Standards and Conformance Bill — In Committee 
Standards and Conformance Bill — In Committee 
[Volume:634;Page:5394] 
Standards and Conformance Bill 
In Committee 
Part 1 Amendments to Standards Act 1988 
Hon Dr NICK SMITH (National—Nelson) 
: 
 During the second reading of the bill I raised some quite serious concerns about the mess we have within the New Zealand building industry. In particular I drew attention to the fiasco we have whereby the standards committee is saying there is one set of rules and the Department of Building and Housing is saying there is another. I also drew the attention of the House to the view of certified builders that this level of confusion is unprecedented. We have had the whole debacle of leaky homes for over 4 years now and it is still not clear for builders and for designers as to what the standards for building houses are. 
My point in respect of this bill is that Standards New Zealand was created in the aftermath of the Napier earthquake quite specifically to deal with the issue of building standards. It is an organisation that has actually done a very good job over a very long time. I think some of the changes that the last Labour Government made in 1988 at the height of Rogernomics were actually counter-productive to Standards New Zealand. 
Hon Chris Carter 
: Look who is talking! 
Hon Dr NICK SMITH 
: The member Chris Carter who was the Minister for Building Issues—[ 
Interruption 
] 
The CHAIRPERSON (Hon Clem Simich) 
: Mr Carter you can take a call if you wish. 
Hon Dr NICK SMITH 
: I raise a point of order Mr Chairperson. The member opposite made an accusation that was quite out of order. I suggest that you bring him to order. 
The CHAIRPERSON (Hon Clem Simich) 
: Mr Carter I thought you would have taken what I said to you just before as a warning. Would you stand withdraw and apologise. 
Hon Chris Carter 
: I withdraw and apologise. 
Hon Dr NICK SMITH 
: The difficulty for the Minister Mr Carter is that he turned a blind eye— 
Hon Chris Carter 
: He’s telling porkies. He’s been caught with $15 million. He’s been caught with it. 
Hon Dr NICK SMITH 
: Now the member has interjected. The fact is that unlike Mr Carter who is not prepared to stand— 
Hon Chris Carter 
: Or was it $18 million? Sorry I was mistaken; it is $18 million not $15 million. 
Hon Dr NICK SMITH 
: Both figures are incorrect. The Minister does not know. [ 
Interruption 
] 
The CHAIRPERSON (Hon Clem Simich) 
: Mr Carter those are not objections so you will cease please. 
Hon Dr NICK SMITH 
: I make no apologies for standing up for the rights of New Zealanders to have their homes properly constructed. [ 
Interruption 
] I raise a point of order Mr Chairperson. You have just asked the member to withdraw and apologise and he has just repeated exactly the same offence. 
The CHAIRPERSON (Hon Clem Simich) 
: I do not think he will do it again. 
Hon Dr NICK SMITH 
: Do members know how many Ministers for building and housing we have had? 
Dr Jackie Blue 
: How many? 
Hon Dr NICK SMITH 
: We have had seven Ministers. 
Hon Chris Carter 
: None of them have been sued though have they. 
Hon Dr NICK SMITH 
: The Minister has already said that I may get sued. I tell Mr Carter that I make absolutely no apologies for standing up— 
The CHAIRPERSON (Hon Clem Simich) 
: Mr Carter I have asked you a number of times to cease. I ask your whip to tell you to cease and that will be the end of it. I do not want to hear you again during Dr Smith’s speech. 
Hon Dr NICK SMITH 
: The part I find interesting is that I am being sued by an American corporation. Is this not the same Labour Party that somehow believes National members are all beholden to Americans? There seems to be a bit of a dichotomy because if we stand up for New Zealand consumers and say: “Come on guys treat the timber according to the New Zealand standard.” the Minister is silent. He was not prepared to do anything about it and I was prepared to put on the public record genuine concerns held by myself and New Zealand scientists about the standard of timber treatment. 
I come back to the issues for the Minister in the chair Lianne Dalziel in terms of this bill. What is the current requirement for treating timber? As I pointed out we had this fiasco whereby the Minister said that standards in New Zealand would be set by a very thorough process—by consensus or by an 80 percent vote. In June there was a vote and two members voted against the watering down of timber treatment standards. 
Dr Jackie Blue 
: Then what happened? 
Hon Dr NICK SMITH 
: The two members were sacked. It was put to the vote again in August and can members guess what happened? There was consensus. So the standard has been changed. I ask the Minister whether that is acceptable. We are putting all sorts of ethical standards in this bill. Sacking members of a committee including a scientist from AgriQuality a State-owned enterprise because they did not agree seems to me to be somewhat out of step with what I would think was ethical conduct. 
I put these questions to the Minister before and she was absolutely silent. She is the Minister in charge of Standards New Zealand and I have a very simple question for her: can she explain why those two members were sacked from the committee? We know that they were the only two who voted against the change. Imagine if we had that in Parliament; that if one votes against the Government off one goes—on your bike! That seems to me to be the style of ethical conduct we will have. The Minister has brought a bill to Parliament to introduce ethical standards into the standard-setting process but she is silent when those sorts of shenanigans go on within Standards New Zealand. 
 I challenge the Minister to please provide some answers. What standard is acceptable today for building houses? That question is pretty important to a whole lot of New Zealanders out there. Tens of thousands of houses are being built and people do not know what the standard is because the Government has not got its act together. Question No. 2: can the Minister tell us why two members of the standards committee—the two who happened to vote against the watering down of the timber treatment standard—were suddenly fired? Was it as everybody within the industry knows because of commercial pressure from some companies that wanted them out? We deserve an answer from the Minister. Can she tell us why those two members were fired from the committee? More important I would like to know from the Minister how in terms of this bill she can talk about introducing ethical standards when at the very same time she the Minister in charge of Standards New Zealand is silent when these sorts of difficulties are going on and when these sorts of Crown agencies are involved in conduct that is hardly becoming in terms of increasing confidence in the most important area of Standards New Zealand’s work—that is building standards. 
PANSY WONG (National) 
: 
 I am actually surprised because the Minister in the chair the Hon Lianne Dalziel is well known for being upfront in taking calls. She is about the only Minister on the Labour front bench who is prepared to answer questions and I think that the two questions posed by my colleague the Hon Nick Smith are very good ones. I am concerned about the fact that in June two members of the Standards Committee were sacked simply because they voted against lowering the standard for building materials. My concern extends then to what would happen to the Auditor-General who actually raised the issue that the Labour Party used taxpayers’ money illegally in the election campaign. I am coming back to the bill but there is a concern if appointed members of a committee get sacked simply because they want to maintain a higher standard about who then is left to hold the Government to account. 
I also want to pose some more questions relating to Part 1. This part increases the functions of the Standards Council to include the development of standards that promote social responsibility. The term “social responsibility” is very subjective and I have a horrible vision of our officials from the Ministry of Economic Development holding hands with international delegates and conducting strategic conversations in order to develop a social responsibility standard. 
I have suddenly found in the last financial review of the Ministry of Economic Development that there is a buzzword and a communication strategy that apparently each Government department is conducting—that is not just a conversation but a strategic conversation. I was very interested in this and I asked the officials what “strategic conversation” means. It is a term that is actually contained in the objectives of a Government department’s mission statement. Apparently the Ministry of Social Development states in regard to “strategic conversation”: “A less technically sophisticated evaluation that can add more to the strategic conversation is of more value than a technically sophisticated evaluation whose results may distract from ensuring the most strategic use of resources.” 
I ask my colleagues whether any of them understands that statement. I thought that another Government department might be able to enlighten me as to this term “strategic conversation”. The Ministry of Economic Development states: “Our attention has turned to improving the quality of strategic thinking and conversation. As part of this we have put more focus on synthesising research to distil the implications for our strategy.” I ask my good colleagues on my side of the Chamber whether any of them is any the wiser about the term strategic conversation. 
We are going to elevate strategic conversation to an international level in order to develop standards that will promote social responsibility. I would like the Minister to take a call and say how much more compliance implication that would impose on business or on anybody trying to adhere to or develop eventually a social responsibility standard. The Minister is the one who claimed sometime in June that she was conducting a dynamic review on the compliance burden particularly horizontal vertical strategic—who knows? She is doing this particularly for small-business people and I want to know what the implication of these new objectives will be for the Standards Council. What sort of a standard will be developed to promote this so-called social responsibility issue? 
KATE WILKINSON (National) 
: 
 One may be forgiven for giving this bill a somewhat cursory glance and thinking that yes it is combining the functions of two bodies that sounds OK. It is combining the Standards Council and the Testing Laboratory Registration Council and is intended to align the functions of both with international standards. That sounds great it should therefore save some costs. It should be a good bill. However there is a big “but”. 
I divert for a minute to mention something that has not been mentioned in the commentary on the bill. It seems to be international practice these days that only one body in any country has the function of registering certification bodies and that is fine. In New Zealand it is this great thing called theJoint Accreditation System of Australia and New Zealand. Whilst it is possibly not technically within the scope of this bill I do raise the issue of whether New Zealand is losing its sovereignty to this joint body. How answerable is the joint body to New Zealand courts? I would like the Minister in the chair Lianne Dalziel to address that issue because I think it is one that is hugely fundamental to our constitutional law. As an international regulator how many local controls would it need to comply with? Decisions about using world guidelines for standards will not be made by New Zealand at all but by this joint body on which we have two representatives. 
The other question I would like the Minister to answer is how Parliament if it so wanted could actually modify the rules of this joint agency. Does it in fact have the power to do so? I think we are at very real risk of ceding our sovereignty to this joint trans-Tasman agency and I take that as a very very serious constitutional issue. 
Leaving aside that wider issue—because it might be too intellectual for the other side—and coming back to the bill I point out that the popular rhetoric seems to be about reducing compliance costs and making it easier for businesses to do business. So it would seem obvious that some analysis of those consequential compliance costs might have been completed before launching into this bill. What are the fiscal implications of the bill? We are told that the implications of this bill are “just too difficult to assess”. I would have to say that for all the talk and rhetoric about social responsibility this bill has every chance of being yet another irresponsible bill with yet more unintended consequences. There has been no disclosure. 
In fact there is no idea of what the compliance costs resulting from this bill will actually be. The compliance cost statement in relation to the bill even identifies that compliance costs will be incurred because of these two accreditation bodies being reduced to one. But as there may be some confusion in the market because of these changes “It is not possible to quantify the size of the compliance costs.” and we are expected just to accept that. Well I do not think so. 
I said before that this could have been a good bill. It is important that other countries have confidence in our system for the accreditation of those certification bodies. We place a heavy reliance on our trade exports and wishy-washy unreliable and inconsistent standards are certainly to be avoided. But this potentially good bill has been spoilt by the Government sneaking in a couple of new objectives of the Standards Council. 
Just to go back in time I tell members that under the existing Standards Act the primary functions of the council—which are quite sensible—are to develop standards to promote encourage and facilitate the use of standards in New Zealand and to improve the quality of goods or services having regard to economy in their production or supply. We cannot argue with that. They are also to promote standardisation in industry trade or commerce—we cannot argue with that—and to encourage and facilitate industrial development trade or commerce which we cannot argue with either or to promote public or occupational safety health or welfare. That all makes some sense because at the end of the day we must acknowledge the importance of objective standards and standardisation of standards with our trans-Tasman neighbour Australia. Nobody wants to compromise those standards but this bill just had to go that sneaky bit further. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I move  
That the question be now put 
. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to the Standards and Conformance Bill and to bring to the Minister’s attention for starters—I am sure she is well aware of the Ministry of Economic Development’s website—the Government’s objectives for conformance and standards. I will not ask her to recite them off pat because that would be unfair of course but I will remind her of what those objectives are. I will read through them. First and foremost is facilitating domestic and international trade. Second is minimising risks to health safety and the environment. The third is facilitating innovation and economic development as part of the economic transformation equation that our Prime Minister is banging the table about at the moment while we are still going backwards on economic growth. The fourth is reducing compliance costs. That is what it says there; it is all about reducing compliance costs. 
So I imagine that is why the Minister is planning a trip in February of 2007 to the ISO Working Group on Social Responsibility which will take place in February 2007 in Sydney Australia. I ask the Minister whether she will be attending that conference. I do not think she is sure about that. 
Hon Dr Nick Smith 
: She doesn’t know. 
CHRIS TREMAIN 
: She does not know. Well I would like her to find out a little bit more—being the Minister of Commerce responsible for commerce and standards and for introducing a new standard that is all about minimising environmental risks and promoting social responsibility into the Standards Act 1988. Yet the Minister does not even know about a conference that will be taking place in Sydney in February 2007 on the ISO Working Group on Social Responsibility. Now we might ask ourselves why the heck might we have a conference on that. Well I have to say that I would not be wasting my time in attending it myself. But it is the very reason this whole change in the Act is coming about and the Minister is not even aware of it. 
I want to talk to her about why it is coming through because there is a hierarchy of standards that come about throughout the world. Firstly there are international standards then standards set on an Australasian level. Then regional and local standards are set—all done under the Standards Act of 1988. Just for the Minister’s reference—this evening is probably a bit of an education for her—I tell her that the Standards Act was originally put in to consolidate and amend the law relating to standards and to repeal the original Standards Act of 1965. 
A body was set up called the Standards Council I say for the Minister’s benefit and there are 12 members on the council. She may not be aware either that the membership of that council is made up of bodies as august as the New Zealand Institute of Architects Inc. Was she aware of that? It includes the National Council of Women—it is there to help set standards and be part of it—and other august bodies like Local Government New Zealand. So that standards organisation is there to set standards for New Zealand and now we are seeing this amending legislation being brought in to add to the functions of the council. The primary functions of the council should be to develop standards and to promote encourage and facilitate the use of standards in New Zealand. Let us go back to the Ministry of Economic Development website and I ask what those objectives were—to facilitate innovation in economic development and to reduce compliance costs. 
I want to know how the heck minimising of environmental risk and promoting social responsibility will have any impact whatsoever on increasing economic transformation for this country. That is the question the Minister should be asking because creating growth should be what it is all about. I will tell members why we have this—this whole thing comes from a conference that will end up in Sydney next year dealing with the international standard ISO 26000 on social responsibility. 
Let me tell the Minister a little about ISO 26000 which is the international standard that has been set on a worldwide basis for social responsibility. The interesting thing about that standard is that it will not include requirements and thus will be a certification standard. So it will be optional. We are going through this whole process of amending legislation to make two changes to the Standards Act—for the minimisation of environmental risk and the promotion of social responsibility—all for ISO 26000 which will be optional. That is unbelievable. How will it enhance economic transformation in this country? 
Hon CHRIS CARTER (Minister of Conservation) 
: 
 I move  
That the question be now put 
. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I appreciate the opportunity to have some input into this debate. I am particularly concerned when I look at this bill; I am really delighted that my colleagues and National are opposing it. I think that it is quite scary when we see Labour making such amendments in legislation. When we look at Part 1 “clause 7: “Functions of council” we see that subclause (4) states: “Section 10(2)(h) of the principal act is amended by inserting after the word “standards” the words “and other specifications”. To me that is broad in the extreme. What does “and other specifications” really say about what we can expect in the future? 
I am mindful of a recent press release about cars. If one also takes into account environmental and social responsibility where will the emphasis be? If we look at the latest press release about small cars being death traps we see that it says that smaller vehicles are built as economically as possible and the biggest economy is attached to safety features. So yes small vehicles have a saving in terms of fuel consumption but safety features are sacrificed as a consequence. So will we support small vehicles because they seem to be more environmentally friendly or will we oppose small vehicles because they have a much greater personal risk to people’s health and safety? The article goes on to say that there are a lot of problems in providing adequate performance protection. If specifications or standards are being set which one will take precedence—the environment or people’s safety? Who will weigh up those sorts of issues when it comes to setting standards or indeed specifications? Here “specifications” are a pretty broad brush and can be applied to just about anything. 
When I was listening to my colleague Mr Chris Tremain earlier I was very impressed with his presentation and with his reacquainting us with the intention of standards—that is to facilitate domestic and international trade. I would say that the Government has failed miserably in that regard when one thinks about honey imports and the standards it applies there. The Government is putting our whole agricultural and horticultural sector at risk because those standards are not robust. The Government acknowledges that they are not yet it has taken that on board and still made the decision to allow honey to be imported into New Zealand that is not heated to its optimum in order to ensure we do not have diseases coming into this country and putting the rest of our horticultural and agricultural sectors at risk. 
This bill was supposed to enhance public confidence in the setting of standards but in no way does it do that. What else does this bill say? Clause 7(5) states: “Section 10(2)(i) of the principal Act is amended by adding the words ‘or that the Minister may direct it to perform in accordance with section 112 of the Crown Entities Act 2004’.” What does section 112 state? It states: “If an Act or a Crown entity company’s constitution gives the responsible Minister power to add to the functions of a Crown entity the Minister may direct the entity to perform any additional function that is so added and that is consistent with the entity’s objectives.” This bill now gives the Minister the power to direct it to perform any other functions that the Minister deems acceptable and again that could be broad in the extreme. I have absolutely no faith in this Government particularly with its record around fiscal responsibility and indeed around compliance costs. 
I think two of the most telling submissions were from Telarc and from Health and Disability Auditing New Zealand Ltd. Both made very clear submissions and in fact did the work for this Government of identifying what the compliance costs would be. What did this Government do? It completely ignored the content of those submissions around compliance costs. It completely dismissed those concerns that were raised. Health and Disability Auditing New Zealand Ltd made it quite clear by setting out graphs and identifying all the figures. It was going to cost that company $155000 compared to $18000. I think that is absolutely abominable. I can believe that this Government would be so ignorant of the effect of the introduction of this bill on other entities. Telarc itself also goes on to outline some of the costs in its submission. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 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 
New Zealand Labour 50; New Zealand First 7; Green Party 5; United Future 3; Progressive 1. 
Noes 51 
New Zealand National 48; Maori Party 3. 
Motion agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 66 
New Zealand Labour 50; New Zealand First 7; Green Party 5; United Future 3; Progressive 1. 
Noes 51 
New Zealand National 48; Maori Party 3. 
Part 1 agreed to. 
Part 2 Amendments to Testing Laboratory Registration Act 1972 
The CHAIRPERSON (Hon Clem Simich) 
: This part includes debate on the schedule.  
Hon Dr NICK SMITH (National—Nelson) 
: 
 I am not at all surprised this evening that the Government has chosen not to take a single call on a bill to do with standards. If we think about it it is not at all surprising. If we look at this Government which Helen Clark promised would set new high standards and the shemozzles we have seen since I am not surprised that not a single member of the Labour Government would want to participate in a debate on standards. We could talk about the standards that Labour has set around immigration law for instance and Mr Phillip Field. [ 
Interruption 
] Lianne Dalziel the Minister in the chair has finally popped up with a word in defence of Phillip Field. She is an ex-trade unionist. 
Hon Lianne Dalziel 
: Tell us about the bill. 
Hon Dr NICK SMITH 
: The bill is about standards. I would like the Minister in the chair to talk about standards. I think it could be quite interesting to hear from this Government about standards. We could hear about standards of ministerial conduct. We could hear about standards of parliamentary conduct. We have seen appalling examples of standards from everybody in the Government—from the Prime Minister down—in respect of this bill. 
This Government says in this classic Labour bill: “Do as we say not as we do.” Government members want to have a Standards Council in order to preach to others about what should be the standard but they do not want any standards applied to themselves. We had the extraordinary exhibition from the Prime Minister today that showed that the Government would not accept even the standard of the Solicitor-General or the Auditor-General. I ask the Minister why we are going to all this effort to pass laws about standards in respect of laboratories and petroleum all because we want to have an independent standard-setting process. We have one of those—it is called the Auditor-General. What happens when the Auditor-General says that the Government has breached the law? Labour members say that it is nothing to do with them and that the Auditor-General is wrong. 
Hon Chris Carter 
: Tell us about the $16 million. 
Hon Dr NICK SMITH 
: I just challenge Mr Carter to talk about— 
Hon Chris Carter 
: Oh tell us about the court case. 
Hon Dr NICK SMITH 
: One minute the member wants me to refer to the bill on standards and the next minute he wants me to talk about building standards. I have a simple question for Chris Carter. Can he tell me whether houses in New Zealand—he is an ex-Minister in this area—should be built according to standards set by Standards New Zealand or whether we should defer to the Department of Building and Housing? Can the Minister in the chair tell us? I have here a press release from the Certified Builders Association which wants to know what standard applies. Can Mr Carter—a Minister of the Crown the previous Minister for Building Issues and the Minister of Housing—tell us? Can the Minister answer the question? 
Hon Chris Carter 
: I’ve never been in court. 
Hon Dr NICK SMITH 
: I have to say to the member that I stand by my record of standing up for causes and I will continue to do that with courage—something that that member never does. But can he simply answer the question? What happens with Labour members is that they just want to change the law retrospectively if they get it wrong. Is that what Mr Carter will do with regard to breaking the law— 
Hon Chris Carter 
: I didn’t break the law. Did you Dr Smith? 
Hon Dr NICK SMITH 
: Actually the Solicitor-General says that Mr Carter did break the law. Mr Carter is subject to a court case for breaching the law over the pledge card. What is his answer on that? 
Lindsay Tisch 
: No standards. 
Hon Dr NICK SMITH 
: He has no standards. I simply ask the Minister in the chair and Mr Carter how Labour members can preach about standards to other New Zealanders when they blatantly ignore the law and ignore the standard-setting authorities around Parliament—the Chief Electoral Officer the Solicitor-General and the Auditor-General. We simply say that it is hypocritical of the Government to advance law on standards when it ignores the standards set for others. 
PANSY WONG (National) 
: 
 The Labour Government is not only failing to live up to and set the standard but it is also consistent in not caring about other people’s money. Let us look at Part 2 which is about—fair enough—amalgamating accreditation bodies to make one body so that organisations can now receive accreditation under this new organisation called the Joint Accreditation System of Australia and New Zealand. But we are not talking about more compliance costs; we are talking about more actual costs to those organisations. 
I particularly want to challenge some of the other parties that supported this bill like New Zealand First and United Future in relation to the organisation called Health and Disability Auditing New Zealand. It is not just any organisation; it actually accredits services. It is a designated auditing agency approved by the Director-General of Health to audit all service areas under the Health and Disability Service. Under its existing accreditation which is from International Accreditation New Zealand the fee cost is $18915 for 3 years. I wonder whether my colleagues would like to take a guess at how many times that fee will increase when the organisation switches to accreditation under the Joint Accreditation System of Australia and New Zealand? 
Hon Members 
: Tell us. 
PANSY WONG 
: Five is too modest—10 times! The fee will be $155823 which is 10 times the previous fee. I am not too sure what benefit it will buy for that organisation. Anyway a member of the organisation raised that point with the Ministry of Economic Development which once again said that he should not worry; it was a Government department and it was there to help. So the ministry talked to the Joint Accreditation System of Australia and New Zealand and said that maybe it should review its fee structure as it seemed a bit high and that overnight there had been a tenfold increase. So the ministry came back with a counteroffer. Can members guess how much it was? 
Kate Wilkinson 
: Nine times. 
PANSY WONG 
: No not quite that much. It actually reduced it for 2 years by $20000. So from the original increase in fee which was about $137000 the increase will go down to $110000. What can be gained overnight by an accreditation fee increase of $110000? 
Dr Jackie Blue 
: Hope. 
PANSY WONG 
: Dr Jackie Blue is on the Health Committee. She can tell me how much $110000 could purchase for us in terms of any operations. How many people could be put back on the waiting list that was culled? 
I would like the Minister to take a call. I think that having a one-standard accreditation agency is a sound concept but how do we justify the cost? We are not even talking about compliance costs—some of the organisations involved are providers of the health service. Overnight Health and Disability Auditing New Zealand will have to pay an additional $110000 simply to get accredited. I want the Minister to take a call and say what additional advantage will be offered to those health service providers that can now get an audit from that very reputable organisation Health and Disability Auditing New Zealand. 
I think we need to take these issues seriously. This bill is not just about increasing compliance costs that people will have to adhere to; it is actually about increasing overnight by $110000—by 10 times—the cost for an organisation that is already accredited appointed and approved by the Director-General of Health. If that organisation is doing such a bad job we should ask the director-general about it but if he felt confident to appoint that agency what is the justification for it suddenly to incur a $110000 additional cost? 
The CHAIRPERSON (Hon Clem Simich) 
: Before I call the next speaker I will deal with another issue. The previous two votes should have been announced as “Ayes: 66; Noes: 51”. So both votes will be altered accordingly. Thank you. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am very pleased to take another call on the Standards and Conformance Bill and to highlight yet another clause that gives rise to concern. Before I do so I say that people should be really concerned and alarmed about the Joint Accreditation System of Australia and New Zealand because that is another one of those areas where there is agreement between Australia and— 
Hon Lianne Dalziel 
: It was set up in 1998 by the National Government. 
SANDRA GOUDIE 
: Well I still have concerns around that relationship and I hope—[ 
Interruption 
] Well I was not here then and I can still have concerns around it. If it is anything like the Trans-Tasman therapeutic goods agency model then I think we would do well to have concerns around it. 
I draw the Committee’s attention to clause 16 “Powers of Council”. I note that part of the function is to: “collect and disseminate information relating to conformity assessment including the publication of reports pamphlets books journals and other publications: (m) provide advisory and other services in respect of conformity assessment:” and: “(n) promote research into the methods of conformity assessment:”. Members should look at that clause coupled with the review and the consultant’s report back on the review which states: “there are a number of gaps in knowledge of the standards and conformance infrastructure amongst the business community; and some regulators have opted not to utilise New Zealand’s standards and conformance infrastructure especially in terms of developing or applying standards to support performance-based regulations and/or using third party conformity assessment. The report also found that some firms are not aware of the potential benefits standards and conformance may offer their industry generally or their individual business specifically.” I have to say given the compliance costs involved with this bill—which have been outlined admirably by previous National speakers—that businesses will not look to adopt any sorts of standards or conformity in regard to this bill at all if they assess what the cost will be as a consequence. 
Members should look at Telarc’s accreditation costs from the Joint Accreditation System of Australia and New Zealand. They are a significant part of Telarc’s cost structure being the third-largest cost after staff costs and rent and equal to approximately 50 percent of its 2004-05 annual profit. That is pretty substantial and pretty horrific and I suggest that not too many businesses will be rushing to get any standards or certification from that organisation. In 2001 the fee structure was amended in such a way that the impact on Telarc was a 30 percent increase in accreditation costs per certificate issued to its clients. That is a huge increase and it makes a huge dent into the profits of such companies. So how can they possibly try to remunerate any staff when those sorts of costs are involved? 
The Minister in the chair the Hon Lianne Dalziel waxes lyrical about wanting to reduce compliance costs in this country yet when push comes to shove she does absolutely nothing—in fact she did the reverse. This bill is a classic example of the ignorance of this Government around fiscal capability and responsibility. The Government has no idea of what its actions continue to mean for businesses in this country with the pervasive increased costs it keeps dumping on them and this bill is a hugely significant example of that. 
We note that the Joint Accreditation System of Australia and New Zealand charter states that it is a not-for-profit organisation. One has to wonder what on earth it is planning to do with all of those fees and whether with the new agency being created it will start imposing a lot of other constraints and conditions on all sorts of businesses and requiring them to meet all sorts of standardisations. 
When we look at the other provisions that have already been outlined we see that the Minister can identify any sorts of specifications. New section 13(2)(m) inserted by clause 16 allows the Testing Laboratory Registration Council to: “provide advisory and other services in respect of conformity assessment:”. For goodness’ sake! The Government cannot even do that for itself let alone for the public of New Zealand. It has failed miserably to provide an example to the New Zealand public in the way in which it conducts its own affairs yet it expects the New Zealand public to have confidence in the way it acts on behalf of business. 
NICKY WAGNER (National) 
: 
 It is very hard for ordinary people to get excited about this Standards and Conformance Bill. The world of standards and conformance is all long words acronyms and plenty of specification numbers. This bill is so convoluted that none of the many media people around Parliament has even taken the slightest interest in it. 
This bill is designed firstly to make sure that the Standards Council develops standards for goods and services and that the Testing Laboratory Registration Council makes sure these standards are being met and conform with international standards norms and practices. That means in lay speak that New Zealand can be trusted internationally to produce goods and services of a high and consistent quality. The average New Zealander may not be interested in the detail of this bill but he or she does expect and rightly so that goods purchased and services used are functionally effective. People also expect that the standards in force in New Zealand are in line with international practice. 
But take a simple small issue—noisy exhausts. New Zealanders are very unhappy about the current standards concerning noisy cars and the testing regime for noisy exhausts. New Zealand is out of step with the rest of the world in terms of noise standards. For most of us it is pretty irrelevant but not for someone whose home happens to be near a road that has been designated by boy racers as a drag strip—and there are plenty of those around the country. For someone whose hotel or business is in the centre of a city the situation is a disaster. Families lose sleep and patience businesses lose patronage and income and our country loses its reputation for being clean and green. 
Our legislation has become weaker and harder to enforce over the last few years while most other countries—those of Europe the UK and Australia—have tightened their standards. Australia has updated its requirements so that all new cars need to meet a drive-by test of 76 decibels but in New Zealand cars have to meet only an 81-decibel test. But the real problem is that we allow the modification of cars with no commitment to a regular testing regime to ensure that even our inadequate standards are met. Cheap Japanese cars with modified noisy exhausts have been a persistent and growing problem ever since Labour came to power. 
Progress to be reported presently. 
House resumed. 
The Chairperson reported progress on the Standards and Conformance Bill. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 66 
New Zealand Labour 50; New Zealand First 7; Green Party 5; United Future 3; Progressive 1. 
Noes 51 
New Zealand National 48; Maori Party 3. 
Report adopted.