we did that whole review of Radio New Zealand without getting to the heart of the problem which is that the whole organisation is totally cash-strapped. We did not address the funding issue at all and to me that is a major problem. 
Others have spoken about the headlines we have all read such as “Radio New Zealand blows budget for news” and “Newsroom on the verge of implosion”. As others have mentioned there is clearly a serious morale problem within Radio New Zealand. We acknowledge that but we believe that funding issues are an underlying problem. Radio New Zealand is being expected to implement this lofty charter without sufficient funding. We suspect that deeper issues including staffing have also contributed to the alleged implosion. 
However having identified problems of morale etc we should nevertheless hesitate to become involved in sorting out those issues. We must remember that Radio New Zealand is part of the fourth estate whose independence we should be jealously guarding. We should resist the temptation to get our sticky little political fingers into that crisis and try to sort it out by deciding who should or should not be running Radio New Zealand—or who should not be deciding this or that. Clearly those are issues that Radio New Zealand should sort out and let us hope that they do because there clearly is a serious problem. But we should also recognise and appreciate that we have independent radio in New Zealand and an independent fourth estate. Our democracy would virtually cease to exist if we did not have radio and television channels that were truly independent impartial and unbiased but instead had radio stations that were effectively the channel of corporate interests or the State. 
The Greens will certainly be supporting this bill. We cannot see why everyone is in such a state of consternation about the fact that Radio New Zealand should have to make a few programmes that contribute to spiritual and ethical understanding. It seems eminently sensible. We think it is extremely sensible also to ask Radio New Zealand to look at the full range of age groups and to consider focusing more on children and young people which is obviously one of its weak areas. It is not succeeding very well in reaching that particular audience. We think that requiring Radio New Zealand to commission surveys is extremely important. It is all very well having a charter but how do we measure it? One of the few ways we have of doing so is through quantitative and qualitative research and we have required that that be done. Ultimately we are concerned that there is no point having these charters worthy though they are if we are not going to provide Radio New Zealand or Television New Zealand with the revenue they need to implement them. 
MARTIN GALLAGHER (NZ Labour—Hamilton West) 
: 
 By and large I totally agree with the observations made by the previous speaker. I have to say how depressing it is to see the vision for public radio that is held by National and ACT in particular. If they had their way they would replace the independent New Zealand – owned public radio network that is beholden only to the people of this country and hand it over the media moguls in Ottawa Sydney London or wherever. 
That is their vision. I find it absolutely amazing that parties that presume to represent the people of this country would be happy to do that. I support Radio New Zealand and want to take this opportunity to thank it for the excellent work it does in reflecting the diversity the vitality and the richness of this nation. Well might people in ACT and the National Party sneer and jeer; frankly if members want a definition of patriotism then thank the people who work at Radio New Zealand who reflect the nation’s way of life to us. 
We want to get this bill through. I compliment the select committee on the work it has done and I compliment all those who work for our excellent public radio network. 
A party vote was called for on the question  
That the Radio New Zealand Amendment Bill be now read a first time. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Bill read a first time and referred to the Commerce Committee. referred to the Commerce Committee 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I remind members that there are to be no interjections at all during the taking of a vote. I refer members to Speaker’s ruling 56/4. 
New Zealand Horticulture Export Authority Amendment Bill (No 2) 
First Reading 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
: 
 I move  
That the New Zealand Horticulture Export Authority Amendment Bill (No 2) be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Primary Production Committee. The bill provides amendments to the New Zealand Horticulture Export Authority Act. The Act establishes the Horticulture Export Authority to promote the effective export marketing of horticultural products. In particular the Act provides for the Horticulture Export Authority to approve export-marketing strategies for the horticultural products prescribed under the Act and to license exporters to implement those strategies. Almost $170 million of horticultural products were exported under the Act in the year to 30 June 2002. The major horticultural products exported under the Act are squash avocados and summer fruit. 
The bill provides for five amendments to the Act. The first amendment is to enable kiwifruit exports to Australia to be prescribed by Order in Council under the Act. This amendment was proposed by the kiwifruit industry to allow the industry to better coordinate exports of kiwifruit to Australia. It is not possible simply to prescribe kiwifruit under the Act because it would result in a conflict between the Act and the Kiwifruit Export Regulations 1999. Those regulations govern all kiwifruit exports except for kiwifruit exported for consumption in Australia. They provide for only Zespri Group Ltd and approved collaborative marketers to export kiwifruit to these other markets. 
Kiwifruit exports are New Zealand’s single most important horticultural export accounting for almost 30 percent of the total value of horticultural exports in the year to 30 June 2002. Australia was the sixth most important market for kiwifruit exports and was worth $31 million. However the price received for kiwifruit exported to Australia was 29 percent less per kilogram than the average price received for kiwifruit exported to the rest of the world. 
Lower kiwifruit prices in Australia have a wider negative effect. The price differential between Australia and other markets especially Asian markets encourages illegal re-exports of New Zealand kiwifruit from Australia. Such re-exports are illegal because kiwifruit exports from New Zealand other than for consumption in Australia must comply with the kiwifruit export regulations. Higher prices in Australia would reduce the incentive for this activity and licensing exporters to Australia would aid enforcement. 
It is important to note that this bill does not in itself regulate kiwifruit exports to Australia. Once the Act is amended an industry body representing growers and exporters of kiwifruit to Australia would need to seek growers and exporters support and then apply to the Minister to prescribe kiwifruit exports to Australia by Order in Council under the Act. The time line for the bill is driven by the kiwifruit industry’s desire for kiwifruit exported to Australia to be prescribed under the Act as soon as possible and certainly in time for the season commencing April 2004. 
The second amendment in this bill is to remove the ability for quantitative restrictions to be imposed under the Act. Such quantitative restrictions could limit either or both the number of exporters and the volume of exports. The Government proposes this amendment for two reasons: first as exporters generally oppose the use of quantitative restriction provisions they are neither currently being used nor likely to be used in the future; second these provisions potentially could be used in a way that would be inconsistent with New Zealand’s international obligations. 
The final three amendments in this bill are administrative in nature. The first of these improves the transparency of the Horticulture Export Authority’s statutory decision-making processes through allowing applicants to seek a reconsideration of the authority’s decision. The second administrative amendment relates to the powers of the arbitrator who under the Act considers appeals of the Horticulture Export Authority’s statutory decisions. The last administrative amendment is to allow the Horticulture Export Authority to revoke redundant export licences. 
This bill is necessary to achieve these changes. The Horticulture Export Authority supports these amendments and most kiwifruit growers and exporters support enabling kiwifruit exports to Australia to be prescribed under the Act. I welcome the support of most parties in this House for this non-controversial legislation and I commend this bill to the House. 
Hon DAVID CARTER (NZ National) 
: 
 I start by thanking the Minister who has just introduced this legislation for not imposing the guillotine clause on the Primary Production Committee thereby giving us a chance to genuinely hear submissions. That is certainly a change from the treatment the committee has had in recent times whereby we have been given legislation to consider but are expected to treat the submissioners with disdain in order to report it back to the House in a matter of weeks. So I thank Damien O’Connor as the Minister introducing this legislation and as a very valued member of the select committee for allowing us to hear this bill over a reasonable time frame because I have little doubt that submissions will be made on it. 
I start by saying that we will certainly be supporting this legislation to the select committee but we want to have the opportunity of clearly hearing the arguments from both sides of the fence as to the need for supporting this legislation further. First I will quote from a publication put out by HortResearch in which it makes this statement: “Horticulture makes a significant contribution to the New Zealand economy both through its exports now worth more than $2 billion annually and through its growing reputation for providing fresh and often exotic produce to tempt the tourist’s palate.” I make that contribution because we often forget how important horticulture is to this country. In talking to this bill we are clearly dealing with only one of our horticulture-based industries—the kiwifruit industry which effectively comprises a third of all horticultural exports. 
The kiwifruit industry is a major industry. Last year its export value was close to $620 million. I acknowledge that there is an issue and concern particularly with regard to the quality and price of the fruit being sold through Australia. The difficulty for me personally as we progress this legislation is that over a period of time we have been through a process of trying to deregulate older producer boards and allowing people to get on and do their thing. Having said that I take this opportunity to acknowledge the success of the kiwifruit industry over recent years. 
Before coming to the House I had the opportunity to look at the annual report of Zespri to 31 March 2002. Zespri was able to record record sales in excess of $800 million. It is close to being a billion-dollar industry and that is a credit to it. I am aware as we look ahead to the coming year and as the export season gets under way that things have not been so easy for the industry. I was in the Bay of Plenty in the spring of 2002 and I recall the difficulty some growers faced with the late frosts that had caused in some cases quite significant damage to kiwifruit acreage. I think that this year we will see prices up and that is good but volume down somewhat because of the damage caused by the frosts. 
The evidence before the select committee will no doubt show us that there is a problem with the way the Australia market is being handled. I note that the explanatory note of the bill quotes figures of $2 per kilo free on board in 1999 and that has declined in 2 years to $1.53. 
Ian Ewen-Street 
: That’s outrageous! 
Hon DAVID CARTER 
: Ian Ewen-Street interjects and says that that is outrageous. As a member of the select committee I want take the opportunity to hear submissioners tell us what is going on and if the situation is one of quality not being maintained because of the kiwifruit regulations of 1999 then we need to look at that. 
When I first got to know a little about this bill I was certainly aware of the additional problem of fruit going to Australia and then being re-exported into our market which is currently protected by the single-seller arrangement. Again if that is happening we as parliamentarians need to address that situation. What I remain unclear about is how having identified that situation and having passed this legislation we will still be able to catch up with operators who are determined to break Australian rather than New Zealand law. No doubt as we get under way we will have the opportunity to examine that issue. 
The Horticulture Export Authority has itself been very successful as a means of assisting the export of significant products of New Zealand. The one that surprised me when I was in the Bay of Plenty late last year was the avocado industry. We often consider ourselves to be importers of considerable quantities of avocados particularly from Queensland. In fact we export $28 million worth of avocados a year and that is a rapidly expanding market. That crop is then controlled via the Horticulture Export Authority. I say that if it works there then it is certainly worthy of consideration in respect of kiwifruit if we are having a problem with that particular market. 
It will be interesting for the select committee to see where opposition to this legislation comes from. Late last year in November I recall a visit from Mr Paul Morgan of the Federation of Maori Authorities. He said that if we support such legislation we will make it more difficult for Maori kiwifruit exporters to do their own thing and to create wealth for themselves. Let us look at that argument as it is delivered to the select committee. I have little doubt that quite divergent views will be presented to us and it will therefore be quite a challenging situation for the select committee to then arrive at a solution to the legislation presented to us by Damien O’Connor today. 
In closing I say that I look forward to the opportunity to work through this legislation. I take the opportunity of repeating how important horticulture is to New Zealand; its importance is often under-estimated by many many New Zealanders. Again I congratulate Zespri and the Kiwifruit Marketing Board on the success they have achieved over recent years in making kiwifruit a vibrant industry. It was not so many years ago that this industry was under extreme difficulty. As all New Zealanders I hope appreciate we will improve our standard of living in this country substantially only if we can identify what we are good at producing and then make sure we satisfy overseas markets. We have learnt a lot in recent years about presenting to the overseas markets the fruit and other produce they want. It is no longer acceptable for us to tell overseas markets what they are going to get because of what we have to export. We have moved well past that. 
Zespri has been part of that process. I congratulate it on the stunning effort it has made as outlined in its annual report for last year and look forward to another annual report which must be just about due at the printers to make sure that it is still doing its part to assist in raising the living standards of all New Zealanders. 
LARRY BALDOCK (United Future) 
: 
 On behalf of United Future I rise to support this bill’s progression to the select committee. It is important to understand that this bill amends the New Zealand Horticulture Export Authority Act in two ways. One suite of changes relates to the operation of the authority in general. As it stands the Act allows quantitative restrictions to be imposed on the export of prescribed products. Although those provisions are not used their continued existence in legislation is inconsistent with New Zealand’s international trade obligations. 
Three other general amendments to the Act suggested by the authority itself are aimed at improving its administrative efficacy. There is a hearing process for Horticulture Export Authority decisions on export licence applications and also where the authority believes on reasonable grounds that a licensed exporter has conducted export operations that prejudice the current product group’s export marketing strategy. However there is no provision for hearings to be held on other statutory decisions of the Horticulture Export Authority so the bill will change that. The bill also allows costs to be awarded to all parties in the case of any dispute under the Act overriding the precedent set by the recent arbitrator who did not award costs to all parties. Finally the current Act does not allow the Horticulture Export Authority to revoke redundant export licences and therefore the register of exporters includes some redundant information. The bill tidies that up. 
Beyond those changes to the general operation of the authority the bill also contains specific amendments relating to the kiwifruit industry. It provides the kiwifruit industry with an option to coordinate the export of kiwifruit to Australia through the Horticulture Export Authority. Kiwifruit exports to the rest of the world except Australia are managed by Zespri in a single-desk export regime. Here I would like to echo the comments made by the member who spoke previously to me in congratulating Zespri on the fine work it has been doing in recent years. As a resident of Tauranga in the Bay of Plenty I welcome the transfer of Zespri’s head office to Mount Maunganui where it will continue to make a significant impact on the economy of the Tauranga region. 
The bill amends the definition of “product” under the Act to include a specific reference to “kiwifruit for export to Australia” otherwise all kiwifruit exports could be prescribed conflicting with the Kiwifruit Industry Restructuring Act and the Kiwifruit Export Regulations that regulate all exports except those for Australian consumption. Since the Australian market for kiwifruit was deregulated in 1988 it has been swamped with low-quality kiwifruit coming from New Zealand which has damaged the market. There is also a problem with the re-exporting of New Zealand kiwifruit from Australia to other countries where it competes alongside high-quality Zespri product. 
The industry considers that bringing kiwifruit exports to Australia within the Horticulture Export Authority framework will allow marketing to be coordinated and quality standards to be applied leading to increased returns. The move will make it possible to limit or end illegal re-exporting because exporters will be required in their export licences to comply with an agreed marketing strategy. Increasing returns from the Australian market will reduce the margin between this and higher-value Asian markets thereby reducing the incentive for re-export. 
The problem of re-exporting was highlighted by a recent Commerce Committee report that found that Zespri had withheld payments to 20 growers it suspected of illegally exporting fruit to Asia and the Middle East. This was the only recourse available to Zespri in the absence of the solutions that this bill will provide. Zespri claimed that some exporters were sending fruit to Australia which they were entitled to do but were then involved in this fruit being sent to other countries for example Taiwan and China where it competed on price with Zespri’s fruit. Only the Ministry of Agriculture and Forestry has the legal power to investigate suspected breaches of kiwifruit export regulations and Zespri was acting outside its statutory authority in this instance. However it was able to suspend payments because it has a monopoly on export except to Australia. We are hopeful that this bill will ensure that Zespri is not forced to take those actions in the future. 
However it also has to be said that this problem has been around for some time. When the Government decided in 1989 not to include Australia in its kiwifruit regulations because it was deemed to contravene the principles of closer economic relations kiwifruit industry leaders were unhappy at the prospect of an open slather Australian market. The Chairman of the Kiwifruit Marketing Board Paul Heywood predicted that “grower returns from the Australian market are likely to be poor as a result of this decision which is not in the long-term best interests of the industry.” The Managing Director of Fruitfed Export John Mangon warned: “If the Australian market is flooded with fruit exporters over there are quite likely to buy it cheap and fly it somewhere else.” Regrettably those prophecies came to fruition. Low-quality New Zealand exports had a far-reaching effect on much better lines of New Zealand fruit on the same market where sceptical buyers forced the price down. At this time Australian kiwifruit also began to appear on the market. 
Things have not improved. In the 1999  
Gazette 
 trade standards for kiwifruit were revoked and in the same year the Kiwifruit Export Regulations came into force to regulate all New Zealand kiwifruit exports except exports to the unregulated Australian market. Because Australia is the only unregulated market for kiwifruit some growers and exporters tend to treat it as a dumping-ground for low-quality product undermining the price while returns from other export markets have increased over time. Declining quality has led to a downgrading of kiwifruit in supermarkets with very little promotion and the Australian consumers are therefore substituting other better-quality fruit for kiwifruit. Low returns in the Australian market encourage the illegal re-export of kiwifruit to Asia damaging returns from New Zealand exports to these high-value markets. Zespri has estimated that this activity cost it $1.9 million in 2001 alone. Details of the volumes involved are difficult to obtain given the re-export of product via Australia. 
The key question that the select committee will need to grapple with is whether the Horticulture Export Authority is the most suitable mechanism for controlling kiwifruit exports to Australia. The authority serves horticultural product groups that do not have single-desk marketing. Its powers under the Act are minimal since the spirit of the legislation is that it should be used to enable industries to succeed not restrict them. The 1998 review of the Horticulture Export Authority resulted in the Ministry of Agriculture and Forestry receiving 203 submissions with 85 percent of respondents supporting the authority’s retention. 
If the bill is passed kiwifruit exporters and growers would need to form a product group and apply to the Minister of Agriculture and the Minister of Foreign Affairs and Trade for an Order in Council to prescribe exports to Australia under the Act. The Minister must be satisfied that there is industry support for this application. The product group would then be responsible for developing its export marketing strategy obtaining industry support for it and submitting it to the Horticulture Export Authority for approval. The authority can then license exporters allowing the industry to put standards in place lift returns and stop exports. 
The advantages of working under the Horticulture Export Authority lie in the existing legislation the authority’s independence and the experience that exists within the authority. Industries are free to decide whether to use the Horticulture Export Authority and are free to withdraw. The select committee process should determine whether the kiwifruit industry is genuinely supportive of working under the authority. 
The alternatives seem to be limited. For the Australian market there is no desire to replace the current multiple export environment with a modified single-desk system like Zespri. The industry could work together to maintain standards but attempts to do this voluntarily have met with only limited success partly because it is not enforceable without statutory backing. Our hope is that this is the best-available mechanism to ensure that growers exporting to Australia receive adequate return for quality product and we shall be looking with interest to the return of this bill from the select committee following the submission process. 
R DOUG WOOLERTON (NZ First) 
: 
 I will say at the outset that New Zealand First will support this legislation to the select committee where we will listen to the debate with interest and in particular hear what the select committee will do about the concerns that the Federation of Maori Authorities has regarding this bill which they see as an attack on free enterprise or the free market. In particular the federation sees this as disadvantaging Maori. 
Hon Damien O'Connor 
: What do you reckon? 
R DOUG WOOLERTON 
: I will tell the member what I reckon in a minute. We would like to hear what the select committee has to say on that but before I go into that subject I would like to say that this industry along with all the other producer boards had the once-over heavily by the Hon John Luxton at the time of the review of the producer boards. 
I was told by people close to the Federation of Maori Authorities that this industry wanted to be deregulated that it wanted to go it alone into the free market and do all those sorts of things. In fact when the vote came this industry voted for a similar structure to that which the dairy industry opted for which was to change the board and the other structures surrounding it into a corporate to be called Zespri and it has continued more or less as a single seller since then. Therein lies the problem for some of the people namely the Federation of Maori Authorities which does not believe that that was the way it should go. But that was what the industry voted for. The industry went back to the Minister of Agriculture and so it turned out to be and that is what we have at this point in time. 
If a corporate like that with the backing of the industry decides that it will set standards and a marketing strategy and put value into its brand it will insist that that value is retained by the selective choosing of products. In other words only the highest-quality product will get through to the market. That situation is harmed enormously when some people use the one deregulated market in Australia to then export on to other markets and therein lies the problem. 
The legislation we are considering now which we support going to the select committee will be looking at whether that is the case whether it is being used quite deliberately and whether it is like the monkey with his hands over his eyes ears and other parts saying “I don’t want to see this evil I don’t want to hear about this evil and I don’t want to know about this evil”—let alone any other evils that the Greens might think up. 
Hon David Carter 
: The Prostitution Reform Bill. 
R DOUG WOOLERTON 
: We have an interjection from the numbers man in the National Party. I would have thought he had far more work to do in that corner than to spend time interjecting on my interesting speech. 
We in New Zealand First believe that if the majority in an industry is intent on retaining a market sector and brand value and on creating more money for New Zealand and New Zealanders the majority should be backed. People who do not agree with that stance need to have a very good case and we would be prepared to look at some alternatives that may progress the Federation of Maori Authorities’ desire to have a freer market. In order to have their ideas accepted we think they should come up with some fairly entrepreneurial points of difference. However we will look at that in the select committee. I look forward to this bill getting to that point so that we can do business with it. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 As a member of the Primary Production Committee I rise to take a short call in support of this bill. This bill is about retaining the integrity and benefits of cooperation within the industry rather than putting that sort of benefit at risk through a pure market model. The industry has come to the Government and Parliament and asked for reforms—as have other industries like the dairy and pipfruit industries. The Government and the select committee will listen to those submissions but we would obviously like to get the job done as soon as possible to signal to the industry that it must abide by the principles of the regulations which state that all marketing should be cooperative and collaborative. It is about enabling the kiwifruit industry to retain its quality and its standards maximise its benefits and maintain its integrity. I support the bill on that basis. 
GERRARD ECKHOFF (ACT NZ) 
: 
 This bill as has been alluded to by other speakers is about an export-marketing strategy—amongst a few other minor details—for exports to a country called Australia. I have a couple of rhetorical questions I would like to ask any member of the House. What happens if the strategy is wrong—and indeed what happens if it is wrong over a period of years? I ask members to cast their minds back to just a few short years ago when we had an organisation called ENZA which was exporting New Zealand apple crops to the world and was getting good prices for a time. But what happened? It got fat and lazy. It did not bother getting out there and doing the yards doing the selling. The apple industry was absolutely brought to its knees. 
I have another question for any other member in this House. What is the marketing strategy of Zespri or the Kiwifruit Marketing Board for New Zealand? At the Coal Creek dairy I can find exactly the sort of fruit that every other member in this House is complaining about. I can buy second-grade or third-grade fruit in Coal Creek or in Alexandra or in any other part of this country yet the kiwifruit grower is not allowed to export that fruit to another country. That is absolutely nuts. I am sure that Mr Damien O’Connor will pick up on that and will probably take a call if he can to explain to us why the kiwifruit industry does not have a first-rate marketing strategy for our own country. 
R Doug Woolerton 
: It does—send the rubbish. 
GERRARD ECKHOFF 
: It does—there we go. Again I am slightly perplexed here. Why is it OK to sell second-grade or third-grade fruit to our own people but not OK to export it to Australia? 
I have another question for this House. If somebody decides to export a product to another country I would presume that that person had been paid for the product; who then owns the product? If I sell kiwifruit to my colleague on the other side of the House and he gives me some money for it who then owns the kiwifruit? I say that any exporter who wants to sell a product to another country will lose the marketing rights once that product is sold. When I hear this nonsense about how we have driven the market down because there is second-grade fruit there I think that I could probably take people to meet a few million Australians who are very happy to pay a lesser price because that is what they can afford. But they still like kiwifruit. They still like to put it on top of their pavlovas and they still like it for their early morning constitutionals—which is very important; that feature being one of the great attributes of kiwifruit. Why can we not export fruit of a lesser quality to allow those who have a lesser income to enjoy the fruit? Why do we have to sell just the top-quality fruit to those people and say: “If you can’t afford to buy our gold or green kiwifruit—tough! We’re not going to give you our slightly lesser grade fruit which might be slightly misshapen because Zespri says it does not like it.” 
It might come as a surprise to members of this House to learn the basis on which we sell other products overseas like our New Zealand wine. We sell New Zealand wine on the basis of quality and price. We have New Zealand wines side by side in shops in Australia the UK and throughout the world and a buyer can come along and say: “Gosh there’s a nice bottle of Cloudy Bay at $45 a bottle.”—or probably $85 a bottle in the case of that particular wine. Buyers could also buy a bottle of “Coal Creek Chateau Something-or-Other” for $15 or $100 a bottle. Our wine competes on price and quality. So why is kiwifruit so different? I am getting some sort of stunned silence here. I am asking some pretty fundamental questions and I am not really getting any answers. 
This bill is about a constraint on trade. I expect to hear from the Maori members on this. We have already heard Mr Woolerton speak of the Federation of Maori Authorities which demands the right—as it should—to sell its own fruit without having to get permission to do so from somebody in Wellington. Is that so wrong? What is so wrong about having the right to sell one’s own fruit wherever one wishes if one can find a market? 
I go back to ENZA. A few years ago the growers in Roxburgh complained because they had a bad year when the fruit did not swell up. They said: “We’ve got small apples and ENZA won’t take them. We’ve got to dump them or mulch them and feed them to the pigs.” An enterprising grower went to America knocked on the door of one of the education boards over there and said: “I’ve got these small apples. Is there a market in your school for them?”. Someone on the board said: “How many containers can you give us a week? Our children take one or two bites then bung the apple out.” 
So there is a market for everything. There is a market for second-grade wool for all sorts of purposes including carpet. We do not have to sell first-quality products all the time although we strive for that. Of course we want to hit the top but any of us who have been in the production game know that there are such things as seconds and that we cannot always achieve 100 percent quality whether we are growing wool beef kiwifruit or whatever. 
I come back to the fundamental question: if we are to have some sort of hybrid single desk for this produce why do we not have a similar thing for the meat industry as well? The answer is that we did and it was an abject disaster. It cost the Government of the country at the time millions upon millions of dollars to bail the industry out. It did not work. So why do we not have a wool export authority? Well we did and we had massive stockpiles of wool that we could not sell. It cost the industry; it put that particular industry back years. Again I come back to the principle behind this issue—that is that an individual an exporter or whomever it might be must have the right to export his or her product. Can members imagine for example the massive wall of radiata that we have in New Zealand right now having a single export authority—a timber export authority? And why not have one for cheese as well while we are about it? 
What I am trying to put to the House and to listeners to the radio is that the fundamental right of every grower and manufacturer in this country should be to have the opportunity to export their product whether it be first-grade or second-grade. If they so wish they find the market. The issue is not about flooding markets with poor-quality fruit. One can do that only for so long before one goes broke. There is no question that New Zealand has a reputation for producing quality food and I would demand that that reputation remains but we must also recognise that we do have seconds and that we can and should export those wherever people see fit. 
I make the point that to date Zespri has been a great success. So was ENZA a few years ago. Nobody is suggesting and I am certainly not suggesting that Zespri should be abandoned and the 83 percent of growers who wish to be within ENZA should disband—nothing like that at all. I am saying that the 17 percent of Maori authorities the indigenous people within that grouping who want to export their own fruit should not have to go cap in hand and present a marketing plan to ENZA or the Horticulture Export Authority. Again I come back to a fundamental principle—the right of every manufacturer and every grower to sell their own product. 
MARTIN GALLAGHER (NZ Labour—Hamilton West) 
: 
 I certainly want to congratulate Damien O’Connor on the introduction of this bill. I believe that he as a relatively new Associate Minister of Agriculture is beginning to make his mark in that portfolio and that he is doing a very good job. As the member for Hamilton West I want to commend him for his great work. 
It is relevant that I reflect on a visit I made to Australia the other year during which I spent time with my federal member friend the member for Bendigo Steve Gibbons. Bendigo is a large provincial city in the state of Victoria where orchards and the fruit industry are quite important. He conveyed to me the significant grower sensitivity about any New Zealand fruit imports. I was aware of some of the sensitivities around biosecurity and other issues not all of which I agreed with at the time. 
I draw members’ attention to one aspect of New Zealand fruit exports to Australia be they kiwifruit or any other type of fruit. The previous speaker said that if an exporter exports a poor-quality product the exporter will eventually go broke and the market will somehow self-regulate. The reality is that if one has poor-quality fruit going to the state of Victoria or anywhere else within the Commonwealth of Australia we as a country will in terms of our brand name go down the tube. Quite frankly the previous speaker’s contribution was in my view—and with due respect to him; I am not questioning his sincerity for one moment—somewhat in a fruity way nutty. I commend this bill and I commend it to the select committee. 
IAN EWEN-STREET (Green) 
: 
 I intend to take only a very brief call this afternoon. But I do want to take the time to say to the honourable member from “Upper Coal Creek” Gerrard Eckhoff: “I told you so!”. It is very interesting how fashions come and go. All through the 1970s and the 1980s we had to deregulate. Every single-desk seller had got fat lazy and inefficient and so had to be deregulated. We have done that and look at what happened to ENZA. Mr Eckhoff said that ENZA is a classic case. ENZA of course was corporatised—it actually became a corporate. That was the cause of its demise not the fact that it was a single-desk seller. 
We need to look at what is actually going on here. For years we have been told that the market would dictate prices that inefficient growers would fall by the wayside and that those remaining would live happily ever after in a prosperous nirvana. They would be safe in the bosom of the free market. Well what has happened to these exporters to Australia? The prices have fallen by 24 percent over the last 2 years. At the same time the regulated part of the same industry has had increases in prices over the last 2 years. It is interesting. 
We Greens get dumped on a lot. We have consistently opposed deregulation and consistently supported single-desk sellers. Our reason for doing so is that we believe they provide better returns for growers. Our friends in National told us that we were wrong and that we were just a bunch of long-haired jandal-wearing mung bean - munching potheads and dropouts—myself excluded of course except for the long hair. We have been told that we are wrong. But are we? What has happened in Australia with the kiwifruit is that a whole lot of people have been independently exporting to Australia and the prices have dropped. We know all about the re-export to other countries. But what has happened in respect of kiwifruit going into the Australian market is that it has become a commodity. 
We are told that commodities are great that we live and die by commodity prices going up and down. But we do not often stop to think of what a commodity is. A commodity is simply something we grow or produce in this country that is identical in every way to an equivalent product grown or produced in any other country. When these products which are identical to those from a whole range of countries whether New Zealand Australia Argentina Chile the United States or wherever go on to the open market and when the buyers which are generally big international corporates or supermarket chains have established that they are buying commodities—which members should remember are identical to each other—their sole criterion in making a purchase is price. If people are selling a commodity then by definition they have to accept the lowest possible price for their product. 
That is the problem with our deregulated industries. With Zespri we have a regulated industry that is showing a united front to all those commodity buyers in other parts of the world who are trying to undercut or play off individual exporters within New Zealand. It simply does not work. 
Gerrard Eckhoff 
: What about stockpiles of wool? 
IAN EWEN-STREET 
: That is perfectly true. I would not defend that kind of behaviour. It was unusual behaviour in the first place. 
It is interesting to look at the prices that have happened in Australia. The price has gone from $2 a kilo in 1999 to $1.53. That is a 12 percent decline per year. That is extraordinary. 
A further thing I want to mention just very briefly is the question about Maori growers. Other people have mentioned the Federation of Maori Authorities which quite rightly said that it wished to retain the right to export its product independently to Australia. The majority of growers have voted to be reregulated. That is what this legislation about. 
Gerrard Eckhoff 
: Who needs the tyranny of the majority! 
IAN EWEN-STREET 
: Yes the tyranny of the majority. The Maori authorities want to have something that is good for them. It does not happen to fit the ideology of the day but it is clear to them that it is better for them. The Maori authorities are perhaps a special case. We could probably argue a special case for organics as well. Maybe there is a reason they should be left out of the collective. They should have the right to export either independently or collectively. 
Gerrard Eckhoff 
: Why? 
IAN EWEN-STREET 
: They have qualitatively different product. It is the same with organics. We are not talking about the same product; we are decommodifying it. All the conventionally grown kiwifruit that is going into Australia are effectively the same. But if one has certified organic kiwifruit or indigenous-grower kiwifruit then one has something that is different. It is a different market. It may look the same and taste the same but it is a different market. We have to be very aware of that. The Maori authorities have a very good point. Is their right to export independently covered by their right to self-determination? That is a fairly interesting point. Does self-determination for Maori mean self-determination in exporting their product? It is a reasonable point to put. 
I said that I would be brief so I had better stop before the interjectors get too excited. I look forward to hearing the evidence particularly of the Federation of Maori Authorities in the select committee. I am happy to say that the Greens support the passage of this bill through to the select committee. 
GEORGINA BEYER (NZ Labour—Wairarapa) 
: 
 It is always a privilege to make a contribution to a first reading debate and particularly on this bill. This is good positive legislation that I know that people in my area of Wairarapa will be keenly interested in since we have a fruitgrowing industry in that area. Naturally of course the bill is backed by the kiwifruit industry itself. This bill will be of interest not only to that industry but also to all New Zealanders in the hope that we make better law for their better production. 
SHANE ARDERN (NZ National—Taranaki - King Country) 
: 
 I will start by saying that the National Party will support this legislation to the select committee. I congratulate the leadership of Zespri on going through the process in a thorough way and coming back to this Parliament with a recommendation for some change. 
Jill Pettis 
: How’s the leadership going in the member’s party at the moment? 
SHANE ARDERN 
: The member for Whanganui of course is an expert on kiwifruit and other land-based industries. I respond to her by saying that this has to be the most schizophrenic Government I have seen in the history of this country. One moment it is deregulating industries up and down the country and the next moment it is suggesting in the House that in this case there needs to be further regulation. Which way is it? I guess the answer lies in listening to the previous speaker from the Green Party Ian Ewen-Street. If ever there was a case for how to make money and become a millionaire then people should have listened to the speech made by that Green member. I guess it explains why most Green members of Parliament are millionaires when we listen to the logic behind the debate put forward by Mr Ian Ewen-Street and how people can have a bob both ways and save face politically with their organic growers at the same time as they recommend further regulation providing it does not include Maori or organics. A rort is only a rort if one is not part of it. The reality is that people should take note of that. 
National supports this to the select committee. The New Zealand Horticulture Export Authority Act needs some amendment and the Associate Minister the Hon Damien O’Connor explained the reason that that is necessary. Thirty percent of horticultural exports from this country or something in the vicinity of $800 million are kiwifruit. It is a dynamic industry and it is an excellent fruit. Kiwifruit used to be known as Chinese gooseberries. I wonder whether anybody knew that? In typical Kiwi fashion we identify an opportunity rebrand it find a way of marketing it and do it well. That is what this industry has done and it is doing it exceptionally well. I congratulate that industry on that. 
The problem the industry has is that under its current regulatory frame with free exports into Australia there are those who are using that to export what would be described as seconds in most industries into Australia then on-exporting those through various structures into countries like China. The claim is that up to $300 million worth of export opportunity is being lost as a result of that. In fact in one market alone it has been claimed that $3 million was chopped off the potential export opportunity of exporting a branded quality fruit called Zespri. For those reasons alone the select committee is the right place for this legislation to go through a robust and close scrutiny process to come out at the other end with some solid recommendations for the Government to proceed with. 
If the select committee comes out in favour of proceeding with the bill and strengthening regulation then the Government will have some problems with Maori authorities. There is no question about that. Maori authorities up and down the country that have been involved in this industry have lobbied successive Governments over a long period of time saying: “We want the opportunity to export outside of the single desk. We don’t know why we should be constrained by this. We can’t understand the logic around this.” Of course the industry itself runs the argument that the only way people can maintain good quality accurate market records and solid reliable service to markets that take years and millions of dollars to build up is to export through a single authority. 
There is the debate. There is the philosophical divide. I am pleased that in the Opposition we do not have to have a strong view on that at this point. The select committee is the correct place for that to happen. I know that under the very capable leadership of the Hon David Carter and of course aided and abetted by some of the luminaries on that committee such as the president of New Zealand First my good colleague over here and Ian Ewen-Street I am sure this committee will get to the bottom of the issue that is before us. 
The issue that Ian Ewen-Street touched on of having concession for differential products will need some investigation. There are a number of reasons that somebody might be able to develop a market for a certain product—and they do—but there may be some reasons that people are being constrained by the current regulatory framework or the proposed regulatory framework. 
I notice that the Minister over there on the Government benches is nodding his head; I am not sure whether that is in acceptance or in disbelief—and that is the place for that to be sorted out. The Horticulture Export Authority last year handled exports worth $170 million—not an insubstantial amount. The most notable area where it is involved in terms of the regulatory framework that controls quality is the avocado industry. That industry is growing and going well. A lot of people are moving from kiwifruit in some of the areas where they have discovered that the fruit does not grow as well into avocados. Clearly that industry has a huge opportunity to be another growing export industry for this country which is very important. 
I know that the Government has very little affinity with most of these industries simply because it does not understand them. There are probably about two people in the Government who have any idea how the commercial world works in that regard and I hope the Government will give the select committee the time and resourcing and allow submitters to come before the committee because people who will submit to this committee I am sure will be people who have spent a lifetime studying the whys and wherefores of the various regulatory frameworks and markets and who have spent millions of dollars in this industry developing what was a fledgling industry about 15 years ago to the industry it is today. They developed the kiwifruit through genetics to brands that are now world-known and unique to this part of the world through the use of research and development and some of the excellent work that has gone in in those areas. 
I know that the chairman of Zespri in the company’s recent annual report commented that the industry had enjoyed strong growth since the formation of the Zespri brand and he is absolutely right. If members look at the figures they will see that they are overwhelmingly strong and the industry has returned a very very good return to its shareholders. 
So having said that I think that what needs to happen now is that this bill needs to go to the select committee. The select committee needs to be resourced in a way so that it can give this bill the due process it deserves. Representatives of the industry itself need to have time to come in and submit to that committee and talk about the reasons they think the industry’s regulatory framework is necessary. The Horticulture Export Authority needs to be given an opportunity to talk about why it believes it is the best body to handle that. Those marketers who have markets they have developed in international arenas around the world need to be given the opportunity to tell the select committee why there is a vacuum in some of the special areas. If all that is allowed to happen—and I trust that the Government will allow that to happen—we will end up with a thorough piece of legislation at the end. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I am pleased to support this bill and to speak to it briefly. Once again the most helpful thing we can do for the industry is to get this legislation to the select committee so we can improve the situation for the industry. I repeat that this bill is in front of the House at the request of the kiwifruit industry. Their representatives have brought to the Government’s attention the concerns they have with the export of kiwifruit to Australia following the deregulation of that market in 1998. The issue that became of concern was the low quality of some of the kiwifruit going on to that market which was impacting upon our very good reputation here in New Zealand as kiwifruit producers and exporters. 
This is a good bill. As I said before it was drafted in consultation with the industry itself and is certainly not imposing things upon it that it does not wish to occur. We look forward to the bill’s rapid passage through Parliament and its return to the House for its third reading in as quick a time as possible. 
A party vote was called for on the question  
That the New Zealand Horticulture Export Authority Amendment Bill (No 2) be now read a first time. 
Ayes 109 
Labour 52; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8. 
Noes 8 
ACT New Zealand 8. 
Bill read a first time and referred to the Primary Production Committee. referred to the Primary Production Committee 
Corrections Bill 
First Reading 
Hon MARGARET WILSON (Acting Minister of Corrections) 
: 
 I move  
That the Corrections Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Law and Order Committee. This measure is a major reform of the law governing the operations of the corrections system. Reform is needed for four main reasons. First the legislation needs to reflect modern conditions and practices. The Penal Institutions Act envisaged prisons as small units under the control of the superintendent who was charged with the administration of the prisons as well as having the responsibility for the welfare of inmates. That was realistic in 1954 when Mount Eden was the only prison to have over 200 inmates but prisons are now much larger. For example Waikeria has over 800 inmates. 
Secondly the law governing the administration of the corrections systems needs to be compatible in its philosophy as well as in its specific provisions with the recently enacted Sentencing Act and Parole Act. That legislation includes reference to such key considerations as protecting the community providing for the interests of victims and assisting the offender’s rehabilitation and reintegration. By contrast current corrections legislation is silent on the principles that should guide the administration of sentences and parole orders. Thirdly the bill is also needed to support the Department of Corrections’ new approach to the assessment and management of offenders which is aimed at improving community safety. A set of assessment instruments has been developed so that efforts to rehabilitate offenders are better targeted at those who pose a serious risk to the community and those who are most likely to benefit from interventions. The legal framework should support this system. Finally the bill is needed because many incremental changes over the years have made the Penal Institutions Act complex and difficult to follow. 
This bill has been developed over 3 years and includes a substantial public consultation exercise. I would like to thank many people involved in that exercise. I also acknowledge the former Minister of Corrections the Hon Matt Robson and the current Minister the Hon Mark Gosche for their contributions to the bill’s development. 
The bill makes some important changes to corrections legislation and I would like to examine these briefly. For the first time there are legislative statements of the purpose of the corrections system and the principles that guide the operation of the system. In summary the purpose is to contribute to the maintenance of a safe and just society by ensuring compliance with sentences and orders assisting in the rehabilitation and reintegration of offenders and providing information to the courts and the New Zealand Parole Board. 
A number of operating principles are set out. The first two are that the maintenance of public safety is a paramount consideration in decisions about the management of offenders and that victims’ interests must be considered in such decisions. There is also a strong emphasis on effective rehabilitation and reintegration. The bill makes no provision for privately managed prisons beyond 12 July 2005—the expiry date of the contract with the Australasian Correctional Management Pty Ltd for the management of the Auckland Central Remand Prison. That reflects this Government’s view that the management of prisons is a core activity of the State including the use of highly coercive powers against individuals and that it is inappropriate for private sector organisations to exercise such powers. 
The remand prison is owned by the Department of Corrections and after 2005 will continue to operate much as it does now but under departmental management. The department’s chief executive will have the legal custody of all prisoners except any who may be held in police jails. This is administratively simpler than the current arrangements whereby prisoners are in the legal custody of the prison superintendent. It also reinforces the point that the chief executive is accountable for ensuring the safe secure and humane containment of prisoners throughout the country. Consistent with the department’s approach to offender management the bill also requires individual management plans to be devised for prisoners and for rehabilitative programmes to be provided within the available resources to prisoners who will benefit from such programmes. 
A number of provisions currently in regulations are elevated into primary legislation by the bill including prisoners’ minimum entitlements. These entitlements are extended to cover access to news library services and education. In this regard New Zealand law will better reflect international standards particularly the United Nations Standard Minimum Rules for the Treatment of Prisoners. 
The bill also expands on the internal complaints system to cover community work centres and probation officers not just prisons. The role of the inspectors to resolve complaints is similarly expanded to cover offenders who are or have been on community-based sentences or orders and not just prisoners. 
The detection of drugs and other unauthorised items will be assisted by this bill which includes changes to search provisions. An enhanced strip-searching procedure is to be used when there is reason to believe that a prisoner is concealing contraband. The bill also clarifies that staff members are themselves liable to be searched. In one area search powers will be reduced by this bill. A Court of Appeal ruling in mid-2002 held that corrections officers have the power to strip-search visitors to prisons under section 18 of the Misuse of Drugs Act. This power is not currently being used and is considered to be excessive. Instead where a strip search under the Misuse of Drugs Act is necessary corrections officers will be empowered to detain the visitor for a reasonable period while the police are called. 
Provision is made in the legislation for regulations approving the use of non-lethal weapons. However this will be done only if the Minister is satisfied that their use is compatible with the humane treatment of prisoners and the potential benefits outweigh the potential risks. This approach safeguards against the introduction of weapons that are unsafe or inhumane. By contrast current legislation is inconsistent. On the one hand there is a complete ban on such types of non-lethal weapons—namely tear gas and substances designed to disable temporarily. On the other there is no restriction on the use of other types of non-lethal weapons such as batons though in practice batons are used only in very restricted circumstances. 
There are substantial revisions to the prison disciplinary offence regime in this bill including provision for legal representation in certain cases and internal disciplinary hearings. There is also a significant change regarding the appointment of visiting justices who hear appeals and the more serious and complex disciplinary cases. The existing provision for the Minister of Corrections to appoint JPs as visiting justices is replaced by a provision for the Minister of Justice to appoint barristers and solicitors to this role. Visiting justices hear appeals that may turn on complex legal issues and it is therefore appropriate that this role be undertaken by senior lawyers with relevant skills and experience. 
Finally I signal two areas in which amendments to the bill will be needed to reflect policy that is still under development. The first is to improve the sharing of information. I shortly intend to seek Cabinet approval for a proposal to allow a greater range of information to be shared between the Department of Corrections and Police. This would enhance the ability of law enforcement agencies to more effectively manage the risk to the public posed by high-risk offenders including child-sex offenders who have been released from prison. Consideration has also been given to an information-matching agreement with the New Zealand Immigration Service which would assist in the identification and management of prisoners who will be deported at the end of their sentence. 
The second area in which amendments to the bill will be needed is to reduce the use of cellphones by prisoners to intimidate people organise escapes and plan crimes. Officials are looking at the feasibility of jamming cellphone transmission in prisons as a means to prevent such activities. 
Overall I consider this bill will provide a sound legislative framework for the corrections system well into the 21st century. I therefore commend the bill to the House. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 The National Party in Opposition strongly opposes the Corrections Bill. We describe it as “Labour ideology meets bureaucratic envy”. The ideology leg of the double is Margaret Wilson and the other spa-pool liberals in Cabinet who do not believe that private enterprise should be involved in managing prisons; the bureaucratic-envy leg of the double is that the Government does not want private prisons showing up the inadequacies of the public prison service. The fact is the public prisons are failing in every benchmark that we would expect of a sensible prison service; and when the Parliament finds out about certain matters happening in Hawke’s Bay in the last 24 hours that will be even more evidence of a prison system that is in complete failure. 
The worst feature of this bill is that the Government plans to cancel the private management of prisons in New Zealand and it simply does not make sense. The Auckland Central Remand Prison the only private prison we have in New Zealand is better than the public service on price quality assessment violence and cultural grounds. I would like to go through those issues to highlight to the Parliament why it is just not common sense to support the abolition of private prisons in New Zealand. 
Right now the private prison in Auckland has 300 inmates and that costs an average of $43000 a year per inmate at that prison. 
Jill Pettis 
: How much? 
Hon TONY RYALL 
: It is $43000. This compares with equivalent prisoners in the public sector at a cost of $72000 per prisoner. So it is $43000 in the private prison and $72000 in the public prison. The cost of the average prisoner in the public service is $54000 a year on average. So it is cheaper in the private prison. The private prison requires only about 70 corrections staff for the 300 prisoners. The union code that this Government has negotiated would require 150 prison officers for an equivalent prison population. 
On Radio New Zealand last month the Minister of Corrections misled the country when she said these costing comparisons were invalid because the private prison dealt only with prisoners of low security. That was not true. We believe that the Minister has been advised that that was not true. The remand prison deals with some of the most dangerous prisoners that the prison service deals with. In fact it is high-security prisoners who dominate in the remand prison sentence and what we are saying is it is $43000 in the private prison and $72000 in the public prison. It does not make sense on price. 
Let us look at the issue of quality. What we know is that there is a huge requirement on the private prison service to meet a whole lot of benchmarks. Every quarter they must file with the Department of Corrections a benchmark report a couple of inches thick of comparative figures on the performance of the prison. What we know is that the private prisons perform better when it comes to assessing an inmate on arrival. They provide higher-quality psychological services. We know that more education and rehabilitation is being delivered per hour per prisoner in the private prisons. We know that Maori are much happier with the performance of the private prison than they are with the public prison service and I think the Government will be hearing a lot from Maori on this bill. We know there are fewer incidents of self-harm in the private prison and less violence. 
So on all the benchmarks that we would expect of a prison the private prison service is better than the public prison service not only on price but also on quality violence assessment and cultural grounds. In fact the public prison service and its leadership are so regarded by the public prisons that the Government has been trying to recruit the chief executive of the private prison in Auckland to be on the Ngawha prison project management team. It then said that once that prison is built it wants those staff to mentor the manager of the Ngawha prison then move on to be on the project team of the next public prison. 
The Government is trying to poach the people who run the private prison system to run its own system. The private prison system is so bad that the Government wants the guy who runs the private prison to run some of the public prisons! It is just ideology meets bureaucratic envy. The Government does not want private enterprise involved. It talks about public-private partnerships on the roads. Internationally public-private partnerships have worked most effectively on the roads and in the prison system. The Government says that it wants those public-private partnerships on the roads but it is not prepared to have them when it comes to the prison service. 
What is more there is bureaucratic envy. The Department of Corrections fails in comparison with the Australian-run private prison time and time again. That prison the Auckland Central Remand Prison is run by a Maori guy with a strong history in the prison service. He brings a different corporate culture a different style of running the prison. The public service admires him so much that the Government has been trying to poach him to go and work in the public prison service. 
The National Party says this bill is wrong because it stops the opportunity to expand the use of private prisons in New Zealand. National appeals to the other parties to realise that it is just not common sense to do away with what is working when in fact the Government wants to do away with it only because of ideology and because the failing Department of Corrections is embarrassed by what is going on. 
We simply do not believe that the Department of Corrections should be subject to new legislation at this stage. We believe that the Department of Corrections should be subject to an independent commission of inquiry into its own performance. It is a department that paroles killers to live next door to the sisters of their victims. It is a department that failed to advise a young woman who was sexually molested by a member of her family that that molester was actually being paroled to the community in which she lives. It is a department that fails to enforce the sentences that the courts hand down. It is a department that has lost control of its staff. It is a department that is being completely mismanaged. The Department of Corrections is a department that can take a $40 million prison-building project and turn it into a $132 million prison-building project. So the National Party is strongly opposed to the Corrections Bill. We will be waging a strong campaign up and down the country because it simply does not make sense to pursue ideology in this way. 
In the other areas of this bill which my colleagues the Hon Nick Smith and Judith Collins will talk about it is clear that this bill is overly prescriptive and overly bureaucratic. We oppose the extension of prisoners’ rights. We think they are privileges that should not become litigious in terms of being enshrined by Parliament. We oppose the inclusion of the integrated offender management system in legislation. We think that that will lead to further litigation and cost by prisoners and we are most strongly opposed to the ideologically driven bureaucratic envy that is halting the use of private prisons in New Zealand. If public-private partnerships are good enough for our nation’s roads they are good enough for our nation’s prisons. 
We know that that Auckland prison has—[ 
Interruption 
] When Mr Robson was the Minister of Corrections he went to the private prisons and praised them for what they were doing. He told them they were doing great. If they are doing great why does the Government want to stop the private prisons? It is only to do with ideology. The National Party is strongly opposed to this bill. 
MARC ALEXANDER (United Future) 
: 
 United Future supports this bill going to the select committee but we do have grave concerns and we will outline them a little later. We commend the Government for undertaking the decisions to upgrade and reform the legal framework of the corrections system. It is advantageous to bring legislation regarding corrections under one bill. 
The Penal Institutions Act and the Criminal Justice Act have both had to incur many incremental changes in the last 49 and 18 years respectively. Current legislation is not user-friendly and struggles to allow for an effective management team. It is timely to look at this legislation and make changes that allow for modern policy security treatment management and administration. New Zealand has changed since the 1950s when the Penal Institutions Act was enacted to govern the prison system. We now govern a much larger group of inmates. We aim to control the entry of different drugs. The more familiar drug marijuana amongst others has now been joined by methamphetamine which is easy to smuggle. 
In 2001 about 2800 inmates tested positive for cannabis and we need to address that and any other drug abuse before our ideas on drug and alcohol treatments can have any real success. We have to draw a line when for example children are used to bring drugs and needles into prisons. We need to consider the implications of needles that are shared amongst inmates entering our prisons and leading to blood-borne viruses. We need to act on statistics that show that the number of random drug tests returning positive results rose again in the year 2001-02. We need to be able to stop unauthorised objects such as mobile phones and weapons from entering our prisons. But to combat that we will need to have different security measures and new surveillance capabilities. These need to be incorporated into legislation to provide for better tools to combat the problems within our corrections system. 
As well as incorporating practical changes into the corrections system there are also new philosophies that guide our policies. We need to legislate these changes to ensure that custodial community-based sentences and rehabilitative interventions are instituted effectively. New ideologies are ineffective if they are not accorded appropriate levels of resources or commitment. 
The motivation to align this bill with the Sentencing Act and the Parole Act is also important. Although it is known that United Future has serious reservations about those new Acts we do still consider it necessary to have legislation working in a complementary fashion and as effectively as possible. But United Future will find it more effective to deal with fewer pieces of legislation when pushing for changes regarding law and order. We think that the provision for a purpose and principle clause in this bill will help align the corrections system to a more modern framework and we look forward to discussions at the select committee to ensure that this will be achieved. 
United Future is very keen to see effective management of the corrections system. Much of this bill is concerned with the policy rules and responsibilities for management including the chief executive of the Department of Corrections taking legal responsibility for all inmates in New Zealand. It is crucial to have submissions and discussions about how these roles have been delineated in the bill and to discuss the responsibilities that they have been given. 
With repeat offending and recidivism levels so high in New Zealand—up to 87 percent within 5 years—we are interested in the level of individual management rehabilitation integrated programmes and assessment that will be available to inmates. We expect this bill will be contentious. The treatment of people involved in the corrections system including all levels of staff and the inmates needs to be considered. We expect deliberation on the rights of inmates balanced by the need for effective procedures. We look forward to arguments being put forward both for and against the new search seizure and detainment powers. We are already aware of staff who will find their inclusion in search and seizure protocols a welcome relief from threats and coercion from inmates. It is not wrong to have search and seizure procedures. Inmates are after all in prison for a crime. They are not meant to be enjoying the pleasures of freedom. Their crimes have seen to that. And visitors should accept that they have nothing to fear if they are not acting against the law. But the need is definitely there. 
In December 2002 a search of 355 visitors in Christchurch Prison resulted in the seizure of cannabis leaf and oil amphetamine drug utensils ammunition and knives; in Waikeria Prison in December 2002 700 pseudoephedrine tablets were located in the vehicle of a visitor. However United Future at the outset of this bill has reservations about the proposal to involve police in visitor searches. It seems the Government is overlooking the fact that we are already experiencing staff shortages particularly in Auckland and that increasing the duties of police is not really a viable option not to mention the practicalities of where these visitors will be held in cells with their kids—and what practical accommodation will be provided? 
United Future has no problem with the intent purpose and scope of this bill excepting in one very important area. Although supporting this bill to select committee we strongly object to the proposal to end and remove the ability to contract out prison management. We have heard that before and this will be a very grave stumbling block to our future approval. We believe that private-public management of prisons requires further deliberation. 
We also consider that this bill will help support a private-public contracting agreement as it is outlined in detailed very focused policies roles and responsibilities. The private-State mix in the running of our prisons is important in that each can keep the other honest particularly in terms of innovation cost efficiency accountability transparency and progress. I hope Labour takes note of those because if the privacy of prisons is not addressed to the satisfaction of United Future we cannot support this bill. We would like to stress that if contracting is not adequately addressed in the select committee support for this bill beyond the first reading will definitely not be assured from United Future. With that one major reservation United Future supports the bill to the select committee. 
EDWIN PERRY (NZ First) 
: 
 New Zealand First will support this bill to the select committee and will watch it very carefully as it makes its way through there. There are some concerns though with regard to the bill. The background to this bill to do with the corrections system has changed markedly since the current Act was passed in 1954. Obviously there may need to be some changes to the legislation but my concerns are that we are currently building three more prisons and I want to ask Labour members whom those prisons are for. That is my concern. Who will be going into those prisons and how much will it cost? 
Hon Dover Samuels 
: Full of Maori. 
EDWIN PERRY 
: Yes the prisoners are all Maori; it is exactly as the member has just said. That is dead right. I have some concerns about that because 53 percent of Maori males on a population basis do house themselves in the prisons. So I have some real concerns about this particular area. 
Much of the bill deals with the operations of the prisons. Yes that is questionable too. In respect of how some of the prisons are run my informants tell me that the prisoners have more rights than the officers so I have some questions to be answered about that. 
I also wish to discuss the purpose and principles of the corrections system. Clause 5(1)(c) states that one purpose of the corrections system is to provide “information on offenders to the courts and to the New Zealand Parole Board to assist them in decision-making.” Prior to Christmas 500 prisoners at risk of re-offending were released. Were we informed about that? No. So there is an example of prisoners who had committed crimes being released—prisoners we would have had to keep our eye on. Some of them have committed crimes since being released and their names have been noted quite clearly in the newspapers recently. 
I want to come back now to the cultural background and language of offenders. My informants tell me that some of the Maori programmes that have been run in some of our prisons are not working for the betterment of the Maori people involved. The laugh is that some of the Maori prisoners attending those classes get paid $2 for attending and quite frankly some of them are going there just to collect the $2. Another thing is that tikanga is being taken into the prisons and a service is being provided in the prison by a marae that sits outside the prison. I believe that tikanga and cultural aspects are a matter of mana and some of the things being taught should stay outside the prison. I know for a fact too that some Maori prisoners are under so much stress from having different cultural aspects of their kawa forced on them that some of them have entered mental institutions. I have some personal experience of that involving my cousin whom I will not name in this House obviously. The information is available if somebody wants to contact me about that. 
Clause 6(1)(e) states: “the corrections system must ensure the fair treatment of prisoners and offenders who are subject to community-based sentences released on home detention or released on conditions under the Parole Act 2002 or the Sentencing Act 2002”. We will be watching that area very carefully as the bill goes through the select committee. I sit on the Law and Order Committee with other members of the Opposition and the Government. 
Another area that interests me is paragraph (g) in clause 6(1) which states: “offenders must so far as is reasonable and practicable in the circumstances within the resource available be given access to activities that may contribute to their rehabilitation and reintegration into the community”. I do not think we go far enough in doing that and I do not think the programmes that are available within the prisons allow prisoners when they come out to move to a feeling of confidence and self-worth or a feeling of their mana. I believe that the polytechs could play a very important role in that regard. Prisoners could enter into a training programme while in prison and if they are released before the programme finishes they could gain creditable certification by going on to polytech to finish their training programme. That would endow them as I said before with the mana the experience and the training to enable them to move into programmes. 
Clause 6(1)(h) states that “contact between prisoners and their families must be encouraged and supported”. I must say that that area is very close to my heart. I went to a prison recently to visit one of my cousins; it was the first time I had been into a prison to visit someone. I tell members something that really hurt me. I saw a Maori chap who was in prison come out to meet his family. His wife arrived—whether it was his wife or his partner I do not really care; I believe it was a whanau group. The father appeared from the door that prisoners come through for visits and the two little children who were with the wife the two little tamariki raced up to their father and grabbed him round the legs. They held on to him and called out “Dad Dad Dad”. Quite frankly it really upset me to see that sort of thing going on. It just seemed to be a way of life for that family to enter the prison to say good morning to Dad. It really upset me to see that happen. 
Hon Dr Nick Smith 
: And rightly so. 
EDWIN PERRY 
: I thank the National member for that. 
I want to talk about clause 69 which deals with prisoners’ minimal entitlements. I know prisoners have to have some entitlements but at the end of the day those people are better looked after than our returned servicemen and women who at one stage did not have any accommodation and were just about kicked out of their building in Levin. Our old people do not have the entitlements that prisoners have. 
Jill Pettis 
: Oh don’t be so simplistic. 
EDWIN PERRY 
: Oh the member for Whanganui can go on too. 
Hon Trevor Mallard 
: At least someone elected her. 
EDWIN PERRY 
: That is fine; I do not have a problem with that. I have the same opportunity as her while I am here to state my view. 
Clause 69 also mentions physical exercise. This is what prisoners get: physical exercise bed and bedding food and drink and access to private visitors. That is fine. I do not have a problem with that. I do not have a problem with allowing access to their family not at all. They also get access to legal advisers. 
Judith Collins 
: Elderly people should have access to legal advice. 
EDWIN PERRY 
: Exactly. Our old people should have access to legal advisers if they cannot afford one. Prisoners have an entitlement to receive medical treatment. Why cannot old people have free medical care if the Government gives it to these people? Certainly the elderly may need that. Other minimum entitlements are to send and receive mail and to make outgoing telephone calls. What a wonderful place prison is to be! I do not have a problem with information and education either. I believe that is what those people need in order to be rehabilitated into the community. [ 
Interruption 
] Something is buzzing over there. I must be doing something as a new member. 
In relation to drug searches my informant informs me that children under the age for being searched are being used as couriers to take drugs into prisons. It is a real concern that little children and babies are being used as couriers to take drugs into prisons. 
Jill Pettis 
: What populist crap! 
EDWIN PERRY 
: Is that right? If Jill Pettis wants to organise a meeting with me I will welcome a visit from her and I will inform her of whom that person is and where those drugs are going. 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. I really think that the remark made by the member was grossly out of order and that she should be asked to withdraw and apologise. I am sorry to interrupt the member’s speech. 
Madam DEPUTY SPEAKER 
: I ask the member to stand and withdraw and apologise. 
Jill Pettis 
: I withdraw and apologise. 
EDWIN PERRY 
: The member’s body language tells me a lot. Thank you. New Zealand First does support this bill going to a select committee. Obviously with Mr Ryall on that committee he and other members will be watching the matter very carefully. 
Hon MATT ROBSON (Deputy Leader—Progressive) 
: 
 I am surprised that on a subject like that of this bill there are not more members here in the Chamber. The reason I am surprised is that I have found that every one of the 120 members of this House is an absolute expert on prisons. Yet as the former Minister responsible for prisons I found that there were very few members who had actually visited prisons and for some of those who had it was a very fleeting visit rather than an in-depth one. 
The corrections system in New Zealand can take a lot of criticism. There were a lot of things to change. It was only 10 years ago at te Mangaroa Prison in Hawke’s Bay that savage beatings were handed out to inmates—inmates whom I would quickly say had no sympathy from the New Zealand population because they had carried out some terrible crimes. But the beatings were carried out by staff. That happened about 10 years ago. There was never a thorough investigation of what happened there and it took a long time to clean that prison up. Recently as I am sure Mr Mark will bring to our attention at Christchurch Prison a group was set up to enforce security. It was popularly known as the goon squad. That was an inappropriate use of security in a prison and the group was disbanded. There are many many examples that could be brought up in the prison system of matters where change is needed. 
But the most important aspect of the bill is that it attempts—in fact I think it more than attempts; I think it succeeds—to reflect the positive changes that have been made in the New Zealand corrections system to my knowledge making it one of the leading corrections departments in the world. It has taken some time to get through to members of this House and to the public that the changes being carried out are aimed at reducing reoffending. That means that inside a prison the first task is to know whom we are dealing with how we can make changes and how we can make those changes be of a long-term nature. It is very clear that we need standards in our prisons. One of the difficulties with private prisons and there has been some discussion on that is that in a prison system one can get a number of different standards. So the part of the bill that ends the contracting-out of prisons to allow for private prisons is not a shutting down. That measure will ensure that we have a similar standard throughout our prisons. The challenge is to make that standard a very high one. 
It has been pointed out that in my time as a Minister I praised the private prison that exists at Mount Eden. I did praise it. I was very impressed with the programmes that it ran and with the professionalism of those involved. I said that to the staff and I said it publicly. At the same time I said it would be the Government’s policy that private prisons would come to an end when that contract ended and I gave my reasons for that decision. I gave the reason that the most important aspect of a prison system is to reflect the fact that taking somebody’s liberty is a duty of the State. It is a very very onerous step to take away the liberty of the citizens of any country and therefore when we do that we need to make sure that all the safeguards are there. In my opinion and in the opinion of the Labour-Progressive Coalition Government that safeguard is guaranteed by ensuring that the State is the custodian of prisoners. But I praised the prison at Mount Eden because the corrections system needs to look for the highest standards. The majority of those working in the private remand prison at Mount Eden were trained in public prison systems throughout the world and in New Zealand and Australia in particular and they have given a good shake-up to many of the methods that can and should be used. 
But parallel to that process has been the shake-up that has been going on throughout the corrections system in New Zealand. This bill reflects the fact that in 1954 we had 200 inmates at Mount Eden Prison and I think at a maximum 800 prisoners throughout the country. We now have 6000 people in corrections institutions and about another 20000 people on probation in periodic detention etc. So there is a large number of people within the corrections system. The bill now encompasses those changes and the changes that have been made in order to allow our prisons to get at the core of offending. 
One thing that the bill also does is to reflect the new method in prisons of integrated offender management. Integrated offender management is a triumph of the resolve of those people in the corrections system who are determined not just to handle people in prison as those who should just be warehoused but to be able to undertake the changes necessary to return them as humanly as possible safely to the community. If members read the bill carefully they will see that public safety is a paramount principle within the bill. As well as that in the final analysis public safety which is the aim of the prison system can be ensured only if inside a prison system we have both the resources to carry out the programmes that are necessary and also the structure to make sure that those programmes are in the best interests of the community and the inmates and therefore ultimately of victims. 
Victims are another important aspect of this bill. It takes into account the interests of victims and that is a growing part of New Zealand’s justice system—making sure that we incorporate what happens to people who are the victims of offending. In the Sentencing Act and in the Parole Act the aspects of both the victim and the need to change the offender are central parts of what we are doing. 
If there is one amendment that I consider we should make to this bill it would be to strengthen the provisions to ensure that we take account of restorative justice practices and processes. Restorative justice is a growing phenomenon in New Zealand with communities taking big steps towards being involved in the processes where there has been offending and towards making sure that communities are part of the solution to offending and our New Zealand prisons are not left behind in that. 
In the Hawke’s Bay prison we have the Sycamore Project which I am sure a number of members have visited. It brings victims and offenders together—not necessarily the same victim for the particular offender but offenders face up to what they do to victims. It is a project that has had the enthusiasm of dedicated people both in terms of those who are corrections staff and those who are part of community organisations. I believe this bill should reflect that process and enable us to go forward. 
Another part of the prison system that is crucial to making sure that the goal of avoiding reoffending is reached is recognition of what we do with the large number of Maori in prison. Mr Perry spoke about that. I would be the first to say that at this stage what we are doing is still inadequate. But recognition should be given to the steps that have been taken to make sure that when Maori come into prison we ensure that the best programmes possible in terms of recognising who they are and how they can change are put into place. This bill has updated provisions that will make sure that the legislation reflects the prison system as it is today and not as it was in 1954 and that will underpin the forward movement for the Maori programmes. 
The Maori focus units in New Zealand by the dedication of those who have serviced them—both the corrections staff and the Maori from the community—are a shining light in our prison system. They have got to the core of offending. Before programmes had integrated offender management—which I have praised and which should be enhanced by this bill. The Maori focus units have taken the concept that we take a person from where he or she is by looking at the person’s background and the inherent values that person is entitled to have and strengthening and working on those. It is nothing less than a simple recognition that offending by Maori is offending against Maori as well. 
This bill is not the end of what we need to do in terms of our prison statistics which are far from satisfactory. But it is a big step along the way. The bill will give our corrections staff—I say here quite publicly they are the unsung heroes of New Zealand’s fight against offending in the main—a tool that will allow them to put in place the best practices that we should have in a modern New Zealand prison system. 
NANDOR TANCZOS (Green) 
: 
 The Green Party is supporting this bill through the first reading to the select committee. We are supporting it with mixed feelings. We think it does do a number of useful things. It consolidates clarifies and updates the legislation in particular in relation to integrated offender management which the Hon Matt Robson has referred to in the previous speech. But we believe that it also does have some aspects that need careful scrutiny and we are looking forward to finding a way to participate at the select committee. The Greens do not have a member on the Law and Order Committee but we will be looking to participate on that committee in going through the careful scrutiny of this bill that is required. 
I have been looking at the Bills Digest on the bill. I saw it discusses the purposes and principles of the bill and the purpose of the corrections system. It sets out a number of purposes including ensuring that the community-based and custodial sentences that are imposed are administered in a safe secure humane and effective manner. I do not think any of us could disagree with any of those objectives. It also mentions assisting in the rehabilitation of offenders and reintegrating them into the community so far as is reasonable and practicable in the circumstances. That does bring me to think about the Roper report which was written some time ago now and about some of the very useful recommendations in that report in particular in relation to habilitation centres. 
I have raised with justice officials at the Justice and Electoral Committee a number of times the issue of why there is such little support for habilitation centres in this country. I have been told that there are only a few actual habilitation centres but that many of the principles of habilitation are being applied in all kinds of ways. I do not find that answer satisfactory. I do not see the kind of support for released inmates that I would expect to be provided through habilitation centres in place for many inmates. When I think of the few habilitation centres that do exist I am thinking for example of Te Ihi Tu Trust in Taranaki which has done some very good work with released inmates or inmates at the completion of their sentences showing very good results in reducing offending among them. But as with many of those kinds of community organisations it constantly struggles for money and support. We should be looking at how we can provide more support to some of those organisations that do such valuable work in the community. 
I am also aware of the representations from many community organisations to me as justice spokesperson for the Greens that refer to the lack of support for released inmates and inmates who are coming out of prison. There are some emergency benefits available but often they are difficult to obtain and inmates are basically left to their own devices in many circumstances after they are released from prison. If we are serious about wanting to stop reoffending we have to carefully address that. The reintegration of former inmates into the community is extremely important and for people who may have been institutionalised by spending possibly years in prison it is crucial that we look at ways to ensure they are able to exist peacefully non-violently and lawfully in the community. 
The digest goes on to refer to other principles of the bill. The maintenance of public safety is the paramount consideration and that is as it should be. Also the victims’ interests must be considered and another principle is to reduce the risk of reoffending by taking into account the cultural background ethnic identity and language of offenders in decisions related to their management. That is all common-sense stuff. Offender’s families are to be engaged in decision making; that seems common sense to me. Another principle is that there should be fair treatment of prisoners and offenders. 
The digest then goes on mention that sentences and orders must not be administered more restrictively than is reasonably necessary. I am not sure what the bill has to say about the incarceration of people with disabilities in particular but I can talk from my experience as an advocate for at least one wheelchair-bound person who has been imprisoned about the quite abysmal treatment of that person. That was not through any callousness towards or disregard of that person by prison staff but simply through the lack of facilities for people with serious disabilities. One of the things we do need to look at in this bill is what it states about people with disabilities and how can we ensure that people with disabilities do not have their basic rights abused simply because of the lack of facilities available for them in prison. 
The digest states that offenders are to be given access to activities in the community that may contribute to their rehabilitation and reintegration and it also finally in the clause about principles states that contact between prisoners and their families must be encouraged and supported. That is again an extremely important aspect of the prison system. If I look at what has happened over the last few years—much as I respect the Hon Matt Robson’s work over many years on prison reform and some of those issues—I see that some of the things that happened under his ministerial leadership were in my opinion sadly lacking. In particular in the regulations governing prison visits we now have a system that is regulation bound extremely bureaucratic time consuming and takes an inordinate amount of forward planning which is often not appropriate in the circumstances. It is now impossible for a person to just say he or she will go and visit a cousin or sibling in prison to see how he or she are going. Now people have to go through an extended period of letter writing correspondence and approval before they can go to visit someone in prison. While that may be justified on safety and suchlike grounds the effect in practical terms is to restrict access by families to inmates and by inmates to families. 
Some people in this House may not care about that because they think those people are all thugs and scum and we should just deal to them in whichever way we please. But if we are serious about stopping offending about rehabilitation and reintegration and about a concern for victims our main concern must be to prevent more victims being victimised. The encouragement of contact between prisoners and their families is crucial in that. The select committee should look at how it can bring some pressure to bear on the regulations governing visits to prisoners in order to make it easier and more streamlined and to try to facilitate that contact which is so important in rehabilitation. 
One of the areas of the bill that does concern the Greens quite a lot is some of the new coercive powers: the use of force and restraints and some of those related matters. Clause 83 authorises the use of force in certain circumstances and provides for the authorisation and use of non-lethal weapons by people in certain circumstances. We need to be very careful when providing new powers that enable the use of force against inmates. Obviously there are times when it may be necessary to restrain people physically but we should be very careful about how we regulate those powers and how we put limitations around them. That is a caution and something that the Green Party will want to examine in some detail. There are some new clauses around the search provisions and it is interesting to note the concern of prison officers that they themselves may be subject to strip-searching. We should look at that as well. 
Finally I shall touch on two things very quickly before my time is up. Firstly we should be looking at the education that is available to inmates. That has been severely curtailed under the previous term of the Labour Government—in particular the access of outside tutors to prisons. They are important in providing a fresh perspective to inmates and we need people going into the prisons who are not prison staff. If we look at the kinds of practices of the goon squad that the Hon Matt Robson has already referred to we see that many of those things will come to light only when we have outsiders going in—whistle-blowers who can go into the prison system and see what is going on. Our opposition to any attempts to restrict outside people going into prisons and having relationships with inmates is important. Secondly we also need to look at the culture of the Department of Corrections. I have been to many prisons. There are some very good officers who see their role as protecting the community and aiding rehabilitation. There are also some officers who have a brutality of attitude that cannot be accepted in our Department of Corrections. 
RUSSELL FAIRBROTHER (NZ Labour—Napier) 
: 
 It would be a travesty for this bill to be seen as a prisoners’ rights bill. That is the way it has been portrayed by my friends in the Opposition. We have heard it already from Mr Tony Ryall and Mr Edwin Perry. There cannot be defined roles for prison officers unless we know what they are there for. For 10 years under that Government there was anarchy in our prisons as prison officers bumbled their way around endeavouring to apply sentences properly. I speak as someone who has acted for over 20 officers before judges and juries the Employment Court and the Employment Tribunal. They have been doing their best but without any help and without the nasty cynicism of Judith Collins who tries to find her way around the prison system. The only prison door she would have been through would have been a peephole. 
Judith Collins 
: You big liar! 
RUSSELL FAIRBROTHER 
: I have to say— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Would the member sit down. The member will stand withdraw and apologise. 
Judith Collins 
: I must say that I do—. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No The member does not need any other comment. She should just withdraw and apologise. 
Judith Collins 
: I withdraw and apologise. 
RUSSELL FAIRBROTHER 
: This bill sets out the rights of prison officers as they go about bringing about reform in our community. It is not good enough to close one’s legislative mind to what is happening in those prisons; we have to address the problems there. This bill addresses those problems and empowers prison officers to do their job properly and complete their responsibility to our community. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: 
 That speech showed just how out of touch the Government is with the expectations that the people of New Zealand have of our corrections services. This afternoon I join with my colleague Tony Ryall—one of the most effective spokespersons on justice I have seen in my 12 years in this Parliament—who brings some realism to the key issues of law and order we deal with in this House. In particular I want to focus on the Government’s obsession with statist solutions to correctional challenges. 
It is good to have John Tamihere in Parliament. What he said about the statist policies of this Government is absolutely right and no more reinforced than in the mad provisions of this bill—clauses 185 and 186—that will prohibit private management of prisons in New Zealand. John Tamihere said that the State does not have all the answers and National knew that. That is why in 1997 National provided in our correctional laws—specifically the Penal Institutions Act—for the private management of prisons. What did Labour members predict? Labour members should go back to  
Hansard 
 to look at the stupid things they said about what private prisons would do. They made all sorts of obscene claims. As a previous Minister of Corrections I am proud that I signed the contract to allow Australasian correctional management to introduce the private management of the Auckland remand prison. 
Have any claims made by Labour in 1997 come to fruition? 
Hon Tony Ryall 
: Not one. 
Hon Dr NICK SMITH 
: Not one. In every single performance measure the Auckland remand prison has outperformed our public prisons. Labour wants to shut it down and I want to know why. 
Stephen Franks 
: It is too embarrassing. 
Hon Dr NICK SMITH 
: My colleague is probably right. He is right in saying that Labour is so embarrassed by the success of private prisons. 
One thing that concerns me and my constituents is the cost of running our prison service. Do members know that the private prison system is providing a remand facility at $29000 per inmate a year less than the public service? That is $5.7 million a year being saved by what National did in providing private contracts. Why are members opposite opposed to saving $5.7 million a year? 
Russell Fairbrother 
: You cannot compare remand prisons to sentence prisons. 
Hon Dr NICK SMITH 
: Let us check that out. Mr know-it-all Fairbrother says that one cannot compare prisons. Margaret Wilson tried that line and misled the people of New Zealand. She said that the figure of $72000 per inmate in the public prison service was an unfair comparison with $43000. Let us be serious. Where do we know of a comparable public facility? The Christchurch remand prison is identical. It was built by National. It is a brand new building run by the public prison service and it costs $29000 per inmate more for public prisons to run it than it does to run the Auckland facility. If that is not comparable then I ask Mr Fairbrother to explain why. [ 
Interruption 
] I remind members opposite of all the good things we could do with $5.7 million a year such as the number of people who could be put into a prevention programme like Family Start the number of extra teachers and a reduction in the number of mental health patients. Under this Government they are being thrown into police cells and prison because this Government’s ideological perversities are so opposed to private success stories. It is just unexplainable and it is a disgrace. I challenge John Tamihere to oppose this bill because it is statist nonsense. It is that simplistic view that if it is not run by the public service then it is not good. 
Then we had the contribution from Mr Matt Robson. He said—and I give him credit—that as Minister of Corrections he had been to the Auckland remand centre and it was doing a good job. On that Mr Robson we agree. He said the reason was that all the staff had been trained in the public prison service. 
Hon Tony Ryall 
: Rubbish! 
Hon Dr NICK SMITH 
: Well I have the staff figures here and there are 69 correctional officers at the Auckland remand centre. Do members know what portion of them have previously worked in the public prison service? It is less than 10 percent. Ninety percent of them have never worked in the public prison service. Is it not a remarkable success story that a facility run by a private service with independently trained officers is able to so outperform the public one? 
Let us look at the ways in which the private prison service is outperforming the public sector. Let us look at the number of incidents. All of us in this Parliament would want to run a prison service in which suicides and self-harm are minimised. Is it not interesting that the record of the private prison service is substantially better than the public prison service? Let us look at the training programmes that have operated in terms of the Maori relationship which is obviously important for a prison in Auckland. I can tell Mr John Tamihere that the Maori community in Auckland says that the privately run prison is a success story. 
Let us look at the number of programmes that are run in terms of education and cultural activity. In all those things the private prison service is outperforming the public prison service. Why shut it down? Why let ideology get in the way of what works? When we debated that matter in 1997 there was a theoretical debate. People said it might work in Australia but it would not work in New Zealand. Well it is working in New Zealand and this ideologically stupid Government wants to shut down success increase the cost to the New Zealand taxpayer and reduce the performance of our prison service. I say that that is a disgrace—[ 
Interruption 
] I ask Mr Fairbrother why the Auckland remand prison has been able to operate successfully with 69 prison officers— 
Russell Fairbrother 
: It is a remand prison. 
Hon Dr NICK SMITH 
: That is right it is a remand prison. When it is taken over by the public prison service how many staff do the union rules say it must have? Not 69 but 150! What is the sense in that? That is simply about Labour playing to its trade union - lackey mates rather than doing what is in the interests of the taxpayers and our prison services. It is a disgrace. 
The further point of concern that I have about this bill is that there are loads of clauses on all of the rights our inmates must have and so little about the victims. We have three clauses about all the food and dietary provisions we have to make for our prisoners. 
Hon Tony Ryall 
: Read it out. 
Hon Dr NICK SMITH 
: Well it does make interesting reading: “Every prisoner must be provided with a sufficient quantity of wholesome food and drink based on food and nutritional guidelines”…that will comply with “the various religious spiritual and cultural needs of the prisoners.” My goodness me! It seems to me that this Government is more interested in the rights of inmates than the rights of other citizens in this country of ours. Members on this side of the House say that is wrong. 
I have to make one further point in respect of some of the other rights such as telephones. We will give inmates the right to use telephones. Is it not intriguing that the Minister of Justice Phil Goff challenged me as Minister of Corrections to make the legal changes to allow phone-tapping? In 3 and a bit years of a Labour Government they have not done a thing about it. Inmates are continuing to commit crimes behind prison walls and Labour does not seem to care. It is not good enough. 
MARTIN GALLAGHER (NZ Labour—Hamilton West) 
: 
 One thinks that whenever the volume gets turned up on the Opposition benches as per the recent performances then things truly are happening up on the third floor in the Leader of the Opposition’s office. As we read in the media no doubt the numbers are running. I sense that the loud voices down here are concealing the huge disquiet upstairs. 
In the brief time I have I will just repeat what this bill is about. The purpose of the bill is to provide a new legal framework for the corrections system. The current legislation the Penal Institutions Act was passed in 1954. I was 2 years old when that bill was enacted and I think it is probably time for a review and a bringing up to date. This is an outdated piece of legislation—it must be if it is from 1954 nearly 50 years ago—and it no longer suits the needs and sizes of prisons in 2003. 
The other important point which is my contribution to this debate is that the law governing the administration of the corrections system needs to be compatible with the recently enacted Sentencing Act the Parole Act and Victims’ Rights Act. On the basis that this bill will go to the Law and Order Committee it will give us great pleasure to deal with it in a sane and rational manner without some of the histrionics we have just heard. I look forward to this bill being referred to the committee. 
STEPHEN FRANKS (ACT NZ) 
: 
 Like the speaker who has just resumed his seat I would like to talk about something that was happening in 1954. I wonder whether it might induce a little bit of humility. In 1954 we were three-quarters of the way through 40 years in which the average murder rate in this country was two per year. It may be that they were doing something right back then and that this nonsense appeal to change the law because it is old is something that Labour ought to think about. I want to read something that has had more support from New Zealanders than any other document in this country. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
STEPHEN FRANKS 
: I raise a point of order Mr Speaker. A continual barracking I understand is not consistent with Standing Orders. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is right and the member will notice that I actually did call “Order!”. 
STEPHEN FRANKS 
: I am sorry; I did not notice. Just on 4 years ago 2 million New Zealanders signified their consent to a single-sentence document. I do not think any other document has ever had that level of support. It read: “Should there be a reform of our justice system placing greater emphasis on the needs of victims providing restitution and compensation for them and imposing minimum sentences and hard labour for all serious violent offences?”. This Corrections Bill is the final trashing of Norm Withers’ referendum with its 92 percent support. This Corrections Bill says explicitly that hard labour cannot even be contemplated. This bill says expressly that that part of the referendum must be ignored. 
This bill has also been said to form the final part of a trilogy with the Sentencing Act and the Parole Act. Those Acts and this bill together say that the only punishment of imprisonment is the deprivation of liberty. This expressly reflects the United Nations standard minimum rules for the treatment of prisoners that the Government has signed up to. They include among other things that the conditions may be no more restrictive than is necessary to keep people in custody. In other words depriving people of privileges and telling them that it would be a good idea not to be in prison because it is nastier and less pleasant than being outside is not to be lawful any longer. This bill makes no reference anywhere to punishment. It is not a permitted purpose of imprisonment or of a prison officer’s supervision that prison denounce deter or punish. None of those words appear anywhere in this bill. This bill is the triumph of the politically correct justice Ministers who have done nothing on the justice portfolio for 3½ years. 
Let us go through some of the detail. The Hon Matt Robson referred to victims’ interests. The bill states that prisons 
must have regard to victims’ interests. The Government has been very careful never to define those or even to answer questions in this debate as to what victims’ interests might be. This bill says that each offender—and there are 5000 of them—must be given an individual plan that meets his or her needs. The plan does not meet the needs of the community or the needs of the sentence or the needs that the judge thought were being satisfied when he or she sent the individual to prison to punish to deter and to denounce. There is nothing in this bill about meeting those needs—only the needs of the individual prisoner. This bill is utterly cynical. 
One unusual feature is that it does not have the normal treaty provisions. What is going on over there? I think this is the first bill we have seen for some time that does not draw open discrimination on the grounds of race which is fortunate because the rules that the Government signed up to say there can be no discrimination on the grounds of race colour sex language religion or political or other opinion in a prison. However that is not the practice. As we know the practice in our prisons is in some way to elevate tikanga Maori into a magical potion. In a way it is patronising and insulting. 
An upstanding member of the community who has been deeply involved in prison matters for many years called me in distress just a month or so ago. He had been to the opening of the new wing at the Rimutaka Prison. Around 1½ hours of the opening ceremony were spoken in Maori and around a quarter of an hour in English but he was not offended by that. He could see that most of the people there were Maori and the intention was obviously to be respectful. He said he does not mind New Zealanders adopting welcoming and other Maori ceremonies because they are more colourful than Pakeha ceremonies. What he was offended by was the fact that no one took any time to explain what that prison was trying to do or what those facilities were setting out to do. Even worse he said that one of the kaumatua said to him afterwards that it was comforting to be able to come and see that their mokopuna were going to feel comfortable in prison. What a response! What an objective—to set up a system that so identifies Maori culture with prison that consciously and subconsciously it normalises prison! What an idea—that we simply expect Maori to be in prison to such an extent that tikanga Maori becomes a motif for every prison opening! 
Exactly the same thing happened when new units were opened down in Rolleston. When I heard Mr Perry’s speech I was really comforted to hear that it was as offensive to him as it is to me to see a culture being so closely associated with criminality. 
What else do we find in this bill? Bodily samples cannot be taken from prisoners. One can take fingerprints but one is not allowed to take DNA. No that would be far too modern. It might enable criminals to be caught and we do not want that because then the criminals would just have to be put back inside. It would appear that prisoners cannot be stopped from having computers. The bill expressly bans other electronic equipment but it cannot ban computers. 
Then there is the matter of appeals over security classification. One of the things that the UN rules state is that there should be segregation of prisoners to ensure that they do not in effect cross-infect each other. The imprisonment rules state that those prisoners who by reason of their criminal records or bad character are likely to exercise a bad influence should be separated from others. In this bill segregation is subject to such tight restrictions that I do not think a prison can actually take that rule into account. The bill also states that transfers cannot be used for punishment. Segregation cannot be used to break up gangs. There is absolutely nothing in this bill that reflects the common sense of the old non-association order. There is nothing in this bill that says that security classifications should be made in order to improve the prospect of rehabilitation. Instead security classifications are just that—to ensure against the possibility of escaping. I take it that that is because prisons are paying such a woeful degree of obedience to the rule that says prison cannot be made any more uncomfortable than is strictly necessary for the deprival of liberty. 
Prison is a community. Prisons have become places where the offenders in this community—that is the 2000 to 5000 families whom the police tell us commit 80 percent of the crime—can go and feel at home. This bill confirms that the prison officers are simply hosts. When members read through the disciplinary procedures they will see that they give the lie to it. 
Adjudicators have to have a hearing on whether prisoners are to be given a lawyer to defend them when they are involved in a disciplinary procedure. What are the outcomes of disciplinary procedures? Seven days’ withdrawal of privileges. I can find no definition whatsoever of privileges. Another fierce penalty that can be awarded is 7 days’ cancellation of earnings which may not exceed $100. It is only earnings that may be cancelled; prisons cannot access other amounts in prisoners’ accounts. Prisons carefully provide for the setting up of accounts but they cannot access anything else in them for the purpose of paying fines. The fine for an alcohol or drug offence appears to be potentially cancellation of 7 days’ earnings. What about those who are not bothering to earn? There is nothing here to force prisoners to work. There is nothing about that. As far as I can tell they can be fined only if they have earnings. 
The provisions do not allow segregation or restriction and they make all those bows to the welfare of the offender. The victims the courts and the judges are forgotten. 
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am pleased to rise in support of this bill and recommend that the House send it to theLaw and Order Committee forthwith where I know it will get rational consideration in contrast to the prejudice we have just heard expressed about this issue. 
JUDITH COLLINS (NZ National—Clevedon) 
: 
 We oppose this bill for many reasons. Unlike the Labour member Mr Fairbrother who spoke previously we are not a bunch of wimpy white liberals who sit around in our spa pools drinking Chardonnay thinking about the happiness of the dear Maori in prison. We do not look upon Maori as prisoners; we look upon Maori as New Zealanders. 
Edwin Perry 
: Hear hear! 
JUDITH COLLINS 
: I thank my friend in New Zealand First. We do not sit around saying we are going to say one thing to people about prisoners and that is: “Let’s lock them up for longer.” then when we get into power we will sit around and pass legislation about their diet and their religious and spiritual needs. Look at the sorts of provisions this bill provides. I ask all members to have a look at clause 79(1) which states: “The chief executive must ensure that in every corrections prison so far as is reasonable and practicable appropriate provision is made for the various religious and spiritual needs of prisoners.” What if the prisoner is a Satanist—and that is not a silly question is it Mr Cosgrove? Mr Cosgrove and I both know that there is a bunch of them down in Christchurch. You know that there is a whole stack of them— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member cannot use the word “you” as it brings the Chair into the debate. 
JUDITH COLLINS 
: I am sure that that member knows there is a whole bunch of Satanists down in Christchurch in a White Power gang. That is how one knows one is in Christchurch: the gangs are not Black Power but White Power. That particular right will now be enshrined in law. The bill says to prison management and prison officers—who ought to know what they are doing even if they do not always—“Please don’t make decisions or policies because we are going to legislate every single thing that you can or cannot do.” In clause 72(2) the bill states: “As far as practicable in the circumstances in providing food and drink to prisoners allowance must be made for the various religious spiritual and cultural needs of the prisoners.” What is the prison manager supposed to do if he or she gets a whole bunch of people who say they want a particular sort of meal because of their religion? If they need halal meals will the manager have to go and get different sorts of meat and grains? What about a vegan’s needs? That is absolute twaddle. That is what the Government is putting in this bill. It is wimpy white liberal nonsense and none of the people who must be consulted have been consulted. [ 
Interruption 
] 
Unlike that Labour Party member I have actually visited prisons. I have visited Mount Eden Prison and seen the appalling situation there. I have been to the Paremoremo medium security prison and the Paremoremo maximum security prison and I have even visited someone in D Block. I can tell members that those prisons do not rehabilitate inmates. We in the National Party are not foolish enough to think that prisons at the moment ever rehabilitate. What they do is keep people in a place where it is hoped they will be out of harm’s way and away from the general public. Prison is in fact a punishment. I know that to the Labour Party that is a whole new attitude but prisons should be places of punishment. They should not be holiday camps to improve the diet and physical well-being of prisoners or to cater to their spiritual needs. 
Having said that I acknowledge that some people who go to prison are not absolutely evil and that some of them can be rehabilitated. But I can tell members that they will never be rehabilitated in Paremoremo’s maximum security or medium security prisons or at Mount Eden Prison because the culture in those prisons is not about rehabilitation. 
However the private prison in Auckland the Auckland Central Remand Prison is a prison that is working. It has a culture in which the spiritual needs of prisoners are taken care of but that is not done by making a big song and dance about it and putting it in legislation. It has a culture where prisoners are treated as individuals. They are given education programmes and are helped as much as possible. Better than that as well as the prison’s culture being good it is cheaper and it is not driven by the Public Service Association. It is not about getting more money into the Labour Party coffers through its union membership; it is all about doing the right thing. If that prison can stop someone from going to prison again then in every single case that is a victory. But the reality is that our current prison system is not working. Legislating for prisoners’ diets and putting the onus on prison operators to provide those sorts of things will not fix it. 
How much consultation has there been with Maori? In respect of getting rid of the private prison in Auckland there has been absolutely none—diddly-squat. I understand that plenty of Maori are now lobbying the Maori caucus in the Labour Party and saying they do not want their people to go to prison or to go back to prison but if some of them do go to prison then they want them to come out better people than when they went in. The Te Puni Kokiri people—the closing the gaps people—in their report on 3 October 2002 were very very critical of the corrections service except for one thing: they really liked the private prison. They said that the private prison was actually doing some good. 
It does not matter if we send people away for 20 years or 30 years; one day they get to come out. That is the scary thing because if all we have done by locking people away for all those years is make them into worse criminals—into people who are more inclined to say: “I want I want I’ll take it.” which is what this bill is all about—then we will unleash on the poor unsuspecting community another criminal another rapist another murderer. That is what happens. 
So this bill much-lauded by members of the Labour Party—the wimpy white liberal set the people who wander around jump into their spa pools and drink their Chardonnays the people who are completely out of touch with ordinary New Zealanders— 
Hon Tony Ryall 
: Like Clayton Cosgrove. 
JUDITH COLLINS 
: Like Clayton Cosgrove. What do these people say? They say: “We want to spend more on the prisons but we want to get less.” They want more money for less. That is what this Government wants. It wants 150 staff employed at the Auckland remand centre. It wants 150 Public Service Association members employed there. That is what this Government is all about. It does not want the 69 correctional officers currently working there because gee they might be a bit good. This Minister and his ministry are very concerned now to pick the brains of the general manager of the Auckland Central Remand Centre and his staff and to get those people to help them out with their own thing. That remand service already does health screening for chlamydia hepatitis and diabetes and our public service for all its money does nothing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The question is that the Corrections Bill be now read a first time. As many as are of that opinion will say “Aye” of the contrary opinion will say “No”. The Noes have it? A party vote is called for. The Clerk will conduct a party vote. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: 
 I raise a point of order Mr Speaker. I heard you very clearly call for the Ayes and the Noes and there were absolutely no Ayes at all. 
David Benson-Pope 
: Rubbish! 
Hon Dr NICK SMITH 
: There were not. That is a statement of fact I tell Mr Benson-Pope. There were no Ayes—only Noes. How can you call for a party vote when nobody voted in favour? 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: 
 I called very loudly indeed. Obviously the member has an issue with his hearing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I looked there and I am satisfied that a vote was called for. [ 
Interruption 
] All members in this House are honourable members; their word is unreservedly accepted. If members are not satisfied with that the  
Hansard 
 can always be checked. 
A party vote was called for on the question  
That the Corrections Bill be now read a first time. 
Ayes 81 
Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Bill read a first time and referred to the Law and Order Committee. referred to the Law and Order Committee 
Consumer Protection (Definitions of Goods and Services) Bill 
Second Reading 
Hon MARIAN HOBBS (Minister for the Environment) 
  
on behalf of the 
 Minister of Consumer Affairs 
: I move  
That the Consumer Protection (Definitions of Goods and Services) Bill be now read a second time 
. Since 1994 the Consumer Guarantees Act has been the main source of rights and remedies for consumers who have purchased products and services that are proven to be defective. The Act was meant to cover all goods and services ordinarily acquired in trade for personal and domestic purposes but in 1998 the High Court ruled that the Act did not apply to electricity or electricity line services. This bill will reverse that decision and erase all doubt that the Act applies to other utilities and to computer software. As a cornerstone of New Zealand consumer laws the Consumer Guarantees Act lays down some common-sense rules. Goods must be of acceptable quality services must be performed with reasonable care and skill and when things go wrong the supplier or manufacturer has an opportunity to put things right except in serious cases where the consumer can choose to reject the goods or cancel the contract and get a refund. 
This bill has three underlying purposes—firstly to ensure that the Consumer Guarantees Act applies to all products and services that are ordinarily supplied in trade for domestic consumer use now and into the future; secondly to ensure that the supplier in the supply chain who is best placed to manage the risk of product failure is liable to the end consumer for defects; and thirdly to ensure that New Zealand’s trade practices statutes are consistent with each other. 
The first purpose is achieved by expressly including those products about which doubt has been cast. These include electricity gas water and computer software as goods. They also include network supply functions for electricity gas telecommunications water and waste water removal services. The second purpose is achieved by amending the definition of supplier to clarify that the firm that supplies the service to the consumer is liable for failure to meet the minimum standard performance required by the Consumer Guarantees Act. However there are exceptions for contracts that involve business consumers so that the Act does not interfere with the integrity of business-to-business transactions. 
The third purpose is met by bringing into line the corresponding definitions of goods and services in the Commerce Act the Fair Trading Act and the Consumer Guarantees Act. I commend the members of the Commerce Committee for the sterling work they did in grappling with some very complex issues in connection with this bill. The committee heard many submissions and listened carefully. Most submissions supported the bill but many suggested amendments to make the bill more workable. The committee has recommended several changes that have improved the bill immeasurably. Once again I thank the committee for its good work. 
I would like to comment briefly on the main issues considered by the committee. The original bill included telecommunication signals in the definitions of the goods. Several submissions warned that this might expose Internet service providers and telecommunications companies to liability for the content of and accuracy of information on third-party websites. This would have been an undesirable and unintended outcome and I agree with the committee’s recommendation that telecommunications signals should be deleted from the definition. 
Several submissions urged the committee to delete electricity from the definition of goods. This would undermine the Consumer Guarantees Act purpose with regard to consumers’ redress. The Consumer Guarantees Act provides incentives for everyone in the chain of supply—manufacturers distributors and retailers—to stand behind the products and services they supply. If electricity were included as a good then the guarantee of acceptable quality would apply to electricity retailers and manufacturers. If electricity were included as a service only then the injured consumer would have to prove that the lines company was negligent before redress was available. This would leave most consumers without any remedy and it would remove the incentive for electricity companies to determine who has caused a particular fault. 
Defining goods to include electricity makes a lot of sense and it is not onerous for electricity suppliers. This is because the meaning of “acceptable quality” is based on what a reasonable consumer who is fully acquainted with the nature of the product would regard as acceptable. A reasonable consumer understands that electricity is supplied in real time is subject to momentary fluctuations and is prone to outages due to environmental or other hazards and periodic maintenance. 
A major concern of submitters was identifying who is a supplier of electricity for the purpose of the Act. The committee has formulated an amendment to make this easier. In practice electricity retailers will be responsible for supplying electricity that is of acceptable quality. Electricity lines companies will be responsible for supplying line function services with reasonable care and skill. They will not however be responsible for failures that result from the acts of third parties or events beyond human control where the supplier manages the risk of that occurrence with reasonable care and skill. 
The committee also heard submissions that that definition of goods should not include computer software. As the consumer receives a licence to use software it was argued that software should be regarded as a service rather than a good. Rightly I believe that the committee considered that the consumer receives an interest in software that is similar to other goods such as music CDs. Therefore it should not be regulated differently in terms of its quality and fitness for purpose. The guarantees and remedies that relate to goods are also more relevant and applicable to software than are the guarantees and remedies that relate to services. 
Several submitters asked for water to be removed from the definition of goods and the supply of water to be removed from the definition of services. The committee concluded that the bill should cover water. Currently there is doubt about whether all trade practices legislation covers water. Therefore as with computer software water and its associated supply services are included in the bill for the avoidance of doubt only. 
Another area where submitters raised some serious concerns was the suppliers’ ability to exclude liability to business customers in situations where they do not have a contract with them. The committee resolved this issue by giving a non-contracting supplier such as a lines company the benefit of any liability exclusions contained in the contract to supply such as between the retailer and business consumer. In conclusion I consider that the bill represents a significant development for consumer protection in New Zealand. I commend the bill to the House. 
JOHN KEY (NZ National—Helensville) 
: 
 I rise on behalf of the National Party to support this bill and in particular the amendments contained that will alter the Consumer Guarantees Act. When the original Act was passed in 1993 it had pretty broad provisions. Unfortunately the definition failed to have clarity in a number of areas and this amendment bill attempts to clarify those. I want to spend my time this evening talking about what the bill does what the amendments are proposing to do and the benefits of that. However I want to spend some time at the end on flagging some concerns I have. While the intentions of the bill are good and while we will support it on reading the bill and not being part of the select committee I saw a few red flags and I want to alert the House to those. 
What does the bill do? It provides certainty about the scope of the Consumer Guarantees Act and in particular this is an omnibus bill that attempts to change legislation across a number of bills including the Fair Trading Act the Commerce Act and of course the Sale of Goods Act. In particular as the Minister outlined in her address to the House there are really two issues in terms of the definition of goods and the definition of services. I will touch just for a moment on the definition of goods. This bill will look to include definitions of amongst other things computer software electricity gas and water and in particular the definition of service will also move in those areas but looking at the suppliers. It will mean the definition of a supplier will include someone who does not have a direct contract with the consumer. That is quite an interesting point in the sense that the bill will be implying a contract on a consumer. 
Members will be aware that that has become somewhat more necessary as a function of the electricity reforms that took place where the supply of electricity moved from being a vertically integrated supply chain all the way through to having various pieces: obviously the generators the lines companies and the retailers. The current law is that a consumer will have a relationship with the retailer. If the retailer fails to deliver electricity because of a fault caused by the line company then the consumer will have no further redress. That is one of the things that the bill is attempting to deal with. 
Clause 7 as the Minister outlined allows the retailer to have specific contracts with the business community and to contract out with the business community in certain parts as does clause 9. 
I guess an issue where I start having concerns is that of how the law works. In practice the primary obligations covered by the definition of goods are those of acceptable quality and conformity to a description given. What is of acceptable quality may to a reasonable consumer have one definition for one person and one definition for another. Acceptable quality to a consumer cooking for a dinner party for 12 in the suburbs of Auckland when those people are about to turn up in half an hour the cooker is not working and therefore there will be a lack of food may be completely different from that for a consumer who is not in the house between the hours of 10 in the morning and 3 in the afternoon because he or she is out working hard as we would expect that person to be—not out somewhere on some jolly that he or she may find more enjoyable. 
At a reasonable time like 12 o’clock in the afternoon when not in the house a consumer may not consider a lack of electricity supply to be an issue. But as I said earlier if 12 people are turning up for dinner and the cooker is not working I can assure the House that a reasonable consumer under that condition would want an electricity supply. So there is considerable ambiguity contained in those clauses and I believe they will need some definition. 
One of the major concerns I have is the fact that reasonable consumers will have to read their documentation extremely carefully. It may be argued that they will take a different course of action from the action that they would otherwise take if this legislation were not passed. I ask members to allow me to expand my thought processes on that concern. Currently most consumers in the country take out insurance coverage for their fridge-freezer in the event that there is not continuity of electricity supply. I know that when I look in my freezer at nights I see tucked in there lots of things that I would like to insure on the basis of their being high-quality seafood and the like—from the wonderful electorate that I represent of Helensville—and I know that I have taken the precaution to have a guarantee of that through an insurance contract. This law by being passed will argue that that is not required because we will be able under the legislation to seek compensation and redress via amendments to this consumer protection legislation. 
That raises a number of issues. The first is the sheer logic of that. In other words the cost will now be passed to all consumers as opposed to the cost being passed to consumers who want to cover their positions. For example maybe I do not have a terribly large fridge-freezer in my house— 
Clayton Cosgrove 
: You could afford one. 
JOHN KEY 
: I would like to think I can afford one. But maybe I do not have a very large one because maybe I do not believe in frozen food. I enjoy the freshness of food. I enjoy food and the freshness of food so I am the type of consumer who tends to go down to Foodtown or the local supplier select the fruits of the sea and enjoy them fresh. But unfortunately as a result of this legislation I will be paying through my electricity bill for those people who do not value freshness in the same way I do. That is one of the things when I picked up the bill that just whacked me around the face. I started thinking: “Whoa!” 
Stephen Franks 
: People who cook in hangis are paying for the microwaves of others. 
JOHN KEY 
: That is right. We are supporting the bill because we supported it through the select committee. Now that I have had an opportunity to review it I am not completely sure of that but we are supporting it and supporting it for the rationale that it attempts to do the right thing. The spirit of the bill is in the right place. The heart is in the right place. I am very very confident that when National is back in Government in 2005 or earlier in a few months’ time if Labour cannot go a full term I am absolutely sure I will be banging the table—I am not quite sure what table I will be banging—arguing: “Let’s just pull out of the 2003 Consumer Protection (Definitions of Goods and Services) Bill and just have a look at that.” In particular they are some of the issues I have. 
I want to commend the select committee and of course the Minister for having the wisdom to delete telecommunications signals. I say that because again an interesting part of this legislation is the way it implies a contract with someone whom one does not have a formalised contract with. If I could just take a moment in the House I will discuss why it was very important that telecommunications signals were removed. I point out that there has been a change in the way that financial market instruments are traded in this country as there has been worldwide. The days of oral trading of stocks and shares via brokers in Queen Street have moved somewhat to Internet-based trading. As a former member of the largest sharebroking house in the world I can assure members that that move to Internet-based trading has taken hold and will be significantly greater as the years go by. Had telecommunications signals been left as part of this legislation the downstream effect of that would have been quite simply this— 
Stephen Franks 
: No they are still there. 
JOHN KEY 
: No I tell Mr Franks that I think they have been deleted. They have been struck out unanimously in Part 3. [ 
Interruption 
] Then it is of great concern to me because my concern with the legislation is that there is some ambiguity in it. Let us imagine for a moment that that provision is in there. I do not believe that it is but let us imagine that it is. Then my great concern is that a consumer trading on the Internet purchases a stock and then suddenly there is a telecommunications signal at the point at which that consumer hits the “buy” key. That communication is not transmitted and the consumer then suffers a loss because the stock goes up. Who will that consumer be looking to for redress? That was my understanding of why the provision had been deleted from the bill. I stand to be corrected but my understanding was that that was why the select committee deleted that provision. 
Anyway may I say that I do have pleasure in commending this legislation to the House for its Committee stage but I flag those concerns that I raised in my speech. 
BRENT CATCHPOLE (NZ First) 
: 
 I rise on behalf of New Zealand First to speak on this bill. This bill came about as a result of a 1998 High Court decision in a case brought by the Electricity Supply Association against the Commerce Commission challenging its ruling that electricity was covered by the Consumer Guarantees Act. During the select committee’s deliberation there was some concern about the inclusion of electricity in the principal Act as goods. Because that definition already exists in the Fair Trading Act and the Commerce Act it seemed natural to extend that definition to consumer protection legislation. The bill also inserts the supply of electricity line function services into the definition of all three Acts. 
Including electricity as goods as well as services in the principal Act will create incentives for all suppliers to take reasonable steps to avoid failure of supply. I notice that the Minister mentioned that it also reminds people of the climate changes and climate issues associated with electricity supplies. But what she did not mention was the mismanagement of generation under those circumstances. If a generation company is allowed to mismanage the supply then there will be ramifications all the way down the line regardless of whether there will be a shortage of water or other supply. 
So the inclusion of electricity as both goods and services may actually create a problem under the looming electricity shortages that appear to be threatening for this winter. If that is the case when we consider the inclusion of electricity as such there is an attached agreement that electricity is of acceptable quality. However will this bill affect supply if we begin to experience blackouts and even brownouts? We will need to watch this issue because it could well open up supply companies to legal ramifications. 
With reference to telecommunications signals as goods we acknowledge that there are difficulties in separating the content of the telecommunications signal from the actual product. As a result telecommunications is treated as a service only which means that consumers of telecommunications services have more limited rights under consumer protection legislation than consumers of other utilities. That is unfortunate—however we can see the difficulties in classifying telecommunications as a good. The implications of making intermediary service providers such as Internet service providers responsible for the content of the communication is certainly not desirable. 
The inclusion of water as a good and service during the select committee stage caused some concern that this bill could force local authorities to incur huge costs in upgrading the pipelines of supply when the water supply dropped below the acceptable standards. This would result in some drastic rates increases to cover these huge capital outlays and to avoid the possible legal ramifications of challenges to the supply. 
Software companies are also very difficult to legislate for because in fact consumers are buying only a licence and not the product itself. They are buying only the licence to use that product and do not actually receive the product as a commodity. So it is very difficult to cover that issue but this bill makes an attempt to do that reasonably well. In general New Zealand First supports this bill but noting our concerns and the comments I have just made. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 I rise to take a short call to support the Consumer Protection (Definitions of Goods and Services) Bill. Unlike the future leader of the National Party Mr Key who I am told— 
Hon Brian Donnelly 
: No deputy. 
CLAYTON COSGROVE 
: No no—leader! I hear that that reality is getting nearer and nearer every day. Mr Tisch over there is doing the numbers—“Old Squeaky”! I just make two points to Mr Key: firstly hangi are not cooked in a microwave and secondly instead of having his groceries delivered it may pay him to go down to the supermarket. That is a good way for MPs to keep in touch with their constituents. This is a good bill. It ensures that New Zealand’s trade practices statutes are consistent with each other. It makes a number of very positive amendments. I support the bill. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future also to support the Consumer Protection (Definitions of Goods and Services) Bill. The purpose of the bill is to ensure that the Consumer Guarantees Act applies to all goods and services that are ordinarily acquired for personal domestic or household use or consumption. This bill similarly covers the Commerce Act the Fair Trading Act and the Sale of Goods Act. Specifically it amends the definition of goods and services in these Acts to ensure that computer software electricity gas telecommunications water and services related to their supply are included within the scope of the legislation. 
The Commerce Committee made a number of technical changes to the original bill. Notably this included the removal of telecommunications signals from the proposed new definition of goods in the Consumer Guarantees Act Fair Trading Act and Commerce Act. The reason for the removal of telecommunications signals is that the definition of telecommunications signals in the bill was deemed by several submitters to be wide enough to cover the actual content of telecommunications. This caused controversy and unease within the industry. For example Internet service providers were concerned they would be liable for emails they did not get through for reasons beyond their control—such as a problem of an overseas network. The committee agreed that it was never intended that suppliers of telecommunications signals should be liable for the content of those signals and therefore recommended removing them from the definition of goods but still left them in the definition of services. 
One widely publicised aspect of the bill is that it will give consumers the right to claim compensation from electricity companies when spikes or power surges damage computers or other equipment. Speaking as one who has had enough heart attacks over power spikes I am glad this is in the legislation. 
Stephen Franks 
: That comes free! 
PAUL ADAMS 
: Nothing comes free; the member should know that! Electricity suppliers will become liable for direct losses and reasonably foreseeable consequential losses to domestic consumers caused by problems for which they are responsible. This bill was originally designed to clear up an anomaly caused by a 1998 court ruling in a case between the Electricity Supply Association and the Consumers Institute which held that electricity network services were neither goods nor services. The bill also closes a legal loophole that has meant that companies or individuals selling computer software packages who misrepresent their products have not necessarily been obliged to offer refunds or replacements to unhappy customers. Therefore United Future supports this bill going on to the Committee stage. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 The ACT party will be opposing this bill which changes the definition of goods and services. This bill is the child of the Labour-Alliance coalition Government and that should have been known as “Labour-Alliance Takeover”. I notice that this bill was introduced to the Houseby Laila Harré on behalf of Jim Anderton—and what an unhappy alliance that was. This legislation will bring only unhappiness to consumers in this country—because consumers will all end up paying higher prices under this legislation whether or not they can afford it. The high prices are what they will pay for what this Government sees as a gold-plated standard. 
This Government has said that it wants to protect consumers but at what price? The price will be severe. Just like the bill I opposed earlier today—the Banning of Parallel Imports Bill—this bill will punish consumers by raising the price of goods and services right across the board. I notice from the  
Hansard 
 that when Laila Harré introduced this bill she said that it would extend the definition of goods and services to include electricity gas telecommunications water and waste-water removal. It is interesting that the definition of telecommunications has been taken out of the definition of goods but it has been left in the definition of services. When the Luddites in the Alliance rushed to bring in this bill they forgot about the Internet and how that affects so many people’s lives now and how the Internet works and how an Internet service provider could well be held liable for losses that a consumer might suffer if he or she had relied on information gained through a web page that was incorrect? 
There is no guarantee that a web page will be correct. Everybody knows that or should know that. Just because something is on the Internet does not mean to say that it is correct. Anyone who has marked his or her children’s homework will know that. But as it is a service a consumer still could be liable under this legislation because the legislation is so unclear and so nebulous it is difficult to tell what would happen if someone made a claim to a telecommunications provider under a service. 
When I was going through this I wondered whether the Alliance had actually got the idea for this legislation from a website and thought that that would be a good idea and let us pass a law that makes us look like we are caring sharing neo-socialists but it will actually make goods and services expensive and put them out of the reach of many poor people in this country. 
Laila Harré spoke absolute tripe when she introduced this bill and despite its going to the select committee and being reported back tripe it still remains. Steven Franks said when he spoke on this bill in October 2001 that this Government is giving no regard to the most sweeping law in this country—the law of unintended consequences. I think that is a good quote. I ask the member whether he remembers saying that. It is a wonderful phrase—“the law of unintended consequences”. 
The arrogance of this Government is truly gobsmacking. Those members sit there and pass legislation like this; legislation that changes definitions and adds applications. They sit back thinking that there will be no negative consequences only positive ones. Well I hate to disappoint them but there is absolutely no such thing as a free lunch. 
If we look at the current Consumer Guarantees Act we see that it covers things like quality durability safety and a number of other assurances. Under this bill as I have said that cover will extend to electricity supply. As I see it this is just a knee-jerk reaction to the power crisis of 1998 in central Auckland. For a start we are now 5 years on; it is 5 years ago that that happened. Power companies have long since made changes and carried out work that minimises the chance of a repeat of that. But just as this Government is trying to do with its transport legislation it thinks it can buy votes in Auckland at the expense of the rest of the country. 
Hon Dr Michael Cullen 
: Oh! 
DEBORAH CODDINGTON 
: Obviously I am keeping Dr Cullen up. What happens if the power goes off for 2 hours? It is fine for someone who is wealthy enough to own heaps of electronic goods—I understand that spa pools are very popular with this Government—and video games. The gas supply is included in this bill as well and as John Key added just a minute ago under this bill when the power and the gas go off while one is cooking for a dinner party then people will probably be affected quite badly. The spa pool will get cool and the Chardonnay will not chill so they might be in deep trouble. But the people who have all those things would be most likely to be covered by insurance. They can afford to minimise the risk for themselves. 
What this legislation will do is allow those insurance companies to renege on their responsibilities under the cover that those people will have because instead the supplier of the electricity or the gas will be liable under this legislation. This is typical of this Government which tries to eliminate all sorts of risk in people’s lives. It just cannot be done. Sometimes people cannot be protected from themselves no matter how much one might want to try. 
Also this bill will lead to increased compliance costs for the electricity and gas suppliers. Will they absorb those costs themselves? No they will pass them on to consumers. We can expect everyone’s electricity and gas bills to go up so that the electricity retailers are able to cover themselves for the stream of claims that will undoubtedly result when this bill is passed and of course that will be another godsend for the lawyers. 
As Stephen Franks said a minute ago the people who cook in a hangi or on a barbecue will be paying for those who like to cook on a Smeg or in a microwave oven and want a guaranteed uninterrupted power supply. This legislation is nothing more than self-congratulatory nonsense and the people who have to pay for it will probably never benefit from it. The people with a television a freezer a hot-water cylinder and a radio—basic electrical goods—are not actually adversely affected when the power goes off for a couple of hours. Every sensible person who owns a freezer knows that if the door is kept shut the food is OK and that if the hot tap is not run then the hot water is OK. Even if people do not have insurance to cover the contents of the freezer they are fine. But the people who cannot afford the very goods and services that this bill protects will be paying for those who can afford them. 
There was some talk in October 2001—and I am glad to see Dr Cullen in the House because perhaps he will take a call and clarify this situation—about the inclusion of shares in this bill. I cannot tell whether shares are included and neither can Stephen Franks. Section 2(1) in clause 6 states that the definition of services “ (a) includes any rights (including rights in relation to and interests in personal property)”. At first glance that appears to include shares. So does this mean that a purchaser of shares will have to be guaranteed; that for instance the supplier of those shares—and it is unclear whether that would be the company or the promoter of the shares—would have to guarantee that say in 35 years’ time those shares will be a safe nest egg for the consumer? 
David Parker 
: No. 
DEBORAH CODDINGTON 
: Well that is not clear in this legislation. It is impossible to tell from that clause and someone will have great fun with it one day because of all this. This is actually crap legislation and we are opposing it. 
A party vote was called for on the question  
That the Consumer Protection (Definitions of Goods and Services) Bill be now read a second time. 
Ayes 108 
Labour 52; New Zealand National 27; New Zealand First 13; Green Party 8; United Future 8. 
Noes 8 
ACT New Zealand 8. 
Bill read a second time. 
Fair Trading Amendment Bill (No 3) 
Second Reading 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
 on behalf of the  
Minister of Consumer Affairs 
: I move  
That the Fair Trading Amendment Bill (No 3) be now read a second time 
. I thank the Commerce Committee for its thorough consideration of the bill. I also acknowledge the efforts of those who made submissions. The Fair Trading Act of 1986 is a key piece of consumer legislation designed to protect consumers from misleading and deceptive conduct and unfair practices by traders. It also provides for the disclosure of consumer information relating to the supply of goods and services and product safety standards to protect against unsafe products. 
This bill updates and strengthens the Fair Trading Act with a particular focus on its penalty and enforcement regime. The Act has been in force since 1987 and since then barriers to its effective enforcement have become increasingly evident. The fines imposed by the courts are too low to deter offending. In fact the fines are so low that many traders regard them as merely a cost of doing business. This is especially true of pyramid-selling schemes at least two of which have generated revenue exceeding $1 million. The maximum penalty—$30000 for an individual and $100000 for a company—does little to stop the promoters of these scams. Notably in the vast majority of cases the courts have imposed fines that are well below the maximum penalty level. Increasing the maximum fines will send a clear signal to the courts that the fines they are imposing are too low. 
Problems with the legislation however extend beyond the issue of fines. Procedural impediments have been preventing the Commerce Commission from seeking remedies available under the Act. The requirement for the Commerce Commission to give undertakings as to damages when seeking interim injunctions is a significant disincentive to the commission seeking a remedy that can have an immediate and positive impact for consumers. Corrective advertising orders are another remedy that is seldom sought by the commission as procedural requirements result in time delays that make those orders ineffective. 
The purpose of this bill is to strengthen fair trading law. There are four key measures designed to achieve that purpose. First the bill substantially increases general penalties and creates a much tougher penalty regime for pyramid-selling schemes. The pyramid-selling penalty regime includes a commercial gain penalty up to the value of the revenue obtained from the offending. This will enable the courts to wipe out the profits made by rogue individuals who mercilessly rip off ordinary Kiwis. Second it extends the Commerce Commission’s search power to enable it to enforce the new commercial gain penalty. It also introduces a new notice power that provides the commission with an alternative to the search power. That is a less intrusive power designed for use when seeking information from witnesses who are not hostile. Third the bill removes the procedural barriers that have prevented the commission from fully utilising corrective advertising orders and interim injunctions. It also reforms the limitation period within which the commission may take a prosecution. Fourth the bill updates the Act to reflect modern trading practices and modern variations on scams by amending the definition of pyramid-selling schemes and repealing the prohibition on trading stamp schemes. 
The committee heard several submissions opposing the removal of the requirement for the Commerce Commission to give undertakings as to damages when seeking interim injunctions. Some submitters were concerned that innocent traders would be left without a remedy if they suffered a loss as a result of the commission seeking such an order. The committee carefully considered that issue and decided that the judicial process provided adequate protection against the commission making unreasonable applications for interim injunctions. It was noted that the amendment provided consistency with an earlier amendment to the Commerce Act which exempts the Commerce Commission from giving undertakings as to damages when seeking interim injunctions under the Commerce Act. 
Another issue raised by submitters was the extension to the criminal limitation period. Those submitters were concerned that the amendment would extend liability indefinitely for some traders. The committee was satisfied that sufficient remedies were available through the courts to protect traders from stale claims. The criminal limitation period will now be consistent with the civil limitation period. 
I would like to thank all members of the select committee for the work they have put into this bill. It is a very timely bill that represents a worthy step towards improving the effectiveness of New Zealand’s core consumer legislation. I commend the bill to the House. 
BRENT CATCHPOLE (NZ First) 
: 
 The objective of this bill is to strengthen the Fair Trading Act. It particularly focuses on pyramid selling. Although pyramid-selling schemes are already illegal under the existing Fair Trading Act this bill extends the scope of the Act to incorporate newer forms of pyramid selling that have developed since the original Act was implemented—for example schemes where the participants buy or sell an investment opportunity and use agents provided by the scheme operators to recruit other participants on their behalf. Instead of finding the recruits themselves they ask the agents to do so. If we look around this House we find that one party here was recruited to find a particular agent and I am referring to Mr Rodney Hide who went to Fiji as an agent to recruit people for a pyramid-selling scheme that turned out to be a total scam. 
Stephen Franks 
: I raise a point of order Madam Speaker. I understand that that reference was to a matter on which there has been a personal explanation. It is against the Standing Orders to refer to the matter in a way that implies that there was some substance to it when there was none. 
Madam DEPUTY SPEAKER 
: The member is correct. There should be no further reference to the matter. There has been a personal explanation. 
BRENT CATCHPOLE 
: I must point out that this bill does not affect existing legitimate franchise operators. They continue to operate as they have done in the past. 
I would like to draw attention to clause 14 which deals with search powers. Under the current wording of section 47 of the Fair Trading Act the Commerce Commission can search to ascertain whether a person has or may have contravened the Act. This bill extends the Commerce Commission’s search powers under section 47 so that it may obtain a warrant to search for evidence demonstrating the nature or extent of any breach of the Act revenue obtained through the offending or other matters material to the seriousness of the breach. That is to assist the Commerce Commission in gathering evidence for the courts to consider in sentencing. We in New Zealand First have difficulty with that provision because the extension of powers of search amounts almost to harassment. The commission has an unfettered power to undertake a fishing expedition to search for evidence to endeavour to prove its cases. We feel that that is putting too much emphasis on the search process and giving it too much power. We have difficulty with that particular aspect so we ask that it be reviewed during the Committee stage and that change be considered. 
Noting those concerns New Zealand First supports in general the purpose of this bill and we are looking forward to debating it in the Committee stage. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: 
 Along with John Tamihere and others on this side of the House I rise to support the bill. The essence of the bill is the introduction of a range of protective measures for consumers. One of the amendments updates the definition of pyramid selling to more accurately reflect the modern versions of those schemes. I have some interest as does Mr Tamihere in trying to advocate for New Zealanders who were victims of a particular scheme referred to by Mr Catchpole—the Investors International pyramid-selling scheme. Members will recall from before the last election that a member of this House—I do not infringe on the member’s personal explanation—attended a conference the purpose of which was to promote a pyramid-selling scheme. That member then spoke at that conference and the result of the conference itself was that many New Zealanders lost millions and millions of dollars. 
Darren Hughes 
: Who was it? 
CLAYTON COSGROVE 
: My colleague asks who the member was who spoke at that conference of Investors International in Fiji. It was one Rodney Hide and that is not a challenge. 
Deborah Coddington 
: I raise a point of order Madam Speaker. As has already been pointed out Rodney Hide made a personal explanation to the House and under the Standing Orders that cannot be debated further. I ask you to bring the member back to the bill. 
CLAYTON COSGROVE 
: Speaking to the point of order I point out that it has been ruled in a previous ruling that one can question the judgment of a member but not his word. I am not challenging the member’s personal explanation. I did not say that he promoted a scheme. I am simply relaying the fact—which does not challenge his explanation—that he attended and spoke at that conference. I put it to you that that is perfectly in order. It is a matter of public record. 
Madam DEPUTY SPEAKER 
: Yes the member is correct as long as there is no implication whatsoever—as there was in the previous reference—of anything to do with the explanation that the member subsequently made. 
CLAYTON COSGROVE 
: I would never challenge Mr Hide’s judgment—Mr Hide of course being the only honest man in Parliament. 
Hon Chris Carter 
: What happened at Waiheke? 
CLAYTON COSGROVE 
: We will not get into Waiheke and that sort of stuff. But I am sure Mr Hide will want to take a call—being an expert in those sorts of matters and the only trained economist in Parliament who would be able to identify a pyramid scheme from a million miles away and therefore choose not to participate in one. 
I want to take this opportunity to put to Mr Hide again the question why when he came back from speaking at that conference the great scam-buster—by his own admission the only trained economist here—did not stand up to defend and try to assist the many New Zealanders who lost millions of dollars as a result of that Investors International scheme. It has been over a year and to this day Mr Hide has never explained his silence. What has he got to “hide” if the House will excuse the pun? I would have thought the great scam-buster would be itching would be running—or at least rolling or crawling—to try to bust the scam and defend and protect the many New Zealanders who lost hundreds of millions of dollars. 
I applaud this bill because it will shut down that sort of activity or go some way at least towards protecting those Kiwis who to this day have been given no protection at all by Mr Hide. The great scam-buster the great defender of the faith and the taxpayer has never to this day stood up and explained how he got involved and why he will not defend ordinary Kiwis. 
Sitting suspended from 6 p.m. to 7 p.m. 
CLAYTON COSGROVE 
: Prior to the dinner break I was speaking about two things. I was speaking about the nature of the bill and how it provides protections for our consumers through a variety of measures but especially in relation to shonky disreputable and grotesque investment schemes like pyramid schemes. I was also talking about the rorts that this bill will protect consumers from. 
As I said before the dinner break I have some experience as does my colleague Mr Tamihere in advocating for the victims of such schemes—those in New Zealand whom the  
Consumer 
 magazine identified as having lost millions of dollars as a result of schemes like those run by Investors International. It was a disreputable and shonky investment scheme run out of Fiji by a convicted felon Rudolf van Lin. It was that organisation that invited one Rodney Hide of the ACT party to speak at that conference. He did speak at the conference and they paid for his airfares accommodation food drink and so on—as he has acknowledged. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Let us not go into that. The member can mention that he went there and can criticise the fact of his going there but there is to be no detail please. 
CLAYTON COSGROVE 
: Thank you Mr Assistant Speaker. I do mention that he went there and I do criticise him for going there. 
What I am pleased about is that this bill will provide substantial protection against those shonky schemes. I am also interested in an amendment that extends the definition to include schemes that for many participants primarily involves an opportunity to buy or sell an investment opportunity—whether personally or through an agent—rather than an opportunity to buy or supply goods or services. The agency issue is very very important. I think that this bill will cater very well for a case where a person acts as an agent and actively promotes a shonky scheme. This bill will hammer that person and rightly so. I have seen the financial carnage of families ripped apart by schemes that this bill seeks to put the boot into. Disreputable agents have misrepresented the so-called investment position to those people. They have said that families and other people can invest a small amount of money and get a huge return. The organisers have got experts—economists and others—to lend credibility to those schemes by for instance participating as speakers at conferences. 
I finish by repeating my request to Mr Hide and I make it in all sincerity: he has some expertise and in respect of this legislation can help victims of those schemes. I invite him as I did 8 months ago to come forward and talk about his experiences. I invite the great scam-buster to tell us why he has never at any stage explained why he did not assist those New Zealanders who lost money by breaking the scam—the conference that he attended—and trying to protect Kiwis from investing. As members of Parliament we have a duty and a huge opportunity. We have the ability to broadcast to New Zealand and use our profile to protect ordinary Kiwis. I ask why the scam-buster—the great man the trained economist who would recognise a scam as he would recognise a side of mutton—did not do his duty and do that. I commend the bill to the House. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future to support the Fair Trading Amendment Bill (No 3). This bill aims to strengthen the Fair Trading Act by making amendments to enforcement and procedural provisions and in particular as we have heard by creating a new additional penalty regime for pyramid-selling schemes based on commercial gain from the scheme. 
Specifically the bill doubles existing maximum fines under the Act—currently $30000 for an individual and $100000 for a company. They have been raised to $60000 for an individual and $200000 for a company. The bill also amends the definition of pyramid-selling schemes in the Act to take into account newer types of schemes. These schemes may involve participants buying or selling an investment opportunity and using an agent provided by the scheme operators to recruit other participants on their behalf instead of trying to recruit new participants themselves. 
The bill also extends the search powers of the Commerce Commission so that the commission may obtain a warrant to search for evidence to demonstrate the nature and extent of a breach of the Act revenue obtained through offending or other matters material to the seriousness of the breach. That will assist the commission in gathering evidence for courts to consider in sentencing. In particular it will help to implement the commercial gain penalty for pyramid-selling schemes. The bill also introduces a new power that will allow the Commerce Commission to issue notices requiring people to supply information or documents. This power will give the commission more flexibility and is most likely to be used when the commission seeks information from witnesses who are not hostile. 
The bill also amends the Fair Trading Act to provide that the criminal limitation period runs 3 years from the date a breach is discovered or ought reasonably to have been discovered. That is being done because in some markets such as building investment products insurance and long-term guarantees consumers or the Commerce Commission are unlikely to discover a breach until well after 3 years from the date the breach occurs. 
United Future sees this legislation as mainly technical in nature and does not believe it to be controversial. Therefore we are happy to support it going to the Committee stage. 
JOHN KEY (NZ National—Helensville) 
: 
 National supports this legislation. As other speakers before me have outlined in large part the bill looks to include the acts of pyramid schemes within the legislation and to apply increased penalties to those acts. 
I want to talk for a moment about pyramid schemes in New Zealand. Pyramid schemes arise in a lot of different forms. One of the forms in which one often sees a pyramid scheme operating is a chain letter. Chain letters are a common form of a pyramid scheme. Often they start in a very innocent form. I fondly remember in my time at school when chain letters went around. I imagine that in my case they were probably love letters but that in the case of many other people they were other letters. There were numerous young ladies—[ 
Interruption 
] In fact an infinite supply of young ladies did write back to me and talk to me about the physical attributes I had—my good looks—and my charm. That was certainly my first introduction to such letters and I would hate to think that the Fair Trading Amendment Bill (No 3) was looking to close down that kind of activity because I found it quite enjoyable. 
But on a more serious note chain letters are an example of pyramid schemes. One of the reasons that we must pass this bill and close down pyramid schemes is the fact that they are doomed to fail. As someone who has been involved in the financial markets for all of my life I have always looked to supply financial instruments and investments for people that are fair and that give them a great opportunity to prosper in their retirement in the years when they most need that income. One of the major issues with pyramid schemes is that they are simply doomed to fail. They must fail because they do not rely on the sale of a good or service; they rely on more members joining up. Fundamentally there is a finite number of people in New Zealand. We saw in the last census that there were 3.95 million New Zealanders—about 40000 Kiwis short of being over the 4 million mark. Therefore eventually irrespective of how big or broad the pyramid scheme is or whether it takes the form of a chain letter or whether it is sold by an agent or a scheme fundamentally it must collapse. An investment scheme that is doomed to failure is an investment scheme that simply must be stopped. National strongly stands for the Fair Trading Amendment Bill (No 3) to protect New Zealanders who are asked to invest in schemes that are doomed to fail. 
I draw the attention of the House to the fines in this legislation. The original law applies a maximum fine of $30000 for an individual and $100000 for a company. The bill proposes to increase that to $60000 for an individual $200000 for a company but $200000 for a pyramid-selling scheme. One of the very important reasons that National and other members of the House fully support this bill is that when a fine is under the amount proposed in this legislation—under that $200000 limit—pyramid-selling schemes may be undertaken by members of the community who know that they will eventually be closed down and fined that eventually it is a zero-sum game that there are not an infinite number of members. Fundamentally they will become involved in these things knowing that they may well pay a fine but the fine is not large enough to deter them because they will make money even once they have paid the fine. 
Last week I had in my office a member of the community who had been duped by a pyramid-selling scheme. Without going into the gory details of it this member of the community in my Helensville electorate had had a farm had invested in a scheme and had lost in the order of $1.65 million. I felt a great degree of sympathy for him because although on the face of things one can always argue that sometimes people do something a little silly this member of the public—one of my constituents—was really someone who had innocently gone into something and had been conned by a scheme like this. It was one of those situations where the amount was rather exponential in how it went. The upshot of it is that this member of the public one of my constituents has now lost his farm and I have great sympathy for him. We have great support for this legislation in what it attempts to do. 
I want to talk a little bit about section 47. It applies the search warrant powers and the ability to search for information. Again the nature of a lot of these schemes is really complex. On the face of things they look quite probable and the investment often looks quite low but there are lots and lots of reasons that people are tied into these schemes. Because of their very very complex nature I think giving the commission the power to have extended search capabilities which section 47 does is to be applauded. It will allow these schemes to be investigated further and to be looked at for quite some time. 
New Zealand unfortunately does have a history of some schemes affecting quite a number of the community. I often ask someone from the financial markets why people are fooled by these schemes and what legislation could be passed to help protect those people. The answer is that we can only go so far in our legislation in terms of providing a deterrent in the form of the penalties that are proposed in this legislation as I outlined earlier—an increase of the fine of $30000 for an individual up to $60000 and of the fine of $100000 for a company up to $200000; and a fine of $200000 for someone involved in a pyramid scheme. That is a very good starting point. One of the things we can do is pass legislation like this which will help give enforcement and infringement notification. 
But it is incumbent on members of the financial services community as well if they ever see these schemes to the extent that they are financial advisers to look at and comment on these schemes. Also people have the opportunity when these schemes are exposed to bring them to the attention of the public either via the terms of this bill or via the Commerce Commission. In describing one of the most important ways to close down these pyramid schemes the analogy I give is Internet viruses which we see on our computers these days. Members of the House will know that when there is a virus of some sort very often what happens is an email goes around the community and advises people about what is happening. The other day I received an email with a teddy bear icon. It was not one of those love letters dating back from the time when I was at Burnside High School from someone who had been affectionate to me at that time; no it was an Internet virus of some sort. In terms of pyramid schemes forearmed is forewarned. That is very very important. All members of the community have a responsibility to bring these schemes to the attention of the public and to the attention of the Commerce Commission. Under section 47 they can investigate these matters and can highlight them to members of the public. 
Although some of us have had training in the financial markets and have had an opportunity to study these things many people have not. These schemes prey on people who have not had the opportunity to make a full study of these things. Very often they are people who can least afford to lose money and can least afford to have their families afflicted by these schemes. 
National supports the Fair Trading Amendment Bill (No 3). We look forward to this bill becoming legislation that protects New Zealanders who would be preyed on by those who would promote pyramid schemes in a manner that is to their detriment. As I said earlier before I came to the House I looked at relevant legislation in other jurisdictions. I can tell members that if they do a search of the Internet on what is happening in Australia and the United Kingdom they will find as I did—and I printed it out—very similar legislation from the Department of Trade and Industry in the United Kingdom that promotes exactly what is happening in this bill. It has some very good pointers in terms of citizens advice and where members can have legislation. On that note I commend this legislation to the House. 
STEPHEN FRANKS (ACT NZ) 
: 
 There are some parts of this bill that make sense—the abolition of the prohibition on trading stamps for example. That was a fairly embarrassing provision. It treated New Zealanders as being more gullible more credulous and more foolish than almost everyone else in the world where trading stamp schemes were permitted. New Zealanders were thought to be incapable of understanding them. 
There is some upgrading of the penalties but it is not done in a very intelligent way. It could have been done by looking at the gains that people make and determining the penalty by a multiplier of the gain or by in some other way relating the penalty to the difficulty and cost of getting a conviction. For example it would be recognised that many of these things will come to light only if there is a whistle hunter or a bounty blower—sorry a whistle-blower or a bounty hunter. [ 
Interruption 
] Those members like the “blower bounty”. If the penalties had been looked at in terms of getting the right incentives to chase and catch people who were breaking a law that is not easy to enforce then the penalties would have been related to making sure that enforcement was worthwhile. 
Clause 10 is of much more dubious value. It exempts the Commerce Commission from having to take account of the damage it might do by granting an injunction lightly. That really puts into the hands of a regulator a power that could destroy a business. Elsewhere the commission has exemptions from liability. At present the court is able to take into account and balance the risk and the cost and to require an undertaking as to damages. This measure is without any proper reasoning. ACT believes that there should always be a balance and that people should certainly not be exposed to the arbitrary power of State agents. The power to search is unexceptionable. 
I want to come back to a provision that Mr John Key just made a key point of his address. Before that a member whose name I always forget but whom I think of as the “beagle boy”—the member from Christchurch Mr Clayton Cosgrove—focused his address on an alleged improvement to the law about pyramid selling. There is only one change in that provision. It adds the words “whether personally or through an agent” to an existing provision on pyramid sales. 
That provision is entirely redundant. Section 45 of the Fair Trading Act already covers actions by or through an agent. It states: “(4) Any conduct engaged in on behalf of a person other than a body corporate—(a) By a servant or agent of the person acting within the scope of that person’s actual or apparent authority; or (b) …with the consent or agreement (express or implied) of a servant or agent … shall be deemed for the purposes of this Act to have been engaged in also by the first-mentioned person.” In other words the change to the pyramid selling scheme provisions has absolutely no purpose and does absolutely nothing. 
We have just heard about 25 minutes of complete and despicable drivel from people who have no idea about what this bill can do and no idea about pyramid selling. It was kicked off by a man who when he was the chair of the committee on which I sat that first opened an investigation into prime bank schemes wasted the time of the Securities Commission and the Commerce Commission. Mr Clayton Cosgrove as chair of that committee invited those commissions along to give submissions on fraud and on schemes that financially defraud consumers. Those poor bodies thought that that was a genuine request. They sent along people whose time was valuable and they prepared pages and pages of submissions on what they wanted to see by way of improvement in the law to protect people from fraud. I happened to attend a meeting of the committee on the day those people turned up and I could see their utter bewilderment— 
Mark Peck 
: That has nothing to do with the bill. 
STEPHEN FRANKS 
: It has everything to do with the bill because the origin of that alleged change to pyramid-selling schemes— 
Mark Peck 
: It hadn’t even been reported to the House. 
STEPHEN FRANKS 
: That happened at another committee I say to Mr Peck but it has everything to do with this bill. Those bodies made the submissions that they were called upon to make to that committee and they carefully explained to Mr Clayton Cosgrove who has made such a feature of pyramid selling in this legislation that this law has absolutely nothing to do with pyramid selling. 
Hon Pete Hodgson 
: Is there anything to do with privilege? You are not in any trouble with privilege now. 
STEPHEN FRANKS 
: I say to Mr Hodgson that I have no idea about that. If Mr Hodgson wants to suppress the account of this matter by alleging privilege he should go ahead. 
Hon Pete Hodgson 
: I just brought it to your attention that you shouldn’t be cavalier with the rules of the House. 
STEPHEN FRANKS 
: This committee which had the Commerce Commission and the Securities Commission in front of it had a series of interrogations on a subject matter that had absolutely nothing to do with the question that was put to those bodies. 
Those interrogations were very very similar to the wild allegations just made by members who spoke in this debate earlier. They purported to inquire about commercial fraud prime bank paper and all the kinds of schemes that I knew about because I was on the Securities Commission and we put earnest effort into trying to stop them. The language used was precisely the language that Mr Clayton Cosgrove has just used in relation to the amendments to section 24(2)(a) inserted by clause 5. He made a disgrace of this House. He embarrassed anyone of integrity who sat on that committee by totally baffling the witnesses and he did the same tonight when he spoke on clause 5. 
Mr Cosgrove addressed no element that is in this bill at all. He did not address any of the hard questions such as the distinction between franchises and pyramid schemes. He did not bother to consider the comparison between Lotto Telebingo and the other State-subsidised-and-promoted gambling schemes that cause a guaranteed loss to those who participate in them. He did not try to compare anything that the select committee stated it was doing in that area with what the Government is actually doing in other areas—areas in which it regards punishment and penalties as not working. The Government is embarrassed that it sets up fines that it does not bother to collect. If this bill had a provision that allowed for effective enforcement of fines—and indeed if the enforcement of fines had been seen as a topic on its own—we might not have $427 million of uncollected fines in a blowout from $325-odd million over the term of this Government. 
Mr Cosgrove’s ranting— 
Sue Kedgley 
: Ranting. 
STEPHEN FRANKS 
: Is that how one pronounces it? I do not want to sound Australian. 
The ranting on pyramid-selling schemes had nothing to do with any effective amendment to the Fair Trading Act. The Act itself suffers from the same enforcement difficulties that all our law suffers from. The people who can look menacing who are prepared to hide and who do not worry about the bailiff or fines will not suffer. Whether people get a $60000 or a $30000 fine will make a real difference only to those people who are honest who have their assets in their own name who probably did not intend to commit an offence and who have been caught up in a law that they did not understand. The “shrewdies” will not have their assets available to be seized under this bill; they will not even have to go to the bother of defending themselves. The “shrewdies” will not have records that the Commerce Commission can go out to requisition and search. 
Hon Harry Duynhoven 
: Why didn’t you back my inquiry into motor vehicle dealers? 
STEPHEN FRANKS 
: There should be the same principle across all this law. If we want to have proper enforcement of our law we should focus on enforcement not on political slogans or on the completely empty exercise of ranting about non-existent or possibly existing fraud schemes that had no involvement from anyone who will ever respond to any kind of order in this bill. 
MARK PECK (NZ Labour—Invercargill) 
: 
 One can always tell when one touches a raw nerve because people stand up and say nothing about a bill at all. I do not intend to speak for terribly long about this bill. I simply remind the member who preceded me that the Commerce Committee dealt with this legislation. It had five submissions on the bill and took 30 minutes to hear the submissions. There was no opposition to the bill at all and it was reported back to the House unanimously. The bill does four things: it amends the definition of pyramid selling it increases the penalties for pyramid selling—there was a previous ACT party member who knew quite a bit about pyramid selling; that person is no longer in Parliament but there it is—it extends the search warrant powers of the Commerce Commission and finally it changes the time for bringing criminal proceedings. This is a good bill and I support it. 
SUE KEDGLEY (Green) 
: 
 The Green Party will be supporting this bill. We regard it as a fairly narrowly focused and modest bill but we will support it nevertheless. The bill seems to focus on pyramid-selling schemes. I am not sure whether they are a huge problem in the land—in the scheme of things are they an enormous problem? But the bill focuses on them. I think the bill is perfectly reasonable. It increases penalties and so forth and I say so far so good. 
Mr Anderton said in introducing the bill that the Government will be taking a tough line to deter people from misleading consumers about the money they can make from pyramid schemes and so on and so forth. All I would say is that it is well and good that the Government is to focus on taking tougher action to deter people from misleading consumers about the money to be made from pyramid schemes but what about all the other issues where consumers are being misled many of which I would regard as potentially more significant? This legislation gave us an opportunity to really examine the Fair Trading Act a very significant Act that is woefully weak and lacking in powers in many areas. We had an opportunity to really look at and examine that Act and to strengthen it but what did we do? We just focused on pyramid-selling schemes. In that respect we have missed an opportunity here. 
As a result the bill is more significant for what is not in it than for what is. For example one area in which we might have liked to see a strengthening in the bill concerns the consumer’s right to know. In many jurisdictions overseas consumers have a recognised legal right to know what is in a product they have purchased for example and where it comes from. That would have been a wonderful right to enshrine in a bill that amends the Fair Trading Act. But no we have just focused on pyramid-selling schemes. The basic right to know what is in a product we purchase and where it comes from is extremely important but according to our officials it does not exist in law. Therefore this would have been an opportunity to enshrine that. 
The other point is that when the Minister of Consumer Affairs talked about the bill she said that we need to ensure that consumers have the information they need to make informed choices and we need to protect them from exploitation etc. It is extraordinary that for example if one walks around a supermarket one would find dozens and dozens or perhaps hundreds of examples of goods that are misleadingly or deceptively labelled and that absolutely nothing is done about that. This bill would have been an opportunity to enshrine that consumer right to know and to look at issues such as how to strengthen the provisions in the legislation to protect consumers from misleading and deceptive behaviour. 
Equally extraordinary from my point of view is that the Minister of Consumer Affairs and indeed the entire Government are actively opposing the fundamental right of consumers to know where their food comes from. We have the extraordinary spectacle that our Government will be in Australia on Friday vehemently opposing the right of consumers to know where their food comes from. It is called country of origin labelling. Similarly in the international Codex Alimentarius forum that decides on international standards New Zealand has taken the most vehement stand of any country in the world in opposing the right of consumers to know what country their food comes from. It seems quite extraordinary that on the one hand we are fretting about pyramid-selling schemes and focusing on the protection of the consumer in that particular area and on the other hand we are busily undermining the right of consumers to have even such a fundamental right as to know where their food comes from. 
It does seem to me to be quite bizarre and extraordinary that even the Ministry of Consumer Affairs which is supposed to be all about protecting consumers from misleading and deceptive behaviour opposes our basic right to know where our food comes from—the basic country of origin labelling. So the Government is at international forums—at the Codex Alimentarius Commission—and in Australia arguing that the Australians should get rid of their mandatory country of origin labelling and that consumers have no right to know where their food comes from. Then the Government makes a great big deal about a small amendment to the Fair Trading Act concerning pyramid selling. 
If we are to be concerned about strengthening the bill protecting consumers and the whole issue of deceptive and misleading conduct let us apply that across the board. Let the Government be consistent and not undermine that right in some areas while in other areas suggesting that it is taking some great action to strengthen the legislation. It is extraordinary that if we wander around a supermarket and look at meat for example—and 40000 tonnes of meat is imported into New Zealand—we would not see one single label in any supermarket in the land to indicate where that meat comes from. It comes from places like the People’s Republic of China Australia South Korea America and so forth. Surely in this era of mad cow disease etc. we have a legitimate right to know where our meat comes from. That is simple. 
What about fish? We import hundreds of thousands of tonnes of fish. We import shrimps from places in South-east Asia where they use antibiotics routinely in fish farming etc. Surely we should have a basic right to know where that food comes from not only because of our concerns about health and safety but also because we may prefer to support and purchase products from New Zealand. I would argue that when the vast majority of New Zealanders go into a supermarket they fondly imagine that they are buying New Zealand meat and they do not realise that is really a bit of a lottery and a lot of the meat comes from overseas countries. They have no idea of that and to me that is misleading and deceptive. 
We are told that this bill will strengthen the whole Fair Trading Act so why did we not focus on issues that are of fundamental concern to the people of New Zealand? This bill is a wasted opportunity. We will support the bill in the narrow little areas that it concentrates on but frankly it is woefully inadequate does not go nearly far enough and is very much a missed opportunity. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 I shall make a brief contribution because this is a good bill. It is in the interests of the New Zealand community. One of the best things we can do is to assist its rapid passage through the House. 
JOHN CARTER (NZ National—Northland) 
: 
 In response to Sue Kedgley’s contribution I must say thank goodness we do not have any mad cows in the House! Her contribution lead to that comment. 
I am taking this call for a couple of reasons. The first is that one of my colleagues came to me—actually he was talking about the next bill if I can digress for just a minute—and asked whether it would be all right if he spoke immediately after the Minister. I said that I was sure we could arrange that with the consent of my colleague Judith Collins. The member said the reason was that he was on the committee and he needed to speak on the bill so I thought it was not an unreasonable request. But then he threw in that Doug Woolerton was having a shout and he wanted to get to it. I thought that was fair enough and we would let him have the call first but I will now take 10 minutes to delay him for a fair while before he can get to his drinks! 
That is the first reason. The second reason I am speaking is that we are in urgency and I have to fill in 10 minutes because the bloke who should be speaking is not. Unfortunately here we go again team; we will have to hang on. Actually I will not take 10 minutes for this reason. 
Mark Peck 
: Your mum’s going to be very disappointed. 
JOHN CARTER 
: No my mother has never been disappointed in any of her sons at all I can tell the member. Her sons are the best things ever from my mother’s perspective. 
Mark Peck 
: What does your mum think? 
JOHN CARTER 
: I have not got to anything yet so I cannot tell the member what my mum thinks. But if he is patient I shall get round to it. Members should just be patient. 
Mark Peck 
: Pyramid selling? 
JOHN CARTER 
: No I must confess that pyramid selling is one thing my dear old mum has never been involved in bless her heart. 
Tonight I want to talk about the issue of powers of search. One of the previous speakers—I cannot think who it was—said that the bill had been passed unanimously by the Commerce Committee. I draw the House’s attention to the fact that New Zealand First did not support the provision with regard to the search powers. I would have thought that in view of that members of New Zealand First might take a call to explain why that was so. Then I realised that they could not because of an invitation to an event that is outstanding that its members have to rush to. 
I make the point that the Commerce Committee has done something with regard to the search powers that is useful. I have no concern myself about our giving authorities the power to make sure that the law is properly enacted. If they think somebody is breaking the law and there is a need for information to allow them to advise the courts that some error has been made or somebody has broken the law then they should have the right to do so. However one thing that I think is important—and this is a quite specific point—is that the committee has changed the way in which the bill is written so that when people apply to the court the purpose is not just to get a search warrant but also to advise the courts why the search is necessary. 
I think that is very good because it is very easy to go along to a court and say: “Can we have a search warrant? We think this is happening.” The Commerce Committee has made a very good change. People cannot only apply for a search warrant; they have to advise why they believe there is justification for their application. That is a good step forward because when we give authorities this power as we in Parliament do we should also be happy that they have gathered the right information on which to grant those applications. So I draw the House’s attention to that. That was a sensible thing for the select committee to put in the bill to change it from the way in which it was first drafted. As a consequence the committee has improved the bill. 
As I say I am surprised that we have not had a contribution from New Zealand First on the bill given that its members do not support this provision. I would like to know why. It may be that my friend and colleague Mr Jim Peters will advise us but then again he may not because his friend Brian Donnelly might be upset that he was taking more time of the House. 
So with that contribution I will resume my seat and commend this bill to the House. The National Party supports the bill as I know my mum will and we should get on with the next business. 
Bill read a second time. 
National Library of New Zealand (Te Puna MAtauranga o Aotearoa) Bill 
Second Reading 
Hon MARIAN HOBBS (Minister responsible for the National Library) 
: 
 I move  
That the National Library of New Zealand (Te Puna Matauranga o Aotearoa) Bill be now read a second time 
. The Education and Science Committee has heard submissions and has proposed amendments that bring greater clarity to the bill. The Government will support these amendments and will also propose some technical drafting amendments in a Supplementary Order Paper. My thanks to the select committee with special thanks to the chair Brian Donnelly to the deputy chair Jill Pettis and to Helen Duncan who is a trustee of the National Library and thus brings special knowledge about the National Library to her select committee work. I also want to thank the National Library trustees Friends of the Turnbull Library and the library community because they have worked so hard for this solution. 
This bill replaces the current National Library Act of 1965 and brings it up to date in four areas. First it clarifies the relationship between the National Library and the Alexander Turnbull Library. The current Act does not include a statutory purpose for the Alexander Turnbull Library and this has been rectified. The bill also states that the Crown is to continue to own the Alexander Turnbull Library collections in perpetuity. The status of this unique resource which specialises in New Zealand and Pacific studies is enhanced by the creation of a new body the Guardians Kaitiaki of the Alexander Turnbull Library. This body will focus on providing specific assurances about the Alexander Turnbull Library’s collections and the character of the services that distinguish that library as a research library. 
The select committee heard submissions that sought to ensure that while the Crown continued to own collections there was provision for the loan of items for public exhibition on a temporary basis. The proposed amendments provide for a delegation to empower the Chief Librarian of the Alexander Turnbull Library to make documents from the Turnbull collections available for public exhibition. The amendments also prevent the National Librarian from transferring the ownership of documents owned by the National Library without ministerial approval. 
The purpose of the National Library has been widened to include working alongside organisations with related aims and to strengthen links with library and information communities. That simple sentence hides a multitude of aims and plans for the future. A new body the Library and Information Advisory Commission will advise the Minister about emergent issues in the changing library and information world as well as issues concerning documentary heritage in a national and international context. 
Revision of the 1965 Act provides a welcome opportunity to address Maori interests in the National Library and in the areas of documented heritage and information. Anyone exercising powers and functions under the bill will be required to protect the collections as documentary heritage and as taonga. The library’s existing and widely used Maori name can now be included and the bill refers to matauranga Maori alongside references to knowledge and information. 
The third area updates legal deposit provisions to take account of electronic publications. This aspect of the legislation drew a number of submissions to the select committee and I am grateful to the committee for its detailed work on this part of the bill. There are amendments to Part 4 that were recommended by the committee and that I am pleased to support. It was clear from submissions that there is general agreement that documentary heritage should be preserved through the means of legal deposit. Legal deposit is a statutory obligation used in over 130 countries that requires publishers to provide copies of works to a national agency. Section 30A of the current Act is limited to books however and it is obvious that limiting the collection of recorded knowledge to paper formats will lead to collections being far less comprehensive than is desirable. This bill expands the range of documents that will be subject to legal deposit to cover any publicly available document used to store or convey information whatever the medium. 
This part of the bill was not well understood and amendments are proposed to clarify the legal deposit process and the use of materials deposited. Because information technology changes quickly it is essential that the bill addresses broad principles and can accommodate changes to the ways in which information is collected stored and made available. The bill establishes that the purpose of legal deposit is to assist in preserving New Zealand’s documentary heritage so that it is available subject to any applicable terms and conditions for the benefit of New Zealanders. Under the bill publishers are required to give specified numbers of public documents to the library by ministerial requirements which will have the status of regulations under the Regulations (Disallowance) Act. A requirement for books will continue the practice of collecting books and paper-based documents. When this book requirement is made it will address the concerns of fine letterpress publishers and take into account the cost and size of print run in setting the number of copies to be deposited. 
A separate requirement will be made for electronic media and this will address the concerns taken to the select committee. Technical processes for the collection and storage of electronic media are different and requirements may need to be changed from time to time to deal with changing technology. The overall approach to the collection of electronic materials will also differ from that for books. While the library seeks comprehensive collection in the traditional print medium this is not desirable nor practical for the electronic world—that is a wee message to the publishers’ association. Instead the library aims for a selective approach and one that will be developed following consultation with electronic publishers. In particular the process will provide for the protection of publishers’ commercial interests—another thing for the publishers association—through consultation on terms and conditions about access to the deposited material. Requirements for documents other than traditional books and similar media will not be made until there has been consultation with affected parties. 
The bill provides for the Minister to exempt documents or classes of documents from deposit. Also it is not envisaged that requirements will be made for the deposit of motion pictures or broadcast material where current arrangements are considered adequate. 
The final area of change proposed in this bill addresses a conflict in the Official Information Act in relation to oral histories provided to or commissioned by the National Library. Many informants were unwilling to provide oral histories if they could not make conditions of access. That was really sad during the whole period of constitutional change to MMP when we were unable to continue a really wonderful oral history archive. The bill amends the Official Information Act to exclude such oral histories from the definition of “official information” in the Official Information Act and requires the National Librarian to comply with conditions on access to the histories set by the donor. 
I am very happy to have this bill back before the House. We have so much to do and with new legislation a new National Librarian and new committees we are champing at the bit to get going. 
Hon BRIAN DONNELLY (NZ First) 
:  
I could spend most of my 10 minutes talking about my “mate” from Northland who keeps confidences so well! What he was saying is not true. 
During the select committee stage of this particular bill one of the things that the Education and Science Committee did—and it really took the issue very seriously—was to take a tour of the National Library. Many of us had never been there and it just gave us a context for the bill and allowed us to see what we were working with. At this stage I have to say that the experience was mind-blowing. 
John Carter 
: It’s got a lot of books in it. 
Hon BRIAN DONNELLY 
: It has more than books in it. The member could go and look at the pictures over there. It is a real national treasure and I am not certain whether many members of the House fully understand its monumental nature. 
There is another treasure within it and that is the Alexander Turnbull Library. New Zealand First will be supporting this bill because we believe that it is important to fix up some of the tensions that exist around the 1965 Act in relation to how those particular parts of the library operate—the functions and roles etc.—and how they relate to other external legislation such as the Financial Responsibility Act. We believe that it is very important that this bill does go forward for the protection of our national assets. The bill clarifies some of those relationships and sorts out things. It will allow all those tensions to dissipate and for both elements of the National Library the National Library itself and the Alexander Turnbull Library within it to move forward and to protect our heritage in the way that they should. 
The bill does another very important thing which the Minister responsible for the National Library only alluded to and it is to do with oral histories in relation to the Official Information Act. The interpretation of the Official Information Act has been made in such a way that it really curbs the potential for the nation to be able to archive some oral histories that could explain very clearly what actually happened. For example this nation has absolutely no idea of what actually happened during the coalition talks in 1996. The public has been presented with myths produced by those in the media who have no idea what went on behind closed doors. The Official Information Act has put a real limitation upon the people who were actively involved in those decisions by preventing them from presenting their oral histories. If we are going to be able in the future to really know about the history of our nation it is important that we are able to get former Prime Ministers or Deputy Prime Ministers to tell it as it was from their perspective. That is a quite important element of this bill. 
The third element relates to electronic deposit and that was a toughie—we really worked through it. So that people can understand the meaning of “electronic deposit” I will explain the problem we had with the Newspaper Publishers Association. The association’s members often contract other agencies to feed them electronic information. Their concern was that if the law required them to make that information available to the National Library on an ongoing basis which would then make it available to the general public what would prevent other news agencies from being able to tap into what they had been purchasing? It was a quite important issue and I thank Mr Peck because he came up with the idea of bringing the protagonists and the antagonists into a debate situation to really get to the nitty-gritty of it. I believe that did allow the members of the select committee to conclude that with the processes that are in place there is no reason for the National Library to do that sort of thing; the systems that the legislation is putting in place which we are confident will proceed will not allow that to happen. It is not in the interest of the National Library for that to take place nor is it the purpose of the National Library to do that. 
We have some discomfort with some elements of the bill. We raised those at the select committee but did not always get particularly good answers. I want people to think seriously about this issue because it is not just a case of bashing around and playing politics. It is about addressing Maori interests in the National Library. We talked through a lot of those things. The explanatory note to the introductory copy of the bill talked about providing “a presence for a Maori world view within the National Library by the inclusion of the existing Maori name of the National Library Te Puna Matauranga o Aotearoa in the title of the Act.” That raises a whole lot of other questions. Is that what we are doing or is it just tokenism? For example if Aotearoa was the name of New Zealand that was utilised prior to the missionaries coming along can anyone explain to me why both the Declaration of Independence and the Treaty of Waitangi use the words “Niu Tirini” not “Aotearoa”? Has our belief in Percy Smith created another myth which we are now codifying in legislation? 
We asked some other questions. For example one way that this bill is honouring the Treaty of Waitangi is by having the guardians of the Alexander Turnbull Library and the commission appointed after consultation with the Minister of Maori Affairs. One could say that is tino rangatiratanga in action that is partnership in action but we have to ask a very serious question. The Minister of Maori Affairs was put into that position by not Maori but the Prime Minister. How can it be tino rangatiratanga unless the Minister of Maori Affairs is elected to that role by all Maori? It is just tokenism. It is an attempt but I think one has to be prepared to look through the issues and see what exactly is going on here. 
The third part of this is the introduction of Maori language into English texts as if that is the way it should go. We do not have a Library and Information Advisory Commission but the following unusual expression: Library and Information Advisory Commission Nga Kaiwhakamarama i nga Kohikohinga Korero. That is what the body is called. Let us ask ourselves what we are doing with the English language with that text because this bill is in English not Maori. If it was in Maori that name would be quite justified. It would be quite acceptable if it were an alternative expression for the Library and Information Advisory Commission but it all runs into one. 
I have no difficulty with the expression “taonga” which is used here because it obviously means those things that are valued by Maori. But what is the difference between “matauranga” and “matauranga Maori”? Why do we put the word “Maori” on it? The very use of the word “matauranga” in an English text means Maori knowledge Maori understanding. We asked the members of the National Library what they meant by “matauranga”. For example if we had the works of Euclid translated into Maori would that be matauranga Maori? Is Witi Ihimaera’s  
Pounamu Pounamu 
 matauranga Maori? It is very much matauranga Maori as far as I am concerned but it is in English. They could not tell us the answer. They actually said it is very fuzzy. I therefore put it to the House that we need to think through some of those issues very clearly and with a fair bit of rigour or we will end up with warm fuzzy tokenism and not much happening. 
I do not think those issues are strong enough for us to vote against this bill because they are outweighed by the positive elements. We are just raising questions and have an element of discomfort with the idea of middle-class Pakeha bureaucrats washing away their guilt about their ancestors’ actions by putting some fuzzy stuff into legislation. We asked questions about some of those things and the library said it had consulted Maori. We asked whom it had consulted and were told it had consulted the one Maori librarian in the National Library. We are putting in place legislation based on that level of consultation! The Maori Language Commission has also criticised the wording of this legislation because it also has concerns that it is only paying lip service and is not genuinely getting to the underlying depth of what we need to be doing to truly consider addressing Maori interests in the National Library. If it is just on the surface just superficial we may as well not be going through it and that is the discomfort that New Zealand First has; we believe that at this particular stage there are real dangers that it is just on the surface. 
JUDITH COLLINS (NZ National—Clevedon) 
: 
 I must commend to the House that extremely good speech made by Mr Brian Donnelly and I have to say that I agree with every single word he said. It is not often that we can so agree. The National Party has agreed to support this bill and I commend to the House the work of our representatives on the Education and Science Committee in particular the work done by Dr Paul Hutchison who will also be speaking on this bill this evening. As Dr Hutchison pointed out to me it was his idea to go and visit the National Library. There is nothing like a bit of practical knowledge. Some of us actually visited the library before we came to Parliament as MPs. It is stunning—not only have I visited the prisons; I have also visited the National Library. 
John Carter 
: Are they the same? 
JUDITH COLLINS 
: No I say to Mr Carter they are not quite the same but I am sure I should discuss it all with his mother—and one day if Ms Pettis is a good enough girl I will take her along to visit the library. I do commend the National Library to the House. It is one of New Zealand’s absolute treasures. I particularly enjoyed being able to search the records and find details of when various ancestors of mine first came to New Zealand and how they registered for and fought in the wars that now form part of our history—not that that will get me too many votes in this House— 
Hon Georgina te Heuheu 
: You never know. 
JUDITH COLLINS 
: As Georgina te Heuheu says “You never know.” I particularly enjoyed looking at those records. A provision in this bill is about the requirement to have knowledge of the Pacific and I commend that to the House. New Zealand has a history of work in the Pacific. At one stage we had a colony—our only colony—Samoa which was then called Western Samoa. Samoa relies on New Zealand to assist it in relation to record keeping and details. My husband who is of Samoan Chinese and American heritage was particularly pleased to be able to find details relating to the American side of his own family going back to when they were pilgrims to North America. Some of us might ask what that has to do with New Zealand. It actually has quite a lot because it shows the depth of knowledge the National Library holds. I note that the Minister nods at that. 
I am a little interested in the title. However I will not speak further on what Mr Donnelly said because I do agree with him in respect of tokenism. I am deeply offended by any tokenism towards Maori Pakeha or anyone else in this country because at the end of the day we are all New Zealanders. Having said that I do wonder and perhaps the Minister or somebody who was on the select committee—probably Ms Pettis—could take a call. I know she is always very willing to speak in the House although not always by taking calls. 
Jill Pettis 
: I am the shy retiring type. You’ve got me mixed up with somebody else. 
JUDITH COLLINS 
: Yes and the member is always so eloquent too. I think “library” is an unusual description these days because my understanding from the many people who used to be called librarians is that they are now called researchers. Libraries are now almost uniformly starting to be called research centres or information centres. The reason is that libraries are no longer just about books. They are about all sorts of other things and I am particularly interested in the oral histories that the National Library is able to keep. 
One of the things that often amazes me in this House is the amount of time that is devoted by select commitees to bills such as this that are very non-contentious and the expense of that process when I would have thought they could be dealt with by way of amendment to the existing legislation which in this case is the National Library Act. I compare that with the amount of time this House has not devoted to for instance the question of the coalition of the willing and Iraq. We have to look at the priorities that this House often seems to have and I am sure that John Carter’s mother listening on her crystal set in Northland will be wondering about exactly that point. I am sure she will be very very worried about that. 
As well I am interested in clauses 30 and 35. I note the provision for notice of requirement for public documents. In my past life as a lawyer the National Library forwarded me a notice requiring me to forward to it three copies of my documents—documents that I had written or had taken part in writing. I found it quite interesting that those documents were so required. I have to say that if people want three copies of what a person has just published it would be nice to occasionally ask. I find it really insulting as someone who has done all the work to get a letter from a person I have never met requiring me to send copies to the other people who co-benefit from it. Of course now I am expecting very soon to receive a note from the National Librarian asking for three copies of  
Collins Comments 
 the newsletter of the MP for Clevedon—myself. I have to say that it is in extreme demand. I am expecting a call right now from the National Librarian who no doubt is listening to this speech and saying: “I have to have three of those. One won’t do.” 
Georgina Beyer 
: Send them six. 
JUDITH COLLINS 
: Georgina Beyer is the member of the Labour Party for whom I have the most regard. She wants six copies. It can be done but I tell her that I do mine electronically because I am into electronic communications. It is so much quicker so much cheaper and saves forests. I see that Mr David Benson-Pope wants three copies too. No it is six copies he wants. I must say that he would learn a tremendous amount from my  
Collins Comments 
 newsletter as I note would several other people. Tonight I attended a function outside of the House and received three more requests for copies and those were from people who do not even live in the brilliant electorate of Clevedon— 
John Carter 
: One is going to my mother. 
JUDITH COLLINS 
: Yes one is going to Mr Carter’s mother. I have to say that the brilliant electorate of Clevedon has everything that any MP could want including I have to say a good majority. Those are the sorts of things that make us feel particularly good and I am proud to represent that electorate. 
One of the issues Mr Donnelly raised was the Official Information Act and he spoke tonight about the fact that the Official Information Act was brought in to stop Governments from having secret information—not that any particular Government represented in this House would have that sort of thing—and hiding it from members. At the moment documents just turn up with great big black marks all through them—such as we get with sports funding issues. But it is great to see that there is to be some provision to allow the Rt Hon Winston Peters to talk about his side of the coalition talks which no doubt is what Mr Donnelly was referring to. Having said that I am sure there will be another set of documents for the other side of those particular coalition talks. No doubt at some stage Mr Peter Dunne would like to discuss his discussions with the Labour Party and the Progressive Coalition which no doubt were so valuable. I see my friends in United Future for whom I must say I also have very kind feelings as they know—and they are waving to me now. I am sure they will all have their own views. There was a slight wave—a movement of the wrist. Amongst we members of the right—and I am sure those members want to come on our side; they are desperate to—that is a secret signal we have. 
I commend this bill to the House. It is so nice to be able to support something that the Government has put up. 
BERNIE OGILVY (United Future) 
: 
 I rise to support this second reading. As we have all just been told this bill replaces the old National Library Act and it tidies up some sections that we have all been very very interested in over time. A number of submissions to the bill supported extending deposits in the library to cover electronic deposits. This caused a lot of discussion as we were presented with different understandings. The committee recommended some changes to help the library cope with the influx that would occur. During the financial year of the National Library the chief executive informed the committee in December last year that although the library was ready it would still be quite a stretch if I remember the words. United Future nevertheless is a little sceptical that electronic content can be captured with ease which was the expression used. Given the shear scope of the published material available on the Internet not to mention the fact that much of it is constantly updated—and this is something I believe that the Minister made reference to—the bill envisages the library would only harvest web content that it wanted to archive but it obliges publishers to provide assistance to the library to read and to store information in both electronic and non-electronic form if required. The fact that on-line publishers will now have to comply with that requirement to submit material to the library and in a usable format will add a compliance cost to that particular industry. It would be wise in the coming years to review the policy of lodging electronic documents as people get used to it. 
We applaud the moves to exempt oral histories as someone else pointed out of past and present Ministers of the Crown from Official Information Act requests. Those oral memoirs are usually lodged under the proviso that they are not to be released until a certain amount of time has passed or sometimes until the persons are deceased. That enables contributors to speak frankly about their experiences but the threat of an Official Information Act request on such information in their official capacity as Ministers would seriously undermine the willingness of those involved in public life to record their histories in the first place particularly for those who are still active in their political careers. I know of one former Prime Minister who has regularly recorded his reminiscences over an extended period. That will be a fascinating source when it becomes available. We are pleased that the bill recognises the value of oral histories in building the complete picture of events in our nation’s lifetime. 
Over the last few years there has been some concern about the library’s collection policies—in particular the fact that it periodically weeds books from its general collection. However the Alexander Turnbull Library is dedicated to holding the library’s heritage collection and collects one copy of everything published via the legal deposit system. The National Librarian is also prevented from transferring the ownership of any documents without the approval of the Minister. 
Some of the submissions expressed fears about the bill specifying that the collections bequeathed to the Crown by Alexander Turnbull must remain in the custody of the National Library at all times. This would mean that the material would not be loaned. Fortunately the bill reaffirms the status of the Alexander Turnbull Library and ensures that its holdings are secure and are able to be loaned. 
There is a wider question to be answered about the place of the National Library. The library’s stated objectives include collecting maintaining and making accessible national collections of documents yet decisions on access to library resources lie with the hundreds of other libraries in the country which have the bulk of resources and determine how they will be used. Access to international resources is now direct—library to library—without any intermediary; even the National Library for instance. The combined collections staffing and expenditure in just some of the large public libraries in New Zealand such as Auckland Wellington Christchurch and Dunedin are far greater than those of the National Library. 
There is a danger or perhaps it may be an intention that the National Library could end up as a collection of last resort. United Future is concerned about the future of the National Library and its wonderful collections. We support this bill; we also make the suggestion that both the present and future Governments continue to think carefully about the future of that library and the ways in which it may best serve the citizens of this country. 
JILL PETTIS (NZ Labour—Whanganui) 
: 
 It is a pleasure to speak on this bill. I was very pleased to be able to be on the select committee that considered this bill. Libraries are one of my favourite places. I have a very wise mother who took her children to all the free places in town when we were very young and libraries were one of those places; and repeating those same skills that I learnt from my mother I did the same with my own children. It was a pleasure to participate in the debate on this bill through the select committee. 
The bill replaces the National Library Act so it is timely that we have a review of the legislation as it has stood for almost 40 years. Minister Hobbs has a special interest in this bill. I am delighted with the good work that she has done as our Minister in this regard. It is always good to work on legislation when we have a Minister who is so sincerely interested in that legislation. We were delighted to work with Marian Hobbs in progressing this bill through the select committee. The select committee worked very cooperatively and it was a pleasure to work on the bill during those stages. 
I just want to mention very briefly the aspect about the collection of electronic material. Following recommendations from the select committee the library aims to selectively collect electronic material. This will be developed following consultation with electronic publishers. We are all aware of the rapid changes that have taken place with technology and the need for our collection methods to be modern and timely. The bill will allow the library to collect information for preservation purposes only and any public access to it would be granted only in agreement with the publisher. That is an important safeguard included within the bill. 
The bill is important because it secures our heritage for future generations. It is a more interesting aspect of human nature that as we mature we become more interested in preserving the past. The National Library most certainly plays a pivotal role in that because having access to the historical documents of our nation is incredibly important. We are very grateful for the role that the National Library and its most skilled and expert staff have in protecting the resources for future generations and protecting the history of this nation for future generations. I am delighted to commend the bill to the House and wish it a rapid passage through its processes. 
HEATHER ROY (ACT NZ) 
: 
 I rise to support the second reading of this bill. When looking through  
Hansard 
 at the first reading speeches on the bill I was very interested to find that the first reading was also taken under urgency. The Rt Hon Wyatt Creech commented at the time that this was an important subject but not one that justified turning the whole parliamentary system on its head. The same comment is relevant today. As a new member I must say that I have been staggered at the legislation that comes forward during urgency. For those of us who are spokespeople for our parties for arts culture and heritage it has been a busy day. We have had the New Zealand Symphony Orchestra Bill this morning and we now have the National Library Bill this afternoon. That says something about where the commitments lie for this Government. 
The role of the National Library is an important one—that of preserving our nation’s culture its heritage and its literature along with other materials that allow us to investigate or research our history. I have on occasion found the library very useful myself when I needed to research topics and information before I came to Parliament. The information was often difficult to source and the National Library certainly is a great resource. That of course was before I was an MP and before I had access to the Parliamentary Library which is an extremely valuable resource. 
The commentary on the bill states that this bill replaces the 1965 Act and provides for four things. The first of those is the clarification of the relationship between the National Library and the Alexander Turnbull Library. The Alexander Turnbull Library is currently run by trustees but they are about to be replaced if this legislation is passed by guardians—not more than five people the legislation states. The guardians will be appointed by the Minister after consultation with the Minister of Maori Affairs. 
As I read the bill in particular subpart 3 of Part 2 it is clear to me that those new guardians will operate in an advisory capacity only. They will be responsible to the Minister and it is the Minister in fact who has the power to make decisions and act. If we look at clause 16 we see that: “The purpose of the Guardians is to provide assurance to the people of New Zealand …”. Clause 17 states: “The function of the Guardians is to advise the Minister …”. So providing assurance and advice is the role of the guardians—nothing more. 
The second thing the new bill provides for is addressing Maori interests in the National Library hence the repeated references to consultation with the Minister of Maori Affairs I presume. I would contend in particular in the light of ACT’s “one law for all” policy that the National Library should address the interests of all New Zealanders who have contributed to the history of our country. That of course includes Maori but also Chinese Europeans and any number of nationalities that combine to make New Zealand the country it is today. 
The third area this bill provides for is the clarification of the status of oral history. That is something other members have spoken about and something not previously collected but important none the less in recording our history. 
The fourth area and one I want to spend a little more time on is that of extending the scope of legal deposit. That is to cover the area of electronic documents. Some publishers have expressed their concerns to me. Clause 30 “Notice of requirement for public documents” worries me in that there appears to be no restriction to reasonable cost to publishers. Clause 30(1) states: “The Minister may by notice in the  
Gazette 
 require a publisher of a public document … to give to the National Librarian at the publisher’s own expense a specified number of copies … of the printed public document and in the case of an electronic document the specified number of copies of the medium that contains the document.” Another member mentioned compliance costs and that is the area that worries me. 
I have some difficulty in particular with clause 30C(4) which allows the National Librarian to make available content harvested from public websites—for example that of stuff.co.nz or newzealandherald.co.nz—available via the Internet. That could have two implications which I think are worth considering. The viability of some publishers’ commercial news archives would be threatened. What hope do those services have of surviving if the content they aggregate and charge for is available for free from the National Library via a smaller Internet-based archive? 
The second concern is this: if the National Library unintentionally it could be said destroys the important revenue stream provided by those news archives the publishers’ ability to continue to fund free websites will be severely tested. As a result of that all Internet users may well be affected. That may well result in the erosion of the amount and quality of information available to the public via the Internet. 
As I said ACT supports this bill going to the Committee stage but we will be putting forward some amendments. The first of those will be to amend the definition of restriction in the bill to provide for the recognition of legal restrictions that may exist for material on Internet sites. The second amendment will require the National Library to gain agreement from affected publishers prior to the library making material available via the Internet. 
As I said ACT New Zealand does support this bill despite the fact that the provisions covering the Alexander Turnbull Library can best be described as “fluffy”. The Minister has the power and the new guardians fulfil an advisory capacity only. The addressing of Maori interests is in many ways camouflage and certainly this legislation should cover the history of all New Zealanders. I have also covered ACT’s concerns about the legal deposits of electronic matter but we are hopeful that amendments will deal with those concerns. 
KEITH LOCKE (Green) 
: 
 I rise on behalf of the Green Party to support this bill and I would like to pay tribute to the National Library and the Alexander Turnbull Library. Their performance and what they have achieved over the years is truly something we should all approve of. I support the idea of the Alexander Turnbull Library remaining a separate subdivision of the National Library system. I know that it has an identity that goes way back and that the various prominent citizens who have given their papers over to the Alexander Turnbull Library have done that on the understanding that those papers will be well protected. The library has that tradition has a good organisation looks after and indexes those papers very well and makes them available to a wide number of people. In fact when Dr Elsie Locke my mother died we had representations from different libraries about where her papers would go and it was quite clear to us after discussions among members of the family that they should go to the Alexander Turnbull Library. They have gone there and been well organised there. Its staff are in the process of completing that organisation and we are very satisfied with what they are doing. 
The thing that impresses me about the Alexander Turnbull Library too is not only the tradition but the support base—the volunteer base as it were—that has developed around that library in terms of the Friends of the Turnbull Library in the various functions they have which are well attended the publications they put out and their involvement with an important sector of the community in their ongoing work. It is good that under this bill guardians are being set up as a supportive body. I presume those guardians will be appointed from those people who are already very involved in the work of the library. It has a very important place in preserving our heritage and making it available to the public. 
There is a section there on oral histories and I know that the National Library and the Alexander Turnbull Library have paid much more attention to oral history and to collecting oral histories in the libraries over recent times. I think that is very important because a lot of our important people—people who are part of our history—do not get around to writing their autobiographies or to having other people write biographies about them and it is sometimes distressing when we know that their accumulated wisdom and experience will disappear if they die. It is good that there are now a lot of people around in the oral history area who are going out into the community and getting records of those people which are now being deposited in the National Library and the Alexander Turnbull Library and being well organised and made available. We can go and listen to those oral histories. That is a very good development and it is mentioned in this bill. 
There is also the question and Marian Hobbs referred to it about the exemptions that the Minister can make for certain categories of documents and Government documents. That is a question that relates to the National Library the Alexander Turnbull Library and Archives New Zealand. There are grounds for exemptions—no one is challenging that—but we have to be wary that those exemptions are not over-used or used just because the Government is a bit embarrassed about things or used to do the bidding of a particular Government department that wants to keep its papers unnecessarily secret or unnecessarily secret for too long a time. We have that problem a little bit with our intelligence services where in terms of Archives New Zealand they have been given exemptions for 25 years and then their exemptions have been renewed for 25 years so that virtually for a 50-year period we are not able to access any of those materials even though a lot of them—materials that the Security Intelligence Service for example collects—are public domain materials: publications leaflets and those sorts of materials that would be valuable in an archive. 
I am just referring to a problem that has been somewhat discussed by academics and by researchers. They are a bit worried about that and recently have made submissions to the Prime Minister on this question of making a freer public deposit system for those materials into the National Archives. I am just worried given the reference in this bill to the “Minister granting exemptions” and believe we have to be careful to keep an eye on that so that it is not used as a reason over a range of Government departments for having long-term and broad exemptions. They all should be properly justified in terms of genuine security interests or genuine protection of people who should be protected. With those qualifications I reiterate the Green Party’s support for this bill. 
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am pleased to rise to speak very briefly in support of this bill and to congratulate my colleague Minister Hobbs on her stewardship of the legislation. I acknowledge also the work done by other colleagues right across the political divide—some of which I have seen while serving on the select committee. 
One of the most interesting challenges that has been met is the sensible way that this pathway forward copes with the extraordinary challenges presented in terms of the capture of electronic material in particular. That issue has been very sensitively and pragmatically handled and I commend the bill to the House. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: 
 It gives me great pleasure to support this National Library of New Zealand legislation. I was interested to hear Mr Benson-Pope say that a sensible approach has been taken by all parties but I note that in the first reading debate the National Party actually opposed this bill. I believe that was for very good reasons because at that stage a lot of technical aspects posed huge problems and for commercial reasons caused great concern particularly for publishers such as newspapers. 
I note that this bill replaces the National Library Act of 1965 and when one thinks of the changes in technology that have occurred since 1965 there was no way that the sorts of things that the National Library would be required to look after could be envisaged for all time. Naturally enough if one thinks of Schumpeter’s curve and the logarithmic way that new discovery is just rattling ahead in this new millennium it is likely that in 10 or 15 years’ time—but hopefully not too soon—a new National Library bill might have to contend with things that we just cannot envisage now. 
The bill deals with four major areas and I might say at this stage that it was a pleasure working with the Education and Science Committee led by Brian Donnelly. One of the things that was a revelation to me was the National Library. I am afraid I had not visited the library so I suggested that that be done and we went over there. It is indeed an absolutely superb facility for the nation not only in terms of its literary content—the wonderful range of books in the National Library itself and the extraordinary collection bequeathed by Alexander Turnbull—but also the other facilities it has such as the oral and photographic archives. 
I was fascinated to learn that it is possible to go there if one wants photographs and the historical evidence that is accrued from just about any part of a large electorate like Port Waikato. I was able to get photographs from 1863 of Tuakau Pokeno and Rangiriri which I now am planning to hang in my electorate office to give a feel of the history of a wide area of the Waikato. But what is just so wonderful is that this facility is accessible to all New Zealanders. One can easily access those archives and the extremely helpful librarians will give one a range of options of how the material can be acquired lent etc. I just cannot underestimate for one moment how important that National Library collection is and the same goes for the Alexander Turnbull Library. 
The bill continues the National Library and the purpose of the Alexander Turnbull Library is confirmed by the Crown’s undertaking “to preserve protect develop and make accessible for all the people of New Zealand the collections of that library in perpetuity and in a manner consistent with their status as documentary heritage and taonga;”. I note that the status of the Alexander Turnbull is assured by the replacement of the present Trustees of the National Library with a new body to be called the Guardians of the Alexander Turnbull Library. When those people submitted I was particularly taken with their sheer intelligence—maybe gentleness but also an aspect of severity—their incredible commitment to the cause of preserving this hugely important collection and their determination that the heritage bequeathed by Alexander Turnbull himself and the others who subsequently bequeath to that collection would be protected and respected in the years to come. 
One of the other major areas this bill addresses is the Maori interest and as Brian Donnelly said so eloquently it is hugely important that in this year’s legislation—as compared with the Act of 1965 which contained no reference at all to the interests of tangata whenua or Maori—there is absolutely meaningful involvement and reference rather than tokenism. 
The area of legal deposit was perhaps one of the most contentious and that is encapsulated in clause 30. Legal deposit is a statutory requirement under which publishers and/or printers must provide copies of works to a national agency. The mechanism is found in the statutes of over 130 countries so it is certainly not uncommon. Clause 30(1) states: “The Minister may by notice in the  
Gazette 
 require a publisher of a public document … to give … at the publisher’s own expense a specified number of copies (not exceeding 3) …”. 
A variety of technical aspects came out of the woodwork. One was a submission by a publisher who had a very limited publication of exquisitely leather-bound books. Those books were literally worth thousands of dollars. It would be a huge requirement were the publisher to be forced to give up three of those copies and the bill allows for flexibility in those cases. So it is down to that detail and appropriate detail that the bill has reached. 
I think the most difficult part was the concern about electronic transfer and certainly the Newspaper Publishers Association was very concerned about that aspect. I note that the  
Dominion Post 
 said on 9 December: “The National Library looks likely to win the right to compel anyone who publishes on the Net to help the library access and store their content. The obligation covers individuals publishing Web pages and professional publishers of subscription-based online information who will have to provide ‘reasonable assistance’ to help the library access and store their material if asked.” In fact the acting chief executive of the library replied on 13 December and the mechanisms to protect commercial rights have been worked through very well. 
The last thing I would like to mention is oral history. I found this area particularly of interest because two people I had something to do with—Hugo Manson and Judith Fyfe—spent many years taking the oral histories of prominent New Zealanders and in particular former Prime Ministers. Unfortunately that process had to be stopped because of access through the Official Information Act but it was done with a huge amount of care for confidentiality and respect for the people whose oral histories were taken. Hopefully a mechanism will be worked out so that that process can be restored. 
I end by saying that this is a very important bill. It has been worked through in a multiparty way and I commend it to the House. 
Bill read a second time. 
Ngati Ruanui Claims Settlement Bill 
Second Reading 
Hon MARGARET WILSON (Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I move  
That the Ngati Ruanui Claims Settlement Bill be now read a second time 
. Ngati Ruanui is one of the eight generally recognised iwi of Taranaki. Its historical treaty claims cover some of the southern part of the Taranaki region and relate mostly to the Crown’s waging of war in Taranaki in the 1860s and to the loss of property through the confiscation of land under the New Zealand Settlements Act of 1863. The claims also relate to the treatment of prisoners during the wars to the Crown’s unconscionable actions in its dealing with the Parihaka community and to the inadequacy of the West Coast commissions. This settlement addresses the longstanding and significant grievances suffered by Ngati Ruanui Tangahoe and Pakakohi. The widespread loss of Ngati Ruanui land has hindered its development throughout the past 160 years. 
This settlement enables the Crown to apologise for its atrocious behaviours towards Ngati Ruanui especially in relation to the people in that area. Ngati Ruanui suffered a heavy punishment due to a decision of the Government of the day to make an example of it in order to deter other Maori from taking up arms against the Queen’s authority. The Crown has acknowledged that its actions had a prejudicial impact on those of Ngati Ruanui. In particular that impeded the ability of Ngati Ruanui to exercise control over its taonga and its wahi tapu and to maintain and foster spiritual connections to its ancestral lands. The Crown apologises unreservedly for its actions which breached the Treaty of Waitangi and its principles. As well as an apology this settlement provides for financial redress of $41 million which includes the transfer of six commercial properties and a variety of cultural redress that aims to recognise and protect the interests of Ngati Ruanui in sites that are particularly significant to them and to enhance their relationship with the Crown. 
This bill makes it clear that this is a comprehensive and final settlement of all the historical claims of Ngati Ruanui. This settlement is an important milestone for Ngati Ruanui and the Crown. It will enable us to move forward and renew our relationship as treaty partners. I know that members of Ngati Ruanui would like this settlement to be finalised as soon as possible to enable them to begin their development plans and to look to the future. This settlement is also significant because it is the first in the Taranaki region. I hope that this settlement will encourage other claimants to enter into and complete negotiations with the Crown. 
The Maori Affairs Committee has considered this bill and submitted its commentary on the bill to the House. The committee has recommended that the bill be passed with certain proposed amendments and I thank it for its timely and thorough consideration of the bill. The committee made some observations concerning objections to the bill in relation to some individuals within Ngati Ruanui and in particular with regard to some members of Tangahoe and Pakakohi who have opposed parts of the settlement throughout. That opposition led to mediation several judicial conferences and proceedings before the Waitangi Tribunal and the High Court. On the whole those inquiries found in favour of the settlement proceeding. I am glad to note that the majority of the select committee was satisfied that the issue of whether Pakakohi and Tangahoe be included in this settlement has been well and truly traversed and agreed that the settlement should proceed. 
I note that the Green Party member on the committee holds a different view and objects to the inclusion of Pakakohi and Tangahoe in this settlement and I respect that position. I would like to point out to the member however that of the 16 Ngati Ruanui hapu Tangahoe members affiliate mainly to five hapu and Pakakohi members affiliate mainly to six hapu. Also the Waitangi Tribunal stated in 2001 that although each group traditionally had distinct identities it is now very difficult to tell the people apart. Also the settlement recognises that unique relationship and identity. All members of Ngati Ruanui Tangahoe and Pakakohi will be able to benefit from the settlement wherever they may now live. 
I note that the committee has made a few minor amendments to the bill generally to reflect the recently approved survey plans for the cultural redress properties that are to be transferred. As is noted in the committee’s commentary on the bill further amendments are to be made to the bill reflecting among other things the change under Land 
online 
 from a certificate of title to a computer register. Those have been provided for in Supplementary Order Paper 72 which has been tabled in the House. 
It was in April 1998 that the previous Government recognised the mandate of Ngati Ruanui negotiators. A deed of settlement was then finalised and signed in May 2001. This settlement has been achieved in a timely manner and it is important that we now finalise it to enable Ngati Ruanui to receive the redress. I acknowledge the work done by the former Minister and the Associate Minister in charge of Treaty of Waitangi Negotiations who contributed to this settlement. 
I also want to thank the other Ministers involved and in particular the Minister of Finance the Minister of Conservation and the Minister of Maori Affairs who have supported the process throughout. I acknowledge the support and assistance of the Parliamentary Under-Secretary for treaty negotiations. I wish to thank the officials from the Office of Treaty Settlements and other Government departments for their work in seeking a just and fair settlement. 
Finally I would like to acknowledge and thank the individual kaumatua members and negotiators of Ngati Ruanui whose commitment on behalf of their people their ancestors and their descendants has led to this pathway to reconciliation. I commend this bill to the House. 
Hon GEORGINA TE HEUHEU (NZ National) 
: 
 I am very pleased and proud to speak to the second reading of the Ngati Ruanui Claims Settlement Bill. I commend the Government for finally getting the bill to this stage. I also say that I am satisfied with the work that we did in the Maori Affairs Committee and that this bill should certainly now proceed with hopefully swift passage. 
As the Minister has already stated the settlement that gives rise to this bill involves the Ngati Ruanui people of South Taranaki. It aims to give effect to a deed of settlement dated 12 May 2001 which has been ratified by a majority of Ngati Ruanui. Specifically 88 percent of the adult Ngati Ruanui voted with agreement from 60 percent of the total which in terms of a mandate and a brief to go ahead and do something is a very reasonable majority. I will come to the issues raised by Pakakohi and Tangahoe later because I would imagine given the depth of feeling with which they came to the select committee to raise their concerns they will still be feeling some loss that this bill is now proceeding through the House. 
The Ngati Ruanui claims are settled through this bill. It is important to note that under clause 15 the Crown is released and discharged from all obligations and liabilities in respect of the Ngati Ruanui claims. The clause states that the settlement of the historical claims effected under the deed and the legislation is final. That is a feature of all the settlement legislation that comes through the House and hopefully it gives some confidence to all both inside and outside the House that given goodwill and settlement packages that are fair and reasonable these can indeed be said to be final settlements of the historical claims of iwi. 
The settlement provides for an apology. The background to that apology is the Crown’s waging of war in Taranaki the land confiscations that followed the Waitara purchase and the invasion of Parihaka in 1881 following a period of passive resistance. That was not a good period in our history and the Minister has alluded to that. I want to remind the House that things happened during the wars that were waged and during the invasion of Parihaka that none of us can be proud of. All of us therefore should be pleased that with the passage of this bill this House makes some atonement for the dreadful things that happened to these people. 
Interestingly enough those actions still live on in the way that these people present themselves to us today. One can only imagine that if people are living with a history in which their tupuna were invaded and imprisoned without trial with some being sent away and imprisoned in caves down in the South Island—some never to return and others to return but to no homes—even though that happened back in the 1880s the legacy of those kinds of injustices to a group of people may in the minds and hearts of those people never be made right. Hopefully this settlement at least shows good faith and goodwill on the part of the Crown and this Parliament to make up for those actions. 
The settlement provides as I say for an apology and also for a redress package which consists of commercial redress in the form of cash and properties and also cultural redress. That package is extremely important because with the alienation and the dispossession of land came the loss of an economic base which the tribe no doubt widely expected to be able to develop along with the emerging nation. That is why the tribe signed the Treaty of Waitangi but that did not happen. But while the redress package is important it is also very important that the Government on behalf of the people of New Zealand makes this apology. As I say people who are interested might want to read through the full preamble which sets out exactly the reasons that the apology is important. Essentially the commercial and cultural redress follows the same kind of package that was developed for previous settlements. It has proved to be a worthwhile structure for settlements and I would imagine that future settlements will also be based on the framework that is now present in this bill. 
This is the first settlement in Taranaki as the Minister referred to and like the Minister I would hope it acts as a spur for both the Government and the other iwi of Taranaki to move sooner rather than later to settle their historical claims. Nobody needs to feel guilty about this claim because none of us here today was responsible for anything that happened to Ngati Ruanui but we have a great opportunity to make up for the things that were done in the past. I think it is always a very worthwhile thing that the House does to show that the Crown is capable of good faith and of making atonement for the actions or inaction of past Governments. I always feel proud when we do one of these settlements and I hope everyone in this House does too. 
None of these settlements will be perfect. Nothing can ever be done to fully make up for the losses incurred by iwi that have resulted in these historical claims but we in New Zealand are foremost in the world in the way in which we address these injustices. I think New Zealanders should be very proud of the fact that we have a framework in place to address them and that when we put our minds to it we are very diligent in going about settling these injustices. There can be no equality of citizenship while this sort of injustice sits and waits to be atoned for. 
This is a good night. This is a worthwhile debate. The select committee hopefully did its job reasonably well. We were satisfied that the issues raised by Pakakohi and Tangahoe had been well traversed by the Waitangi Tribunal. There were also some Cabinet minutes available to us. The issues about whether those two sub-tribes should be included in the settlement had been well traversed. The select committee has no power to change a deed of settlement. The best that we could do was to make sure that due process was followed and in this case it appears that it was. I hope that in time those who feel disaffected and who came before the select committee with much depth and emotion will be able to put that behind them as well to join together with the rest of Ngati Ruanui and as the Minister says to use this settlement as a beacon to go forward into the future. 
MURRAY SMITH (United Future) 
: 
 United Future supports the second reading of the Ngati Ruanui Claims Settlement Bill. Indeed it is United Future’s view that the claims settlement process needs to occur with a great deal more speed than is apparent. I would like Ngati Ruanui to be aware that the reason this bill is being passed in urgency is that United Future requested it to be included in the list of bills to be debated under urgency this week. Without that the bill would not be here tonight. 
We believe it is important that the process of settling grievances be resolved as a matter of urgency. We believe that until we can get the grievances between Maori and the Crown resolved and the settlements out of the way we will be inhibited as a nation from moving on together. We are concerned that there are delays in the whole settlement process and at the length of time that the Government is taking to get the settlements through. 
However turning to the bill I am particularly glad to see it progressing with speed. As I said in my first reading speech I trace my own great-grandparents back to the town of Maxwell. They were farming at the time that a lot of these events would have happened. In the first reading I expressed my concern that my ancestors who were around at that time might have been involved in them or might have had land given to them or sold to them by the Crown that in fact was Maori land. I apologised at that time on behalf of my ancestors for any grievances that they might have been party to. I noted from the deed of settlement with Ngati Ruanui that the Crown adopted a policy of attrition or a scorched earth policy in regard to the southern Taranaki operations. That resulted in many villages being destroyed in bush-scouring campaigns and in much loss of life and property on the part of Ngati Ruanui. It is over time that we as a nation recognised that provided an apology to Ngati Ruanui and recompensed them albeit modestly for the losses that they suffered. 
I was also aware that Ngati Ruanui was part of and contributed to the Parihaka community. That community was an example to New Zealand in terms of its peaceful existence and the way that it operated as a community. It was a community that was based on the scriptural principles of the Beatitudes and it tried to live in a peaceful way with the English. Unfortunately the British did not respond in the same way. We know the story of Parihaka and the way that the armed forces dominated that community and endeavoured by force and intimidation to make those people leave their land. Eventually a lot of them were exiled to the South Island and there were many deaths as a result of that. 
I am also particularly pleased to support this bill because a lot of the Ngati Ruanui people settled in my own area of the Hutt Valley. Te Whiti led a number of people down from Taranaki to settle in the Hutt Valley. Te Whiti Park which is a key park in the Hutt Valley is named after Te Whiti because that is where the people settled. Therefore in terms of my current area of residence I feel an affinity with the Ngati Ruanui people and I am delighted to see this bill progressing further. 
I have indicated the frustration that United Future feels at the slowness in resolving the treaty grievances. I note for example that the Gisborne inquiry process—the newly developed process that came into effect last year—is still awaiting the publication of a report as to its effectiveness. The Attorney-General advised this House way back in September that the assessment was being completed yet many months on from that we still find a situation where the Gisborne inquiry report has not been published. It is expected that the report will be positive. The Attorney-General has indicated that once that report is received if there is a need for more funding then that will be looked at. Yet we are now getting close to the Budget round where the Government will be considering the provisions it will make in order to expand its policies. There is an urgent need for things like the Gisborne inquiry process which has by all accounts been effective to be extended to all the other claims throughout New Zealand so that we can speed up the Waitangi Tribunal processes resolve the grievances get the legislation into this House and pass it. 
As I indicated before it is the view of United Future that until we can get the grievances resolved and the whole job completed we are inhibited as a nation from moving forward. We have a thorn in the side of our history that prevents us from moving into the future together. So I encourage the Government even more strongly to provide more funding and to speed up the process. I encourage it to give more urgency to getting the resolutions through tabling the legislation and passing it through the House. Many iwi and hapu have been waiting for too long to see their grievances resolved. I know that there are issues such as mandating issues and things like that that fairly need to be completed by the iwi and hapu themselves but it seems to me that even greater resources could be provided to the Office of Treaty Settlements. That would enable the claims development teams to be expanded so that they take a proactive and not simply a reactive role in having disputes resolved. The Office of Treaty Settlements should be approaching iwi and hapu encouraging them to get together and facilitating in every way possible the resolution of their issues. I am not talking about taking away the authority and the decision making from Maori but simply about working alongside them and providing all the resources possible to speed up the process of the iwi fulfilling the aspects that they need to fulfil so that we can reach some resolutions and get the settlements through. 
However the second reading of this bill is important for Ngati Ruanui and therefore United Future supports it. We are keen to see the bill go through the House with a degree of speed. We commend the bill to the House. 
BILL GUDGEON (NZ) 
: Kia ora ano tatou i huihui mai nei i roto i tenei Whare i tenei po. Ki o tatou manuhiri ki nga rangatira o Ngati Ruanui nau mai haere mai. Tena koutou tena koutou tena koutou katoa. 
[An interpretation in English was given to the House.] 
[ 
Greetings once again to all of us who are gathered here tonight in this House. To our visitors and chiefs from Ngati Ruanui welcome welcome. Greetings to you all greetings greetings 
.] 
I rise on behalf of New Zealand First to support the second reading of this bill. Between 1990 and 1995 the Waitangi Tribunal investigated 21 claims concerning Taranaki Maori including Ngati Ruanui made to the Waitangi Tribunal under section 6 of the Treaty of Waitangi Act of 1975. In 1996 the Waitangi Tribunal released its interim report on the Taranaki claims. Its report was based on the Waitangi Tribunal’s inquiry up to the date of the report in order to expedite negotiations for settlements in relation to the Taranaki claims.  
In April 1998 the Crown recognised the mandate of Ngati Ruanui Muru me te Raupatu Working Group including Tangahoe and Pakakohi in its negotiations. The Crown and the working-party reached a heads of agreement in September 1999 which recorded that in principle Ngati Ruanui and the Crown were willing to settle the Ngati Ruanui historical claims. 
The Crown and the working-party then finalised a settlement offer which was put before Ngati Ruanui for ratification. Ngati Ruanui approved the ratification by a majority vote of 87.8 percent of participating adult members of the claimant community who were eligible to vote. On 12 May 2001 the Crown and Ngati Ruanui entered into a deed of settlement. Throughout the negotiations members of Ngati Ruanui representing some members of Tangahoe and Pakakohi in particular and in some cases members of Hamua Hapotiki and Ngati Tupaia hapu have opposed the settlement. That opposition has related mainly to the inclusion of the Tangahoe and Pakakohi claims in the Ngati Ruanui settlement. 
I am positive that all in this House would dearly love to have these claims settled for once and for all so that people can move on after an arduous time-span of negotiations. But I ask the question: what of the concerns of Pakakohi and Tangahoe? Are their claims valid enough given that many submissions were before the Maori Affairs Committee towards the end of the year 2002? Crown policy is that it is for claimants to decide who will represent them and how to select those representatives. Representatives are selected through an open and a transparent process and only when certain criteria are met will the Crown recognise the mandate of a claimant group. Those criteria are for instance that the mandate process was open and transparent was representative of all claims and descent groups has wide support from the claimant community and represents a large natural grouping of claimants’ interests. Those factors and many others all require careful judgments by officials and ultimately by Ministers. There will invariably be opposition to any mandate recognition decision. What the Crown needs to be certain of is that a clear majority of the marae hapu and claimant community members support the mandate and that those who do not are still able to participate in the process. 
After considering the Office of Treaty Settlements and Te Puni Kokiri assessments in April 1988 Cabinet decided to recognise the working-party’s mandate to represent Ngati Ruanui including Pakakohi and Tangahoe. I ask members to allow me to add that as long as there is division amongst the people how can we live together as a nation? New Zealand First recognises the mana of those concerned and that it has always been part and parcel of Maori make-up. But for the moment I ask that we look at the common sense of these issues. After all we are whanau and hapu is an extension of the whanau concept. I am sure that for the sake of peace for our tamariki and mokopuna all the parties concerned can sit down together in a spirit of tranquillity and negotiate an amicable agreement that would be profitable for all. 
New Zealand First supports the bill but we also recommend very strongly that the leadership of Ngati Ruanui Pakakohi and Tangahoe and others whom I may have omitted gather together on their maraes of abode and negotiate a peaceful and satisfying agreement. I believe that this can and will be done within the confines and wairua of our tupuna. New Zealand First would be happy to facilitate that if required in order to bring these matters to finality. I am sure that the sore that may burst can be cured. Kei te kata koe. 
[ 
You are laughing 
.] 
To Ngati Ruanui and all the hapu concerned I say the bill has been before the Waitangi Tribunal. It has been before the select committee along with all the submissions for and against it and we know and feel those concerns and the heritage that is represented there. The indications are that this bill will receive the stamp of approval. My question will be bandied around amongst many: where to from here? Taku whakahoki ki tena patai kei a koutou tena. My reply to that query is that it is now over to the hapu. New Zealand First endorses and will support this bill and hopes that all will proceed for the good of all hapu. No reira ki a tatou ki a koutou nga rangatira o Ngati Ruanui tena koutou. Tena koutou i tae mai nei koutou ki te whakarongo ki nga korero e whakawhitiwhiti ana i waenganui i nga mema o tenei Whare. To those of Ngati Ruanui I thank them for being present and listening to the conversations and the debate that has been going on this evening. Greetings to us all. 
MAHARA OKEROA (NZ Labour—Te Tai Tonga) 
: 
A tena koutou e kui me te ropu e haere maomao mai mai raro i ta taua nei maunga a Taranaki me te tihi o taua maunga. Uhia mai te tipare rau kawakawa hei tohu no te mate ki a ratou kua uhia mai i te korowai aroha i a ratou timata ai o ratou nei hikoi ki te matatoru te iti me te rahi tena koutou. Tena koutou o koutou nei maia ki te haramai ki te rongo atu i nga korero kua whakahuatia kei roto i tenei pouwhare. Kua rongo hoki koutou kei te tautoko tino tautoko mai te nuinga o matou i te tikanga o tenei pire. Na ka maumahara au i tetehi o nga whakatauakitanga korero e whakaputa mai i o tatou nei poropiti a Te Whiti ki te iwi i a ratou e noho i runga i te marae o Parihaka. Ka metia e te poropiti ki a ratou nga ropu “E te iwi ka riri mai te hau ki a matou ka piko. Ka mutu te riri e te hau ki a matou ka tu ano.” Na kua tae te wa. Ka tu mana ano koutou matou te katoa o nga iwi o Taranaki i tenei wa. Kia whakatutuki pea i nga auwetanga i te haehae o te whatumanawa o ratou ra nga tau heke a kua ngaro ai te katoa. Me ki me ratou ra e mauherere ai kei roto i nga ana kei Te Waipounamu. A ratou ra kua mate ai kua tanumia ai kei te whenua o Te Waipounamu. No reira tena tatou.  
[An interpretation in English was given to the House.] 
[ 
Greetings to you the elderly womenfolk and the group who travelled here from afar and from that mountain of ours Taranaki. Greetings to its summit. Cover us with the sprig of leaves from the kawakawa tree that is worn around the head to mark death and to honour those who have been shrouded in the cloak of love as they began their journey. To the multitude to the meek and to the illustrious greetings to you. Greetings to you and on your boldness in coming to hear what is being said in this House. You have also heard that the majority of us support what this bill is about—really support it. Now I recall one of the wise sayings that this prophet of ours Te Whiti said to the people when they were living on Parihaka Marae. The prophet said this to the group: “When the wind is angry with us we bend over. When its anger is over we stand up again.” The moment has now arrived. At this moment you and all of us of Taranaki stand with authority. To carry out the anguish perhaps to its completion and the things that cut them up inside all have disappeared over the years—let us say those held captives in caves in the South Island; those who died there and are buried there. Therefore greetings to you 
.] 
I am very pleased to hear so far the level of support that has been expressed for this bill following the start of the debate on its second reading by the Minister the Hon Margaret Wilson. It shows a very collective consciousness towards addressingnga he rawa o mua ake [ 
the things that went wrong before 
] because many of our people not only those in Taranaki have had that kind of mamae for generations. As a former long-term trustee of Parihaka—as an uri of Parihaka just like those in the gallery—I am very very pleased and privileged to stand here as a former chair of the Parihaka trustees and now as the member of Parliament for Te Tai Tonga and sometimes for Taranaki to express our view. 
We understand and you understand without doubt the kinds of statements that have been made about te auwetanga [ 
the anguish 
] because we have lived it. It has been our reality. We understand fully as well the kinds of implications it has had for our people. It is not just about land. Ehara mo te whenua anake. To see you here tonight Mate your having travelled to Wellington as you have done for—I do not know—the last 4 decades kawe mai i taua take i konei na i mua i te aroaro o te Kawana [ 
to bring this matter before the Government 
]. Seeing you here of course causes reflections of memory and I see beside you many other people including my mother. There is a whole range of people involved here not just those who are physically with us me te tini o ratou ma kua whakawairua [ 
but also the vast number of 
thosewho have died 
]. 
I think that is very important because we are talking about not just ourselves who are here physically but also those who are no longer here and those architects of the Taranaki claim which was first sought under the umbrella of the Taranaki Maori Trust Board. We are here to celebrate that. I am really looking forward to the third reading which I think we will have as soon as possible kia haere tika ai te kaupapa kia whakawatea mai pea te toimahatanga mai ra ano i noho i runga pokohiwi. 
[An interpretation in English was given to the House.] 
[ 
so that the matter proceeds in a proper way the burdens that have sat on our shoulders are perhaps cleared away 
.]  
I want to acknowledge also along with the Minister in charge of Treaty Negotiations the work that was done by the previous Minister and the Associate Minister the Hon Georgina te Heuheu and her sterling support as deputy chair of the Maori Affairs Committee. We hope that continues I say to her. I also acknowledge the other members of the select committee. So ahakoa te ruarua hoki o nga kupu kei te noho tonu ai te aroha ki a koutou me te katoa tae noa atu ki te wa wahakatutuki mai i tenei kaupapa.  
[ 
even though the words are few the regards for you and everyone remains and will still be there right up to the time when this matter is completed. 
] 
There is just one more thing. When we took the submissions it was extraordinarily difficult for me to sit there as the chair of the select committee partly because we were in a situation kei te haere wehe wehe mai [ 
where we had come separately 
]. But as I said as the chair a select committee is not a court of law nor can it address issues outstanding and seek legal solutions. That was sought as the honourable Minister has already alluded to through the Treaty of Waitangi in the High Court. We were compelled to pursue the path of the majority. 
In answer to the patai from the honourable member from New Zealand First I say there are seats for everyone to participate in the structure after the claim. It is there he turu mo nga hapu iwi katoa a Ngati Ruanui Tangahoe me Takakohe. Kua kite ai te hiahiatanga kei roto o te wairua o ratou kua waiho kotahi.  
[ 
a seat for the subtribes and all the people of Ngati Ruanui Tangahoe and Takakohe. What is desired can be seen in the spirit of others; it has been left as one 
.]That is the answer to the question the member posed and I do not think we need to go up there and facilitate it. Thank you Mr Chair kia ora mai rirerire hau pai marire ki a tatou katoa. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. The honourable member gave the answer to my good colleague’s question but I did not understand it. Can I ask the interpreter to interpret? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member most certainly can. Can we have an interpretation please? 
[An interpretation in English was given to the House.] 
METIRIA TUREI (Green) 
: 
 Kia ora koutou katoa. He mihi nui he mihi aroha ki a Ngati Ruanui Tangahoe me Pakakohi. 
[ 
Greetings to you all. An affectionate and appreciative greeting to Ngati Ruanui Tangahoe and Takakohe 
.] 
First I must pay my respects to those kaumatua kuia hapu and whanau who have travelled all this way tonight to be here for the second reading of this bill and to those who have worked so terribly hard for it and are now able to celebrate it. The journey for them to this point has been long and arduous and many hardships and sacrifices have been made but this particular process is almost at an end. To those whom this bill causes sorrow we acknowledge your pain and your struggles also. 
We in the Green Party have weighed very carefully our support for the restitution of claims and our deep concern about the treaty settlement process. For this particular settlement we have decided in these circumstances and out of respect for Ngati Ruanui to support this bill. [ 
Interruption 
] Kia ora. The restoration to the iwi of land particularly wahi tapu and the ability to enhance and advance Ngati Ruanui hapu through the settlement are for them significant gains and we acknowledge Ngati Ruanui’s efforts to achieve some form of justice and restitution for the grave losses suffered by the mana whenua of Taranaki. The Greens acknowledge that delegated representatives of the Crown have breached and continue to breach te tiriti rights of Maori and we support resolution of and restitution for all outstanding historical and current breaches. 
We gave very serious consideration to abstaining from the vote on this bill. We are loath to suggest to the Government that we support the general process by which this settlement was reached. I want to make clear to the Government that we believe that the treaty settlement process is seriously flawed and cannot fully resolve the breaches of te tiriti because of those fundamental flaws. It is some of those issues that I want to address tonight. 
In the Maori Affairs Committee many submitters talked of their feelings of exclusion and their fears that their sovereignty and identity will be subsumed by the settlement process. It also became clear that the Ngati Ruanui Muru me te Raupatu Working Group was not responsible for those fears but that the process through which all of these people sought redress was inadequate and unable to deal with the complexity and enormity of the issues involved. One submitter in particular Te Miringa Hohaia talked of the duress of poverty and of how this was the only deal in town for the relief of that poverty and he also spoke of how the failure to deal with the whole of the Taranaki tragedy has led to the picking off of iwi to everyone’s detriment. He is absolutely right. The Government has failed to find an adequate way to truly compensate mana whenua in the Taranaki area for the crimes committed against them. 
I am talking about not just money and property because there are other ways by which the injustices could be acknowledged—initially and most important by the Government being prepared to look at the process itself. Maori have never been able to be actively part of constructing the process by which they are to obtain resolution of their historical grievances. They have never been properly involved in the development of the treaty settlement process. 
The process was constructed in the late 1980s and involved at that time Cabinet Ministers and officials. It was not until 1993 after 4 years of planning that it was finally recognised that Maori ought to have some level of involvement other than through Te Puni Kokiri. There were 4 years of the Government planning and constructing a process and only then was it taken out for consultation. 
It would come as no surprise to many that the submissions and concerns raised by Maori were not taken up by the Crown which by then already had 4 years of investment in its process. Never mind that Maori had 150 years invested in that process and had thousands of deaths and hundreds of wrongful imprisonments and theft and dispossession invested in it. Never mind that the whole point was to recognise the treaty relationship and remedy the failures of the Government in the past. 
We can see those failures in the bill. On page 5 the preamble talks about the New Zealand Settlements Act 1863 which was used to confiscate lands of Maori whom the Crown had assessed as being engaged in rebellion against the authority of the Queen. It was under that Act that much of the land of Ngati Ruanui was taken. Sixty years later in 1926 the Sim Commission was set up to investigate that Act and the confiscations under it. That commission’s recommendations were very poor. They were not discussed with iwi and were never considered by them to be adequate. 
The honourable member Georgina te Heuheu said in her speech tonight that there cannot be adequate restitution and I agree. There cannot be adequate restitution for what was stolen and taken and done. That is why we must look at what this process does and we must not confine our views about how to make restoration simply to propertarian rights. It is about much more than that. It is about constitutional structures and it is about empowerment at a level that this Government and previous Governments have not ever considered. It is only by engaging with Maori in a direct process to determine how that restitution should come about that there will ever be anything like true restitution. 
It is imperative that the treaty settlement process is properly reviewed by the previous claimants by current and future claimants and by Maori in general who are affected by those claims and need to be able to contribute. As with any restorative justice process Maori as victims must be able to have some control over the process for their own restitution. Let us be very clear that the fact that Maori engage in this process does not mean that they endorse it. I return to the words of Te Miringa Hohaia: this is the only game in town; this is where the duress of poverty is at its most stark. Maori will do what is best for their people and will take up the meagre opportunities for redress available to them but there are very few opportunities and it is a heavy obligation on rangatira to make every effort to achieve whatever is possible for their people. So much mana is vested in the successful outcome of this process—a process that does not respect that mana. 
I turn now briefly to my minority statement in the select committee report. I have enormous respect for those of Tangahoe and Pakakohi who went through the court and tribunal processes in order to assert their tino rangatiratanga. Theirs has been a real struggle to have their issues recognised and taken seriously and they will feel aggrieved by this bill. It is the underlying settlement policy of dealing only with large natural groupings that has seriously undermined the tino rangatiratanga of hapu within this claimant group—within Ngati Ruanui. This further exacerbates the injustice that the settlement is designed to cure. The Greens believe that the Government should develop with Maori a diversity of models for restitution premised on the tino rangatiratanga of hapu as the first principle. Clearly hapu must not be punished for choosing not to participate in a Crown process that is extensively designed for their benefit but that fails to recognise their needs and concerns. The Crown policy could be changed to engage with individual hapu as set out in te tiriti. It could engage in a resolution process that focuses more closely on ongoing relationships and less on fiscal and time constraints. It could accept alternative models for resolution that are determined by Maori themselves. We believe that it is the perpetuation of a serious grievance to require Maori who disagree with the process either to participate or to be left without restitution. 
Finally I acknowledge and recognise the members of the Maori Affairs Committee who were involved in hearing the claims and submissions on this bill. It is true that the best that the select committee can do is hear since we cannot make any changes to the bill but it is important that we do hear those claims and ensure that everyone’s issues are truly acknowledged. Kia ora koutou katoa. 
MITA RIRINUI (NZ Labour—Waiariki):  
Kati kia ora hui hui tatou. Taranaki maunga Taranaki tangata nau mai hara mai tena koutou. Tena koutou i nga ahuatanga e pa ana ki to kotou hara mai ra i te nuku o te whenua i tenei ra whakahirahira. Hei matakitaki  hei tirotiro ki nga ahuatanga e pa ana ki ta kotou pire nana nei kua tae atu ki tona mutunga. No reira tena koutou tena koutou tena koutou. Tena hoki koutou i nga ahuatanga kei runga kei a koutou nga aitua maha ratau kare e tae-a-tinana mai ana. Otira e tu poto noa iho tenei ki te tautoko i nga mahi e mahi ana i to tatou Minita a Makareta te Wirihana a me to tatou Komiti Motuhake mo nga Take Maori me te heamana hoki ta koutou tangata a Mahara Okoroa ahakoa kei Poneke e noho ana kei a koutou tona ngakau. No reira tena koutou tena koutou tenahoki tatau. 
[ 
Hello indeed to all of us gathered here. Taranaki mountain Taranaki people welcome welcome greetings to you. Greetings to you in respect of the circumstances that brought you here from the breadth of the land on this great day to view and look at the circumstances that relate to your bill that has reached its passing. So greetings greetings and greetings to you. Greetings as well in respect of the many deaths upon you they the ones who were unable to be here in person. Indeed while this is a brief address I rise in support of the work by our Minister Margaret Wilson our Maori Affairs Committee the chairman as well your very own man Mahara Okeroa; even though he is living here in Wellington his heart is there with you. So greetings greetings greetings to you and to us as well 
.] 
I thank my colleagues including the Hon Margaret Wilson members of the Opposition parties and in particular the members of the Maori Affairs Committee and more particularly the chairman Mr Mahara Okeroa for their endeavours during this entire process. I have to say that for many members on the Maori Affairs Committee hearing submissions was not only difficult for them but very painful because the issues that were being discussed were specifically about them and their history. I take this opportunity to acknowledge them and congratulate them on the strength they showed throughout the process. 
I also acknowledge here in the House today representatives of Ngati Ruanui. As I said: a Taranaki tangata Taranaki maunga ahakoa he maunga titohea ka rere nga manu ki reira unu ai e kore e mimiti. 
[ 
and Taranaki people Taranaki mountain even though it is a barren one and birds fly there to drink it never runs dry 
.] 
By saying that I mean that Taranaki has a tremendous history a very very long history and a history that this country can be proud of. As I was sitting here listening to the speeches I thought to myself that I should be talking about the bill and about the process that this bill has been subjected to. But then again I thought to myself well everybody else here seems to be speaking about that so what is there left for me to say apart from the fact that we have not taken the time to acknowledge the history of Taranaki and its people? 
Although I come from the sunny Bay of Plenty I do know quite a bit about Taranaki because my people travelled in the early days to Taranaki to help with the passive resistance movement. Some of them never came home. They did not die there; they married there. I was kind of amused at a comment made by the New Zealand First speaker Mr Bill Gudgeon who said: “Hopefully one day we will sit together in tranquillity.”; I thought to myself that that was what Taranaki people were doing when the soldiers came. Maybe that is a part of our history we are not very proud of but it is still part of our history. 
A lot of comments have been made about and a lot of references have been made to Taranaki’s ancestor and their prophet who is well known throughout Maoridom Te Whiti o Rongomai and his associate Tohu. A lot of proverbs have been quoted here in this House tonight whereby the prophet heralded the way forward and that was through passive resistance. That may not seem unusual but it was at a time when no one throughout the world spoke about passive resistance when taking up arms was the order of the day and when people upon people were destroyed because of their views. And we see that happening today. But here was this man from Taranaki who told his people to lay down their arms and who said that they will not fight but will resist. To this day they have held that line and I am sure my colleague Mr Mahara Okeroa is proud of that history although from time to time in this House I wonder whether he follows that practice! But I am only kidding. 
As I say I stand to speak very briefly. It would be good from time to time for us to think about the history of Taranaki rather than the settlement of their claim because the history is what has made them a great people and the settlement of the claim is what will make them in the future an even greater people. There are opportunities and challenges ahead for the people of Taranaki particularly Ngati Ruanui when they leave this place. At the end of this process one can only hope that they never have to return under this sort of kaupapa and that they not only face the challenges of social and economic development for their descendants but also mend the bridges between themselves and other hapu and iwi of Taranaki. I know that they will because they all share a common history. So without contributing any more to the discussion I just want to say to the people of Taranaki: kua tata tonu nei koutou ki te wa e tutuki ai tenei nawe o koutou. Tapae ripenatahia kia watea ai te huarahi kei mua i a koutou. No reira rire rire paimarire tena koutou. 
[ 
You are just about at the point where this trouble of yours is solved. Ensure that the way before you is clear. So rire rire paimarire greetings to you 
.] 
STEPHEN FRANKS (ACT NZ) 
: 
 I waited until I had heard a number of speeches in this debate because my party does not now sit on the Maori Affairs Committee. When this bill was first introduced the leader of my party expressed views that were intended to remind Parliament that while sentiment remorse and a desire to do good are essential Parliament is also a trustee—a steward—of the interests of all New Zealanders and we should subject these matters to the same careful scrutiny that we are required to give to anything else. So I listened to the debate having read the very brief report of the select committee and was obliged to rely on its report so far as it can be relied on. 
I have to tell the House that we will not be supporting this bill further. We will not vote after the second reading debate. We need more answers than the select committee has given. We need answers from the Minister because the select committee’s report essentially puts us all on notice that it had concerns that it does not address. The select committee says that we cannot amend these deeds. We cannot amend the bills that reflect the deeds. We treat them as we treat international treaties and it is a yes/no decision. So effectively the committee has said to us that there are matters here that perhaps would be of concern but there is nothing it could do about it. If I am reading that wrongly no doubt we will be told during the committee stage. There clearly seems to be a warning about the adequacy of mandate. I took that message also from the speech of my colleague Metiria Turei who came back to that at the end. 
There are also problems in the bill that perhaps go further than in just this Ngati Ruanui settlement. Treaty settlements are of course in respect of high-handed breaches of contract. There are cruel and even foul deeds and betrayal of values that had been taught by missionaries and that had been developed by Maori such as Te Whiti. But the matter is now too old to allow us to get at the truth and even the problem in establishing a mandate is an instance of that. The fact that no one can authoritatively deal with the two hapu or representatives who do not wish to be bound by and have their claims settled under this agreement is a warning of just how unlikely it is that true justice can now be arrived at at this length and how approximate this is. 
We have a difficulty in that we cannot trust the Minister in these matters. We cannot trust the Crown to approach these matters looking at them in the same way as it does with international treaties. The continuation of a Crown prerogative to enter treaties is based on the fact that no nation wants to wash its dirty linen in public before foreigners. It is based also on history on an assumption that the best judgment of the Crown will be in the interests of the nation—that in external matters internal politics should be put aside. That is a complete misapplication of doctrine in relation to treaty claim settlements. These are with ourselves. These are highly political internally. It is an absolute nonsense that this House and the committee will not look at the detail of these agreements and at the long-term effects of some of these settlements. So ACT will not be bound by any convention that purports to treat these contract breaches and criminal act settlement proposals—these compensation proposals—as if they were international treaties under the convention of Crown prerogative. 
This bill says that it settles claims arising from the principles of the treaty. We cannot rely on the Government because the Government will not tell us what those principles are. We have asked repeatedly in this House and the Government will not tell us because it does not know. It was very cunning or perhaps it was lack of courage; I do not know what it was 15 years ago but when the courts were told that they had to invent principles for the treaty of course they had to do it. But since then the Government will not define those principles and we do not know whether it is cynical or naïve. Whatever it is it is not creditable. 
We voted to send the bill to select committee as I said but we need clear answers about the effectiveness not only of the mandate in terms of potential contenders—competition for this mandate—we also need to know whether there are unrecognised problems in the mandate. Is it full and final? Who can tell? The Minister Tariana Turia concluded her address in the first reading debate by saying that the Crown must continue to support Ngati Ruanui as they move forward into the future. Was that mere rhetoric or was she just telling us as others have told us that these are not full and final settlements? What is it when a Minister of the Crown effectively says that this is not the end of it? 
Secondly I see nothing in the committee report on the quality of the governance entity and that is something that the Crown and this House should be taking an interest in. I have never really recovered from reading a book about the Alaska settlements where I think US$11 billion was lost by the 13 different tribal bands. I do not think that that is to the discredit of those bands. It is very very hard to hold wealth if a person has not actually earned it because earning it gives the skills to hold it. Very few listed companies last more than one generation and very few entities can hold wealth for more than one generation. It is the responsibility of the Crown to make sure that the governance entity is robust enough for this settlement not to become a cause of embarrassment should it be lost because the finger will be pointed whether or not it is fair. 
In that context it is proper to raise the question of the £5000 in the previous settlement which was probably more generous than the current settlement in real terms. That £5000 per year has obviously not been adequate—no one now thinks it was adequate. But the form of the new settlement has all the risks of setting neighbour against neighbour. ACT and this House need to know what is meant by the words in Part 5 of the bill which essentially say that the statutory acknowledgments can affect the lawful rights and interests of people who are not parties to the deed of settlement. The statutory acknowledgments are to be given regard by the consent authorities under the Resource Management Act. So it appears that Ngati Ruanui will be tempted into exercising a political privilege for ever in relation to land that is not their own. That is not something they can sell and they cannot turn it to good account. All that does is to put it into a position where some of its best brains will be occupied in appearing to frustrate Ngati Ruanui’s neighbours—and what does that do for relations? 
This is not a sensible settlement if I am reading it correctly. It may be that the Minister can reassure us during the Committee stage but as I read it there is an express warning that it does affect the private property of people who are not parties to the deed—that is neither the Crown nor Ngati Ruanui. This is not a light matter. The temptation to think that assets are the same as prosperity and health for a community is very very clear in the discussion in this House. It is not about assets or land; it is about the habits of thrift and respect for education—the sorts of “strength of character” things that have been gutted by unemployment benefits and domestic purposes benefits and by unearned income flowing to people who know that it is not appropriate. If this is a proper settlement of a property claim it is doing what article 2 of the treaty says it should do. But if instead it is creating permanent political privilege on the basis of inherited status; it is only a poisoned gift from this House to the people of New Zealand—both Maori and Pakeha. 
Bill read a second time. 
Motor Vehicle Sales Bill 
Instruction to CommitteeCWH 
Hon MARGARET WILSON (Associate Minister of Justice) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Motor Vehicle Sales Bill that it take the bill part by part and consider any schedules as one question. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
In Committee 
Clause 1 Title 
SIMON POWER (NZ National—Rangitikei) 
: 
 At first glance the title of this bill may seem to be unimportant but there is quite a big difference between this and the original 1998 Motor Vehicle Dealers Bill—and the Minister will no doubt be keen to take a call on this. As we progress through the legislation part by part this evening and well into tomorrow evening it will be clear from the contributions from the National benches that there is a big difference between the prospect of a Motor Vehicle Dealers Bill as was previously the case and this bill. As I said at first glance it may not appear significant but this bill wraps up a whole lot of different environments where sales may occur when under previous legislation legislation of this type would relate only to registered motor vehicle dealers. The issue that leaps to mind relates to car fairs—and I say that quite seriously because in that type of environment there is usually a series of private sellers who bring their goods to the site— 
Hon David Carter 
: By car. 
SIMON POWER 
: They often drive there and trade motor vehicles freely between themselves. That type of activity was not previously caught by any motor vehicle dealers legislation unless the number of cars that were traded came into question. Under this legislation that type of selling will be caught so there is quite a subtle difference between the 1998 National legislation and the current legislation. 
During the discussion this evening members on this side of the Chamber will be tying back many questions and other parts of the bill to the title and explaining why it is that although at first glance the title may seem to be pretty inoffensive it is actually reflective of a different type of legislation to that which we have seen in this country until this date. I look forward to the contribution from my colleague the Hon David Carter who I know has spent some time looking at the title to this bill and who has very strong personal views about how the title relates to legislation that was before this House under a previous National Government. The differences between that legislation and the current legislation will no doubt become apparent as the parts pan out. 
 I just return to my theme that the Motor Vehicle Sales Bill is a different piece of legislation entirely and the title as my colleague points out is different from the title of the previous legislation. I could not be more to the point in saying that despite the previous bill being called the Motor Vehicle Dealers Bill the Motor Vehicle Sales Bill is a wider net cast into an industry that up until now has been governed by very specific legislation relating to licensed motor vehicle dealers and to private dealers who were trading from memory six vehicles or more in the course of one calendar year. What this bill does through the reflection of the title that we have been talking about for what seems some time now is to extend wider than that initial definition to include as I have said issues like car fairs and a more communal way of selling and buying motor vehicles than that which previous legislation covered. 
At this early stage I want to talk briefly about the other interesting point worth making—that is how this name came about given that the aim of the bill is to repeal the Motor Vehicle Dealers Act and to overtake the Motor Vehicle Dealers Bill of 1998. Perhaps the title including “sales” rather than “dealers”— 
The CHAIRPERSON (H V Ross Robertson) 
: The member’s time has expired. 
Hon Roger Sowry 
: It is clear that the member on his feet has a lot of new information and I seek leave of the Committee that he be given a 2-minute extension of time. 
The CHAIRPERSON (H V Ross Robertson) 
: Leave has been sought. Is there any objection to that course of action being taken? There is no objection. I call the member. 
SIMON POWER 
: Clearly I should have objected myself but I thank my colleague. 
Gordon Copeland 
: I raise a point of order Mr Chairperson. The honourable member did not hear us but we did object down this end of the Chamber. We did so quite clearly. 
The CHAIRPERSON (H V Ross Robertson) 
: I did not hear the member call. 
Gordon Copeland 
: We did very clearly indeed. 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry I missed hearing the member but I have already given the call. 
SIMON POWER 
: I am not sure whether to thank my colleagues from the United Future party. Nevertheless I return to what is a complex area of this bill—the title. I will continue with what I was saying before I was interrupted by the bell and I thank my colleague the Hon Roger Sowry for allowing me to continue on this important road of discovery as I find myself more interested in this issue as time passes. Before my colleague granted me an extension—and I thank the United Future party for that with the benefit of hindsight—I was talking briefly about the fact that when the original Motor Vehicle Dealers Act of 1975 was repealed the then National Government decided in 1998 to introduce the Motor Vehicles Dealers Bill—again a completely different title from the one currently under consideration. That bill would have been apparently a very good bill although we have seen some differences through the proposal and comparison documents and my colleague will refer to those in his contribution to the title debate. We now find ourselves dealing with a bill called the Motor Vehicle Sales Bill. 
As I said earlier that at first glance may seem to be a title that we could probably not spend very much time discussing. Having said that I point out that this bill with its ranging five parts and two schedules will allow colleagues on this side of the Chamber to spend some time looking at those parts in detail in a way that reflects the title of the bill and its now quite expansive nature. The interesting thing about the term “sale” is that it immediately throws up ideas relating to a contract. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise on behalf of the ACT party to address the title. The ACT party was going to support this legislation when it came back from the Commerce Committee but we are not now prepared to do so unless at least one of our amendments is passed. I have tabled an amendment to change the title from the “Motor Vehicle Sales Bill” to the “Motor Vehicles Dealers (Regulation and Taxation) Bill”. That in effect is what it is now because the Minister has sneaked in a Supplementary Order Paper after the bill has been to the Commerce Committee and after public consultation has taken place. It is not just an innocuous Supplementary Order Paper; it is a Supplementary Order Paper that introduces a tax a levy on all motor vehicle dealers. That definition is expanded under this legislation. 
Motor vehicle dealers will be taxed to fund the disputes tribunal. Before I go on I say that there are still some good aspects to this bill such as getting rid of compulsory registration with the Motor Vehicle Dealers Institute. But the Supplementary Order Paper now wipes out all the things that the industry wanted. It is just another way for this Government to introduce a tax. The title oflegislation is really important because it signifies the purpose of that legislation. It is important that this bill now have in its title that it is a motor vehicle dealers regulation and taxation bill because that is what the legislation is being used to do. It is being used to tax the industry to fund the disputes tribunal. 
Motor vehicle dealers already pay a huge number of taxes including GST levies and other things so why should the disputes tribunal not be funded out of that in the same way that other court systems are funded? Why punish the good dealers who very rarely if ever get taken to the disputes tribunal? Many never get taken to the disputes tribunal—or to the fidelity fund as it was before—which is to go. Why should they be punished because of the few bad dealers who do need to be taken before some form of justice and sorted out? It is so unfair and it is just another compliance cost on working New Zealanders. They are the people that this Government just loves to tax again and again and again. 
When we had the second reading of this legislation I was told that the industry supported it so I decided to do a little exercise. I knew that the industry had not been consulted about the new Supplementary Order Paper that introduces this tax so I wrote to 2250 motor vehicle dealers. I told them about the tax the levy on the Supplementary Order Paper and asked them what they thought about it. I received masses of replies. They have been flowing in although I wrote to them only last week. I would like to read some of them. They demonstrate why I think the title should be changed to include the word “taxation”. 
One reply was: “We would regard this as the death knell to our continuing to hold a licence as such. These days the used-car business is as sick as ever and we have all but stopped the practice and are now concentrating on our core activity of earthmoving machine trading.” These are the sorts of people that this legislation will catch. It is all very well to pass legislation or to sneak through Supplementary Order Papers that impose specific taxes on specific industries because the public’s perception of used-car dealers is that they are not quite nice or that they are indulging in activities we do not quite approve of. But many people will be caught by this legislation who are not used-car dealers who do not even sell cars and who as this guy said sell farm machinery. 
He said: “The business of running a used-car yard and complying with the necessary regulations must be a nightmare for those actively involved.” My personal observation is that once I could spot car dealers a mile off with their loud dress and non-stop usually cheerful patter. These days those same people look like hunted deer and I do not think it is because they are worried about running into a customer. Is there any objections to calling the bill the “Motor Vehicle Dealers (Regulation and Taxation) Bill”? I think we are getting closer to why it should be called that. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: 
 Like my colleague Simon Power and Deborah Coddington I too want to express concern about the title of this bill and the sneaky Supplementary Order Paper that has been tabled by the Minister. Is it not interesting that this is a process around motor vehicle sales that is now 9 years old? For 9 years there have been discussions about changing the rules around motor vehicle sales and updating that 1975 Act. We then get to the last hurdle and under urgency this sneaky Government wants to clip an extra tax on to honest enterprising New Zealanders. I ask Mr Benson-Pope how many of his Dunedin car sales people have been consulted about this new tax? [ 
Interruption 
] He tells me. I would love to make contact because it will be just like the Minister in the chair the Hon Steve Maharey on the Tertiary Education Bill. At the last moment he snuck into the House a dirty little levy on all sorts of education providers. I suspect that that is why he is in the chair. He will do the same trick again and this time to the motor vehicle dealers. 
I ask the Minister in the chair what level of consultation there has been with the motor vehicle industry about this Supplementary Order Paper. I seek any answer from any member of the Government. I note that United Future supports the bill and the Supplementary Order Paper. Can its members advise me what level of consultation with the motor vehicle industry there has been on this bill? Can any member of the Government advise the Committee as to whether there has been a process of consultation with motor vehicle dealers about this new tax? 
Helen Duncan 
: Concentrate on the new leader! 
Hon Dr NICK SMITH 
: I can see that Helen Duncan does not want to talk about the bill before the Committee. She is more interested in playing some silly political game than she is about the extra tax that will be imposed. This title is not particularly appropriate. If we are to have a bill that will impose a new tax that has been added through the Supplementary Order Paper on those people in the motor vehicle industry then members on this side will say what they mean. If that tax is to be imposed then let us call it a tax bill. If that is what the Government is to do with legislation of this sort let us truly describe what it is all about and describe this as a special tax bill for the latest group of entrepreneurs to be hammered by this Labour Government. 
John Carter 
: With additional compliance costs. 
Hon Dr NICK SMITH 
: That is right. I remember reading in Labour’s manifesto that it was to reduce compliance costs. I would be interested to know how— 
John Carter 
: What does the chair think of the tax? 
Hon Dr NICK SMITH 
: I have to advise my chief whip that we must not bring the Chair into the debate. However I would like to know from the Minister in the chair how this bill contributes to reducing compliance costs. 
Sandra Goudie 
: Did they run it through the compliance cost report? 
Hon Dr NICK SMITH 
: There is a good question from my colleague the very capable MP for Coromandel. It is interesting that every bill that comes before the House has to have a compliance cost report but not for the Supplementary Order Paper that this Minister has now brought into the Committee stage not once but twice under urgency in terms of amendments to this bill. Members on this side of the Chamber tell the Government to be honest about what it is doing and to be honest about the fact that it is introducing a new tax on motor vehicle dealers. Let us call this bill what it is. The Minister may prefer to call it a levy. I notice that when Dr Cullen was in Opposition he said that a levy was just another name for a tax but if he had preferred to call it the “Motor Vehicle Sales Tax Bill” or the “Motor Vehicle Sales Levy Bill” we could live with either of those. I invite any member opposite to get to his or her feet and to justify the significant way in which this Supplementary Order Paper changes the bill and also to justify the fact that this bill has been around for a very very long time. Why are we under urgency rushing this bill through when there has not been consultation on the key changes with the dealers and those who are involved in the industry? Again I say let us change the title and say what it means. 
Hon DAVID CARTER (NZ National) 
: 
 I suspect that this is a sneaky piece of work by the Labour Government. I hoped to be able to stand up here and support the title. 
David Benson-Pope 
: Speaking of sneaky where is the numbers man? 
Hon DAVID CARTER 
: Does that member want to take a call? If he does I will cede and let him have a call then start when he is ready. 
Before being interrupted by Mr Benson-Pope I was saying that I was hopeful of standing in the Committee tonight and being able to support the title of this bill. At first glance it actually is a fair prescription of what this legislation attempts to do. But as my colleagues Simon Power and Deborah Coddington pointed out sneaky little Supplementary Order Paper 30 has been tabled. 
Hon Rick Barker 
: Why isn’t the rest of the National Party here? 
Hon DAVID CARTER 
: Rick Barker clearly does not even know that it has been tabled. He would not be worried about compliance costs; he would not know what compliance costs were. 
This sneaky little Supplementary Order Paper dramatically changes the tone of the bill and talks about regulations to impose a levy. Even Mr Benson-Pope knows that is another word for tax. Mr Benson-Pope has just spelt the word levy and he got that right. He should now have a go at spelling the word tax. He could not manage that one but it is “t-a-x.” Deborah Coddington had it right—this legislation is no longer appropriately named at all. It should no longer be called the Motor Vehicle Sales Bill but the “Motor Vehicle Dealers Regulation and Taxation Bill”. That is what this bill proposes to do. There was no mention of a levy before the bill went through the select committee process. The Government was too sneaky to do that. 
David Benson-Pope 
: That is uncharitable. 
Hon DAVID CARTER 
: It is not uncharitable; it is a fact. If Mr Benson-Pope is so proud of loading another tax on to a very entrepreneurial sector of the New Zealand business community put it in the principle legislation give it an appropriate name and let people make submissions. But no he would not do it that way. Mr Benson-Pope is wrong when he argues that we should be calling this legislation the Motor Vehicle Sales Bill. That no longer adequately describes it and Mr Maharey knows that. Therefore I now completely support Deborah Coddington’s superb work in pointing out that this is no longer a bill just to facilitate the sales of motor vehicles; it is now a bill about how to levy another tax on a particular industry. That means that we have a duty in the Committee stage to give this legislation an appropriate title. 
I note that Mr Chairman agrees with that. He acknowledges that we have a duty to make sure that at this stage of the proceedings we give this legislation an appropriate title. I say to you Mr Chairman— 
The CHAIRPERSON (H V Ross Robertson) 
: The member cannot bring the Chairman into the debate. 
Hon DAVID CARTER 
: The title of the bill is no longer appropriate at all. We need to make sure that the name is changed so that people know that although this legislation talks about facilitating the sales of motor vehicles it also talks about imposing yet another tax and compliance cost on an industry— 
Sandra Goudie 
: What about the compliance cost reports? 
Hon DAVID CARTER 
: The Minister can take a call and tell us whether he has done any work on compliance cost but he will not have done. That is the sort of thing one talks about when in Opposition. It is the “Maharey principle”. 
The CHAIRPERSON (H V Ross Robertson) 
: The member must use a member’s full name and title. 
Hon DAVID CARTER 
: I have been talking to the title of the Motor Vehicle Sales Bill. 
The CHAIRPERSON (H V Ross Robertson) 
: If the member wishes to address another member in Committee he must use that member’s full name and title. 
Hon DAVID CARTER 
: I was not talking about the Minister. I was talking about the “Maharey principle”. 
Hon RICK BARKER (Minister of Customs) 
: 
 I move  
That the question be now put 
. 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 As a transport spokesperson I am very concerned about this legislation. The title of this bill certainly does not now reflect what we have before the Committee. It is important to say that the National Party supports this legislation and along with interested groups has supported it right through the process. We worked with those groups and the Motor Vehicle Dealers Institute to make sure that we had legislation that was non-controversial and able to pass through Parliament with relative ease. 
I am disappointed that the Government has decided—for the second time with this bill—to debate it under the urgency motion because I do not think that is appropriate. What we have now is a bill that the Government has titled the Motor Vehicle Sales Bill which is the bill the industry has been consulted on and the title that everybody is comfortable with. We all know what we are talking about when we talk about the Motor Vehicle Sales Bill. The bill of this title was first referred to a select committee on 5 December 2001 and reported back in 2002 so it has had a long period of time in the House. Now we find that the title of this bill suddenly does not reflect what is in it. Suddenly the bill is changed. 
This is a large bill. Radio listeners cannot tell how big it is but I can tell them that the title of the bill— 
The CHAIRPERSON (H V Ross Robertson) 
: No the member must not refer to radio listeners. 
Hon ROGER SOWRY 
: For those people who are interested out there the Motor Vehicle Sales Bill covers 96 pages. Then a little wee amendment—about three or four pages—is put in— 
Steve Chadwick 
: It is a tidy bill. 
Hon ROGER SOWRY 
: The member says it is a tidy amendment. Perhaps she will tell us whether she has consulted the motor vehicle dealers in Rotorua on the new levy that is being put into this bill—the so-called Motor Vehicle Sales Bill. The title does not reflect that this bill has new compliance costs and the member supports new compliance costs and new taxes. This bill is now an extra imposition on motor vehicle dealers and the people who sell cars. Instead of being the Motor Vehicle Sales Bill this bill should now be the “Motor Vehicle Sales and New Tax Bill”. Why would anyone take something as important as a new tax not put it in the main bill not have it as part of the submission process and then just sneak it in at the end but keep the title the same? That is so that Labour members can say that everyone supported the Motor Vehicle Sales Bill. They want to be able to say: “We had submissions on it. It was all OK.” But the real part of the bill—the sneaky little part of the bill—is not reflected in the title at all. We are very disappointed that under urgency the Government has decided to do that. We know— 
Steve Chadwick 
: Does the member not want a disputes tribunal for consumers? 
Hon ROGER SOWRY 
: The member interjects and asks whether we want a disputes tribunal in the Motor Vehicle Sales Bill. Of course we do. A disputes tribunal was in the bill and we voted for it. The Labour Party voted for it and that party did not put the tax provision into the bill in the select committee—so what changed? What changed between the Labour Party reporting back the Motor Vehicle Sales Bill and titling it that and going along to its caucus and deciding to put in this Supplementary Order Paper with the extra tax in it? Why was that done?[ 
Interruption 
] Well Helen Duncan says that was a clever cunning move. It’s as cunning as a— 
HELEN DUNCAN (NZ Labour) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: No. 
JOHN KEY (NZ National—Helensville) 
: 
 It is my great pleasure to engage in this Motor Vehicle Sales Bill title debate. I want to take up the challenge that the Minister gave in her second reading speech when she said: “There are several issues that the select committee could not agree on ...That will provide an opportunity for the House to debate these issues.” So they certainly will because this is a Minister who could not help herself. At the last minute she has snuck into this bill which had all the hallmarks of being potentially a very good bill this Supplementary Order Paper and by that the whole flavour of the bill has changed. The Minister could have stuck to the very guts of the bill. It was titled the Motor Vehicle Sales Bill for a very good reason because it— 
Hon David Carter 
: Would you buy a used car from that person? 
JOHN KEY 
: No I would not buy a used car from that person. One of the very reasons this bill was named so appropriately the Motor Vehicle Sales Bill was that it covered things the industry really cared about. It simplified a whole wide range of issues for the industry. It covered those issues for people who cared about the motor vehicle sales business. It covered people who operated as car market operators as auctioneers as vehicle traders and those who traded on the Internet. All of those people involved in the motor vehicle sales industry thought that this bill was appropriately titled. They were happy with it and National was happy to support it. But lo and behold in the Supplementary Order Paper has come a levy—a tax—that is not in the title of this bill. Nowhere in the title of this bill do I see the word “tax” yet in the Supplementary Order Paper is a tax that was not on the “credit card” and is not in the title of the bill but it is there for everybody to see. It is there to drag down the industry and add another cost. 
I want to draw to the attention of the Committee comments that the Minister also made in her speech as it relates to the title. She said that in designing this bill there had been a great deal of consultation and input from stakeholders and experts. In terms of the title they may have been experts in motor vehicle sales. I am well and truly prepared to accept that the Minister went out and spoke to a great many people that submissions were taken from all sorts of motor vehicle dealers across the country and that that was aptly put together into the title. I am not happy to accept that the consultation process that took place in the industry was reflected in the Supplementary Order Paper. Therefore I am not convinced that the title adequately reflects it. 
Simon Power 
: Tax! 
JOHN KEY 
: Where is the word “tax”? Where is the word “levy”? If the Minister had gone out and undertaken extensive consultation had asked for submissions and had included in the earlier bill the levy that she intends to put on the industry—not snuck it in some time later on; not snuck the bill through urgency but had done that in the consultation process—I am prepared to wager in this Parliament that those submissions would have clearly come back saying that this title is completely inappropriate. It should not be the Motor Vehicle Sales Bill; it should be the “Motor Vehicle Sales and Revenue Collecting Tax Bill”. It should be the “Motor Vehicle Sales and Tax Bill”— 
Simon Power 
: Motor Vehicle Sales Tax Bill. 
JOHN KEY 
: Absolutely Mr Power! Many submissions would have come back to the Minister and the first thing they would have drawn to her attention is that this title is completely inappropriate and misleading. That is a great tragedy because it is a bill that has great hallmarks—a bill that really claims to do many of the things that National supports. One of the reasons that National has been supporting this legislation is that the industry requires reform. It is an industry that needs simplification. Just as the title is very simple with those four very plain and simple words—Motor Vehicle Sales Bill—so easily was that reflected in the bill until the Minister could not help herself and did that little sneaky deal to raise taxation. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I move  
That the question be now put 
. 
Dr WAYNE MAPP (NZ National—North Shore) 
: 
 I take particular interest in this bill and the reason is that many years ago when I used to practice law on a regular basis the members of this industry were a major sector of my clientele. I can tell members my having applied for numerous motor vehicle dealer licences registration for salespeople and all of that that it was a really complicated difficult and demanding system. I tell members there was a great deal of expectation of expectancy that this bill would reduce costs and generally speaking it does. 
What alarms me when I look at the title is that it does not make sufficient reference to the secret plans of the Government on the one hand to take and on the other hand stealthily to reregulate. The Government has come up with what is actually a quite credible bill I would have to concede—and National is voting for the principle of the bill generally—but what greatly concerns me is Supplementary Order Paper 30 which includes the amendment that was accurately described by Deborah Coddington of the ACT party as the reintroduction by the Government of a tax on thousands of entrepreneurs up and down this country. The Government may just toss this off to one side as being of no particular account but if it looked at the bill it would understand the serious injury it is doing to New Zealand entrepreneurs—hard-working small-business people by and large. They are the sorts of people who Labour is wont to say these days are its supporters. So what does it do to those people? It gives them a hard kick up the butt. 
John Carter 
: Shove them right up. [ 
Interruption 
] 
Dr WAYNE MAPP 
: Well there you are! Those are not the sorts of words I would use I hasten to add but that is the reality. 
This is my concern. Under the bill which is intended to be a deregulatory bill there is only one charge and that is at the time of the initial registration. By and large thereafter we would have light-handed regulation—something that the industry could live with. I imagine the ACT party would probably say that was still going too far but nevertheless it is something the industry could live with. What is of particular concern however is that under the Supplementary Order Paper there is now an annual levy based on classes of trader based on the types of vehicles and it has to be applied to thousands of people. It is allegedly to pay for the disputes tribunal. But what the Government is doing is actually adding cost after cost on an annual basis to these hard-working people. 
Two problems exist. First is the cost of administration which is very significant indeed when one considers that those businesses will have to employ special staff develop a computer system track records and so forth. Secondly how do we ensure that everyone actually pays? What do we do about the people who do not pay? Do we have a special regulatory regime that hunts down those people? That is the kind of approach that this leads to. We cannot I presume pass a legislative measure then have no enforcement mechanism. That would be illogical. 
So I would say this to the Government. It had a choice: it could have had a modest imposition for the cost of the disputes tribunal to be charged to those who actually use it—and that may be the appropriate mechanism—or it could have funded it out of general taxation. Both those choices would have been simple. 
Simon Power 
: Like courts. 
Dr WAYNE MAPP 
: “Like courts” as my colleague the former justice spokesperson says. What an excellent example! But instead the Government has gone for a blunt and crude instrument of a generalised levy which has to be collected each and every year with all the range of draconian apparatuses to punish those who do not pay it. So under the guise of deregulation we now have a completely new and demanding regulatory regime. 
DARREN HUGHES (NZ Labour—Otaki) 
: 
 I move  
That the question be now put 
. 
SANDRA GOUDIE (NZ National—Coromandel) 
: 
 I am very pleased to be able to speak to the title. I would like to congratulate my colleagues. I think they have done a magnificent presentation of their concerns about the title. The title is “Motor Vehicle Sales Bill” and some concern has already been expressed about the intentions of this bill particularly since the arrival of the Supplementary Order Paper. I would like to acknowledge Deborah Coddington’s great contribution in bringing Supplementary Order Paper 30 to our attention more forcefully and suggesting another title “Motor Vehicle Dealers (Regulation and Taxation) Bill” which is much more satisfactory. 
This Supplementary Order Paper is about introducing a levy to help fund the disputes tribunal. I go further. Members will recall that when this bill was last discussed in the House the Hon Judith Tizard—who sat here knitting during debate on a quite significant aspect of the bill so she may have forgotten what she said—said: “The restrictions cost and procedures of working within the current law are considered to be too onerous by many motor vehicle businesses”. Now the Government is putting forward a Supplementary Order Paper that introduces a levy that I suggest adds to that cost and totally goes against what the Minister considers to be the original intention of this bill—that is to help reduce costs. 
This Government is introducing a levy without a compliance cost report. The Government makes a big deal about the need to have a compliance cost report but then does not even have one. The Supplementary Order Paper should have had a compliance cost report but clearly the Government did not want to go down that path. We are debating the title “Motor Vehicle Sales Bill” but it should be “Motor Vehicle Dealers (Regulation and Taxation) Bill” as suggested by Deborah Coddington and supported by my very able colleagues. 
I also draw the Committee’s attention to some other aspects of the Hon Judith Tizard’s speech. She said: “The purpose of this bill is to promote and protect the interests of consumers when buying a motor vehicle.” I have to say I do not believe she is looking after the interests of consumers at all because she has not included the fund that was there as a back-up for those who could not be reimbursed for bad trading. I do not believe she is looking at looking after consumers. She just wants to put in place a little bit of extra funding for this disputes tribunal. 
If I draw members’ attention to some other provisions in her speech they will understand why she wants to do that. She said: “Effective enforcement is fundamental to this bill. Enforcement will be carried out by the Registrar of Motor Vehicle Dealers located within the Ministry of Economic Development.” She said further: “The registrar will have a dedicated enforcement team.” Of course that will take some funding hence the suggested title “Motor Vehicle Dealers (Regulation and Taxation) Bill” to provide for a levy to pay for all this enforcement and regulatory control and for the disputes tribunal as well. 
But that is just one aspect. It has been stated that a great deal of consultation occurred with the stakeholders to seek their input but I suggest that it has been very limited in the extreme because how many of them actually knew about this Supplementary Order Paper and approved the levy. I say to Government members opposite: “Hands up anybody who spoke to any motor vehicle dealers about the levy?”. I cannot see any of them paying any attention so I say that none of them spoke to the motor vehicle dealers about the levy and asked whether it was acceptable to them. [ 
Interruption 
] Did they say yes? I suggest that they are going to be really bitten in the arse by this levy. We are talking about the need for rigid enforcement as stated by the Hon Judith Tizard; she said it quite clearly in her second reading speech on this bill. [ 
Interruption 
] I would not mind a little bit of quiet if members would like to pay attention. The enforcement that will be required under this bill will require a lot more funding so I suggest that a quite substantial levy will be put in place. There is no control of how far this levy can go and as we know this Government does not understand compliance costs. It did not put in a compliance cost report. 
Hon MARK BURTON (Deputy Leader of the House) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 77 
Labour 52; New Zealand First 13; United Future 8; Green Party 4 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of Deborah Coddington to clause 1 be agreed to: 
to omit the words “Motor Vehicle Sales Act” and substitute the words “Motor Vehicle Dealers Regulation and Taxation Act”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 77 
Labour 52; New Zealand First 13; United Future 8; Green Party 4. 
Amendment not agreed to and clause 1 agreed to. 
Part 1 Preliminary provisons 
SIMON POWER (NZ National—Rangitikei) 
: 
 We are now starting to get to what is often seen as a pedestrian part of a bill which is largely the definitions of various terms contained in it. But it is actually worth raising some questions in relation to some of the terms in this bill. The Minister may like to take an interest in this because there are some odd definitions in the bill. I know that Mark Peck who has told this House that he has consulted one dealer in his electorate on this bill would be interested in this. 
In clause 6 “Interpretation” in subclause (1)—this is the Parekura Horomia clause—the term “actual distance” is defined as: “in relation to a motor vehicle’s odometer means the actual distance that would otherwise have been recorded on an odometer had it not been tampered with”. How is that supposed to work? That would be the “odometer of dysfunction.” I just cannot understand that. 
John Carter 
: Ask Paul Swain. 
SIMON POWER 
: Where is the Minister of Transport? He is in the Chamber. The actual distance is defined in relation to a motor vehicle’s odometer as: “the distance that would otherwise have been recorded on an odometer had it not been tampered with”. What on earth does that mean? In terms of a definition of actual distance how on earth is this legislation supposed to work when actual distance is defined as the distance that would otherwise have been recorded had the odometer not been tampered with? Who knows the answer to that? Which person is able to track that? 
That definition is absolutely impossible. It will take us nowhere and I would be very interested if the Minister or somebody else with a transport background would rise and take a call to help us out with that. [ 
Interruption 
] I ask Mr Peck to help us out. What is the distance that would otherwise have been recorded on an odometer had it not been tampered with? I fail to understand how we will be able to track anything in respect of that. 
Hon Dover Samuels 
: We are on your side. 
SIMON POWER 
: It is just not the same down here. I ask the Minister to come over here. [ 
Interruption 
] Madam Chairperson I have a loud voice but even I cannot compete with this noise. 
The CHAIRPERSON (Ann Hartley) 
: There is banter coming from both sides of the Chamber. 
SIMON POWER 
: The other thing that I do not understand is why on earth when we are talking about motor vehicle sales we now have terms like “car consultant” and “car market operator”. Those people are not hairdressers. They sell motor vehicles and we are now to call them “car consultants” and “car market operators”. 
I have a question. I can see Russell Fairbrother sitting back there; this is a question for a legal mind. Actually Deborah Coddington the ACT member might be interested in this as well. I refer to the definition “sale in relation to any motor vehicle—(a) means the sale or lease or exchange or any other disposition of that motor vehicle …” That would imply to me that a contract has been formed between buyer and seller for the disposition of that motor vehicle. Let me ask this question. We know and Wayne Mapp knows from his legal training that for a contract to be valid there must be consideration. There must be a buyer a seller and consideration. I ask where in an exchange of motor vehicles is the consideration that allows a contract to be formed? I ask the Minister to take a call and help me out on that. What is the consideration in the contract when a sale of exchange occurs—in other words a swap? Where does the consideration lie? 
This legislation is very confusing. Not only do we have a definition of who is treated as a motor vehicle trader in clause 8 but for the purposes of getting it absolutely right we also have in clause 9 a definition of who is not treated as a motor vehicle trader. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I want to start my address by imploring somebody from the Government to stand up and tell us what this bill is about. New Zealand First was not on the Commerce Committee. I heard my good colleagues from the National Party—I think Simon Power said so when he started his speech—say that they are to support this bill but they have not found a thing that is right with it yet. 
Simon Power 
: No I didn’t say that. 
PETER BROWN 
: I was almost certain that the member said he would support this bill. 
I must be a bit more serious. Clause 3 outlines the purpose of the bill. It states: “The purpose of this Act is to promote and protect the interests of consumers in relation to motor vehicle sales.” This bill falls well short of that. We need a Government member to stand up and explain how this legislation will deliver on that. The bill removes the fidelity fund. If members talk to members of the public who buy cars they will hear that the public is concerned about that. Maybe the dealers are not very concerned about it but members of the public who buy cars— 
Hon David Carter 
: Name one. 
PETER BROWN 
: The list would be so long that it would take me all night and half of tomorrow to read it. 
Hon David Carter 
: I will get you an extension of time—until 1 o’clock in the morning if you like. 
PETER BROWN 
: Oh yeah. 
Rodney Hide 
: I don’t think there’s any. 
PETER BROWN 
: Mr Hide should read the report. The select committee said it had looked at a number of alternatives to the fidelity fund including indemnity insurance but it put that in the too-hard basket. It looked at a bond system and again it put that in the too-hard basket. It looked at insurance schemes with ministerial approval and they were most definitely in the too-hard basket. Nevertheless the fidelity fund is to go. 
Another question that should arise is who will police this system? The Government is setting up a structure but who will police it? And if that is too tough a question Government members should answer this one which may be even harder: how will they police it? By reading Supplementary Order Paper 30 in the name of the Minister which is nearly a tenth of the size of the bill—a Supplementary Order Paper that will not be scrutinised by the select committee—we see towards the end Clause 146 “Review of operation of Act”. Not that ACT I hope. Clause 146 states “(1) The Ministry must no later than 2 years from the date of commencement of this Act— (a) review the operation of this Act since its commencement; and (b) prepare for the Minister a report of the review that includes recommendations on whether any amendments to this Act are necessary or desirable.” That really sounds like a Government that has confidence in this legislation! 
I know the Minister in the chair is a sound-thinking member and I invite her to stand up and tell us what this bill is all about and whether it will be to the benefit of the consumers as the purpose clause illustrates it is meant to be. There is some real concern out there on the part of the public. To my mind and I might be totally wrong on this this legislation opens the door to any unscrupulous person who wants to get involved in selling cars—anybody at all. The policing of that is vague to say the least. The bill states somewhere that a car salesperson is someone who sells more than six cars a year. Who will keep a check on that? How will a check be kept on that? I understand it will be administered from a central office in Auckland and I want to know how that will work. 
As I said New Zealand First was not on the select committee at the time of its consideration of this bill so we did not play any role at all in the way that it has been compiled. We are concerned to see a Supplementary Order Paper of significant size relative to that of the bill coming to the Committee and further a one-page proposed amendment from the Minister. We believe there are some genuine questions to be answered and we believe this Committee should be entitled to the answers before this bill progresses too much further down the track. 
Hon David Carter 
: You won’t be able to go to one o’clock if you can’t do better than that. 
PETER BROWN 
: I do not intend to go to 1 o’clock for the information of the good member. I am trying to raise the seriousness of this debate. We have a bill here— 
John Carter 
: When are you going to start? 
PETER BROWN 
: I have been trying to do so for 5 minutes. I thought I was doing very well. We have a bill here that really opens the door to people who are prepared to be unscrupulous in selling vehicles. I think the intention of this bill is admirable but the Government has not made it a reality. 
PAUL ADAMS (United Future) 
: 
 United Future is pleased to support this legislation. As the holder of two motor vehicle dealer’s licences I am affected by it. I notice in the part we are dealing with the question of who is treated as a motor vehicle trader. Each of the licences that I currently hold has cost me between $15000 and $20000 to obtain under the present regime. 
Much has been said about the levy on traders. As I understand it the levy will be $127 per trader. I find that most motor vehicle dealers are very pleased to get any dispute sorted out quickly because we have found in our industry that the longer something goes on the more it will cost us. Therefore if I have to contribute $127 per year per licence towards a tribunal that will sort out disputes fairly quickly I personally am very happy to do that. To say that provision has just been thrown into this legislation is not correct. As I understand it that proposal was in a discussion document that was before the industry in January 2001 which the majority of the industry supported. The motor vehicle dealers have had to operate for many years on what is a very unequal playing field. 
I have concerns about various parts of this bill that I will discuss at the appropriate points but maybe this bill should be called the “Thank Goodness it’s Here” bill. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise to speak to Part 1 of this bill. Clause 2 is where we come to the introduction of Supplementary Order Paper 30 which refers to clause 130A. Clause 130A deals with the imposition of levies and I would just like to come back to what the member over there on the Government benches Steve Chadwick said. She is a very honourable and lovely person and I do not mean to cast any aspersions on her but she said she had consulted with dealers in her area. I would like to ask her whether she has consulted Honda Motorcycles Rotorua which asked me why it was being singled out and why we are not levying all supermarkets and grocery stores. I quote: “If such a levy were imposed the repercussions further down the line would end up affecting none other than the man in the street the very person this Government is supposedly working for. In an age where business is difficult at the best of times and margins are constantly being squeezed it seems ludicrous to be entertaining such a proposal.” 
Again from Rotorua when consulted about clause 130A in the Supplementary Order Paper referred to in Part 1 Nigel’s Cars a car dealer for 16 years wrote: “I think we pay enough levies as it is now and with the change to the motor vehicle sales Act it is supposed to be better for all concerned. But reading your letter it seems this is not the case and that we as car dealers will again be paying for the privilege to sell cars when there are lots of unlicensed people out there selling cars at car fairs and in our case in Rotorua where the local council have created a car yard.” It will be interesting to see whether that business comes under this legislation too. 
Clause 3 sets out the purpose of this bill and it is just more self-congratulatory nonsense from this Government about protecting the interests of consumers. I can see I am keeping the Minister of Finance up again. If the Government is to impose costs on business those costs will be passed on to consumers; there is absolutely no doubt about that. This Government just does not seem to get that. We are not opposed to a tribunal. There are members over there on the Government benches who seem to think we are opposed to a tribunal but I say we are not. I have said before that we were going to support this bill until this sneaky Supplementary Order Paper which has not been consulted on came through. 
I am very disappointed in the member for United Future Paul Adams. United Future’s website says it supports lower flatter taxes and fewer compliance costs. Now Paul Adams thinks that because he has been a car dealer for 30 years he is an expert. I have been a mother for 28 years and a lover for a little bit longer than that yet I am not an expert on mothering or on sex. So how can Paul Adams be an expert on car dealing just because he has been a car dealer for 30 years? It is a non sequitur. 
Turning over to the next page of the bill I note that clause 5 states that this Act binds the Crown. That is a really interesting situation; it will be really interesting to see what happens. At the moment the Customs Service can seize imported vehicles that it suspects have dodgy odometers that might have been wound back. The Customs Service seizes those cars because they are deemed to be unsafe. But what does it do with those cars? It then sells them to the consumer through the auction system. The first consumer is forewarned that the odometer might have been wound back but subsequent customers who buy the cars after that are not warned. They have no idea of that yet the Government is acting as a car dealer. So will the Government now have to pay these levies to itself if it gets taken to the disputes tribunal because someone has bought a car that has had its odometer wound back and that person did not know that? 
I wonder why the Minister of Transport is not in the chair. 
Hon David Carter 
: He doesn’t understand the bill. 
DEBORAH CODDINGTON 
: Oh OK. Well someone else from the Government might be able to answer these questions. As I said the purpose of this bill the Government says is to protect consumers. I will tell members what raising taxes does for consumers. An international report has just confirmed that workers in New Zealand—who are consumers—are now worse off on average than they were 2 years ago. Since Labour’s election inflation and increased taxes and charges mean that a working couple is $1400 worse off than previously. 
Hon DAVID CARTER (NZ National) 
: 
 The question I ask the Minister in the chair the Hon Margaret Wilson is whether she could answer the question raised by the Hon Paul Swain the Minister who is actually in charge of this legislation. The Hon Paul Swain interjected during Mr Peter Brown’s contribution and asked: “Is this better than what exists now?” One would think that the Minister in charge of the legislation would have bothered to get hold of his own officials and find out the answer to that question rather than expect a member of the Opposition to answer it for him. The Motor Vehicle Sales Bill is before the House we are just embarking on the Committee stage and the poor hapless Minister of Transport has to ask Peter Brown whether this bill will be better than what exists at present. I hope that Margaret Wilson will take a call and answer that question for the Hon Paul Swain. 
While she is on her feet I also hope that she will clarify clause 6—the Parekura Horomia clause as it has been named tonight—and the definition of actual distance. This legislation records that actual distance in relation to a motor vehicle odometer “means the distance that would otherwise have been recorded on an odometer had it not been tampered with”. Even Dr Cullen is now expressing amazement at that definition. My simple question to the Minister is: when one comes across a vehicle with a tampered odometer and one needs to determine the actual distance how does she propose to do that? I ask the Minister to spend a bit of time talking to the officials because I think that she will need a bit of time doing that. 
I then move to yet another definition and on this occasion I have to congratulate the select committee on the good work it has done. The definition of a new motor vehicle is as follows: “new motor vehicle means a motor vehicle that is not a used motor vehicle”. I think that is reasonable. I congratulate the select committee under the chairmanship of David Cunliffe on getting that one right. But another definition worries me and I am hoping that the Minister will help me with it. It is where we define a motor cycle. A motor cycle means “a motor vehicle running on 2 wheels”. That is quite serious because we have just had all these problems in relation to the boy racer bill. I ask Clayton Cosgrove what happens when a motor vehicle goes around a corner too fast and suddenly it is on two wheels? It is a motor cycle! 
Clayton Cosgrove 
: We’re OK! 
Hon DAVID CARTER 
: Clayton Cosgrove has answered that question so I do not need the Minister to answer it. Clayton Cosgrove has acknowledged that if a motor vehicle goes around a corner too fast and is on two wheels it becomes a motor cycle. But I have another definition that worries me from the Greens’ point of view. Again it is the definition of a motor vehicle: “motor vehicle—(a) means any of the following: (i) a road vehicle that is drawn or propelled by mechanical power”. 
Dr Wayne Mapp 
: Solar power? 
Hon DAVID CARTER 
: Exactly what about solar power electric power or wind-powered vehicles? We hear a lot from the Greens about the future of wind in energy. In future we might have vehicles with sails and all sorts of things. I am concerned about whether that issue has been addressed. 
John Carter 
: Horse power? 
Hon DAVID CARTER 
: No I do not think that we will head back to the days of horse power but it is a possibility with the Greens anywhere near the Government. I think that gives the Minister a certain number of questions— 
John Carter 
: You could thaw a lot of things out. 
Hon DAVID CARTER 
: I will not comment on that interjection but I thank John Carter very much for his contribution. I ask the Minister to help us with those definitions. The ones we want clarification on are how actual distance will be estimated when an odometer has been tampered with and there is the issue of motor vehicle definition as well. 
BRENT CATCHPOLE (NZ First) 
: 
 New Zealand First has supported the title of this bill but that is as far as we will go because this bill will not work. The comment made by the Minister Paul Swain when he asked Peter Brown whether this bill would work indicates that he has no confidence in this bill whatsoever. I draw the Committee’s attention to clause 146 in the Supplementary Order Paper which states that the Government wants to review the legislation in 2 years. Clause 146 indicates that the Minister has no confidence whatsoever in the bill because he has suddenly realised that it will not work. 
There is a simple description in the bill for interpreting “actual distance”. I cannot believe that it means “the distance that would otherwise have been recorded on an odometer had it not been tampered with”. 
Hon David Carter 
: That’s going to be a curly one but the Minister will be able to answer it—she is getting advice from Parekura Horomia. 
BRENT CATCHPOLE 
: Parekura Horomia is giving her his advice right at this very moment. 
Hon David Carter 
: Seek leave for Parekura Horomia to answer it now! 
BRENT CATCHPOLE 
: I seek leave for Parekura Horomia to give us the answer right now—he is obviously giving advice to the Minister. 
It is impossible to detect when somebody has tampered with an odometer disconnected it or even put undersized or oversized wheels or tyres on to a vehicle which throws the odometer completely out. So how on earth can one decide whether an odometer has been tampered with? 
Clause 8 “Who is treated as a motor vehicle trader” states: “(1) A person is treated as carrying on the business of motor vehicle trading for the purposes of this Act if—... (b) in any specified period the person sells more than 6 motor vehicles”. They could be two-wheelers too. Backyard operators operating with or without a licence—usually without a licence—or under somebody else’s licence; in other words harbouring are not going to report the number of sales they have had. How will the Minister police that part of the bill? Whether or not he is harbouring a backyard operator will not report the number of sales he has had. He will not report that he has bought and sold more than 6 vehicles. This bill will not work; it has no possibility of working. [ 
Interruption 
] I have heard a lot of noise from the other side and it just indicates to me that Government members do not have confidence in this bill. They have realised that it will not work. Government members cannot give an interpretation of “tampering”. They cannot give a genuine interpretation of how they will police whether this bill can pick up backyard operators. 
Dr Wayne Mapp 
: It’s not intended to. 
BRENT CATCHPOLE 
: It is not intended to I have heard. Perhaps that is the answer: the Government is putting in a bill just to tamper with the system. 
STEVE CHADWICK (NZ Labour—Rotorua) 
: 
 I move  
That the question be now put 
. 
RODNEY HIDE (ACT NZ) 
: 
 When Opposition members go through this bill they have one overwhelming question in their minds and it is this one: “How come Harry Duynhoven is not the Minister of Transport?” That is a question that everyone over here has asked. At least Harry Duynhoven understands how motorcars work knows how to lift the bonnet and look inside a car and would not be messing around with a bill like this. Harry Duynhoven knows how the motor vehicle industry works. 
Dianne Yates 
: What do you know? 
RODNEY HIDE 
: Somebody asked me what I know. I will go through the bill and point a few things out. We are very interested on this side of the Chamber to see that Mr David Cunliffe chaired the select committee. [ 
Interruption 
] We try to give David Cunliffe a trial; his nickname over on the Labour Party side is “fast track”. I am not sure whether that relates to the meteoric rise of his career or his ability to get legislation through. Only David Cunliffe would see the need to define some of the things that are defined in there. 
I ask members to consider whether they know what a trailer is. Does David Cunliffe know what a trailer is? We were driving along in our car or truck and the question to David Cunliffe and the Minister of Transport—who is not Harry Duynhoven—was: “What is a trailer?” They came up with this: “trailer—(a) means a vehicle without motive power that is drawn or propelled or is capable of being drawn or propelled by a motor vehicle from which it is readily detachable.” That is a long way of saying it. Every human being knows what a trailer is but David Cunliffe felt the need to put it in this bill. But then he goes further: “trailer—(b) includes a sidecar for a motor cycle.” How in the world can this Government think that a sidecar is a trailer and that by passing a Motor Vehicle Sales Bill under urgency we will somehow make a sidecar a trailer? 
I see Parekura Horomia having a yawn because it is past his bedtime but next time he is coming down to Wellington in a sidecar I ask him to contemplate that under this bill he is passing under urgency he is actually in a trailer not a sidecar and ask himself why that would be. Only David Cunliffe who is nicknamed “fast track” would see the need to define a motor vehicle in this bill. I am trying to find this bit because I know Government members have an interest in it. A motor vehicle is defined and then it goes like this— 
Dr Wayne Mapp 
: It could be a tractor. 
RODNEY HIDE 
: It could not be a tractor but the Governor-General could come along and declare a tractor to be a motor vehicle and then it would be. The Governor-General could declare a giraffe to be a motor vehicle and under this bill it would be a motor vehicle. Why on earth is David Cunliffe giving the Governor-General—late one night after a Labour Party booze-up—the power to decide what a motor vehicle is? I have not heard David Cunliffe or the Minister in the chair take a call to explain why we are having this sort of thing. 
Let us get to ACT’s objection. I know David Cunliffe is suffering from a lack of attention and he will just have to work harder and do the job more. When we look at Labour there is one solution to every problem is there not? Paul Adams of United Future has bought into it and the solution always is—more taxes. 
Hon Dover Samuels 
: Get your hand out of your pocket! 
RODNEY HIDE 
: Dover Samuels says I should get my hand out of my pocket. He should get his snout out of the trough. That would be a good start instead of going around eating at Te Puni Kokiri—eating and drinking away in an election year. I am quite happy to take my hand out of my pocket if he takes his snout out of the trough. 
DAVID PARKER (NZ Labour—Otago) 
: 
 I move  
That the question be now put 
. 
Dr WAYNE MAPP (NZ National—North Shore) 
: 
 I want to take up a particular point that has been raised with me—that a tractor is not a motor vehicle. I was reading the purpose provision months ago and it said that this bill would protect the interests of consumers. Why does the Government not want to protect the interests of farmers? Do members know how much a tractor costs? Mr Carter tells me that a tractor costs half a million dollars—an amazingly huge sum of money. Yet we are more concerned about $2000 cars. This bill is huge. It has many parts hundreds of clauses many schedules to protect consumers of $2000 cars but no protection whatsoever for $500000 tractors. Tractor owners are just stuck with the Sale of Goods Act and the Fair Trading Act—which are pretty good Acts. 
This is what I think. National has a policy of supporting this bill. When I think about it why would we support a bill that cannot even support the farming community? They are consumers they spend hundreds of thousands of dollars but they do not get the sympathy the empathy or the legislation. This Government just washes them aside. [ 
Interruption 
] It does not care about the rural sector. Does this Government even know what it is doing? Does it have legislation that is consistent logical concise and protects the consumer? It seems to me that the honest purchaser of a tractor should be protected. 
The other thing that strikes me as rather odd is that the Government does not trust itself. Clause 5 states: “This Act binds the Crown.” Normally that is seen as a good thing—the law should cover the Crown. But in this instance it is based upon a presumption that the Crown is dishonest that it will try to con consumers that consumers need hundreds of pages of legislation to protect them from the voraciousness of the Crown. 
Sandra Goudie 
: They have given themselves an exemption. 
Dr WAYNE MAPP 
: So the Government is covered and exempted all at once. It is unbelievable. Why would it do that? 
The underlying premise says that the public cannot trust the Crown; that when the Crown disposes of vehicles—through the Government stores board I guess—when it sells those gold limousines that those members all so desire the public is likely to be sold a pup. They will have hundreds of thousands of kilometres on the clock they will have been thrashed and the motors will be about to bust and the public will have to have recourse to all these provisions. 
The other thing is this. We have heard today that the Government has put in a sneaky Supplementary Order Paper to have annual fees for the Motor Vehicle Disputes Tribunal. I have to ask the Minister of Finance who must be concerned about the Government finances whether it is the intention that the Government will each and every year pay fees to the Motor Vehicle Disputes Tribunal. Alternatively will it be making a special allocation of tax funds to the tribunal? One of those things must be true and the Minister should be able to answer that. Why should we be punishing honest hard-working entrepreneurs and small-business people—men and women—with special fees but exempting the Crown? This just loads it all on to the customer even though the Crown is in this legislation at least potentially so dishonest that it would sell vehicles that are faulty to the public. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I move  
That the question be now put 
. 
SANDRA GOUDIE (NZ National—Coromandel) 
: 
 I would like to support my colleagues in their wonderful presentations in the Chamber tonight. I see that their presentations have been so good that we have the majority of the Labour Party out there to listen. I congratulate my colleagues on doing such a wonderful job on this bill. It is a fantastic job. Look at that! Labour is cheering their wonderful presentations to the Chamber tonight. It is a tribute to them. Labour is acknowledging their great contribution to this debate. 
I want to talk to members about the purpose of this bill and read a few words from one of our colleagues who said: “Wonders will never cease in this House when it comes to where Labour Governments come from when they want to regulate and to increase the costs of people in our society.” The Government has done that magnificently in this bill. The purpose of this bill is “to promote and protect the interests of consumers in relation to motor vehicle sales.” What has the Government done? It has released a Supplementary Order Paper that introduces a levy without having a compliance cost report. I support my colleague’s call for the Minister of Finance to make a response to the lack of a compliance cost report in relation to the Supplementary Order Paper given that this legislation is meant to be all about protecting the interests of consumers but is actually more about imposing a levy. 
The bill states as mentioned earlier by a colleague that it binds the Crown yet we see in clause 24 that the Crown has given itself an exemption from the requirement to register. Instead of the Crown going through the same process as everybody else in accordance with the bill the Government has said that the bill binds the Crown but has turned round and given the Crown an exemption from registering. So it does not really bind the Crown even though the bill states that it does. 
I also draw members’ attention as a number of colleagues have done to the actual distance in relation to a motor vehicle’s odometer. One cannot actually tell if it has been tampered with and if it has been tampered with before— 
Hon David Carter 
: You don’t know where it’s been tampered with. 
SANDRA GOUDIE 
: That is right. When a vehicle comes in from overseas how would anybody know if it were tampered with overseas and how can a motor vehicle dealer be held to account? [ 
Interruption 
] That is it. Government members do not actually understand the trade. They have not consulted very well or gone to any great lengths to understand the trade. Do they realise that if one is going to calculate the distance travelled and the odometer is faulty there is a problem? And one needs to know whether the tyre size was large or small because that has an influence upon the distance travelled. Government members might not be aware of that of course but we do not expect them to know because we know they do not really understand vehicles. 
I now take members to “car consultant”. That is a really interesting definition. I will read it out so that members know. 
Hon David Carter 
: Sounds like a Cunliffe special. 
SANDRA GOUDIE 
: Yes it does sound like a “Cunliffe special”. He was saying on the telly that he wanted a little bit of extra fun and I wonder whether he was referring to the definition of a car consultant. It states: “car consultant means a person who for rent fee commission or other valuable consideration”. We have to wonder what “other valuable consideration” might mean. Given the recent debate on the Prostitution Reform Bill is Mr Cunliffe envisaging this as being an element of fun that he was looking for in Government and in Government legislation? I just draw members’ attention to those words in the definition of “car consultant” and wonder what “other valuable consideration” means. The payment in kind or whatever it is that is being looked for is rather questionable indeed. 
I also draw members’ attention to other words spoken previously by colleagues about this bill supposedly meeting consumer interests yet having a heavy emphasis on compliance costs. That is a major concern for us. We are talking about covering only about 27 percent of car sale transactions. Most transactions happen outside the orbit of licensed dealers. So here we are winding back the restrictions and prescriptions of the past in this bill. It will increase the taxpayers’ costs on an ongoing basis. Are we really expecting that all the dispute tribunal costs and all the enforcement costs will come out— 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 66 
Labour 52; Green Party 4; United Future 8; Progressive 2. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Judith Tizard to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to 
Ayes 93 
Labour 52; New Zealand National 27; Green Party 4; United Future 8; Progressive 2. 
Noes 21 
New Zealand First 13; ACT New Zealand 8. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 93 
Labour 52; New Zealand National 27; Green Party 4; United Future 8; Progressive 2. 
Noes 21 
New Zealand First 13; ACT New Zealand 8. 
Part 1 as amended agreed to. 
Part 2 Motor vehicle trading 
SIMON POWER (NZ National—Rangitikei) 
: 
 I am still struggling to recover given that the only part of the bill that one can agree with is the title. I learn something every day that I am here in Parliament. [ 
Interruption 
] Are the members sure about that? 
Peter Brown 
: Absolutely! The title is the only good part about it. 
SIMON POWER 
: OK. Part 2 relating to motor vehicle trading contains a number of prohibitive clauses initially clauses 11 through to 13 which I will deal with briefly. I will then talk about car fairs which are caught up in clause 14(2) and then the old bona fide purchaser and clear title issue in clause 15(1). That is the sort of stuff that haunts third-year law students dealing with security interests as to whether dealers are registered or not. Clause 15(1)(b) is a very interesting clause which we will look at in the next 4 minutes and 30 seconds. 
Clauses 11 12 and 13 deal with persons banned from participating in the business of motor vehicle trading. I put this issue to my ACT colleagues. Clause 11 states: “A person must not participate in the business of motor vehicle trading if that person is a banned person.”—or what? What is the fine for doing that? What happens if a person is a banned person and he or she does participate in the business of motor vehicle trading? 
This legislation is appallingly drafted. We have four-wheel drive vehicles going around corners too quickly and turning into motorbikes. We have odometers being tampered with and we know that the actual distance in relation to a motor vehicle’s odometer means the distance that would otherwise have been recorded had the odometer not been tampered with. That will go down well in court! Clause 13 is my favourite though. It is headed “Tampering with odometers prohibited” and it states: “A person must not tamper with a motor vehicle’s odometer.”—or what? There is no clause in the bill that states what will happen. There is no clause stating what penalty will be incurred for that. There is no clause stating what that person will face. That clause states that a person must not tamper with a motor vehicle’s odometer—or what? [ 
Interruption 
] That is very good Minister! People should not do that—or what? What sort of clause is that? How can anybody take that provision or those preceding it seriously? We are told that we are not allowed to do that. That is fine; we are quite happy with that. But what happens if we do so? We are not sure of that; one just has to take that chance at the time that one does it. That is really poor slack drafting. 
I will move on now because I know my colleague David Carter intends to dwell on clauses 11 through to 13 in his 5-minute contribution. However I do want to raise the question that I raised in my contribution on the title about the difference between the sale of a motor vehicle and its trade. Clause 14(2) captures the car fair—the good old car fair on the side of the road where one used to be able to bowl up park one’s car on the road slap a notice on the front and say one was keen to sell it to anyone for $1500—to any buyer or the best bidder in the room. Now that particular activity is caught under clause 14(2) where a motor vehicle trader who is a car market operator—not a car consultant but a car market operator—must ensure that a consumer selling a vehicle through that trader attaches the notice to the vehicle. When we look at the provisions of the notice we see it is regulation gone mad. That is a situation where a person wakes up on a Saturday and says he or she needs a quick $1000 so he or she will go down to the car fair sell a car and be on his or her way. That person will not be able to do that because under clause 15(1) a person has to attach a notice pursuant to section 58 of the Personal Property Securities Act in a prominent place. 
Sandra Goudie 
: I have many in my kitchen drawer. 
SIMON POWER 
: That is right. The buyer or lessee of a motor vehicle only takes the vehicle free of a security interest in the event that subparagraphs (a) through to (c)(i) of that section are passed. We know how difficult legal transactions are when a security interest attaches to a motor vehicle. 
PETER BROWN (Senior Whip—NZ First) 
: 
 I do not intend to take a long call on this issue. 
Clayton Cosgrove 
: Good. 
PETER BROWN 
: I am glad that I please some members over there on the Government benches. I want to touch on clause 13 “Tampering with odometers prohibited”. 
Simon Power 
: Or what? 
PETER BROWN 
: That is exactly the issue. Right now if an importer brings a car into this country from Japan or somewhere else and the odometer is tampered with he or she loses that car and it is sold by the Customs Department. The department has to put a notice on the motorcar stating that the odometer has been tampered with and the first buyer—and I think Deborah Coddington has touched on this already—knows full well what has happened. There is some doubt as to whether that extends to the second or any subsequent buyers. 
If a car is brought into this country and a person tampers with the odometer I want to know what happens if that person puts in the details of the vehicle that are required under clause 14 that he or she has tampered with the odometer which is the thing that measures the distance. I think there is a clause in there from Mr Clayton Cosgrove—[ 
Interruption 
] Clearly the member over there on the Government benches has not read the bill which is a bit of a worry. [ 
Interruption 
] Mr Power is exactly right. He has summed that up far better than I could have. Nothing seems to happen to anybody who does tamper with an odometer. I cannot find any reference to that. 
Simon Power 
: I looked. 
PETER BROWN 
: Mr Power who is a lawyer has looked and he cannot find anything. Nothing seems to happen to those people. If those people put in the notice that they have to display that the odometer has been tampered with will that be good enough? If it is good enough why is that not good enough for an importer who brings in a car from Japan and has it taken from him and sold by the Customs Department? 
Simon Power 
: Good question. 
PETER BROWN 
: It is a good question and the Minister should answer it. Why is it not good enough for a person to tamper with the odometer and to put that on the notice that must be displayed? Why is that not good enough? 
This bill is flawed. We have said so. The only thing that the Government has got right about the bill is the title. That is the only correct thing in this bill. The sentiments behind the bill are admirable but the bill itself is flawed and that surprises me. Our colleagues in the National Party have recognised that this bill is not up to standard— 
Simon Power 
: Constructive criticism. 
PETER BROWN 
: And I am really surprised that the National Party is voting for it. 
Simon Power 
: We were surprised that you voted for the title. 
PETER BROWN 
: I will answer that question. We felt a little benevolent. We realised a lot of work had gone into this bill and we did not want the Government to feel totally downhearted at producing legislation like this bill and Supplementary Order Paper 30. We thought that we had to find something positive about the bill and the title was all that we could find. 
I come back to the odometer issue which is quite a serious question. Nothing seems to happen to a person who tampers with an odometer. Mr Duynhoven would like something to happen and I would like something to happen. But I ask Mr Duynhoven to tell us where in the bill it states that something will happen. All that it will do is to make the car look as though it has been used less than it actually has. If the person puts a statement on the notice in the window that the odometer has been tampered with he or she is complying with the regulation and is selling a car that looks newer than it actually is. But the extent of that tampering we do not know and that person does not seem to be breaking the law. 
Steve Chadwick who is on the Commerce Committee is taking a keen interest in this issue. Would she please explain whether such a person is outside the law under this legislation and if he or she is would she tell us which clauses put that person outside the law? 
Clayton Cosgrove 
: Read the bill. 
PETER BROWN 
: Clayton Cosgrove is making a lot of noise back there. Maybe he will take a call and tell us exactly where that is in the bill. 
Clayton Cosgrove 
: Read the bill. 
PETER BROWN 
: I have read the bill inside out and Supplementary Order Paper 30. If Mr Cosgrove knows the answer to that question he should stand up and explain that to this House. I do not think he does know; I am certain he does not know. 
This is a serious question. Could we have people tampering with odometers to make cars look to all intents and purposes as though they have had less use than they actually have putting that on the notice that is displayed and making those cars more attractive to a buyer without disclosing how much the odometers have been wound back? I invite the Minister or indeed anybody else to say whether that is ethical. I invite the Minister or anybody else to say that is against the law. 
Hon DAVID CARTER (NZ National) 
: 
 I want to start by moving through to Subpart 3 clause 21 etc. and taking an opportunity to wade through this legislation which is becoming more and more alarming by the minute. We note the Minister of Transport Paul Swain is not allowed to speak on this bill at all. He is the member who asked the House earlier whether this legislation was better than what exists now so that shows how much knowledge he has about it. 
I want to move to the issue of the qualifications of motor vehicle traders and the registration process. I say that this provision appears to be a vast improvement on the current situation. It appears to me that with this bill we are about to remove the very old-fashioned regimented way by which people had to go before a board and prove they were of suitable character etc. 
Peter Brown 
: Why not explain the point I raised? 
Hon DAVID CARTER 
: No no that is not my job. The member should call on Paul Swain to answer his question. 
Peter Brown 
: You are defending the legislation. 
Hon DAVID CARTER 
: No I am saying that after pages and pages of it I have actually found one little bit that I quite like. 
Brent Catchpole 
: It is the title! 
Hon DAVID CARTER 
: No it is not the title; the member has that wrong. But anyway the member can have another go at speaking later. 
The point that I think is a lot tidier is that the registration process will now be effectively automatic with a number of exemptions for people who are disqualified from registering—the issues about whether one is under the age of 18 which seems fair enough and about whether one is a person who has been banned or is an undischarged bankrupt etc. I just say that amongst this dreadfully drafted— 
Simon Power 
: Banned from rugby service! 
Hon DAVID CARTER 
: That is a good point—[ 
Interruption 
] I think we had better get Paul Swain back. In all this dreadfully drafted bill which we are appropriately debating on 1 April—April Fool’s Day—I think I have actually found something that has some merit. So I congratulate the Government on at least getting a small part of the bill possibly right. 
But I want to get back to the point that has been raised by other members about tampering with odometers. There is an issue whereby clause 13 states that tampering with odometers is prohibited. That clause states: “A person must not tamper with”—[ 
Interruption 
] Mark Burton gave an interjection of about four words but by the time he had finished he had forgotten what he said. Now I know it is late at night for the Minister but one would really expect him to recall— 
Hon Mark Burton 
: I did not want to embarrass the member. 
Hon DAVID CARTER 
: He did not want to embarrass me. I assure Mark Burton that when I interject three words I can remember them. But I ask some honourable member from the Government to explain clause 13— 
Simon Power 
: Harry is getting ready! 
Hon DAVID CARTER 
: Oh great! The real Minister of Transport will take a call! That would be great. I want to know what happens to a person if he or she tampers with a motor vehicle’s odometer. I remember Harry Duynhoven putting in hours and hours of debate in this House about the issue of people tampering with odometers. That was a big issue a couple of years ago. In fact Mr Harry Duynhoven made his name on that issue. 
Simon Power 
: “Harry Odometer Duynhoven”. 
Hon DAVID CARTER 
: That sounds quite good; it has a nice ring about it. Everybody expected that Harry Duynhoven would be the real Minister and after the remark earlier by Paul Swain maybe Harry Duynhoven should be the real Minister. So Harry Duynhoven can take a call and explain to us what happens to a person who is caught tampering with an odometer. What is the penalty for that? [ 
Interruption 
] Helen Duncan can tell us what the penalty is. No she puts her glasses on now hides her head in a book and wishes that she had not interjected. 
Brent Catchpole 
: She is knitting. 
Hon DAVID CARTER 
: Oh is it knitting? 
Helen Duncan 
: It is the National Party that is responsible for the legislation. 
Hon DAVID CARTER 
: I do not think that is the case at all. This bill has the Hon Judith Tizard’s name on it. She is a member of the caucus that that member belongs to not a member of our caucus. The member should not blame me. 
Helen Duncan 
: We know you are taking the numbers for the leadership. 
Hon DAVID CARTER 
: No I am trying to get some honourable member from the Government to explain to us what happens when one finds someone tampering with an odometer. It is a simple question. Not even Parekura Horomia knows the answer to that. Nobody on the Government side of the Chamber can answer that question. 
PAUL ADAMS (United Future) 
: 
 I hope not too many of my friends in the motor industry are listening to this tonight because many of them were concerned at my level of intelligence when I said that I was going to become an MP. They said to me: “Paul they’ll run rings around you.” Well hearing the debate tonight I think many of them would be sadly disappointed. I did like Wayne Mapp’s description of car salesmen; I had never heard it before—honest hard working entrepreneurs. The National Party has got something right; they are. 
But if my car salesmen described a car—and members should listen to this carefully—with the same accuracy as my parliamentary colleagues are describing this bill they would have to lose their jobs. Under the Fair Trading Act and the consumer protection bill their descriptions would be so inaccurate that they would probably lose their jobs. There is one word that we need to see come back in every industry in this country and I think the motor industry largely runs on this word and it is “integrity”. One cannot legislate for every situation that one has in business. I am surprised when I see some of my parliamentary colleagues who talk about less legislation bringing in more legislation. I scratch my head and as just a poor car salesman I wonder where they are coming from. 
Let us have a look at clause 13 “Tampering with odometers prohibited”. That is fine but if one is without integrity one can change the speedometer in a car without tampering with it. There is plenty of wreckers’ yards in New Zealand or overseas. Without integrity one cannot write legislation that will cover every situation. 
I would also like to touch on—[ 
Interruption 
] That is not tampering; it is changing. One thing about this legislation is that the motor industry does welcome it but my concern about it is that we are lowering the bar. In other words up until now motor vehicle dealers have had to invest a large amount of money in their motor vehicle businesses. They need a site which they have either had to purchase or had to lease to operate from. All of that is changing. Many of the calculations that have been done have been done on the existing regime of the car industry which to be honest—but people do not like me using that saying. The figures show that for example there has been very little call on the fidelity fund. Unfortunately with the lowering of the bar under this bill I think that we will have greater challenges unless the industry is policed correctly and really dealt with. It will be very easy now to enter the motor industry. 
Many people have also talked about motor vehicles being a high-ticket item. But in reality today that is not the case. One can buy a very good motor vehicle for say $3000 $5000 or $7000 which will serve one well. One can buy a spa pool for $15000 $25000 or $30000 or one can buy a television set. So members should not say that the motor industry has big-ticket items; yes it can have big-ticket items but it can also have very good items. 
I also see in clause 15 problems for the finance industry. I have concerns about the security interest having to be covered in what we call the current motor vehicle dealers window card. If a finance company has a security interest in a vehicle and if that vehicle is sold by a less-than-desirable motor vehicle trader who has entered this industry and who has disclosed in the window card that the vehicle has finance on it then yes the member of the public who purchases the vehicle will have clear title to it but the finance company will lose its right to the security on that vehicle. Its only right of redress to get its funds back will be through the trader. Under this legislation the standard required of the trader is far less than what we currently have. I can see that that may possibly cause a problem down the line. 
Nevertheless I welcome the 2-year review of this bill. I think that is absolutely necessary. 
Simon Power 
: Why? 
PAUL ADAMS 
: If National members are quiet I will tell them why. 
Hon HARRY DUYNHOVEN (Associate Minister of Transport) 
: 
 This bill has a large number of issues in it and it is hard to know where to start in a 5-minute speech. [ 
Interruption 
] For the benefit of the Hon David Carter I will start with clause 89 which is about the offence of tampering with odometers. I suggest that the member read it; it is in large print so he should be able to find it. It has reference to clause 106 which is about penalties. 
I have had some misgivings about this legislation and that would be no secret to anyone in this Committee. I am pleased that in the process the bill has been improved somewhat. I share some of the concerns of my United Future colleague Paul Adams who spoke about the entry level. But it has been deemed that those over the age of 18 who have no criminal convictions should be able to enter into the motor vehicle dealer business. That is outlined in the bill in such a way as to say: “We have faith that the registrar will be able to ensure that those persons who are suitable remain in the industry and that those who are not suitable exit from it by being banned.” 
I am very pleased that this bill is removing the statutory authority given to the Motor Vehicle Dealers Institute. It takes away the institute’s respectability which in my view—and I am not talking about the motor vehicle dealers themselves but about the organisation—has been used fraudulently for a long time. That may seem a very strong comment but in the interests of the consumers who have bought clocked cars over the last decade and a bit I have to say that very few motor vehicle dealers have been imprisoned or indeed taken to the cleaners by the Motor Vehicle Dealers Institute. I imagine that it will now rapidly go out of existence. I see the Motor Trade Association and perhaps even what used to be known as the Imported Motor Vehicle Dealers Association and is now the Independent Motor Vehicle Dealers Association taking over those roles. 
I have a little question about the definition of “motor cycle” in clause 6 not including a moped. The definition of “motor vehicle” states in paragraph (b)(iii) that “a motor cycle the total cylinder capacity of which does not exceed 60 cubic centimetres:” is not included as a motor vehicle. There are lots of motorcycles that go fairly quickly even though they are classified as mopeds. I am surprised by that definition. However there might be a good reason for it which someone might enlighten us about later. 
I am pleased with clause 14 which is about the particulars that must be displayed. I have never ever seen a vehicle with “This vehicle is clocked.” displayed on it despite Mr Delamere assuring us when he was a Minister that that would happen. If members compare—and I have done this; I have been there—the deregistration data in Japan including the mileage by just walking down the lines at any auction and looking at the registration data and the original mileage recorded at the time of the first inspection of the vehicle on its coming to New Zealand they will find that there seems to be a huge disparity. One has only to look at the price of diesel in Japan to start asking: “Why would people buy a diesel vehicle in Japan where petrol and diesel are more or less the same price unless they were doing very high mileage?” and to wonder at the failure rate of Japanese diesel vehicles in New Zealand to conclude that clocking is still with us and is an issue. I am pleased that it is addressed in clauses 89 and 106 of the bill. 
I have some concern about one aspect which I hope will be rigorously policed and that is the idea of travelling door-to-door salespeople. How can people believe that pressure will not be exerted in that situation? For example if an elderly person has an older car that breaks down and that will cost a lot to repair a motor vehicle dealer who knows the person may notice that the car has broken down and may shoot around with a flash Japanese used-car import and say: “This is a marvellous little car. We will give you a good trade-in on your old car.” The dealer would see the person alone in his or her own home where the person could be convinced by offers of finance and by lines like: “We can do the deal right here in your lounge.” Motor vehicle salespeople are excellent at psychology: they know how to close deals. We will see that happen. I hope that is an aspect of the bill that the registrar will rigorously follow up. 
I am pleased with clause 22(ea) which is the new bit that has been added and is about one of the concerns I raise. I have to say though that anyone who investigates that will be very disappointed with the very low number of disqualified dealers. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 The whole point about this legislation is that it is not necessary. It is specialist industry legislation and there is nothing new in that. There are always certain industry sectors that lobby for specialist legislation. [ 
Interruption 
] That is the whole point. When we ran this country like a Polish shipyard only the wealthy could afford to buy cars but those days have long gone and now cars are accessible to a lot more people. Families do not have just one car; they can buy two or three cars. My car is worth about $500 and that is fine. It has done 220000 kilometres but it gets me from A to B. I am going to keep driving it to see how long it lasts. It is a Subaru and it is a wonderful little car. 
The point I am making is that when cars were out of the reach of most people and they had to go on to a list to get a new one and they had to give the dealer a bottle of whiskey to have themselves put further up the list the family car was often the second-most-expensive possession that people owned after their houses. That was why we needed legislation to protect people in the industry. There was a huge amount of money at stake. These days we need regulation that is a lot lighter but that is not what we have with this bill. The neo-socialists always fall for this. They see a problem and they think they can solve it by passing more law. We end up with legislation that is cumbersome and fraught with difficulty. 
I noticed that Harry Duynhoven said he welcomed the end of the fidelity fund— 
Hon Member 
: No he certainly did not. The member spoke of the end of the Motor Vehicle Dealers Association. 
DEBORAH CODDINGTON 
: I do not welcome the end of that but I welcome the end of its compulsory membership. If an organisation is good then people will join it voluntarily—just like unions. If unions are good people will join them voluntarily. It is the same with students’ associations. We can get rid of the compulsory membership of the Motor Vehicle Dealers Association but we cannot apply that to students’ associations! Never mind there is hope; we are the party of influence and we will keep working. We will influence both sides of the Committee but it is very difficult when there is a concrete-bound mentality. 
I return to Part 2 of this legislation. It deals with exemptions from registration. First of all the Crown is exempt from registration so it will not have to be policed or pay levies when the Customs Service seizes cars that it suspects have had their odometers tampered with and sells them. The Customs Service is exempt from registration. That involves something like a thousand cars a year. 
Debate interrupted. 
Sitting suspended from 12 midnightto 9 a.m. (Thursday)