Volume 689 Week 41 - Wednesday 8 May 2013(continued on Thursday 9 May 2013)Text is incorporated into the Bound VolumeVolume 689 Week 41 - Wednesday 8 May 2013(continued on Thursday 9 May 2013)[Sitting date: 08 May 2013. Volume:689;Page:9717. Text is incorporated into the Bound Volume.]Wednesday 8 May 2013(continued on Thursday 9 May 2013)Criminal Procedure Legislation BillSecond ReadingDebate resumed.Mr DEPUTY SPEAKER: The House is resumed. Members the House is debating the second reading of the Criminal Procedure Legislation Bill. David Clendon has the call. He has 6 minutes remaining if he wishes.DAVID CLENDON (Green): Thank you Mr Speaker—Hon Tau Henare: You don’t have to!DAVID CLENDON: I would not deprive you of it Mr Henare. I am pleased to pick up the remaining few minutes. Last evening about 11 hours ago or so when we were discussing this bill I was making the point that the intention of the original legislation which we are now repairing for want of a better word was to make the criminal justice system more transparent more understandable and more efficient and the Minister introducing the bill yesterday reminded us of that.Those are admirable goals and we support this legislation in part because we do need a well-functioning justice system. But sadly—and I was also making this point last night or had begun to—a lot of what this Government is doing elsewhere is actually counting against the implementation and the practice of an efficient and fast-moving justice system. By “fast-moving” I mean we have to get cases through to the courts as quickly as we can practically do so. It is not acceptable for example that people may be sitting on bail or indeed on remand for 6 months a year or even 18 months often in quite serious cases because the courts are that jammed up that we are not getting the cases through in time.The level of offending on bail has gone up we are told and clearly that is in part related to the fact that people are spending longer on bail because the courts are not moving sufficiently—they are not moving quickly enough or smoothly enough. Some of the reasons for that we know are that there have been some cuts in court staffing. The courts are now struggling to fulfil their core functions. We are seeing a significant loss particularly of senior staff or experienced staff—the people who actually understand and have the institutional memory to make these quite complex organisations work well. Although we might seek a legislative remedy to ensure that the legislation supports an efficient operation of the courts if we are going to remove the people who actually make it work day to day then we will not succeed.It is important too that we keep the courts open and it is unfortunate that we are seeing closures of courts around the country. We are seeing a reduction in the accessibility of courts due to reduced services reduced hours. None of this is supporting or helpful in the sense of wanting to get our justice system working effectively smoothly and quickly.We are seeing reductions in the availability of and eligibility for legal aid despite the fact that this can drive people of necessity to represent themselves and we have seen on the Ministry of Justice’s own website cautionary tales advising people not to self-litigate. Self-litigants in the courts dramatically slow the courts. They cause a great deal of extra work and load on judges court staff and other people involved in the process. We ought to be making other practical contributions to a smooth and effective criminal justice system rather than undermining it. We have seen that very recently in fact—legislation is still in process around the Family Courts where again we are seeing areduction in the accessibility to the right of people to use lawyers which will force them to self-litigate. We are seeing increasingly that far from making courts more accessible and more understandable to lay people they are becoming less accessible and that is simply not helpful in terms of what this legislation is allegedly trying to achieve.The Greens will continue as I said at the beginning to support this legislation. It is necessary to ensure the integrity and utility of the primary legislation that was passed a year or so ago. We will support it for that reason and we do obviously encourage the idea of the courts being more efficient more transparent more accessible to people. But unfortunately we are going to have to wait for another Government a more enlightened progressive Government to come along to actually put in place the necessary structures the necessary legislation the necessary policy to make our courts work as we all want them to do. Kia ora.Debate interrupted.Business of the HouseHon ANNE TOLLEY (Deputy Leader of the House): I seek leave for there to be a question time at 2 p.m. on Thursday 9 May and for questions to be lodged in the normal manner pursuant to Standing Order 378.Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there anyone opposed to that course of action? There is not. Leave is granted.Criminal Procedure Legislation BillSecond ReadingDebate resumed.ALFRED NGARO (National): I rise and take a call on the Criminal Procedure Legislation Bill. The previous speaker Mr David Clendon talked about a smooth and effective system and that is exactly what this bill is actually intending to do. The bill makes minor technical amendments—11 in particular—so that the legislative intent is clarified the operational efficiency is enhanced and the predicted benefits are realised. That is exactly what we are doing and I agree with Mr Clendon in that regard.I want to briefly touch on two submissions—in fact there were only two submissions—on this bill. One was from the Law Society and one was from Dr Don Mathias. Clearly their submissions were in support and generally there were a number of just minor changes that people wanted to make but in particular there was general support for this bill because of what it is intending to do. The proposals build on the changes already under way to improve the criminal justice system including removing oral deposition hearings legal aid reforms victims of crimes initiatives and the roll-out of audio-visual links between courts and prisons.I also just want to comment on a couple of things that will be achieved including the changes made in the Supplementary Order Paper. The reforms contained in this bill have the potential to free up 10000 court sitting hours each year by delivering benefits that include 31200 fewer court events 300 to 500 fewer jury trials and 6 to 9-week reductions in the average time to complete a jury trial. This is a good bill. We think it has got great support right across the House. I commend this bill to the House.DENIS O’ROURKE (NZ First): New Zealand First supports the Criminal Procedure Legislation Bill. I would like to begin by congratulating the Associate Minister of Justice Chester Borrows on a good piece of legislation. I would like to congratulate the Justice and Electoral Committee on its work which it carried out in a constructive and non-political way. I would particularly like to congratulate the LawSociety and thank it for the quality of its contribution. It is fair to say that this piece of legislation would not be what it is without its input.The nature of the amendments this bill makes to various Acts is largely technical as others have said arising from the passing of the Criminal Procedure Act 2011. Although technical only in nature they are still important and necessary amendments to keep the criminal law and procedure up to date. Failure to do so of course may result in some very unfortunate results.The amendments fall into four categories. The first is a number of cross-referencing and other minor technical fixes which form the bulk of the bill and are pretty straightforward in nature requiring no debate here. Secondly there are amendments to ensure that the procedures and processes under the Criminal Procedure Act 2011 can be fully implemented to operate as intended and these are also straightforward.The most important amendments are those with references to crime in several statutes due to the repeal of the definition of “crime” in the Crimes Act 1961. An example of those is clause 4 which amends section 5 of the Criminal Procedure Act 2011 and concerns interpretation. The amendment adds a definition of “imprisonable offence” and clause 32 amends section 11 of the Misuse of Drugs Act 1975 which concerns the theft of controlled drugs. The amendments replace “crime” with “offence”.Clause 34 amends section 28 of the Summary Offences Act 1981 which concerns being found in a public place preparing to commit a crime. The amendments replace “crime” with “imprisonable offence”. Those are some examples of many amendments of that kind—simple in nature but very necessary and very important. So those are all measures that we can all easily support. They are good housekeeping amendments. Definitions in criminal legislation are of course of very high importance.Another amendment gives community magistrates jurisdiction to receive guilty pleas for certain category 2 offences being offences in respect of which community magistrates have sentencing jurisdiction. The opportunity is also taken to clarify with greater specificity other aspects of community magistrates’ jurisdiction. These also are sensible and necessary amendments which will improve aspects of criminal procedure.The Justice and Electoral Committee—mainly as a result of the input of the Law Society—recommended the deletion of clause 15(3)(h) of the Criminal Procedure Legislation Bill as introduced which contained a “Henry VIII” clause under which there would have been a regulatory power for the Minister of Justice to change the definition of “crime” effectively amending legislation. Indeed Henry VIII would have been proud of such a power and no doubt would have used it to the hilt. New Zealand First supports of course the deletion of this clause which was unnecessary and improper.The bill makes many such sensible amendments all of which are really just good housekeeping. New Zealand First will therefore vote for the bill which as I have already noted is largely technical in nature. It makes some simple and technical changes in relation to the good operation of the Criminal Procedure Act 2011.Hon KATE WILKINSON (National—Waimakariri): I rise to take a very short call in support of the second reading of the Criminal Procedure Legislation Bill. This bill is another step in our commitment to a more effective and efficient justice system. It has been described several times as “minor and technical”. I would have to say as a previous lawyer that when those words are used it actually leads to more scrutiny and invites more attention rather than less. Having said that it is somewhat minor and technical but it is important.The most debated provision was in relation to the “Henry VIII” regulation-making clause. The Law Society made a very compelling argument. My colleague the Hon Lianne Dalziel has in her earlier speech well traversed the ramifications of “Henry VIII”clauses. I do not need to add any more to the debate than that. I merely say this is a good bill. It should be passed. I am pleased that it has got bipartisan apolitical support across the House and I support the bill.Hon PHIL GOFF (Labour—Mt Roskill): It was interesting—just to pick up on a comment made by the last speaker the Hon Kate Wilkinson—to hear about the Government welcoming bipartisan support. I think it is good when the House can come together and overwhelmingly support a piece of legislation that people acknowledge will improve the functioning of the justice system. Indeed the Law Society in its submissions on this bill the Criminal Procedure Legislation Bill made the point that in regard to criminal legislation you should try to take the politicising of it out and actually work to have a coherent policy that will serve the interests of New Zealanders of victims and of all of those who appear in the court system.I would hope that the Hon Kate Wilkinson and the National caucus as a whole actually take those principles and apply them more generally to the legislation in the House. Last night we spent hours debating legislation—when no member of the National Government got to their feet to debate it—that was rammed through under urgency. No attempt was made to build consensus. There was an absolute politicisation of the process. And then the Government wondered why it got powerful Government security legislation rammed through the House with the barest of margins—the barest of margins.So I say to Kate Wilkinson: take the principles that you have just stated now and apply them to what you are generally doing across the House and then you would get better legislation. You would have proper process and you would have good legislation. What the National Government showed last night was that it was not interested in process and was not interested in good legislation. It was not interested in protecting human rights against the most intrusive powers that the State can operate. Contrast that with this legislation. Suddenly peace and harmony Chester Borrows have broken out across the House. There is good reason for that. I agree with what Chester Borrows said in the House last night. These are the most important changes to the criminal procedure legislation in 50 years—in a couple of generations.We need to look at the process to understand why this legislation will be good. It began under Labour actually in 2007. The way we went about this—and I was Minister of Justice just prior to that—was that we got the Ministry of Justice to do the work together with the Law Commission. They spent thousands of hours in working out how we could get fundamental reform to deal with some of the issues that confronted the justice system. So the process was not rushed it was not rammed through and it was not designed to be a distraction from the embarrassment of the Government in another area like the Government Communications Security Bureau and Related Legislation Amendment Bill was last night. It was proper process. The homework was done and the groundwork was laid.Then we got the legislation. The primary legislation for this bill was 526 pages long. It was an enormous piece of legislation and what it tried to do was address some of the critical issues that were facing the procedures in the criminal justice system. There were excessive costs and there were excessive time delays. You had a legislation process or a framework that was outdated and you had excessive complexity involved in it. In fact the Law Commission described the court system as an impenetrable maze for lawyers. Lawyers might like that because it creates work for them but actually when they think of the public interest they do not like that. You have got to think about serving society about serving victims and about protecting the interests of defendants in the right way. We were getting huge delays in the court system and justice delayed is justice denied. We have heard that many times over and it is absolutely correct.So the legislation that came in aimed basically at addressing these critical problems: excessive costs excessive delay excessive complexity and an outdated legislative framework. There was cross-party support for that broad reform but then the Government decided it wanted to put in a number of more contentious things. That included lifting the threshold for jury trials so you would not be eligible for a jury trial unless your maximum jail sentence was in excess of 3 years. It required the defence to identify and disclose issues under dispute before trial and that clearly would have worked against the interests of the defendant and would have been unfair. There was the allowance of courts to actually try a defendant in the defendant’s absence. That was an absolute turn-round on fundamental rights in the justice system that go back hundreds of years. There was the attempt to load compliance costs on to those involved in the process and there was the attempt to remove the right to silence.I want to give credit to a past National Minister of Justice Simon Power. Actually even though he put this in the original criminal procedures legislation when the submissions were heard before the select committee when the evidence was given and when Labour the Greens and other parties highlighted the inadequacies of this he listened and made changes—he listened and he made changes. There was proper process. The select committee worked. That is what democracy was about. That is why last night in this House we fought tooth and nail against the abridging of that process and the truncating of the opportunities for people to make submissions.If you want to get legislation right this legislation demonstrates absolutely clearly the importance of the select committee process. And we have just heard National members on this technical piece of legislation to bring the criminal procedures legislation into effect saying how important those submissions were. Today they say how important it is for the public to be able to make submissions. Last night they voted in the House to abridge the right of New Zealanders to have their voices heard on perhaps the most intrusive powers a Government has ever given itself to interfere in the privacy of individuals and to direct companies. I say those are double standards. We cannot say: “This legislation is good. Isn’t it great? We’ve got consensus good process good outcome.” and then do the opposite.When is this slow-to-learn Government ever going to pick up the message that if you want legislation that serves New Zealand properly then you do the proper process? You consult before you bring in contentious legislation. You try to embrace the Opposition and say that this is what you are trying to do. Before you tell telecommunications companies what to do in every aspect of their jobs talk to them first—talk to them first. We saw in the corrections amendment legislation which some of my colleagues from the opposite side of the House were on the committee for that the Government in that case did not talk to the telecommunications companies first. It got it absolutely wrong. It had to do a total U-turn. But did it learn that lesson? No it did not learn that lesson.The appalling thing about today is that this bill before us today highlights every rort every inadequacy every breach of process every attempt to truncate the ability of New Zealanders to have their voice heard and people to be properly consulted that occurred last night. When is this National Government going to learn? When are those backbenchers with their heads down now actually going to stop being lobby-fodder and challenge in their caucus the ridiculous decisions being made by their Ministers including the Prime Minister? People elected the Government members to the House to actually have their voice heard not to stand up on highly contentious legislation mumble some inane comment and sit down. That is not the job of the Government backbenchers and well you should hang your heads in shame at the behaviour of the National Party caucus and its acolytes last night in the House.This piece of legislation is actually a good piece of legislation. It supports a piece of legislation that had bipartisan support that went through proper process and we are celebrating that now. So for heaven’s sake if this is good and this was good process and this worked in the interests of New Zealanders apply those same principles across everything that the Government is trying to do including some of the obnoxious pieces of legislation that were compelled through the House last night by the narrowest of majorities. All that means is that actually we will be back in 18 months under a new Government to repeal that legislation. This legislation today is an example of how you should have done it and that is why Labour is supporting it.Dr JACKIE BLUE (National): I am pleased to speak to the second reading of the Criminal Procedure Legislation Bill. As has been noted this bill is largely technical and contains non-controversial amendments to ensure that the intent of the Criminal Procedure Act 2011 is clear and can be applied as it was intended.This bill has the support of the House. It is a good bill with very sensible amendments. It is another step in National’s commitment to make the justice system more responsive. I commend this bill to the House. Thank you.Mr DEPUTY SPEAKER: This will be a split call. Kris Faafoi 5 minutes.KRIS FAAFOI (Labour—Mana): Before I hand out a few brickbats let me hand out a few bouquets: first of all to the Justice and Electoral Committee; to Scott Simpson who is the chair; to Jackie Blue; to my colleagues Andrew Little and the Hon Lianne Dalziel; and to those who submitted to the Justice and Electoral Committee on this bill the Criminal Procedure Legislation Bill.As Phil Goff said we have got a bill in front of us at the moment at the second reading that has been amended. It is a good bill and it is a perfect example of how the process works when good legislation goes through this House. It has cross-party support as the Hon Kate Wilkinson said. There has been a lot of consultation with Opposition parties to make sure that this very important piece of legislation will go through the House and have the wide support of this Parliament because it is a very very important piece of legislation in terms of our criminal procedures. We can contrast that as the Hon Phil Goff said with the pieces of legislation that we had before this around the Government Communications Security Bureau and the interception of telecommunications where the process has been an absolute farce and an absolute shambles.Those two pieces of legislation are very important in terms of oversight of our intelligence committees. You really do have to look at the way that the Government has put this piece of legislation through—in what I think was a very good manner and we have got a very good piece of legislation before us—and what happened before this piece of legislation in terms of those two bills the Government Communications Security Bureau and Related Legislation Amendment Bill and the Telecommunications (Interception Capability and Security) Bill.We have also got the situation where last night we were debating the truncation of the select committee consideration of one of those pieces of legislation; again taking away the ability for the scrutiny that is absolutely needed when we are talking about the surveillance of New Zealanders’ telecommunications. Again this is in complete contrast to the process in the select committee with this bill the Criminal Procedure Legislation Bill.I understand there were only two submitters to this bill the major one being the New Zealand Law Society. You have to contrast the ability of people who are aware of the situation in this criminal procedures legislation with the Law Society coming in and making a fulsome submission to the select committee. That select committee went awayand listened to that submission and made the appropriate changes in the appropriate length of time.But in the previous legislation that I was talking about here we have a truncated select committee period for a piece of legislation that goes to the heart of democracy and also the oversight of our security intelligence agencies. As the Hon Phil Goff has said you can hardly make sense of the contrast between the process with the Criminal Procedure Legislation Bill and with the legislation that this Government put through this House yesterday in terms of the changes that it is making to our intelligence agencies.As has been said before this is a bill that makes technical amendments to I think it is the Criminal Procedure Act which was put through this House in 2011. It has come out of work that was started by the Labour Government in 2007. I do want to just reiterate the words that the Hon Kate Wilkinson said—that although they may be technical amendments they are very important amendments that make sure that the Criminal Procedure Act actually works for those people who are going through the court system because there are some serious issues around delays in our court system the increasing costs of getting justice in our court system and also the complexity of the court system for those who are going through it and that is for victims as well as defendants.It is absolutely fundamentally correct that we should put through this legislation to ensure that the quality of justice that those victims and those defendants are getting in our justice system is as good as it can be. As I did say there was one major submission to the select committee by the New Zealand Law Society and that was basically around some concerns around the “Henry VIII” clause which has been well traversed around the definition of crime and the ability to change the definition of crime by regulation.I just wanted to congratulate the Justice and Electoral Committee on taking that on board and making sure that that part of this bill was removed because as I say this is a case where a select committee has listened and has acted and the process was good. But I reiterate that in other bills that are before this House on this day of urgency that has not been the case.JAN LOGIE (Green): I am happy to take a call in the second reading debate on the Criminal Procedure Legislation Bill. As has been mentioned by everyone before this bill is housekeeping and it is good housekeeping and that is an important thing. It is an indication for us—and I think this has been said before—that we can talk about housekeeping as if it is a very simple thing that is not very important but actually if we do not do the housekeeping properly terrible things can happen. That is why it has been good to see this bill go through this process—some potentially awful consequences have been avoided.We have had the submission the one substantive submission from the Law Society which has enabled us to avoid the Government being able to define crime through regulation. I am sure all New Zealanders will be very thankful for that in the future. I wish all bills in this House had the same scrutiny and when things appear very simple or very urgent or very important to this Government I hope it will remember that this bill which looked so simple so technical and was just a piece of housekeeping actually held within it a small clause that could have had terrible consequences.Without that proper scrutiny this bill would have just passed and we would have had those terrible consequences in place. So I am very pleased to be able to commend this bill to the House with the good housekeeping having being done. Thank you.MELISSA LEE (National): It is a great pleasure to rise to take a very short call to add my support for this bill the Criminal Procedure Legislation Bill at its second reading. The problem with the current criminal procedures over the past 20 years couldpossibly be summarised as being that we have had excessive delay complexity an outdated legislative framework and excessive costs. A lot of members have traversed these matters over the time of the debate of this bill. National believes—and many other members have actually mentioned this—that justice delayed is indeed justice denied. This bill will ensure that timely justice is delivered for victims witnesses defendants and the community. That can only be good.The system is clogged and needs to be fixed. These amendments will reduce delay in the District Courts and free up judge time. We expect shorter trials fewer adjournments and less delay overall. As someone who has actually been a victim who had to turn up to court to face the offenders in a court trial and who knows the frustrations and the stress that happen every time a court case has been delayed I am very pleased that this is actually happening because it can only reduce the stress for the victims. I commend this bill to the House.Bill read a second time.In CommitteePart 1 Amendments to Criminal Procedure Act 2011The CHAIRPERSON (H V Ross Robertson): Mōrena. Kia ora tātou. Nō reira e te Whare e ngā iwi e ngā reo e ngā hau e whā tēnā koutou tēnā koutou tēnā koutou katoa. Good morning honourable members. The debate is on clauses 3 to 17 and schedule 1.ANDREW LITTLE (Labour): As we indicated in the second reading just a short while ago Labour supports this bill the Criminal Procedure Legislation Bill. This bill makes some very important and very necessary tidying-ups to a very substantial piece of legislation which has worked its way through this House in a very deliberate very careful very considered sort of way.This will be the biggest set of changes to our criminal justice system to our criminal procedures in many many years. It is always important when we are considering big change particularly to an area as important as the administration of criminal justice that we get it right and that we take our time to do so. That as my colleagues have pointed out in their second reading speeches contrasts with the approach taken to some other legislation by this Government but on this occasion the Government and the Minister in charge the Minister for Courts are doing the right thing and have actually in the process of this particular bill taken time to consider to listen to and to accede to the points made by not only members on this side of the House but those who have submitted on the bill.In this part of the bill there are a number of parts that I think are very important. It highlights how when the House is considering large pieces of legislation and significant legislation even what might seem to be reasonably trivial aspects of the legislation when it is passing through the House in its stages can be overlooked in its first phase. But it is good that there is time to correct the mistakes that have been made.I want to acknowledge particularly in relation to clause 14A—and this was a change made as a result of the Justice and Electoral Committee’s consideration of the bill—the power of the judge or the registrar to waive certain fees imposed by the court particularly in relation to access to documents and also the provision in clause 14B for the arrangements and provisions for access to court documents. These are very important. These are very important not just for those in the course of a trial or the set-up of a trial—but actually often what happens is an aggrieved defendant considers they have not been dealt with properly is not sure whether it is appropriate for an appeal and wants to consider the matter and to get timely access to documents without theobstruction of the risk of fees and charges. With this change they can get access to them. It is good to see that that change has been made.Then of course there is the important provision in this part clause 15 dealing with the “Henry VIII” clause that was in the original legislation. That is now gone and this Committee is rightly saying that changes to other legislation particularly with reference to a term like crime should properly have the scrutiny and consideration of this House and its proper law-making function and that appears in here. So we welcome these changes.We welcome this bill. This is a good piece of legislation and it has been properly and well considered by the House. We only hope that the example given by this bill might be replicated in other pieces of legislation that are being promoted and pushed through this House by this Government. This stands as a benchmark to be observed and considered in other legislation. It is good that we are able to do that on this occasion even if it is in urgency and even if it is buttered up to more insidious legislation—legislation that poses greater risk to the liberty of the individual and citizens than perhaps posed by the Criminal Procedure Legislation Bill. The Government and the Minister in charge of the bill are to be acknowledged. They are entitled to have the credit of having managed this piece of legislation and this bill properly to the point that we are now finalising these aspects so that by 1 July we will have a good quality criminal justice system and legislation which ought to pave the way to reduce delays and provide people with the sort of fairness and procedural fairness that we expect to have in our system.I referred in my speech last night to the Rule of Law Index. New Zealand ranks seventh out of 97 countries that it presently measures for the principle of the rule of law. This legislation keeps us there. Let us not compromise our standing in the international community by rushed pieces of legislation that compromise the rights and liberties of our citizens.Hon PHIL GOFF (Labour—Mt Roskill): I want to begin by congratulating the Minister in the chair the Associate Minister of Justice because I think this is a good piece of legislation the Criminal Procedure Legislation Bill. We intend to facilitate this legislation and Part 1 of the bill through the Committee because by so doing in the technical amendments that it is making the improvements and the picking-up on one or two things that were wrong with the original bill we will bring into effect the Criminal Procedure Legislation Act in July of this year. That Act will be of considerable assistance to New Zealand. It is designed to reduce excessive cost excessive delay and excessive complexity. It will bring in a modern and fit for purpose framework for criminal procedures.All of those things are important and I am particularly keen on the legislation going through because its origins came in at the time that I was legislation Minister and then my successors when we set up the Law Commission to work with the Ministry of Justice. I want to commend officials in both groups because they worked incredibly hard and I think by and large they got it right. Where the Government did not get it right the Government actually listened and made changes that enabled this legislation and this part of the bill to really attract consensus support.I just want to quote what the Law Society said about that. It argued that cross-party agreement was needed on criminal justice instead of politicising issues that require coherent policy. I think in this part of the bill we have got coherent policy. But the tradition of the Committee stage is that we ask questions of the Minister in the chair. I would not want the Minister to feel that he simply had to just sit there and rubber-stamp everything that happens so I have a number of questions for the Minister.The first question Minister is whether it was helpful that the groundwork for this bill was properly laid by proper process by thorough analysis and by careful consultation. Long before the original and primary piece of legislation the Criminal Procedure Act was brought in the homework was done. I think by and large people got it right and this was not a politicised piece of legislation designed simply to appeal and to win some popular support even though cynically the Minister or the Government knew that that was not going to make any change. So the first question was how important it was Minister that the groundwork was laid the research was done the analysis was clear and the consultation was had.I think Minister you will understand why I am asking that question. It is because I cannot help but contrast the way that this piece of legislation and its primary legislation has been done with the legislation rammed through by the narrowest of margins under urgency in the dead of the night last night. So I guess I am asking you Minister whether there are lessons to be learnt from this legislation that you would want to see your colleagues apply to the legislation that went through last night the legislation on the Government Communications Security Bureau and the telecommunications security bill.The second question I would like to ask the Minister—and I will just pause because the Minister is occupied at the moment. I do want him to answer these questions because they are important questions. Minister what consultation was done with key groups affected by this legislation before it was brought into Parliament? I assume Minister that this was not legislation done in ignorance of the views and the expertise and the attitudes of those who were going to be intimately affected by it. I presume that consultation with groups like the New Zealand Law Society and the Criminal Bar Association the judges and so on was done very thoroughly so that when you introduced this legislation you knew the realities on the ground—well the Chairman probably knew too because he is a very well-informed Chairman but I am referring to the Minister in this case Mr Chairman. The Minister knew that if legislation is to be good legislation then he would have to talk to the people who are most intimately affected by it and involved in it so I imagine that all of those consultations took place.Of course if the Minister did that in this bill can the Minister explain why his colleagues failed to do it in the legislation we had last night affecting telecommunications companies where they were not consulted and we do not know whether that legislation will even work? I ask this question drawing on the Minister’s experience on this bill because he is also the Minister of Corrections I think—no he is not. But he is—Dr Rajen Prasad: Shame. He should be.Hon PHIL GOFF: He should be. Who is the Minister of Corrections?Andrew Little: Anne Tolley.Hon PHIL GOFF: Anne Tolley—oh I thought she was still the Minister of Education. Judging from the utter chaos that is going on in the education area I thought she was still the Minister there. But I ask the Minister whether he is also aware of the Corrections Amendment Act which also affected telecommunications companies where consultation was not done and the Government had to do a total U-turn.So what I am really asking the Minister is whether he will use his knowledge and his reasonableness to talk to his colleagues and say: “Learn from this legislation and for heaven’s sake if we want to build coherent policy and consensus support for it and we want something that will work you’ve got to do it the right way.” I fear Minister that everything that you have done in this bill and all of the lessons that you have learnt in this bill have not been taken on board at all by your colleagues including your leader because if they were listening to this debate now and they were seeing that theOpposition was working cooperatively and constructively with the Government they would say that this is a good model in a democracy that this is how democracy should work.”So my next question is whether there was a full and proper select committee process or did the Minister decide to truncate it to try to ram the legislation through and make it as difficult as possible for experts and for members of the public to have their say on legislation which is a critical part of the democratic process. From recollection I recall that there was a full period for submissions that people were listened to with respect that the timing was designed to ensure the best possible outcome from the legislation and I commend you Minister for doing that. But I have to ask again why it is that for legislation that is critically intrusive in the privacy of New Zealanders and can open things up for the abuse of power the Government did not allow for that normal process of consultation last night when we moved the motion on the Government Communications Security Bureau legislation.What I am asking the Minister really is whether he will use his experience and his expertise and his proven ability to win the support of all of the groups that will be affected by it and all of the parties in Parliament to persuade his colleagues that they got it so hopelessly and dramatically wrong last night. My question to the Minister is whether he will pass on what his experience has been. My question is whether he will tell the Committee now that the process that he has followed has worked for good legislation has worked for the interests of the country and that this should be the model for all legislation that the Government brings through—in particular for highly controversial legislation where enormous powers are given to largely unaccountable agencies which can have huge implications for the privacy of New Zealanders and in the ultimate the establishment of a State that has powers over its citizens that contradict democratic processes and principles.Again to the Minister congratulations on this specific piece of legislation and listening to what the Law Society said about the need not to have “Henry VIII” clause powers so that you should not have the executive moving by regulations things that are substantive parts of the legislation. The Minister in this case listened to the Law Society and he made those changes. So not only in the primary legislation but also in this largely technical legislation we have seen exhibited time and again the benefits in a democratic society of getting legislation right of being fully consultative with groups and with political parties to listening to submissions—because officials are human; they do not get everything right all of the time. So we have got improvements even in this technical piece of legislation that will make the passage of this legislation easy and most important will make the outcome for New Zealand a good outcome in having legislation that will not be back before the House and will not be repealed by the new Government that will come in in 2014.KRIS FAAFOI (Labour—Mana): Taloha ni Mr Chairperson. Thank you very much for the opportunity to speak to Part 1 of the Criminal Procedure Legislation Bill. I just want to begin where the Hon Phil Goff left off because the Minister in the chair the Hon Chester Borrows is someone who is a very good Minister and someone whom this side of the Chamber respects. I would like to just carry on what Mr Goff said and praise Chester Borrows for the way in which he has tackled this Criminal Procedure Legislation Bill because it has been absolutely textbook—absolutely textbook. You could not do it any better. If I were the Hon Judith Collins and the Hon Amy Adams I would be making an appointment with the Hon Chester Borrows just to discuss how the process should work in this New Zealand parliamentary democracy because the Hon Chester Borrows has done this textbook. He has gone out and he has assessed the situation he has consulted and he has put before this House a very good piece oflegislation. That went through the select committee scrutiny stage people submitted and gave their concerns he listened the select committee amended the legislation and that has been supported by the Minister and now this legislation is before the Committee being debated.As you have seen this is in contrast to the two previous pieces of legislation that were immediately before this Criminal Procedure Legislation Bill. An outbreak of aroha has happened because of the way that this process has been put through this House. If you were watching the House roughly 15 hours ago you would have seen absolutely robust debate in fierce opposition to the legislation that was going through this House. But now because of the way that the Hon Chester Borrows has shepherded this legislation through this House in a textbook manner with cross-party coordination and consultation to make sure that this piece of legislation is fit for purpose you are seeing that this piece of legislation has very wide support. I did want to just commend the Minister in the chair for the way he has done this because I think that at least two of his colleagues—at least two of his colleagues—could certainly learn from the way he has shepherded this piece of legislation through the House.I did want to point to a section of the Criminal Procedure Legislation Bill that I think will seriously address the issues that the bill sets out to address and I think Mr Goff pointed out those issues and that is the seriously excessive costs of the criminal procedure system the complexity of the criminal procedure system and also the serious delays that are happening within our court system at the moment. The Justice and Electoral Committee has inserted new clause 14A I believe which allows a judge or registrar to waive certain fees if they are satisfied that someone is unable to or should not be required to pay those fees. I think that is certainly something that will help in the process of equality of justice to help get those people where costs may be a hindrance to them getting a fair trial through the justice system through the criminal procedure system much much more easily. So I did want to commend the Justice and Electoral Committee for that change.Again it is one of those changes that have been made with cross-party support and again I did want to commend the Minister in the chair and the chair of the select committee Scott Simpson who is someone who should also get some praise for the way that this process has worked. Look at the way that has happened in that select committee process and the contrast of that in terms of what we are going to see through a truncated select committee process for the two pieces of intelligence legislation that are going through the House at the moment. There is also new clause 14B which is going to make it much easier for people to access court documents. I think that goes to the heart of addressing the issue of the complexity of the criminal procedure system where a lot of people who are going through that system were finding it very difficult to manoeuvre their way around the complexity of the system.Just before I finish I just want to reiterate again and congratulate the Hon Chester Borrows on this textbook manner in which he has done it. There has been assessment the drafting of appropriate legislation and the select committee has gone out and listened and made the appropriate amendments and we believe that the Hon Amy Adams and the Hon Judith Collins should take heed of the process that has been put in place here with the Hon Chester Borrows and look for some time in his diary.Part 1 agreed to.Part 2 Amendments to other enactmentsThe CHAIRPERSON (H V Ross Robertson): The question now is that Part 2 which is debate on clauses 18 through to 34 and schedule 2 be agreed to.DENIS O’ROURKE (NZ First): I did want to make some brief comments about Part 2 in particular on clause 21 but before doing so I would like to say this. There was I think quite recently really a television advertisement for Mainland cheese. Of course the best cheese does come from the Mainland and this company produced it. The theme in their advertisement was “Good things take time.” and indeed their product was a superb product and still is and it did take time. They were very memorable advertisements and what they said most people believed to be true.In the case of this particular legislation it has taken time it has matured properly it has been considered properly and we have got a good product. So good things take time—this took time and we get a good piece of legislation out of it especially with regard to the input of the Law Society and indeed the other submitters to the Justice and Electoral Committee. I would like to reiterate also what many others have said that it is a shame that with the previous legislation we debated—the Government Communications Security Bureau and Related Legislation Amendment Bill—we are not seeing that. We are not seeing the Government take time. We are not seeing the electorate having the time to make a good and considered submission on that legislation as it has on this. So that is a matter of considerable regret. We can easily agree to legislation of this kind which has been well considered and of course it cannot be expected that any of the Opposition parties would be prepared to support the sort of process we saw yesterday with the Government Communications Security Bureau and Related Legislation Amendment Bill.However I did particularly want to mention one clause in Part 2. The reason I do so is because in the first reading I questioned clause 21 which amends section 8 and that concerns “Jurisdiction in respect of crimes on ships or aircraft beyond New Zealand”. This provision would replace section 8(2) with two new provisions. The first providing that “If a person does or omits to do any act to which this section applies and that act or omission would if it occurred within New Zealand be an offence … punishable by imprisonment for life or by 2 or more years’ imprisonment then … the person is liable on conviction as if the act or omission had occurred in New Zealand.” That is fine. The second however provides that “If any proceedings are taken by virtue of the jurisdiction conferred by this section it is a defence to prove that the act or omission would not have been an offence under the law of the country of which the person charged was a national or citizen at the time of the act or omission if it had occurred in that country.” So that means that a New Zealand citizen would potentially be treated quite differently from the national or citizen of another country for the same offence in the same circumstances.I questioned at the select committee stage whether that was appropriate and it did receive proper consideration. The officials were able to satisfy me that this was not really a change at all that it was and has been for some time a provision in New Zealand law and would be consistent with the legal systems of other countries and that it would be unwise not to have such a provision in our own statute.I just wanted to mention that as I said at the beginning these sorts of provisions need to be scrutinised. We need to get them right we need to understand indeed what we are doing and make sure that they are correct and proper provisions. So as I said good things do take time. We have scrutinised that provision along with the others. We have satisfied ourselves that it is the right law and therefore it deserves support. I just thought I would place on record having raised my concern at the first reading that that concern has now been allayed and I am satisfied that this provision is good and proper and should be passed.ANDREW LITTLE (Labour): I want to take just a brief call on this point. I appreciate that this part of the Criminal Procedure Legislation Bill deals with a gallimaufry of changes to a range of legislation.Hon Member: That’s unparliamentary!ANDREW LITTLE: The last time I used that word the Hansard transcribers got it absolutely correct so good on them. You will have to look in your dictionary. You can download dictionary apps on your iPhone very easily these days so there should be no excuse. It simply means a diverse range of things—a gallimaufry. A bit like this House—we are a gallimaufry Parliament. Some have described us in other terms but—Hon Phil Goff: Does that extend to Aaron Gilmore?ANDREW LITTLE: We are one less gallimaufry down.To go back to the point I was making before I was distracted by my colleagues this part of the bill deals with a diverse range of changes to other legislation. If I could put it in simple terms this is again part of the perfecting and refining of our criminal justice procedures. That is good and that is welcome. I note for example that clause 27C deals with witness anonymity. If there is to be a trial involving a witness that is the subject of an anonymity order then that trial is to be held at the High Court. That is entirely appropriate. It properly deals with the gravity of that situation.I said in a contribution yesterday on this bill that—and I know from talking to many lawyers—many members of the criminal bar are welcoming these changes. There is a sense of trepidation of course that goes with it but they think that this is a coherent set of measures.There is one set of lawyers who are not so welcoming of it and they are the ones who are having to travel further distances to court for their court matters and their trials because of the number of courts that have been closed down. In small courts in rural and provincial areas in what were once upon a time places where the local legal fraternity knew that there were sitting days and there were days when they could conduct their court matters—including in most of the cases affected District Court trials—that cannot now happen. Those lawyers and their clients are having to travel further distances as indeed are the witnesses including the police witnesses. So I simply make that point.It is good that we get our criminal procedures right but we need also to make sure that the fora the courts and the places where we conduct arguably one of the most important functions of our justice system—that is the administration of our penal code—are accessible to people and that people do not in addition to having to either defend themselves against accusations or if they choose to plead guilty put themselves before the mercy of the court have that compounded by the fact that the court now might be some considerable distance away. The Minister in the chair the Minister of Courts is entitled to significant bouquets for the way that he has handled this legislation but there are some brickbats concealed in those bunches of roses because of the fact that there will be some people who will find it more difficult to get access to courts to avail themselves of the procedures that we are correcting improving and brushing up on in this legislation.On that note I once again reiterate that we are supportive of the bill and of this legislation and of anything that will make access to and the administration of our criminal justice system easier.Part 2 agreed to.Schedule 1The question was put that the following amendment in the name of the Hon Chester Borrows to schedule 1 be agreed to:delete the item relating to section 191.Amendment agreed to.Schedule 1 as amended agreed to.Schedule 2agreed to.Clause 1agreed to.Clause 2agreed to.The Committee divided the bill into the Criminal Procedure Amendment Bill the Auctioneers Amendment Bill the Crimes Amendment Bill (No 2) the Criminal Disclosure Amendment Bill the Evidence Amendment Bill the Juries Amendment Bill the Misuse of Drugs Amendment Bill the Sentencing Amendment Bill and the Summary Offences Amendment Billpursuant to Supplementary Order Paper 233.Bill reported with amendment.Report adopted.Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment BillSecond ReadingHon CHESTER BORROWS (Associate Minister of Justice)on behalf of theMinister of Justice: I moveThat the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill be now read a second time. Let me first extend my thanks to the Justice and Electoral Committee for its work on this bill. The committee received seven submissions on the bill and has recommended that it proceed without amendment.The Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill makes three main changes to the Prisoners’ and Victims’ Claims Act 2005. First it repeals the sunset clauses in the Act so that the Act will no longer effectively expire. Second it makes a small change in the civil limitation periods for victim claims for their benefit. Third it clarifies that the Act applies to unlawful detention claims. The Prisoners’ and Victims’ Claims Act 2005 provides for awards of financial compensation to be made to prisoners only in extraordinary circumstances where no other remedy is deemed appropriate. Prisoners are also required to make use of the existing complaint mechanisms that are available to them before they seek compensation through the courts. If financial compensation is awarded to a prisoner or if a settlement agreement is entered into the Act requires that deductions are made to pay any legal aid debt in relation to the claim any outstanding reparation and any earlier orders in favour of victims. The Act then allows victims of the prisoners to claim against the money through a simplified victims’ claims process.Without this bill the Act would effectively expire. The statutory guidelines and restrictions on awarding compensation and deductions and the simplified victims’ claims process would no longer apply to prisoners’ claims lodged from 1 July 2013.The bill will ensure that the judiciary has clear guidance on the circumstances in which Parliament intends that compensation should be available to prisoners. This will avoid any potential inconsistency. The bill will also ensure that victims continue to have first claim against any such compensation awards to prisoners.The Act responded to community concerns that offenders should not receive financial compensation for wrongful treatment without first having to redress the harm that they themselves have caused to victims. The simplified victims’ claims process does not create any new rights for victims to bring claims. The victims always have the option of bringing a civil claim against their offenders. However the victims’ claims process provides an easy and cost-effective way for them to do so in circumstances where the prisoner has the means to pay at least some of the damages due to the victim and while the Crown has control of that money. The bill also ensures that victims will not be disadvantaged by any administrative delays that stop the clock on the civil limitation period for victims’ claims while the Ministry of Justice assesses the level of deductions to be made such as for legal aid payments and where necessary resolves disputes about these amounts.Finally the bill includes a clarification for the avoidance of doubt that the Act applies to prisoners’ claims of unlawful detention. These claims arise from time to time generally when a prisoner is held beyond their statutory release date due to an administrative error. It always has been the intent and practice that unlawful detention claims like other breaches of prisoners’ rights be subject to the Act. The best way to prevent compensation payments is to ensure that abuse does not occur. Prison mistreatment will not and should not be tolerated.I would like to reiterate that the Government has great confidence in the ongoing integrity and professionalism of corrections staff working in New Zealand prisons. However if breaches do occur it is important that we have a fair and appropriate regime that balances the rights of prisoners and their victims. This bill provides for the continuation of that regime. I commend the bill to the House.ANDREW LITTLE (Labour): I appreciate the opportunity to speak on the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. This legislation had its genesis in the previous Labour Government. It was a response to a very precise very confined situation where a group of prisoners because of the way they had been treated by the prison system made a claim under the New Zealand Bill of Rights Act under the precedent case—theBaigent case—and as a consequence of that were awarded damages. These were criminals who had committed crimes of a very serious nature and they were criminals whose victims would not at the time of the trial and conviction of those prisoners have ever thought that there was any value in pursuing a civil claim against those prisoners. They had no claim for personal injury but they might have had a claim for exemplary damages for their conduct.That has always been the nature of our criminal justice system and the victims of it. But that was a different situation where prisoners had won significant damages as a consequence of what had happened to them while they were incarcerated. It was simply repugnant to the community’s notion of justice that people who had inflicted considerable harm and injury on other citizens should because of the circumstances of their incarceration achieve a windfall gain whereas their victims got nothing apart from their entitlements from the accident compensation scheme and any other State-funded assistance they got. So it was absolutely correct for the Government of the day to pass legislation to correct that obvious injustice.None of that is to say—as I think the Associate Minister of Justice said in his opening speech—that we do not strive to ensure that our corrections system our system of incarceration is one that does not lead to abuse of those who are being incarcerated those who are in the Crown’s custody serving out a punishment. We must do that but it would be wrong for those who are harmed by the Crown in the course of being penalised by the Crown to then gain a windfall when citizens who are the victims of those who gained that windfall should have no claim at all. I have no personal difficultywith a regime that provides a greater sense of justice for victims and a signal to all other citizens that the person who has caused a victim harm damage or death should not be the beneficiary of some greater claim in the future.So this law was very important and it was very important that it should spell out that the courts require that in the event of a future claim by prisoners who are claiming abuse in the prison system they should exhaust other sources of remedy. They should go to the Ombudsman or they should go to the system within the Department of Corrections and utilise those forums before they seek redress in the courts. It is also right that we should ensure that we have an effective mechanism to ensure that any abuse of power in prisons is properly redressed. If there are concerns about the existing regime that we have then let us hear those concerns and let us consider what may need to be done. It is only part of our obligations as an international citizen that we ensure that those who are incarcerated by the State are not subject to abuse and torture.Having said all that—and we will support this legislation—I want to place on record our concerns and the first is that the original legislation was time limited. It was assumed that there would be and it was intended that there would be a review of the sort of regime that would deal with victims’ rights and with what happens to prisoners—but most important with victims’ rights. Indeed in one of the more recent renewals of the legislation of the continuations of it an undertaking was given by the Government of the day—this Government—that there would be a review and that other parties would be consulted on it. I have to say—and it may not be the fault of the Hon Chester Borrows who moved the second reading motion—that the reality is that none of that happened. There has been no consultation with other parties and there has been no review. So we are now stuck with a piece of legislation that was designed to deal with a specific situation a specific injustice perceived by the community which raised issues about the broader justice system but most important raised issues about our system our regime of victims’ rights. That work still remains to be done to ensure that we have a system of victims’ rights that is robust and that respects the various positions and standings of the parties concerned.There are some alternatives. There are some who argue that the provisions in this bill should be extended to any windfall gain that a prisoner gets whether it is a bequest as a result of a family member’s death a win in Lotto—although quite how a prisoner incarcerated at the time could buy Lotto tickets defies explanation to me—or any other windfall gain. I do not go that far but what I do say is that a more progressive and comprehensive system of justice that is looking firmly at victims’ rights might say that there are different ways of approaching it and that redress can be provided to victims once a penal sentence has been served.In most cases in the majority of cases prisoners—those who are doing serious time—will get to a point where they have done their last penal servitude and they get released. Because of a progressively changing corrections system we are now getting people back in the community without recidivism. They do not repeat their crimes. It is not too much to say of those who have caused significant harm and damage to others that they may have an ongoing responsibility through their future earnings to provide support and assistance to those to whom they have caused that harm. I do not think it is beyond the realms of a broader system of justice to look at something along those lines. There may be a trade-off in the length of sentences if indeed somebody having served a sentence goes into paid work and as part of their contribution to the community makes amends for the harm they have done and has a further surcharge on their earnings to make good the damage they have done to their victims. I do not think it is beyond us to do that. That would be fair. It could be considered at the time a judge is considering the sentence. It is a matter that could be followed up and could continue to beadministered by either the corrections system or indeed the Inland Revenue Department—on which we are about to spend $1.5 billion on a computer system that should be able to handle at least that.We support this legislation because it continues its confined approach to a confined problem but it does not answer the real problem which is a broader answer to the need for a comprehensive regime a cohesive regime of victims’ rights in order to compensate those victims who have suffered harm beyond personal injury which is compensated for through our accident compensation scheme and who have suffered other harm and damages as well that ought properly to be compensated for. Leaving in place this system makes that a lottery because the victim can recover compensation only if the perpetrator of the crime or violence against them is somebody who suffers their own violence in prison at the hands of the prison system. That as we know does not happen to every prisoner. It happens to a very small percentage of them—in fact a very small number as was evidenced in the particular case that triggered this legislation theTaunoa case.We do not want a victims’ rights regime that is essentially a lottery system; we need one that is based on coherent and considered thought. Coherent and considered thought has not gone into this legislation. It is simply being rolled over with some clarifying amendments. It does not address the fundamental problem. That was the undertaking given by this Government when it rolled this legislation over the last time. It has not fulfilled that undertaking. Even though this is an open-ended piece of legislation now I prevail upon this Government and the Minister who is in the House to take seriously the wish from all sides of the House to get and have in place a sensible system of victims’ rights in order to put to bed once and for all the repeated claims of injustice being suffered by victims. Notwithstanding all that we will support the bill.SCOTT SIMPSON (National—Coromandel): It is a pleasure to stand and take a brief call in support of this Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill in its second reading. At the outset I would like to acknowledge the support from the previous speaker Andrew Little on behalf of the Labour Party which is going to support this good piece of legislation. Of course the purpose of this bill is to make the restrictions on awards of compensation and the victims’ claims process in the principal Prisoners’ and Victims’ Claims Act 2005 permanent. As Andrew Little said it is—and I am sure he did not mean to make a pun—a confined solution to a confined problem and it is a good solution.Mr Little talked a little about the—I did not mean that. I did not mean that actually; it is early in the morning. Mr Little did say in his presentation that a review should have taken place. Well of course there is not much need for a review when a system and a piece of legislation are working very well. The Government I am very pleased to say is satisfied that this scheme is working well. The scheme represents our commitment to victims and the focus upon victims who are of course participants in our criminal justice system completely as a result of other people’s actions and not their own.This is a Government that I am part of and we are committed to ensuring that victims are supported and the scheme that we are supporting today achieves that endeavour. We make no apology at all for focusing our justice system on the rights of victims. It is right and appropriate that we should do that. As chairman of the Justice and Electoral Committee I was very pleased with the way the committee worked through our deliberations on this bill. The committee received seven submissions and recommended that the bill proceed without amendment. I speak in support of the bill. It is a good bill. I commend it to the House.Hon PHIL GOFF (Labour—Mt Roskill): I rise to take a call on the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. There was an unfortunatecomplacency I think in Mr Simpson’s speech when he said that the scheme was working well and is looking after victims. I beg to differ. I beg to differ from the perspective of one who introduced this legislation in the first place and had it legislated through Parliament.The reason I put a sunset clause in the legislation back in 2005 was that I wanted to review the scheme to see that it was doing much more than just being a stopgap measure against windfall profits arising out of theTaunoa case. I wanted to be sure that victims were properly compensated by those who offended against them horrendously when the criminal offender was in a position to provide that compensation. As it works out the legislation probably had a prohibitive effect in terms of some gold-mining lawyers on behalf of some really hard-core criminals but it has not raised a lot of money for victims. I think it was about $45000 from memory.There seemed to me to be a lot of people—not just the vicious blue-collar criminals who were never compensating their victims but another whole category of criminals. These Mr Simpson are the people the National Party knows better—the rich and the powerful the reckless and the greedy. [Interruption] They are the white-collar criminals—Tau Henare knows exactly whom I am talking about—who rip off people’s life-savings. The member will have as I have in my electorate people who have lost their entire life-savings because of the greed and the recklessness and the criminality of people who might have gone to King’s College who have big houses on Paritai Drive and who have all the privileges in life but are criminals nevertheless.I say that when those rich and powerful and privileged criminals rip off people of their life-savings you cannot just put them in jail for 2 years allow them to protect their savings in family trusts and then let them come out of jail and get on with their high lifestyles while their victims go to their graves penniless because they ripped them off.I say that absolutely nothing in this legislation addresses that class of criminal—absolutely nothing. And yet we have seen in the last 5 years time and again people like Petricevic or whatever his name is—he ripped off people in the 1980s and ripped them off again in the 21st century—who get out of jail after a while and are living the high lifestyle. They stole not bits and pieces out of houses like burglars do; they stole hundreds of millions of dollars. They did not steal because they were underprivileged; they stole because they were greedy—Hon Anne Tolley: What did your Government do while it was happening? Sat there and twiddled their thumbs.Hon PHIL GOFF: —and yet they get away with a situation where they never pay their dues Minister. They never pay their dues to society. The reason that I put a sunset clause in the legislation was not simply to stop windfall gains for people who are rotten criminals who never gave any compensation to their victims. That is why I did it in the first instance but I put the review clause in to ensure—Hon Anne Tolley: That Labour Government did nothing—watched it happen.Hon PHIL GOFF: Look I hope the Minister will take a call to explain herself and justify herself because the sunset clause was there so there would be a review so that you Minister—The ASSISTANT SPEAKER (H V Ross Robertson): Order! I am sorry to interrupt the honourable member. There are interjections taking place between members who do not have the call and that is out of order. I know Mr Goff is making a strong robust speech but that does not mean that members from this side and that side can interject on each other. If you want to interject on Mr Goff that is fine but not on each other.Hon PHIL GOFF: It is really sad that over these debates time and again members on the Government side fail to take a call and do not show the “intestitudinal”fortitude—I think that is a word for guts—to get up and debate the bill but they will sit in their seats and interject continually. What I am saying to the Minister who was interjecting is that the sunset clause was for a review so that we could see how we could get this legislation working better for victims.The legislation has expired a number of times. Did the Government ever use the opportunity to be imaginative to show its commitment and its determination to support the rights of victims by getting a piece of legislation that dealt not with a tiny minority of cases in prison—cases where the corrections department got it wrong and was forced to pay compensation—but with the wider spectrum of criminal offenders who never set things right for their victims? I am a strong believer in restorative justice. What restorative justice means is that the offender sets things right for the victims. My colleague next to me Mr Sio knows the system of ifoga in Samoa which is based on a person showing remorse and trying to put things right for the victim.Peseta Sam Lotu-Iiga: Say sorry for breaking the law.Hon PHIL GOFF: Mr Lotu-Iiga will know that system. He should know about it. In terms of restorative justice it is really important that the offender shows remorse—genuine remorse—but that is not very concrete. What is concrete is whether the offender is able to make a reparation payment. It is too often the case with our offenders that they come from dysfunctional backgrounds they have no savings and they have no income. When they are locked up in prison they have no ability to pay and in most cases victims get nothing back from their offenders. That is a fact of life. You cannot get blood out of a stone.What you can do if there is a windfall profit by an offender such as through the compensation cases that followedTaunoa and if they have got money is you can get it and you can give to the victim. Or if somebody wins Lotto in prison—you know they are sitting on a million dollars and they have done grievous damage to their victims—then they should be required to make a payment when they are able to. That is common sense. That is justice in the real meaning of the word.The reason why I focused before on the white-collar offender was that after the global financial crisis which revealed the recklessness and the greed of those white-collar offenders a number of them have ended up in prison and they are the very people who could be required to make compensation maybe not at the time they are in prison but thereafter.There are people who were in prison in the 1980s and who are now very wealthy businessmen again. Have they ever done anything to set things right for their victims? The answer is no. They are back sipping their cocktails living in their mansions driving their flash cars when they have driven other people into poverty at the end of their lives. I resent that. I deeply resent that. I resent it because I have represented constituents who have been placed in that situation—worked hard all their lives to get their savings and maybe somewhat naively put their money in particular institutions that were not sufficiently blue-chip. But they did it in good faith. They believed the promises that were made. They had their savings ripped off and the people who did it to them never paid their dues. Although we will support this legislation reluctantly because those who get windfall profits in one way—Scott Simpson: After all that?Hon PHIL GOFF: No Mr Simpson you should have listened. That is one of your problems as a new member. You have not learnt to listen yet. The Government could have done more than simply raise $45000 for victims. It could have raised tens of millions of dollars to be paid back to victims if it had been imaginative in the sort of legislation it put through. It could have got those white-collar criminals who ripped offtheir fellow citizens to pay their dues. It could have got them to indulge in restorative justice and set things right for those who have suffered.So my objection to this legislation is that it does not go anywhere near far enough. It is faint-hearted. It lacks imagination. Members on that side of the House do not live up to the rhetoric they use on the campaign trail when they say that they stand up for victims. This legislation does nothing for most victims.Hon Trevor Mallard: It’s weak.Hon PHIL GOFF: It is weak. It does not do what the Government could have done if there had been a proper review if it had worked through the options and if it had got its officials working hard in the 4 years that it has had in Government to actually put something in place that would see a far wider extension of looking after the victims ensuring restorative justice and ensuring that people who rip off others are required to put things right when they are in the position to do so. On all of those measures this legislation fails and that is why every member of the Government has got their head down at the moment because they know the truth of what I am saying. This is weak legislation. It could have been much better.DAVID CLENDON (Green): It is a little bit likeGroundhog Day. There is a very strong sense of déjà vu in yet again standing to speak to prisoner and victim matters and the latest iteration of this legislation the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. We have had a—Hon Trevor Mallard: And it’s got yesterday’s date on the wall.DAVID CLENDON: Indeed it has yes. That will be part of the problem I am sure. The principal piece of legislation was first put into place in 2005 as a stopgap measure as a response to the political necessities of the time perhaps in order to endeavour to placate perhaps a very rowdy minority in the public who were objecting to some of the actions that were being taken. Mr Goff just spoke and I must say I am somewhat puzzled to hear such powerful objections to this legislation from the Labour side. I look forward to those members switching their vote and actually opposing this legislation in line with the speeches they are making. This legislation has not worked. It has not been effective in returning value to victims and fundamentally it denies human rights. It is an abrogation of human rights. It is not acceptable in a country that as we have heard this morning rates very highly in terms of our commitment to the rule of law and where we rate ourselves as being a country where corruption is not seen and where we respect and honour everybody’s human rights. This legislation is an offence to that and we will continue to oppose it.The fundamental intention of this legislation is to deny restitution to people whose human rights whose basic rights may be abused while they are in the custody of the State. We have seen instances of that where indeed prisoners and inmates were actually tortured over extended periods under the behaviour management regime that led to theTaunoa proceedings. The court found very clearly and made very strong rulings that the treatment of those men was absolutely unacceptable in a country that calls itself civilised and a country that commits to human rights. It is unacceptable and this legislation is equally unacceptable.I think that the notion that the public was demanding that prisoners inmates and people who have offended ought not to receive any restitution is not based on particularly strong evidence. It is clear that there was a very punitive approach in the air in the mid-2000s and to some extent that still prevails but you have to scratch only an inch below the surface in talking to members of the public in talking to NGOs and reading the public pulse. People are more intelligent than that. They understand that people do not lose their human rights simply because they have offended and because they have been imprisoned. If we are truly committed to that then everybody should beentitled to restitution if their rights are abused while they are probably the most vulnerable people in our society those who are in the custody and the care—I use the word loosely—of the State.Mr Borrows the Associate Minister of Justice in introducing this second reading pointed out that we have a solution available to us. If we do not want to see inmates receiving compensation for abuse let us create an environment where those abuses will not occur. It really is as simple as that. We do not need this particularly vicious piece of legislation; we simply need to ensure that our prison system is run in a humane manner that it is run in a just manner that human rights are respected and maintained and that even minor transgressions of human rights are not accepted so that this sort of legislation need never be triggered. It is not beyond our wit to create a corrections system where prisoners’ rights are protected and maintained.I have to acknowledge that there is some good work being done in the corrections system and the corrections area. The new Chief Executive Officer of the Department of Corrections Ray Smith—not so new now—is working very hard to change the culture and he is having some success in that. But he is trying to steer a very cumbersome very complex very slow-moving vessel trying to take it to a better place and we are nowhere near there yet I would have to say.I think we need only look at some recent examples. A senior corrections officer is quoted today in one of the papers—I think theDominion Post—as saying that the management of maximum-security prisoners is constantly evolving to better assist prisoners towards a crime-free future. I am afraid that that is rather an idealistic and simply an unsustainable proposition given for example what is currently happening in D Block the maximum-security block at Pāremoremo at Auckland prison where for a period of some 3 months over this very hot summer we have had prisoners in the maximum-security block were denied outdoor exercise. For 3 months those men did not get in the fresh air did not get sunshine on them. Imagine what that does to people’s mental and physical health—being denied for over 3 months that minimum requirement of simply 1 hour in the fresh air. That is completely unacceptable. What is that going to do to their attitude to their level of tension the level of stress within that already fairly volatile environment that is a maximum-security wing?As we speak for the last 6 or 8 weeks prisoners in D Block have been washing their clothes in buckets because the laundry facilities have been removed and have not yet been replaced with new laundry facilities. If they send their laundry to other wings only half of it comes back. That has been confirmed by the acting manager of the prison. They do not have that fundamental very basic and simple assurance that their personal property will actually be secure and returned to them. As a result we had an entirely unsatisfactory situation where prisoners were endeavouring to clean their clothes and their bedding in buckets of water without so much as soap or soap powder being issued to them. That is an unacceptable situation in the 21st century.Are we trying to stir up more stress in our prisons? Are we trying to increase the frustration levels of these already volatile men by depriving them of those basic human dignities of clean laundry and a breath of fresh air for 1 hour out of every 24 hours? Are we deliberately trying to create situations where we will get outbursts of violence in our prisons? Mr Kim Workman who made submissions to the Justice and Electoral Committee in February this year—a man with an extraordinary depth and range of knowledge about our prison systems—made the point that prisons will be made safe when prisoners observe that they are being treated fairly and decently.Anybody who believes that our prisons are holiday camps clearly has never been inside one. Prisoners do not expect to be coddled. They know they are not there to enjoy themselves. They accept that. But prisoners also know what is reasonable what is fairwhat the minimum legal requirements are and what the minimum requirements are in terms of human rights. And we are not meeting those requirements. A safe prison is one where prisoners feel that at least their basic humanity is recognised that they are being treated fairly. That environment becomes safe.Mr Workman went on—and I am paraphrasing him here; I am not quoting him directly—to make the point that we have a very poor culture and a very poor environment historically in our prisons and one day if we do not do something to do better our prisons will blow up and we will not know what struck us. We are seeing already expressions of that. Over the last 12 to 18 months there have been five or six quite serious incidents in our prisons at Rangipō prison at Hawke’s Bay Regional Prison at Pāremoremo prison. These are becoming quite commonplace. The Department of Corrections’ response to the latest at Rangipō prison for example was to actually deny that it was a riot despite the fact that 11 men were involved and 11 men were relocated. We are seeing these constant incidents quite serious incidents occurring in large part because we are failing to create a safe and humane environment in our prisons.The legislation that is being advanced today embeds this extraordinary proposition that prisoners should not be eligible for restitution if the State violates their human rights even to the extent of physical abuse and torture—nevertheless prisoners ought not to receive compensation for that. This legislation that we are making permanent today does nothing to make our prisons safer. It will do virtually nothing to protect or enhance the rights of victims. We need to have a comprehensive review of how we can assure that victims of crime in New Zealand are treated as well as we can treat them that the offence against them is made good and that the emotional the physical and the mental trauma they suffer is remedied to the extent that we can do that. This legislation does nothing. It is silent on that. There is no means in this legislation to protect victims beyond the most superficial perhaps way that could be possibly imagined.We need as was promised and intended in 2005 to look at the rights of victims remembering also that many of our offenders many of the people in our prisons are themselves offended against. That cycle of being the victim and being the offender is one we need to break. We need to address that and we can do that by intervening intelligently humanely and thoughtfully. Kia ora.ALFRED NGARO (National): I stand a little concerned at that last speech by the member from the Green Party because what it is telling ordinary New Zealanders is that all we have heard over the last 5 minutes or so is about the rights of the prisoners and not about the rights of the victims. We all know that incarceration on its own is not enough to deal with the issues of recidivist offending. But what we do know in this Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill is that there needs to be a balance.If the previous speaker knew the intent of restorative justice it is about balancing the rights and the responsibilities of both the victims and the offenders and that is exactly what this bill is intending to do. It is taking responsibility for the things that have been offended. The previous speaker Mr Clendon talked about how many of us may not have been in prison. Well I have been in prison. I know that many of my colleagues have been there to see—Hon Phil Goff: What did you do?ALFRED NGARO: In prison to visit may I qualify that statement to visit—to visit. I actually was taking some pastoral care there. In helping to support I understand the issues of those who are in that situation.Hon Member: Go back.ALFRED NGARO: What this bill is trying to do—yes I will go back to the point that I want to make. I want also to commend Mr Little who said a lot about the balance in this bill. That is what this bill is intending to do. I commend this bill. It is taking a balance between the rights of the victims but also the responsibility of the offenders. That is what this bill is intending to do. I commend this bill. It is a good bill. I commend the chair of the Justice and Electoral Committee. It is a small bill but it is powerful. It is a little but it is a lot. Thank you. I commend this bill to the House.DENIS O’ROURKE (NZ First): The Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill re-enacts the Prisoners’ and Victims’ Claims Act 2005 so that it will continue in force beyond the extended sunset date of 1 July 2013. The restrictions upon the award of compensation to prisoners by the court and the process by which a prisoner’s victims can claim from an award are now to be made permanent.I am pleased to be able to say that the Justice and Electoral Committee has conducted a rigorous examination of the bill as introduced and New Zealand First is pleased to see that a number of needed changes have been made.The principles that New Zealand First considered in relation to this legislation—and many submitters have covered these too—included firstly that being a prisoner means being penalised only by the temporary removal of personal liberty and by incarceration. It does not mean anything more than that. Prisoners must have the opportunity for rehabilitation education and reorientation in the direction of their life if that is at all achievable. Secondly it does not result in the loss of other rights. That means that it does not result in the loss of the right to compensation for genuine injury or disability from genuine accidents because they can happen in prison just as easily as they can happen anywhere else. It does not mean the loss of the right to compensation for significant mistreatment should that occur. I agree with my friend Mr Clendon who pointed out some of those sorts of circumstances.I also took Kim Workman’s submission very seriously because he did make a very important submission to the committee. He said that we should take into account the need for a good prison culture and that good process encourages good behaviour inside and outside prison and will lead to fewer assaults within the prison fewer suicides and so on—generally better behaviour by prisoners. He also said that vexatious claims were few in number—and I agree—and that other prisoners dislike troublemakers and have their own effect in suppressing vexatious claims. So those things also need to be taken into account.On the other hand the rights protected in this way must be balanced against the fact that there is concern in the community that some prisoners abuse some of those rights especially the right to compensation for mistreatment and especially in regard to accident compensation. Those are genuinely held concerns as we heard in the submission process. We must give proper attention to them even if cases of abuse of rights by prisoners are rare. We certainly should not mollycoddle prisoners and we should make sure that there are no rorts like those we have seen in recent times by a few prisoners.New Zealand First accepts that there is a need also for an accessible process for the victims of a prisoner to be provided for claims against any award made to a prisoner. That is the fundamental purpose of this legislation. We think that victims’ rights have been seen almost as second-class rights for far too long. This bill pays proper attention to that and creates a clear right and an easily accessible process for a victim to claim against an award made to a prisoner. That achieves an appropriate balance that protects the rights of prisoners on the one hand and also meets community expectations that prisoners’ compensation be accessible to their victims to meet the properly awarded claims made by those victims.The Government I understand originally wanted a fund to hold the proceeds of all compensation awarded for victims who would then have the right to claim against it. But that was clearly impracticable and has been replaced by the better provisions now in the bill for a victim to claim against an award made to the prisoner who committed a crime against that victim.Some submitters have also said that the courts had pre-empted this bill in theTaunoa v Attorney-General case and that therefore the bill is not needed at all. They thought that codification of restrictions on claims made by prisoners may mean that the law would not be developed or refined further. However against that codification provides certainty and consistency in the law. Parliament does need to set out what the scope for claims made by prisoners should be and it does not mean that the courts may not develop the law within the scope of the Act. Again the Kim Workman submission was very relevant. He pointed out that codification helps both prisoners and victims to understand their rights. So on balance I believe that it is right that this process and these rights should now be codified.Section 13(1) of the principal Act sets out the essence of these issues. It says: “No court or tribunal may … award any compensation … unless satisfied that—(a) the plaintiff has made reasonable use of all of the specified internal and external complaints mechanisms reasonably available to him or her to complain about the act or omission on which the claim is based but has not obtained in relation to that act or omission redress that the court or Tribunal considers effective; and (b) another remedy … cannot provide … redress that the court or Tribunal considers effective.”I think that is the essence of the issue but of course there needs to be some guidance as to how that is assessed and section 14 provides for that. Amongst other things it says that the considerations are “the extent … to which the plaintiff … took within a reasonable time all reasonably practicable steps to mitigate loss or damage” and also “whether the defendant’s breach of or interference with the right concerned was deliberate or in bad faith; … the relevant conduct of the plaintiff;”—the prisoner in other words—“… the consequences for the plaintiff of the breach … the freedoms interests liberties principles or values recognised and protected by the right concerned; and”—importantly I think—“… any need to emphasise the importance of or deter other breaches of or other interferences with the right concerned;”. That is where I thought the Kim Workman submission was very appropriate. It goes on to give other considerations which include “the extent … to which effective redress in relation to that act or omission has been or could be provided otherwise than by compensation;”—again an important issue.So taking all that into account New Zealand First considers that the bill now achieves the correct balance that I have spoken of and that prisoners’ rights will be preserved but will be appropriately restricted in the claims that they bring. More important and finally the victims of crime will have a clear right and process to make claims against any award that the committer of the crime against them has received and that is as it should be. The victim should have the first claim against that money. The prisoner who committed a crime can only expect that he or she must first compensate the victim before benefiting from any compensation themselves. So for all those reasons New Zealand First will vote for the bill.Hon KATE WILKINSON (National—Waimakariri): Thank you for the opportunity to take a very short and succinct call to support the second reading of the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. Actually following on from Denis O’Rourke the New Zealand First speaker it was refreshing to see that he used the word “victim” far more than the Green speaker who did not Ibelieve use the word “victim” at all but seemed to concentrate mainly on the rights of prisoners.This is actually about having a fair and balanced system. It is just making the current regime permanent. It is putting victims at the heart of the justice system. It has stronger emphasis on victims not prisoners but it is a balance between the rights of offenders and the rights of victims. It is not removing the rights of offenders but it is putting victims at the heart of our justice system. They are the ones who have been harmed by the actions of the offenders and it is only right that we should have a justice system focusing on the rights of victims. This is a good bill. It is the right balance and I commend the bill to the House.Hon LIANNE DALZIEL (Labour—Christchurch East): I rise to speak in relation to the Prisoners’ and Victim’s Claims (Continuation and Reform) Amendment Bill. I am afraid I cannot repeat the enthusiasm of the previous National Party speaker Kate Wilkinson on this particular piece of legislation. The reason that I do not feel enthusiastic about our position which is to support the passage of the bill is that in so doing in actual fact we are allowing a piece of legislation to go through when the real issue has not been addressed and the real issue is the rights of victims. During a select committee hearing there was a very powerful presentation from the Sensible Sentencing Trust. It was very interesting. I have on occasions clashed with members of the Sensible Sentencing Trust on some issues where I am regarded as being somewhat soft on crime perhaps but I think that its submission was compelling. Why it was compelling was that it actually raised a whole lot of questions around where the Ministry of Justice was up to as far as victims’ rights went.Part of the sunset provisions that went with the original legislation which has had to be reinstated once—and in fact there was a reinstatement bill for a further sunsetted provision when it was replaced with this bill that we are now dealing with. There were two reasons for that. One was to make sure that there was put in place a good process for ensuring that prisoners’ rights were upheld. We are signatories to the Convention Against Torture and Other Cruel Inhuman or Degrading Treatment or Punishment after all and the Ombudsman did come to the select committee and tell us that there are issues around cruel and inhumane treatment of prisoners. The submitters talked about unlawful detention they talked about unlawful strip-searching and they talked about inappropriate placement on segregation resulting in isolation and the removal of minimum entitlements. Nobody wants to see prisoners treated in that way when they are in prison. No matter what they have gone to prison for their punishment is their imprisonment; it is not the way that they are treated while they are in prison and they are entitled to be treated with dignity and respect.However the victims of crime are also entitled to be treated with dignity and respect and here are the “Guiding principles for providing effective service and support to victims of crime” that they brought to our attention: “Respectful and confidential treatment: … Individualised response / flexible services: … Services are accessible: … Provision of ‘right information at the right time in the right format’: … Delivered by experienced knowledgable well-trained empathetic staff: … Consistent high quality services and support: … Integrated service provision: … End-to-end individualised support: … Accountable services:”. Where do you think they got that from? Do you think that that was a charter that they wrote themselves? Because it certainly looks like a victims’ charter to me. Where they got that from was the Ministry of Justice website. It was a report commissioned by the Ministry of JusticeVictims of crime in the adult criminal justice system: A stocktake of the literature. In fact after an extensive range of research relevant to crime victimisation the expert who provided this report to theministry identified a number of guiding principles that emerged as important in delivering effective support and services to victims.This bill does nothing to advance any of those. That is why it is with some disappointment that we see it being enacted but we are supporting it because the balance has to be there and on this occasion the balance requires us to vote for the bill.Dr JACKIE BLUE (National): I am pleased to be speaking to the second reading of the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. The purpose of this bill is to make the restriction on awards of compensation in the victims’ claim process in the principal 2005 Act permanent. The 2005 Act was due to expire at the end of June last year and an interim bill was introduced to cover a further year from 1 July 2012 to 30 June this year. This bill will now make the 2005 Act regime permanent. It is a balanced bill as we have heard before. It balances the rights of victims with the responsibilities of offenders. It is a good bill and I commend it to the House.The ASSISTANT SPEAKER (Lindsay Tisch): I understand the next call is a split call.KRIS FAAFOI (Labour—Mana): It is. Thank you very much Mr Assistant Speaker for the chance to speak to the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. As my colleague the Hon Lianne Dalziel stated at the end of her speech this is a bill that we will support but it is with some considerable amount of reservation. We are supporting it because in essence it is a continuation of a piece of legislation that the Hon Phil Goff saw through this House in 2005. My colleague Andrew Little said it was a measure taken because of community unease at what had happened in a particular case where a prisoner had got some compensation and that should have been passed on to the victim of his crime. At the time the then Minister of Justice Phil Goff said that most people believe it is wrong that offenders should be compensated for wrongful treatment but in turn are not required to pay restitution to the victims they harmed. Good words—from a very good member of Parliament I should add. But I think this goes to the very heart of the Kiwi sense of a fair go in that if you get ripped off and someone has the ability to compensate you then you should get that compensation.But our reservation with this bill comes around a commitment made by the Government to consult the rest of Parliament and to have a review around the functionality of this legislation. This bill that is before us now basically makes permanent the sunset clause that has been rolled over I think three times since the 2005 legislation was enacted. The purpose of that sunset clause as Mr Goff has mentioned was to ensure that there was a review to make sure that this system has been working. The member from the Government side of the House Alfred Ngaro said that there was a balance to this piece of legislation and in a very narrow sense that might be true. But in a broader sense as Mr Goff has said to see whether this sense of fairness across the board is working we believe that a review should be taken of cases where not just victims of mistreatment in prisons were getting some meaningful gain but also other prisoners who were being incarcerated had the ability to compensate. As I said before if someone rips you off and you have the ability to be compensated by them then you should get that compensation.So we believe that there should have been a review. We understood that the Government was going to undertake a review. I believe that the last time the sunset clause was pushed out by another year or so we were told that there was going to be a period of consultation when we could talk about what would be captured in that review. As Mr Goff said in that review we would have liked to look at the issue where some people who have dallied in white-collar crime have been able to sit on rather largeamounts of money while their victims are looking at their bank accounts and their life-savings and seeing very little there and whether or not that should be captured by this bill in terms of being able to get them compensation. It is absolutely unfair and a break of a commitment from the Government to say that a review should not be held for the benefit of those people who are looking at this and saying: “If they can get compensation why can’t we get compensation when someone has ripped us off and is sitting on a huge nest egg? We can’t get our hands on it.”Why cannot the Government in this piece of legislation be true to its promise about caring about victims of crime—whatever crime it may be whether it be an act against the person or an act against their bank accounts—hold a review and broaden the scope around the victims’ rights and their ability for compensation? We have seen that that has not happened. It should happen it is a break of a commitment and although we support this legislation we do it with reservation because the Government says it is on the side of victims but in this case it has not been.JAN LOGIE (Green): I rise to add another voice in opposition to this Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill on behalf of the Green Party. We are not supporting this bill because we have a sense of justice and a belief in human rights and we believe that victims’ rights are absolutely critical regardless of whether they are in or out of prison.I would also like to just remind this House as have many others before me of the intended review that has never happened. If this Government was truly interested in victims’ rights then that review would have happened and we would have had legislation that evolved out of a review that was evidence-based and considered the actual needs of victims and what would make a difference to them. This legislation does nothing towards actually addressing the needs of victims.We have heard about the gaps in terms of white-collar crime and recompense to victims. That point has been made very eloquently I think by my Labour colleagues but I would also like to draw to the attention of this House the work that was shelved by this Government on the inadequacy of our system in addressing the needs of victims of sexual abuse in this country. There was a huge review done by the Law Commission on looking at alternative pre-trial and trial processes to improve the ability of sexual abuse victims to get justice in our courts. We have a system that denies justice to about 99 percent of sexual abuse victims in this country and this Government after months—and decades in fact—of work on that issue just decided to shelve it because it was not a priority and because some of the ideas in that review were contentious. Not many of them were—a huge number of them in fact had agreement—but some of them were contentious so this Government shelved it.Where in that is any concern for the victim? It is a joke to put this forward in front of this House and pretend that this Government cares about victims when the most major piece of work that would have helped improve justice for victims in this country was shelved with no adequate reason being given for it.Another reason that we are opposing this bill is actually the point I made earlier: that we see prisoners being able to be victims. It is a very basic principle. This bill will have the perverse result of making prisoners less likely to report torture and will take away incentives for our corrections systems to create the safe environments that would mean that this legislation was completely unnecessary.Although New Zealanders may have a gut reaction and think that it is unfair that these people who may have done terrible things are now getting a payout from the Government that train of thinking is focused on what happened to somebody outside of prison that was done by this person and it misses the situation of that prisoner having been victimised by our State. The case that led to this was a case of extreme torture thatwas perpetuated by the State and I am very pleased to see the Government now taking action in terms of helping to protect hopefully transgender prisoners in New Zealand who we know are being sexually abused in our prisons at the moment.The State has a duty to protect prisoners. That is a basic basic part of human rights and we know that we are not going to have safer communities if we have prisoners who feel that they are in turn being victimised by the State. That is not going to lead to them feeling as if they have something to contribute to our society and something to give back to the community if they are alienated through the rehabilitative process. So there are many reasons that the Greens are opposing this bill and at heart it is because we care about victims.Hon TAU HENARE (National): Just a very quick call—[Interruption] Sorry?Hon Ruth Dyson: Do a proper speech.Hon TAU HENARE: Well let us talk first of all about Phil Goff shall we? He talks about criminals and victims but he is the one who broke the law just the other week by releasing a coroner’s report that was suppressed. He gets up in this House and talks about all these horrible criminals but the fact of the matter is that he should get up in the House and apologise to the coroner for releasing a protected report. That is the issue here so he has got a cheek to get up in this House and talk about that.I think the best speech in this House was Andrew Little’s. Andrew Little put it succinctly—that is that this Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill is a good bill and he supports the bill not like Phil Goff who gets up and does this raving speech about the rich and the poor and the criminal and the victim and the “I’ve done this.” and “I’ve done that.” He rails against the bill but then he says: “But we’re going to support it.” What a speech for the ages! I support this bill. All it does is to make sure that the victims are looked after.A party vote was called for on the questionThat the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill be now read a second time.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; United Future 1.Noes 19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Bill read a second time.In CommitteePart 1 Main amendments to principal ActANDREW LITTLE (Labour): I do not want to disappoint Tau Henare but our support for this bill is highly contingent. We have considerable reservations if indeed not anxieties about this bill the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill.We understand the origins of this legislation. The origins of the Prisoners’ and Victims’ Claims Act go back to the previous Labour Government. It dealt with a very confined very specific set of circumstances but it was to foreshadow a more comprehensive review of our victims’ rights regime.This legislation is not actually victims’ rights legislation. This places victims’ rights on the level of a lottery. If you happen to have been violently abused mugged harmed or injured by a prisoner or by a perpetrator who then on serving a penal sentence is himself or herself beaten up abused tortured or whatever and is successful in a claimagainst the Crown for that abuse then you might have a claim as a victim. Well that is not a victims’ rights piece of legislation at all.We understand the confined nature of this legislation. It originated under a Labour Government and we continue to support it for that reason. But we have also done so because we were given an assurance and an undertaking that there would be a proper review of our victims’ rights regime. This Government made that undertaking. It said it would consult with other parties including us and it has not done so. It has not fulfilled that undertaking. So that work still remains to be done.My colleague Phil Goff talked about the impact of this legislation since it was originally enacted. It has led to a total of $47000 worth of compensation being paid to victims out of a total of nearly $250000 awarded to prisoners for the abuses they have suffered at the hands of the State. That is hardly a great rallying cry for a successful piece of victims’ rights legislation. It simply is not because it is so chance-based and really requires some considerable degree of misfortune on the prisoner’s side and you might say luck on the side of some victims. That is not taking victims’ needs seriously. That demand that need remains and it remains unaddressed in this piece of legislation.So if by passing this legislation we can give the Government room to continue to consider the issue of a proper regime of victims’ rights it will have our cooperation in doing that. I lay down that challenge and that invitation to the Government. We know that that work still needs to be done the Government knows that work still needs to be done and we should be concentrating our efforts and the efforts of this House on that.None of that means that we do not also ensure that the way we treat prisoners—those who are serving prison sentences those who have been incarcerated by the State as a punishment for the conduct they have visited on other citizens—fulfils our international human rights obligations. We treat those who are in the custody of the State properly and with humanity knowing that merely by being incarcerated they are serving their punishment. Their simply being sentenced to prison does not justify other abuses behind prison walls out of the public gaze. We understand all that and that is a crucial part of our total criminal justice and corrections system.But when it comes to victims’ rights let us not deny that there is something repugnant about the idea that somebody who has been the victim of the serious violence of a criminal—or indeed as Phil Goff has pointed out somebody who has been ripped off by a white-collar criminal to the tune of tens of thousands hundreds of thousands or millions of dollars—has to stand by while that criminal is able to recover considerable compensation from the Crown for wrongful treatment because a misguided prison manager or a misguided corrections officer has mistreated the criminal leading to a recovery for the prisoner while the victim gets nothing. That is unjust and that issue still needs to be addressed. This bill is a start towards addressing that injustice but it does not go anywhere near dealing with it and addressing it fully. So as I say that work remains—that work remains.The impact of this legislation since its inception and the impact it will continue to have means that those who do recover from the State in the rare instance when that happens—we have theTaunoa case and one or two others that have followed it but not many others—when the prisoner does recover compensation it then gets paid to the State. The various claims that can be made upon it are paid out including the recovery of some of the costs that the Crown incurs in bringing a prisoner to justice and then money goes to the prisoner. It is important if we are serious about victims’ rights that victims have a claim regardless of whether or not the prisoner is able to get some sort of windfall payment as a result of an abuse by the Crown.A proper victims’ rights regime—and indeed a proper system of criminal justice—would say not only that those who have suffered at the hands of a criminal are able torecover once the criminal has served a term of penal servitude if that is what the justice system demands but also that the victim can claim and seek and reliably expect to receive some sort of reparation or compensation for the material harm done to them. That is what a real victims’ rights regime would provide for. That is what this legislation when it was enacted under the Labour Government ought to have led to—a proper deliberate consideration of the needs of victims and reparation for victims as opposed to this stop-start lurching from one remedy for a confined set of circumstances to simply rolling over the same remedy for the same confined set of circumstances. That work needs to be done.So let the passage of this bill through this House at this time be a clarion call to this Government and any future Government to say: “Let’s get on with that work.” If we are serious about victims’ rights and we understand the impact of serious crime on victims whether it is violent crime or whether it is white-collar crime in the nature of fraud and generally ripping people off let us have a proper and serious considered look and conversation about what might be done to more reliably give an assurance to a victim that they can get justice beyond simply seeing the perpetrator of the crime against them banged up in jail for a period of time and deprived of their liberty. That to the victim is of limited use when they have been deprived of their ability to go about their ordinary business in their life or deprived of their future if their funds have been ripped off them. That is the real challenge laid down by this bill.We are up for that challenge. We are up for that conversation with a Government that is interested in doing that and I know that other parties will be as well. Let the passage of this bill at least lead to that process. Let us hear from the Minister in the chair that he is prepared to give that assurance so that we can at some point in the near future look back and say: “We have a world-class system not only of criminal justice but of victims’ justice and victims’ rights as well.”DAVID CLENDON (Green): I would like to make a few comments on some of the detail of this bill the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill and to talk initially about the clause that reads as follows: that this bill makes “it clear that certain persons unlawfully detained by or on behalf of the Crown are and have always been for the principal Act’s purposes and the period of their unlawful detention persons under control of supervision… ”. Roughly translated that means that this prisoners’ and victims’ claims legislation—that is the denial of any restitution to prisoners for any wrong done to them while they are in prison—will be extended to include the situation where prisoners are kept in jail longer than they ought to be.This happens surprisingly frequently. The flip side to the advantage of some individuals of course is that occasionally prisoners are released sooner than they ought to be. These are administrative errors. They ought not to happen—I am sure people in corrections work hard to see that they do not—but they do occur. Sometimes people are kept in beyond the expiry of their sentence for some significant periods of time.It is interesting that we are told in the regulatory impact statement that the intention of the original legislation was that people unlawfully detained beyond the expiry date of their sentence would nevertheless be subject to this prisoners’ and victims’ claims legislation. The insertion of this clause as they say is for the avoidance of doubt whether it was because of case law or simply an observation that it could perhaps be read differently. For the avoidance of doubt we are told that prisoners kept beyond the expiry date of their sentence will nevertheless for that period be subject to claims by any victims. Any restitution paid to them for that unlawful detention will be subject to claims by any victims.The argument has been made this morning—and I do not think it is a compelling argument nor defensible—running roughly like this: people who offend and are imprisoned therefore lose their rights or lose some of their rights beyond simply their right to their liberty. We are told that people bring that on themselves essentially. They offend against people’s property or against people physically violently or whatever therefore for the period of their incarceration they should not be entitled to any restitution. I fail to see how you can extend that argument to say that people should not get restitution if the Crown fails in its duty to release them on the appropriate date. You can argue that the period of the sentence has been brought on the prisoner by their own actions and quite reasonably. I fail to see how an unlawful detention beyond the term of the sentence is the fault of the prisoner.By this reassurance by confirming that unlawful detention is subject to the prisoners’ and victims’ claims provisions that somehow implies it is the prisoner’s fault; that it is by their action that they have been unlawfully detained and therefore they should suffer the penalties and they should be denied any possibility of restitution. Frankly that argument makes no sense to me. I would be really interested to hear a justification for including unlawful detention for the period that prisoners are kept in jail when they ought not to be through no fault of their own. How is it their fault? How is it therefore that they are subject to then denied any possibility of restitution for that unlawful detention? I would be very interested to hear exactly how that spins out in the mind of the Minister of Justice who drafted this bill.The other point I will make is a more general point. We have in our prisons a complaints process which is an internal complaints process managed and operated by corrections. Beyond that there is also an appeal available to the Office of the Ombudsmen. I think it is important to realise that there is a very low level of confidence with inmates with their families with other interested parties with NGOs who observe these things in the complaints process. To a large extent it is because prisoners are often in the slightly odd situation where they are having to hand the complaint to the person who could well be one of the people they are complaining about. That is a very perverse situation and one that I think we need to think harder about. The point is that if prisoners’ complaints are not heard and if prisoners and other interested parties are observing that the complaints process is not working then we are more likely to get outbursts of violence and incidents in our prisons. It is very hard to see in the context of this bill how revictimising people while they are in the care of the charge of the State—Hon PHIL GOFF (Labour—Mt Roskill): I would just like to pick up on a couple points that my colleague David Clendon has made. This legislation the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill in my view is not about saying that people who offend lose all their rights when they go to prison and that they have no rights. I think that is a misconceived view of why this was introduced. I guess I am in a reasonable position to know why it was introduced because I did the introduction. What I said when I introduced this bill I still believe. I want to read it out because I think it is pertinent. I said that most people believe that it is wrong that offenders should be compensated for wrongful treatment but in turn are not required to pay restitution to the victims they harmed. This arose from theTaunoa case and the behaviour modification regime. That regime was wrongful and it has been done away with but the people who were in there were amongst the worst offenders. The damage they did physically and emotionally to their victims was intense and they were going to collect tens of thousands of dollars for their rights being harmed. I did not believe then and I do not believe now that if you have harmed somebody else and you get a windfall compensation you should not be required in turn to compensate your victims. Part 1 of this bill keeps that provision in place and I believe rightly so.I am not arguing at all that the Department of Corrections is above the law; if it breaks the law it needs to be called to heel. It must operate under the law. There are provisions that enable that to happen. When we put the Corrections Bill through in 2004 that set up an internal complaints procedure. I disagree with David Clendon that that does not work. We also put through in 2007 under the Crimes of Torture Act the role of the Ombudsman to be designated as the national preventative mechanism where two inspectors appointed by the Ombudsman regularly go through the prisons to examine the conditions and the treatment of inmates. It is putting the fence at the top of the cliff not a compensation regime at the bottom that is really important. So the first point is that.The second point is that this legislation actually does not prevent any claim for compensation being accepted by the court. The court simply has to do a number of things first. It must first consider whether there are remedies other than compensation that should be employed in dealing with a claim by the prisoner. It must consider whether the prisoner made reasonable use of the complaints procedure and was not trying to milk the system. That is fair enough. It said that compensation should be reserved for exceptional cases when it was necessary to provide effective redress and that is fair enough. For those reasons I am comfortable with the fact that this bill remains in force. What I am not comfortable with and what Part 1 of the bill does not address is that we are limiting the payments of compensation to victims by criminal offenders to an ever-decreasing number of people. Hopefully when we stop abuses that might occur within the corrections system there will be no grants but does that mean to say we do not have to look at the wider problem which is that most victims never receive a cent in reparation or compensation from their offenders? If we have inmate A who wins Lotto and gets a million dollars does that mean to say he should never have to pay back that money to the victim to whom he did so much damage?The other example I used is the example of a white-collar offender. They do have the human resources that would enable them ultimately to compensate their victims. Part 1 does not address the problem of the privileged white-collar offender who goes to jail for 2 years gets out goes back to living in the mansion and driving the flash car has all sorts of resources in the family trust and leaves thousands of victims of his offending which robbed them of their life savings never being able to get compensation from their offender. In the original legislation we had sunset clauses. Those sunset clauses called for a review. This part does not actually act on the original legislation. It does not provide for an extension of a system that looks to the interests of the victim. I am in the position of criticising this Government because it has overlooked the opportunity to do something meaningful to help thousands of victims of criminal offenders who never get reparation and who never see restorative justice where the offender is never required to put it right for the victim. This measure is supported by us because in a very limited range of cases there is good cause to say that if the offender gets compensation from the State they may have to pay that to their victim. But it does not say that the vast majority of offenders when they have the ability to do so should repay their victim and make reparation. This bill does nothing to allow justice to happen in that way.The bill that originally went through Parliament asked for a review. Each time when we had to extend the legislation the Government failed to ever put that review into effect. It failed to use its imagination. It failed in terms of commitment and determination to do something on behalf of victims. That is why this is regarded by Labour as weak as half-hearted and as inadequate. Yes what it keeps in place is OK but it does not extend what it put in place. It is not wrong to expect of any criminal offender blue-collar or white-collar if they are in a position to do so to make reparations to their victim. They may not be in a position to do so at the time ofsentencing or while they are in prison but if the circumstances arise where it becomes possible for them to provide compensation then surely they should be required under common sense and any principle of justice to set things right for the victim.Time and again we have heard the rhetoric on the election trail about the need to look after the interests of the victim. When this National Government had the opportunity to do a review and to find ways that we could require the offender to compensate the victim it came up short. In the course of this debate we have not heard from the Minister of Justice. Perhaps the Minister would like to address this: why did the Government not utilise the opportunity provided under the legislation for a review to do a review and to consult with the Opposition as the Minister at the time promised? She broke that promise. She reneged on that promise. The Government has been complacent. It has said: “Well we’ll keep this in place. Labour introduced it. We’ll keep it in place but we won’t do anything more.” That relegates thousands of victims across our country to be in a position of never having hope that they will get a fair redress of the injustice done to them by requiring the person who did that injustice to set things right. What more could we ask from a system of justice than it restore the position of the victim?This is a lost opportunity. This maintains the status quo; it does not extend it. It relegates compensation payments to an ever-dwindling number of people who might get compensation because of breach by the State of its responsibilities. It does nothing to protect or enhance the position of the victim. That is why although we will support it because it keeps in place a limited measure that I introduced it does not take the opportunity to extend it to provide a better a fairer and a more just outcome for victims. Shame on the Government for not taking that opportunity.DENIS O’ROURKE (NZ First): I feel that there has been a good process through which this Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill has gone which has therefore resulted in a good bill. There were also some very good submissions but I would have to say that I fundamentally disagree with some of them. The Law Society made a very good submission and suggested that followingTaunoa v Attorney-General the bill was actually not needed. Of course theTaunoacase did narrow the scope for prisoners’ rights to compensation and that is also what this bill does. But I do not agree that the bill is not needed. What theTaunoa case did show was that the law at that time was moving in the same direction as this bill is and no doubt that is a movement that would have been irresistible. In any event there are some significant advantages in a bill of this kind. I think the main one is that there is a code there to which prisoners and victims can refer to understand their rights. I think that in itself will go quite a long way to limiting vexatious claims by prisoners and unrealistic expectations by victims. So it is a very good bill for those reasons.I also reject I think the submissions made by the Ombudsman and the Human Rights Commission. They suggested that the bill would result in a reduction of human rights for prisoners. I understand that that is also the position that the Green Party has taken. I do not believe that is the case. It certainly narrows the rights of prisoners and it defines those rights. It does not remove them. I think there is also a need for a balance between those rights and the rights of victims. That emphasis is the one that the Labour Party has I think quite rightly emphasised.I would have to say however that the real question is whether this bill actually does go far enough. We have heard a couple of speeches from Labour members who suggest that it does not and that there is further work to be done especially with regards to victims’ rights. I suspect that there is some validity in that position. However I have not really heard any specificity in the claims that more work needs to be done and that the bill does not really go far enough. New Zealand First is however always prepared tolisten to those kinds of arguments. I have not actually heard any yet; I have heard only general claims that more needs to be done and I do not know what that really is. So if other Labour members can tell me a little bit more I would be grateful for that.On the other hand the Greens say it goes too far. They say prisoners’ rights will be too constrained. In fact Mr Clendon said that. I do not think that is the situation at all. The bill certainly limits and narrows claims but it does not really reduce them in any way that I think is a concern for human rights.However New Zealand First has a different position from either of those and we feel that the bill does strike the right balance. In fact we expect that the courts over time will further develop the law with regard to this tension between prisoners’ rights and victims’ rights and that they will develop the law within the scope of the bill. That is appropriate and I think—and we in New Zealand First think—that that is enough.I am pleased that the Government did listen to a number of the submissions. There is one in particular that I approve of and it concerns the issue of compensation diversion. The Government originally wished to provide for a compensation diversion provision which would have meant that there would be a pool of prisoners’ compensation funds which victims could refer to. That I think would have gone too far. It would effectively confiscate any compensation that a prisoner was awarded. So it is much better that that provision has been deleted and that the Government did listen to that and now victims may in fact claim only against the specific award of the prisoner who committed the offence. I think that is appropriate so I am glad that the Government listened to that and that we have a better bill as a result. That good balance has made it possible for New Zealand First to support the bill.It is therefore a bill we can support because it does achieve that balance but that did not really arise because it was a Government bill and a Government-conceived position. So I do not think the Government can really particularly take credit for the bill as it now is because it is not the bill that it originally introduced. What has actually happened is that the bill has gone through a good process. It has been amended and it has been modified and now we get a good balance. So I think that the bill is a tribute to the process to those who submitted and especially to the Justice and Electoral Committee which dealt with it. We support it because of that process and because it is a good outcome. We think that it does not really need any further work but if others feel that it does they need to be more specific about what that should be. We will be voting for the bill as I have already said.Hon LIANNE DALZIEL (Labour—Christchurch East): I am happy to assist the previous speaker Denis O’Rourke with some advice as to what would improve this legislation the Prisoners’ and Victims’ Claims (Continuation and Reform) Amendment Bill. It would require some action away from this place initially because it would require a substantial review of the issues that were really the reason for the original sunset provision.During the period of the legislation’s original enactment 5 years I think was allowed in order for some significant work to be done on the whole issue of reparation for victims. When I read that list before of the number of things that the best evidence shows would support victims in terms of their recovery from serious offences I saw that reparation was an element of that. The question of reparation comes well down the list after respectful and confidential treatment individualised response and flexible services but within the context of individualised responses obviously reparation comes up.The real issue with the sunset provision—the period of time before the provisions expire—was that we were asking how we would get reparation to the victims and how we would do that in a timely fashion because the timeliness of reparation is veryimportant. A number of the submitters who came to the Justice and Electoral Committee made the point that “Actually we don’t want to hear about this guy again until we have to front up for a parole hearing.” In terms of the thought that they might take some comfort from the fact that the prisoners had had their human rights abused in some way shape or form and that that therefore enabled them to pay some money to victims they said they could not think of a worse way of receiving reparation because it would just bring back all of the memories of everything that had already happened.So the idea of the extension of time with the provisions falling out of play was to enable us to establish a system for providing reparation to victims and then decide after that how we then fund that payment. Part of that payment was not to come just from the chance that a person’s rights had been abused in prison; it would have enabled us to then look at any windfall provision. It could have been a tax—an additional tax like a student loan or an additional tax repaid from earnings by those who have offended against someone.Remember not everyone who is in prison has actually caused a victim of a crime. They may in fact be the sole victim of their crime. They may have driven drunk several times and ended up without having caused an accident but having been caught they may have ended up in prison. They may have been in prison for possession of marijuana or they might have been in prison for possession of another drug for their own personal use. So there are a whole lot of reasons. Driving offences are actually a significant reason why people end up in prison at any one time. If their rights are violated they have no credible claim for compensation if it is simply going to be taken by the Crown for the general use of victims because they have not actually caused a victim of a crime.So that is why this bill is problematic and that is why I have no enthusiasm for it. I believe that we are doing the right thing in voting for it simply because it does not offend against the underlying principles. I actually agree with the New Zealand Law Society that it is not really needed any more as a result of theTaunoa case and subsequent changes to how the courts might approach these issues.I think that the best thing we could have done would be to actually step away from the issue and ask what we were trying to achieve. What we are trying to achieve is we are trying to ensure that victims have access to reparation at a very early stage so that it is timely—in fact it is immediate—and so that people do not have to spend money. We heard people saying that they had had to travel great distances to the original arraignment and then to the court hearing itself. They ended up in a town where they had not expected things to be held over for as long as they were and so they had to buy extra clothes. There were just lots of little examples that people gave to us of significant expenditure significant costs that they were confronted with at a time when they were grieving the loss of their daughter the loss of one of their children or the loss of a husband or a wife.We have had people give evidence at the select committee that that is what the priority is. What we were supposed to be doing in the period within which this had its sunset was actually establish what the best way was to provide for that in advance immediately and then how we claim it back. One of the groups of people whom we had to claim it back from was the people from whom reparation ought to be sought and they are the perpetrators of those major offences. But not every single person who has committed an offence ends up in jail and that is the perpetrator I am talking about. But should those perpetrators in fact be allowed to keep a windfall of a Lotto win after they leave jail? Should they be allowed to keep a Lotto win or should they in fact be required to reimburse to the account from which the reparation was paid to their victim? Shouldthey have an ongoing lifelong obligation to repay that amount if there was a windfall situation?That was the sort of thinking outside the square that we had really expected to be done during this period. That is why on the one hand Phil Goff can say that it does not go far enough and on the other hand the Green Party can say that it goes too far. In many respects they are both right because the legislation that we are dealing with actually does not do what the original legislative sunset period was designed for. That was designed for a very specific serious piece of work. This bill does not deliver on that and I think that is the tragedy of it. But on balance as I said before Labour is voting for it.A party vote was called for on the questionThat Part 1 be agreed to.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; United Future 1.Noes19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Part 1 agreed to.Part 2 Saving and repeal amendments to principal ActA party vote was called for on the questionThat Part 2 be agreed to.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; United Future 1.Noes19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Part 2 agreed to.Clauses 1 to 3A party vote was called for on the questionThat clause 1 be agreed to.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; United Future 1.Noes19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Clause 1 agreed to.A party vote was called for on the questionThat clause 2 be agreed to.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; United Future 1.Noes19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Clause 2 agreed to.A party vote was called for on the questionThat clause 3 be agreed to.Ayes101New Zealand National 59; New Zealand Labour 33; New Zealand First 7; ACT New Zealand 1; United Future 1.Noes19Green Party 14; Māori Party 3; Mana 1; Independent: Horan.Clause 3 agreed to.Bill reported without amendment.Report adopted.Land Transport Management Amendment BillSecond ReadingHon Dr JONATHAN COLEMAN (Minister of Defence) on behalf of theMinister of Transport: I moveThat the Land Transport Management Amendment Bill be now read a second time. I would like to thank the chair and members of the Transport and Industrial Relations Committee for their work. I would also like to thank everyone who took the time to make a submission to the select committee.This Land Transport Management Amendment Bill is part of the Government’s ongoing efforts to cut unnecessary red tape and to create better more effective legislation. The bill will lead to streamlined decision making and less prescriptive planning processes for those in the transport sector. It will allow councils greater flexibility to plan for the needs of their regions. It will ensure both central and local government get better value for money from their investment in public transport.The bill has three main components. First it makes changes to the planning and funding framework of the Land Transport Management Act. This channels around $3 billion of central government funding annually into roading public transport and road safety. Second it will also streamline the framework for assessing toll-road schemes and will simplify the Act’s concession agreement provisions while facilitating roading public-private partnerships.Hon Ruth Dyson: You’ve got the wrong speech. Who’s listening anyway?Hon Dr JONATHAN COLEMAN: You should listen actually as a convicted drunk-driver because they drive on roads as well.Hon Trevor Mallard: I raise a point of order Mr Speaker. [Interruption]Mr DEPUTY SPEAKER: Order! Point of order—I think I know what it is.Hon Trevor Mallard: Mr Deputy Speaker you are not a convicted drunk-driver.Mr DEPUTY SPEAKER: Yes the member must not bring the Speaker into the debate. Be very careful on the pronouns that you actually use.Hon Dr JONATHAN COLEMAN: Speaking to the point of order—Mr DEPUTY SPEAKER: No I have ruled. The member should not bring—Hon Dr JONATHAN COLEMAN: Mrs Dyson is not a convicted drunk-driver—sorry is—Mr DEPUTY SPEAKER: Order!Hon Trevor Mallard: I raise a point of order Mr Speaker. You asked him not to speak to your ruling; he did. At this point he should go. [Interruption]Mr DEPUTY SPEAKER: Order! I will ask the member to stand and withdraw the comments.Hon Dr JONATHAN COLEMAN: I withdraw and apologise.Mr DEPUTY SPEAKER: The member will now contain himself to do the speech.Hon Dr JONATHAN COLEMAN: Right where were we? The bill has three main components. First it makes changes to the planning and funding framework of the Act. This channels around $3 billion of central government funding annually into roading public transport and road safety. Second it will also streamline the framework for assessing toll-road schemes and simplify the Act’s concession agreement provisions which facilitate roading public-private partnerships. Third it establishes in legislation a new public transport operating model.Submitters were generally supportive of the bill’s intent to simplify the Act’s planning and funding framework. To achieve this the bill will focus the Act’s purpose and decision-making criteria on an effective efficient and safe land transport system in the public interest. This will make the Act simpler clearer and easier to understand.The bill will also simplify central and regional transport planning processes. The bill consolidates the regional land transport strategy and regional land transport programme into a new regional transport planning document the regional land transport plan. It also consolidates the national land transport strategy and theGovernment Policy Statement on Land Transport Funding into a single document theGovernment Policy Statement on Land Transport. The select committee recommended amending the bill’s provisions on the new Government policy statement to give clearer guidance on what might be included in this document.The bill will also do away with the obligation for regional transport committees to include representatives from a list prescribed in legislation. This will give the committees’ elected representatives the right to decide whom they need to hear from.Rules against borrowing will also change. Currently borrowing is allowed in two situations: firstly borrowing that is repaid through the use of toll revenues that are not part of the National Land Transport Fund; secondly borrowing for cash-flow management of the National Land Transport Programme repaid from the National Land Transport Fund. This bill will remove this artificial distinction between borrowing against the fund and other transport revenues. It will do this by allowing borrowing to be used for future projects should there be a good case and should it be prudent to do so. This type of borrowing would be subject to agreement from the Minister of Transport and the Minister of Finance.Provisions for a regional fuel tax will be repealed. This will guarantee that costs imposed by a regional tax are not spread across all regions. It will also safeguard productive sectors that use fuel for non-transport related reasons from the additional costs of going through a refund system to claim back the tax.The second significant area of change is to tolling schemes and concession agreements. The bill will simplify the process for approving toll-road schemes. A number of existing statutory tests many of which are currently duplicated elsewhere in the Act will be replaced with a single high-level test requiring tolling proposals to be efficient and effective.The bill removes the requirement for toll roads to include at least one method of payment that does not collect personal information. Motorists’ privacy will continue to be safeguarded by the Privacy Act 1993 and the availability of an un-tolled route. The committee recommended that motorists’ privacy is further safeguarded by amending the bill to limit the circumstances in which personal information can be retained by the toll operator. As part of these changes the bill will enable the existing toll road in Tauranga Route K to be brought under the toll-road regime that applies to other toll roads.The bill also simplifies the road leasing policy set out in the Act’s concession agreement provisions reducing potential barriers to the use of public-private partnerships for the purposes of constructing or operating new roads.Finally this bill establishes in legislation a new policy framework for an ongoing partnership between regional councils and public transport operators for planning and contracting public transport known as the Public Transport Operating Model. Almost all submitters on the bill were supportive of this new model.The bill will also repeal the Public Transport Management Act 2008 carrying over relevant provisions into the Land Transport Management Act. The bill will require all public transport services in a region to be segmented into units and provided under exclusive contract to the regional council. Regional councils will be required to identify in their regional public transport plans the units they propose to contract the policies applying to operators of units and any taxi and shuttle services the region intends to financially assist. Services that do not form part of a region’s core urban public transport network will be exempt from operating under contract and will be identified on an exempt services register held by the relevant regional council.The committee recommended amending the bill to insert principles for planning and operating public transport services that will guide decision making. The principles are those that were used in the development of the Public Transport Operating Model and they incorporate the Government’s objectives for public transport services.The committee recommended amending the bill to express more clearly the intended purpose of regional public transport plans and simplify the content requirements for regional public transport plans. The committee also recommended a number of other amendments to ensure existing services and operators are not unduly affected by the transition to the new framework.In closing I would like to once again thank the Transport and Industrial Relations Committee members for their work on the bill. A number of worthwhile refinements have been made. This bill will provide a durable piece of legislation that promotes an effective efficient and safe land transport system. I commend this bill to the House.IAIN LEES-GALLOWAY (Labour—Palmerston North): Labour opposes this bill the Land Transport Management Amendment Bill because it sets in permanent bitumen the National Government’s fossilised approach to transport infrastructure and its determination to waste taxpayers’ money on monster motorways that serve no real purpose other than to be a monument to this Government’s profligate spending on outmoded transport infrastructure that harks back to the 1950s era of sprawl and motorways. The central way in which this bill achieves that is by changing the purpose of the current Act. The current Act says that its purpose is “to contribute to the aim of achieving an affordable integrated safe responsive and sustainable land transport system.” What could possibly be wrong with that purpose and that aim for our land transport? But this is what the Government wants to do away with.Let us have a look at the reasons why. Well the question of affordability comes up first. Is our land transport system affordable and are the Government’s plans affordable? Well clearly they are not. That is why this Government is having to raise fuel excise taxes by 9c a litre increasing the cost of living for hard-working New Zealanders right at the time when they can least afford to face new costs. This Government is not prepared to bring down the cost of electricity and it is prepared to increase the cost of fuel so that it can pay for its unaffordable monster motorways—its roads of national significance.Is the land transport infrastructure integrated? Integrated of course means making sure that different modes of transport can work well together. Well again this Government does not believe in different modes of transport; it believes there is only one way to move people and freight around New Zealand and that is with cars and trucks. It does not believe in rail and it does not believe in coastal shipping so of courseit does not want the purpose of this Act to be that land transport should be integrated because it simply does not believe in that.Does it want to be safe? Well the Government has already withdrawn funding from local councils for their safety promotion programmes so it is making it harder for councils to make their roads and their pedestrians and cycleways safer. But in fact the Government has also indicated that it is prepared to sacrifice the lives of people travelling on local roads the lives of cyclists and the lives of motorcyclists so that it can pay for its roads of national significance. So of course this Government does not want to have safety included in the purpose of this Act.Is it responsive? Well it certainly will not be responsive to New Zealand’s needs. It will be responsive to this Government’s fixation with roads but nothing else. And is it sustainable? Well we know that the least sustainable form of transport is the car especially the car carrying a single occupant.So this Government has no commitment to a sustainable land transport system. That is why the National Government is gutting the Land Transport Management Act by doing away with all of that and simply narrowing it down to “effective efficient and safe.” Well I do not believe the safe bit because the Government has not demonstrated its commitment to safety and “effective and efficient” basically just means “Does it implement National’s fixation on roads?”. That is all this bill is about and that is all the Act will be able to achieve once this bill is passed.The other thing that this bill does is it removes the ability for local councils to implement a regional fuel tax if they choose—if they choose. The current Act does not commit anybody to a regional fuel tax but what this does is take away that option. We know that the Government’s programme is unaffordable and that is why it has had to increase fuel taxes to pay for its monster motorways. It says that that is what it is all about—it is about paying for the roads of national significance.Even if we believe that it is about building roads—and most people do not; most people think that the increase to the fuel excise tax has a lot more to do with helping this Government reach its surplus because it has failed to actually get the economy moving so it had got to reach its surplus somehow else and that is by increasing taxes on ordinary New Zealanders. But even if we believe that it is about building roads we know that actually only CPI increases are required for the Government to meet its roading programme. If the Government would just take a sustainable approach to transport infrastructure if it would not stick to its politically motivated programme that ensures that a group of projects is started before the next election and another group of projects is started before the election after that if it would abandon that political motivation and focus on a sustainable approach to land transport then those excessive increases to fuel taxes would not have been required and New Zealanders would have just a little bit more left in their back pocket.But we know that sense and planning have nothing to do with this Government’s approach to land transport infrastructure. It is all about ideological madness. The next example of the ideological madness is using a public-private partnership to build Transmission Gully. This bill allows for greater use of borrowing to build the Government’s unaffordable transport infrastructure. It cannot afford to pay for it even with its excessive tax increases so it needs to open up the opportunity for borrowing. Well a public-private partnership is the worst possible form of borrowing that it could undertake. There is no evidence that a public-private partnership is more efficient or more effective than simply using the public sector model.In fact this Government was not prepared to release the public sector comparator for Transmission Gully. It is not prepared to tell the public how much it thinks it would cost to build Transmission Gully under the traditional model. I think the reason for that isthat it knows that the public-private partnership will not stack up against the traditional model. The Government has not been able to demonstrate that it will cost less to build it by a public-private partnership. It relies solely on intangible supposed benefits and simply relies on the theory that the private sector can do it better. The evidence says that that is just wrong. If you look around the world all you have to do is look across the Tasman at Australia. We know that public-private partnerships for roading infrastructure have often been a dismal failure there.So we need to get the Government actually looking at the real options not adhering itself to ideological madness. We know why the Government is doing this. We know why the Government is doing this because look at the enthusiasm from the private sector to provide this money. The enthusiasm was enormous because the private sector saw an opportunity for a low-risk high-return investment—a low-risk high-return investment. The Government has taken all the risk out of Transmission Gully. It does not matter how many people use it. It does not matter whether it is the right road or whether people end up using it or not. The private investors will get their money. It is going to cost New Zealanders $2 billion more than it ought to. It is going to cost New Zealand taxpayers $2 billion more than it needs to. Why? So that the National Party can provide a low-risk high-return investment for its mates. That is who it is about not New Zealanders not road users and not public transport users. This is all about the National Party’s mates. That is what it is about.Over on this side of the House we believe in an integrated system. We believe that roads are important we believe that rail is important and we believe that coastal shipping is important. We do need an integrated system. That is why the purpose of this bill should be about building an affordable safe and integrated system that is sustainable. That is what this Government is taking away with this bill. It is going to ruin our transport infrastructure and it locks us in to a 1950s vision of transport. This is a fossilised Government that is stuck in the past. The bill is going to be detrimental to the economy up and down New Zealand as New Zealanders are forced to pay for this madness and for monster motorways.DAVID BENNETT (National—Hamilton East): I never thought I would say these words in this House but I wish Phil Twyford was back. Phil Twyford was the reasonable sensible face of Labour Party transport policy. Now the Labour Party has given up not only economic policy to the Green Party but transport policy to the Green Party. What kind of Labour Party are you? What kind of Opposition is the Labour Party when the Green Party dictates your policy and the Green Party tells you what to say in this House? Be a real Labour Party.Iain Lees-Galloway: I raise a point of order Mr Speaker. I believe that it is outside of Standing Orders to suggest that any members or parties are under the influence of any other group.Mr DEPUTY SPEAKER: I do not—[Interruption] Order! I do not believe that the assertion was made that the member was under an influence. I understand that it is a reasonably fine point but I do not think that that assertion was made with clarity.DAVID BENNETT: Oh those members are so sensitive but they are going to be more sensitive when the regions of New Zealand hear these words the words coming from the Labour Party spokesperson on transport that the car is the least sustainable form of transport. I will say that again: the car is the least sustainable form of transport. Another thing he said in his speech was that there will be only CPI increases for the transport budget—only CPI increases. The other thing he said was that the Government is wasting money on outmoded transport infrastructure and big projects like monster highways. Labour will not support the roads of national significance. That is true is it not Darien Fenton? I know it is because in Hamilton we have the Waikato Expresswaybeing built. I would like to see the day when a Labour member of Parliament or Minister-in-waiting comes to Hamilton and actually says that.Iain Lees-Galloway: Been there.DAVID BENNETT: Ah they cannot come and say that. They came to the paper. It was in theWaikato Times a few months ago. Martin Gallagher that great MP from Hamilton West who is nearly as great as the current MP from Hamilton West asked the question of the Labour Party members: “Do you actually mean what you say?” and they would not answer. The members of the Labour Party would not answer that because they know that they cannot go to Hamilton and say that they are not going to support the roads of national significance.Hon Simon Bridges: What did Sue Moroney say?DAVID BENNETT: Sue Moroney does not have any opinion on this matter. That is the Labour Party: no opinion because it knows that it is bad policy.I wait for the day when that member Iain Lees-Galloway and the leader of the Labour Party come to Hamilton and are asked by the councillors and the mayor and all the big parties in Hamilton whether they are going to support the roads of national significance and the Waikato Expressway and they will not say a word. They will not say a word because they want to go into the next election having no commitment on this. But their real feeling is that they will not support it and today we have seen this in this House. That is a shame and that is why you are going to lose provincial votes. Do not give in to the Green Party any more. Be a true Labour Party: stand up for reason and for Labour Party values. You are not the Green Party. We look forward to this Land Transport Management Amendment Bill progressing through Parliament. Thank you.DARIEN FENTON (Labour): It is a pleasure to take a call on the Land Transport Management Amendment Bill. I want to start by acknowledging the previous speaker David Bennett and the rant from the previous speaker. My question to him and also to the other member from Hamilton Tim Macindoe is why is he so desperate to have people from Hamilton getting out of Hamilton and going to Auckland?David Bennett: We’re not.DARIEN FENTON: Yes you must be. You must be because you go on and on and on about the Waikato Expressway. That is what it is for. You want to see people from Hamilton going to Auckland because they cannot get jobs in Hamilton because that member has done nothing about job creation just like the rest of his Government. That was a rant from that member but we have come to expect that. I would like to advise the House that actually in the Transport and Industrial Relations Committee he shows a little bit more decorum and he did chair—Andrew Little: Sometimes.DARIEN FENTON: Sometimes—not when Andrew Little was there. Now Sue Moroney is back we can probably expect to see lots of decorum.There were 98 submissions on this bill and we heard 29 submissions. One of the good things the select committee did was to go to Auckland to hear from interested parties. That is quite unusual really for this Government which seems to want to cut back on the select committee process frequently.So returning to the bill having praised the chair of the select committee—and he was too busy shouting across the House to listen which is pretty common may I say—I want to talk about the bill a wee bit because its purpose is to reform the Land Transport Management Act 2003. I thought I would inject a little bit of history into the Land Transport Management Act 2003 because that was a brilliant piece of work done by the former Labour Government and it represented the biggest change in land transport funding and management since the 1980s. Prior to that it was a complete mess. The land transport management funding framework was incredibly flawed. There was nostrategic direction. It did not allow for an integrated approach to be taken to land transport because it focused on roading.Well here we are 10 years afterwards and we have a bill that is all about roading. This bill undermines all of the good work that was done with that Act along with the Public Transport Management Act. It made significant strides in our land transport systems including public transport. But of course public transport takes a back seat under this Government. All of that work—there was a 2008 Act also brought in by the Labour Government that enhanced New Zealand’s transport planning and funding system. That Act provided for fuel excise duty for land transport purposes and changed the way that fuel excise is set to provide more certainty for future investment. That was a very progressive move by the previous Labour Government. We increased the investment in public transport tenfold and the funding for passenger transport services.While I am talking about the history of this bill can I also just remind the House that it was Labour that initiated double tracking electrification an extension of passenger transport to other parts of Auckland the reopening of railway links some of which are now being closed and the North Shore busway. I was just gobsmacked to hear Steven Joyce—the Hon Steven Joyce—claiming credit for the electrification and the double tracking of the Auckland rail system because I know that is not true. I live in west Auckland. I know who started that project. I know it was Labour that did that and I found it pretty outrageous actually that Steven Joyce would try to take credit for that. I suppose he has to in a way though because there are not many other public transport system initiatives that he can take credit for.As I said this bill undoes much of the good work that was done in the 2003 Land Transport Management Act. It does show that the Government has realised that its roads of national significance projects are too expensive and it is going to have to borrow to fund them or make them all toll roads. Without increasing petrol tax beyond the CPI adjustments the New Zealand Transport Agency would need to borrow $930 million over the next 5 years to keep the roads of national significance on track. Let us say that again—$930 million will need to be borrowed over the next 5 years to keep the roads of national significance on track That is why we have to have this bill. The Government has realised that it cannot afford it and it is going to set it up so it can borrow more. It can set up public-private partnerships and it can toll people hard-working people who are already struggling to get by.The change in the purpose section in clause 4 I think says it all. I will talk a little bit more about that when we get to the Committee stage but the only reason that I can see that the Government is making changes to the purpose section is that it no longer wants a transport system that is affordable integrated safe sustainable and accessible or one that promotes public health and environmental and social responsibility. That is the only conclusion one can draw from the fact that the Government has amended the purpose section. It is about National trying to tighten its control of land transport so it can cherry-pick more projects to suit itself. The sad thing about that is it removes and this bill removes the opportunities for local communities to support transport projects that benefit them. That is something that I think communities are getting pretty outraged about.The bill reduces opportunities for the community to have input into transport systems. Every community should have the ability to have its say about its transport systems. But what have we got? We have got the debacle in Auckland where you now have a consensus on a way forward for funding for transport and the Government will not have a bar of it—will not have a bar of it. They brought together a whole lot of people—business unions transport experts the cycling forum—all sorts of people have come together and agreed on a system of funding into the future for Auckland and theGovernment is just pulling that they are the big boys in town. Wellington should tell Auckland what it has to do for the future.I live in Auckland and I support the plans that have come from our council about the future. I am sick of being on roads that are jammed to the hilt. I do not believe that building more roads will change that. In fact in Auckland there is nowhere to build more roads.David Bennett: Come to Hamilton. We’ll take you round Hamilton.DARIEN FENTON: No no no you are sending the people to Auckland. That is the problem. If you stop sending all those people to Auckland through the expressway we probably would not have so many problems. I am sick of that. I want to see a city in the future that is supported by this Government. It is not supported by the Government. The wonderful unitary plan that has been widely consulted on throughout the city is being ignored by the Government. It does not want communities to have any say in the future of their cities or their transport systems. That is what this bill does. The Government also continues to underfund local roading. It sees a subsidy on State highways which receive $142509 per kilometre compared with $7573 per kilometre for local roads. So a huge subsidy is going into State highways compared with the local roads. I am sure that other speakers are going to want to talk about Transmission Gully and the expensive project that is turning out to be.This bill as I said at the beginning undoes all the good work that was done by Labour over 10 years. We inherited a mess in the road transport system. We put in place some very very good systems and projects. We allowed communities—wanted communities—to have a say. This bill undoes all of that and goes back to roads roads roads like we had the last time National was in Government.GARETH HUGHES (Green): Kia ora. Ngā mihi nui ki a koutou kia ora. I rise to oppose this bill the Land Transport Management Amendment Bill but it is probably more aptly called the “Road to Nowhere Bill”. You could call it the “Put It On the Credit Card and Pray For a Brighter Future Bill”. But I guess most important for our National MPs who are all fired up now many of them who do represent the regions is that you could also call this the “Regional Road Kill Bill” because what this bill is doing is taking away regional decision making. It is taking away regional autonomy. It is basically saying that this Government does not care about the regions. No no; this Government cares only about motorways in the big cities. It cares only about these uneconomic roads of so-called National Party significance. All it cares about is putting it on the credit card and borrowing more for these uneconomic roads. I believe it should be called the “Regional Road Kill Bill”.This bill the Land Transport Management Amendment Bill deals with transport planning and funding issues. It is a big deal because it deals with the future of our economy the future of our cities and the future of our towns and the way that Kiwis get around whether that is going to be more expensive or cheaper faster or slower stuck in gridlock or not. These are key issues for our country and the Greens have got solutions.Again it was a very low-quality contribution that we saw from the member from the Waikato David Bennett but I think he did touch on the change and how it was seen under Labour. I celebrate this. I congratulate this. Labour in its last term did do some great things for transport particularly in Auckland. I would like to congratulate the Labour Party on the moves around electrification and double tracking in Wellington and Auckland—good stuff. I would like to think the Labour Party has moved with the times because the National Party these guys—and it is all guys in the House today—are stuck in the 1960s. They are stuck in a 1960s approach to transport. We see this in this bill that is all about removing local decision-making putting more money on the credit card for motorways and reducing the regions’ decision-making ability.First of all I would like to acknowledge the select committee process thank all the submitters thank the officials and thank the members of the Transport and Industrial Relations Committee. There were some improvements I understand. I did not get the privilege to sit on the committee but I understand that a new clause 43A has been inserted. This is around the privacy concerns about tolling. This is something I talked about in my first reading speech based on concerns raised by the Privacy Commissioner so it is good to see some solutions proposed and the improvements to the legislation there. Other changes are around regional public transport plans and the hierarchy making with the Government policy statement on transport planning.But you know let us get to the heart of this bill. What this bill is all about is the Government’s motorway agenda. When I was the transport spokesperson for the Greens I used to call Steven Joyce the “Colossus of Roads” but we have got Gerry Brownlee in the transport ministry now—Hon Clayton Cosgrove: That’s Gerry—he’s a serious colossus. There’s a serious colossus there.GARETH HUGHES: —and if there was a “Colossus of Roads” there sure is with Gerry Brownlee.What we see is that this Minister with considerable power has been given a pantry which he has stocked with $20 billion worth of transport funding. The Minister of Transport does not have to go off to the Minister of Finance to get his spending approved. This Minister has got a pantry stocked with $20 billion paid for from the fuel excise tax and the diesel charges and what we have seen is that this Government has totally cleaned out the pantry. The pantry is bare because it has spent it all on the roads of so-called national significance. The pantry is bare because it has spent it on the motorways—the Transmission Gullies the uneconomic road from Pūhoi to Wellsford. That is why as Darien Fenton pointed out it is needing to borrow almost an extra $1 billion to fund the roads of national significance—the seven motorways in the cities.So the agenda behind this bill is bad news because it does not even meet its own economic objectives. We know that the benefit-cost ratios for half of them would get any National member laughed out of a business board meeting if they proposed to go and borrow billions of dollars with benefit-cost ratios of less than one. Take Transmission Gully. Independent estimates previously put that at a ratio of 0.4. For Pūhoi to Wellsford independent estimates put it at a ratio of 0.7. So for every dollar the National Government is going and borrowing from New Zealanders—borrowing from the future—it is planning to lose 30c to 60c. It would get laughed out of any business board meeting but somehow it is doing it to our country.This Government is removing the five previous transport objectives in the legislation: the objectives of being affordable integrated safe responsible and sustainable. I do not know what the National Party has got against being affordable integrated safe responsible or sustainable but obviously it has got some concerns about those points which I think Kiwis would find surprising.The rationale behind this bill is tilting the balance of power as we make decisions on these key transport issues that shape our cities towns and economy. We are seeing considerable and enhanced powers given to the Minister of Transport. We are seeing consultation provisions being removed. We are even removing the non-voting members of regional transport committees. These are the people who sit on committees and do good work advocating for walking and cycling. It is a pretty hard job at the moment because the pantry is being made bare to spend money on these roads of uneconomic national significance. The Government is even getting rid of these people who stand up in their community and advocate for walking cycling or public transport.The Government is removing the regional fuel taxes. This is quite interesting because the Government has the power of veto over any regional fuel tax right at the moment so what it is doing with this legislation is quite literally putting its foot on the floor rubbing it in and making sure that regional fuel taxes are an impossibility. It is disappointing because Auckland which is obviously disappointed by the Government’s 1960s transport agenda is setting out to try to provide solutions for its city—solutions that the city needs like the central business district rail link. But what this Government is doing is making it virtually impossible for Auckland to be able to raise the funds itself. There are other potential funding mechanisms that Auckland Council is investigating and considering but this Government is making it harder to see the transport solutions that city needs.What we are seeing is an increase in borrowing under this legislation. I think we should have an intelligent and considered debate around the hypothecation of transport funding. I think there are some pros and cons. I mean we are not going to see an intellectual considered debate in this House with the National Government on the Government benches but we have got to have a conversation. At the moment the funding raised from fuel taxes on diesel and petrol is spent on roads for everything from public transport to road safety campaigns to policing through to motorways and what this Government is saying is that it has blown the budget on the motorways and it has got to borrow more to fund it.This is an incredible statement because over the National Land Transport Fund’s 10-year funding horizon which the Government allocates through the Government policy statement it has got around $20 billion. Any other ministry would love to have a $20 billion kitty to play with over 10 years and all this Government is saying is that it has blown it all and it needs extra money—it needs to put it on the credit card. Of course there is an argument for long-term borrowing to fund infrastructure investments across generations but look this should be only in a situation where the infrastructure investments make sense have good business cases and have a good rationale.The reason why the budget has blown out of course is that while the Government is off borrowing billions for these uneconomic motorways what we have seen is road patronage flattening down petrol prices go up considerably over the last 5 years and public transport go through the roof in the last 5 years. We are seeing fewer funds in the National Land Transport Fund so the Government has to go to the bank to borrow some more for the motorways.It is not a good way to run the economy it is not a good way to plan for our cities and New Zealand is stuck in traffic because the Government is not offering alternatives to ride or walk to work or to catch a bus or a train. Because those solutions are not there it is going to be the Aucklanders in congestion cursing the National Government because what it is doing through this “Put It On the Credit Card and Pray For a Brighter Future Bill” or the “Regional Road Kill Bill” is not going to be providing the solutions our cities and towns need for the future. That is what the Green Party is doing. We have done it for a long time and it is something we will continue to champion.In Government—sooner rather than later we believe—what you will see a Green Government doing is funding a fair contribution towards the central business district rail link. We will be seeing things like the light rail link in Wellington. We will be trying to make public transport more affordable. Of course this is going to help people get on the bus or safely cycle to work. It is also going to help those motorists because the more people we have taking sustainable forms of transport the more room there is on the roads for the taxis and the plumbers whom Michael Cullen used to talk about fondly. In summary this is a bad bill. That is why we are opposing it. It is a 1960s approach totransport. I believe the Green Party is reflecting the future and the solutions this country needs and I am proud to be championing them in Parliament. Kia ora.MIKE SABIN (National—Northland): I am very pleased to take a call on this Land Transport Management Amendment Bill. It is just a shame that we could not beam the contribution from the previous member Gareth Hughes into the households of New Zealanders on the 6 o’clock news because by crikey would it do some fantastic things for the party vote for this party and put his party vote back where it belongs at about 0 percent. That contribution from that member matched by the Greens’ friends in the Labour Party shows exactly what those people think about what New Zealanders care about which is infrastructure to provide an economic platform and to provide productivity. This bill goes to the heart—it goes to the heart—of providing the freeways the highways and the byways into the economic engine of this country.Members from that party will wander up to Northland once a year to have their retreats. They have some fish and chips at the Mangonui fish and chip shop they snap a couple of photos they pontificate about the challenges of Northland they come back to this place and then say that the Pūhoi to Wellsford road of national significance is the first thing they will get rid of. They would not say that up there. They would not say that up there because they know what sort of reaction that would get. They do not understand that the importance of that road to the New Zealand economy is something that this party does understand and that is why that road of national significance is on track and will happen.When we had the whole of region economic summits in Northland and when we asked what the biggest issue is for Northland’s economic growth and prosperity what was it? It was State Highway 1—State Highway 1. The New Zealand Transport Agency said it would be a $35 million to $45 million addition to the Northland economy per year. That was back in 2011. I drilled into those figures a little bit further with our local economist: 15 percent of the Northland economy that is $1800 million per year travels down that road and by our improving that roading infrastructure it is not only about safety but also about empowering the Northland economy.This legislation goes to the heart of providing the synergy across national land transport planning and programming with the regions because there is a disconnect with what the regions are doing in many respects and getting synergy is about efficiency and understanding how this whole country works and the importance of the roading network in it. I wholeheartedly commend this bill to the House.DENIS O’ROURKE (NZ First): The aim of the Land Transport Management Amendment Bill is to change the funding framework for land transport activities including roading public transport and road safety; repeal regional fuel tax provisions; change the framework for assessing road toll schemes; establish a policy framework for the relationship between regional councils and public transport operators; and bring the existing road toll at Tauranga under the Act’s road toll regime.The changes made to the planning and funding provisions of the Act that I wish to mention include the funding framework being focused on the effectiveness and efficiency of public expenditure; the decision-making criteria being changed to emphasise the effectiveness efficiency and safety of the system; the replacement of the national land transport strategy with a statement on land transport used to set central government’s outcomes objectives and impacts; the removal of non-voting representatives from regional land transport committees; and the repeal of regional fuel tax provisions.Starting with the objective and functions of the agency I note that the changes to the objectives of the agency from the achievement of “an affordable integrated safe responsive and sustainable land transport system.” to the achievement of “an effectiveefficient and safe land transport system” will be a huge mistake for New Zealand. Essentially it means that the Government is interested only in saving money as the first priority but much more is at stake. The agency must seek much better integration of transport modes. As the era of the dominance of fossil fuel transport comes to an end mostly because of the increasing costs and risks of production and the increased competitiveness of alternative energy sources; as the dominance of the use of cars for peak-time travel is increasingly non-viable in the big cities especially at peak times; and as the competitiveness of other modes and the huge increases in road network expansion and maintenance increasingly favour those other modes it will be increasingly necessary to ensure a properly integrated system so that the best use can be made of all modes and of the alternatives to more cars and more and bigger expensive motorways.Similarly it will be essential for New Zealand to design a transport system—especially for freight from one end of New Zealand to the other and especially for personal transport at peak times in the larger cities—that is sustainable and that means economically socially and environmentally sustainable. If that ceases to be an objective then the vast effects of the transport system will not be adequately controlled and mitigated. As a result the viability and usefulness of the system will be so seriously compromised that the Government’s own stated objectives in relation to efficiency and effectiveness will actually become unachievable. But most of all the very environment on which we rely for healthy lives and a good quality of life will also be degraded and that is not the “100% Pure New Zealand” any of us want.The bill will also entrench the current situation with us for decades under successive National and Labour Governments—a situation in which we will continue not to have a genuine and comprehensive New Zealand transport strategy. The intent of the bill under which the Government will issue aGovernment Policy Statement on Land Transport will not be a sufficient basis upon which the planning and funding of our future land transport needs and options can be based. Land transport will continue to be a political football kicked about in different directions by whichever political flavour is in power at any particular time. It will ensure that there is no coherent long-term strategy that we can work towards. It will mean the wasting of huge amounts of public funds on doing what we have always done: failing to provide for fundamental future changes that will be imposed on us.We need an entirely new approach that converts our system to one that over time makes much better use of our vast renewable energy opportunities reduces dependence on imported liquid fuels and replaces more clogged motorways with attractive safe comfortable and affordable public transport systems as well as facilitating more cycling especially at peak times. In my work on the city council I accepted the need for a better road network and indeed led the project for the completion of the ring road there and supported the completion of the southern motorway. But I also introduced however a living streets concept so that roads would be designed to enhance neighbourhoods and safety while making good provision for both road traffic and the prioritisation of public transport. I think Fendalton Road is an exemplar of this.I went and studied examples of advanced modern integrated systems such as those I found in Portland Oregon where I saw a cut-off motorway ramp. The city had simply said: “This is enough. These motorways stop here.” Instead they replaced them with a new light rail system and much better bus services. That city is now one that we should look at as an example to follow. We must learn the lessons from other countries where the headlong race to build more road capacity has resulted only in more demand especially at peak times; Los Angeles is the exemplar for that.The effect is a vicious circle that costs vast sums in capital expenditure and increased maintenance costs and in addition it causes very large increases in externalities such as the costs of accidents health care and deaths and the increased costs in relation to pollution waste delays community severance business dislocation and so on and so on.I note also that some of the best aspects of regional transport administration will be removed by this bill. The non-voting representatives of a prescribed list of interests as members of regional land transport committees are removed. This reinforces the Government’s disregard for the integration of land transport modes and its determination to favour road transport over all other modes through planning and funding mechanisms. From my experience the quality of input of volunteer experts in public transport transport safety cycling walking business operations and so on is too valuable to lose. It is just another way in which this Government is intent on the minimisation of local democracy.The removal of these people is just silly but worse still is the intention to remove the option of regional fuel taxes. Although issues in relation to these are significant they are certainly not insurmountable. If a regional council can persuade its population in favour of such a tax it offers an inexpensive effective and fair way of funding important regional transport initiatives that might otherwise not be achievable. The removal of this option is a great shame and is entirely unjustifiable. We need to try to broaden the funding base not narrow it.New Zealand First is focused on a sustainable transport system. We want more from the system than just roads. We want a modern rail system integrated with good roading shipping and air transport systems. We want to develop these with Kiwi expertise rather than buying this from overseas and the same applies to transport equipment especially railway wagons and electric locomotives. That creates more jobs and more economically and environmentally sustainable transport facilities for this country.The Government’s direction in this bill is entirely misconceived. It will damage New Zealand’s economy social well-being and environment for decades to come. We will therefore certainly vote against it.CHRIS AUCHINVOLE (National): It is a pleasure to take over from Mr Denis O’Rourke. Although his speech to my ears was for the most part very positive and obviously coming from a good solid knowledge and experience base I am still not quite sure whether he is going to vote for the Land Transport Management Amendment Bill or against it. Let us hope that he is going to vote for it because this is a very important bill and one that will serve the country well.It is a disappointment to me to hear members on the other side speaking so negatively about such an important bill. I thought during the select committee process—and I am sure my colleagues think the same—that they were reasonably responsive they were open to argument they reasoned things quite well and there was a touch of collaboration there until we got back in the House. Then off Labour went with the Greens to satisfy its left-wing trade union base and sycophantic supporters and out the window went common sense reasoned argument and any suggestion of collaboration.Labour should be braver. It is a disappointment to me and it lets those members down. It is a disappointment to the voting public and to those who will be assisted by the passage of this bill and there are a lot of those. Fortunately we will pass this bill. I commend it to the House. Thank you.ANDREW LITTLE (Labour): For the avoidance of any doubt for my friend Mr Auchinvole across the aisle there Labour will be opposing this bill the Land Transport Management Amendment Bill. It is a bad bill. It will do nothing for transport. This bill is a bit of a curate’s egg. There are actually some good bits in it but the rest of it isrotten and stinks. We are opposed to it and we will not swallow this bill. In reference to Denis O’Rourke and Iain Lees-Galloway this is a bill that does give you the dry horrors even just thinking about it. It does get us pretty choked up.I raise a question: what is this bill going to do for State Highway 3 in north Taranaki? David Bennett will know that State Highway 3 is the only northern link to Waikato. There are a lot of Hamiltonians who when they need a break from that thriving city that exciting city come down the coast down State Highway 3 to enjoy the delights of Taranaki—the mountain the surf; the things you do not get in the Waikato. When you get sick of green paddocks and the flush of milk you come down to Taranaki because you get the flush of milk and the green paddocks but you get the surf and you get the mountain as well. That is why a lot of Hamiltonians come down here. There are two very notable roads in Taranaki. The other is the Forgotten World Highway which some people mistake for the pathway to the National Party research office or sometimes Aaron Gilmore’s office. But it is not the Forgotten World Highway that we have to worry about because the residents on that highway quite like the way it is. That goes not quite all the way to Waikato; it heads off towards the other mountain.State Highway 3 is a very important road to Taranaki and it has never featured on the list of roads of national significance under this Government in spite of the fact that it carries every day literally tens of millions of dollars’ worth of valuable product. It is a lifeline to Taranaki—it is a lifeline to Taranaki. Most of the heavy lorries that supply the supermarkets and the shops have to go through State Highway 3 in north Taranaki. Many of the trucks laden with Taranaki gold the crude oil that is pulled out of the ground in the safe extractive industries that are occupied there have to go on State Highway 3. You would think given that in that region there are no fewer than three National Party MPs—none of whom sit in the full Cabinet; the real Cabinet—that the Government might actually listen to what those members have to say. But no it does not. Never a word has been spoken about State Highway 3. The only concession given by this Government is to spend $15 million on 30 metres of road which is a bridge just out of New Plymouth. The remaining 100 kilometres between New Plymouth and Piopio were ignored by this Government until I actually raised this issue of State Highway 3 recently and Jonathan Young has talked about but since.Let me tell you about that road. It is a dangerous road. There are heavy lorries going on it and they have to negotiate poor paving and poor bridge abutments. It is very dangerous if you are a truck driver that is why we have very skilled truck drivers in Taranaki. It is very poor quality. Then they have got the Awakino gorge which has been a point of debate for frankly decades. There would not be a year goes by when that piece of road is not closed for several hours because of an accident as it was only a month or so ago. Then there is Mount Messenger—another very dangerous piece of road. Millions of dollars have been spent on repaving trying to get it upgraded and expanding the tunnels that are up there but that does not improve the productivity of the roading. You would think that a Government concerned about productivity and good quality roads and not wanting to make political gestures all the time would look closely at that road. This Government has not done that.There is nothing in this bill—nothing in this bill—that will shift this Government away from its highly dodgy benefit-cost analyses on its roads of national significance to have a look properly and in a considered way at roads that are of value to significant communities. Taranaki punches well above its weight in the contributions that it makes to the national coffers through taxes on income GST and royalties on those goods extracted out of the ground. Taranaki pays an enormous amount and it is not too much to ask for a decent long-term plan on the upgrade of State Highway 3. It is long overdue and we have the means to do it.One of the dangers of this bill of course is that we hand everything over to the New Zealand Transport Agency. This was the agency that only 2 years ago made an accounting error to the tune of $182 million—$182 million—and we want to give it the responsibility for oversight of this relaxation on tolling making it easier to introduce toll roads and for the introduction of a much less wholesome consideration of what is needed for our roads. It now wants to reduce that to criteria that focus on effectiveness efficiency and safety—never mind the cost to the public. The old wording which required a much broader consideration when it came to roading decisions is much more important. It requires that there be consideration of integration of not just roading transport but public transport and other modes of transport as well. That is all gone under this bill. That is wrong—that is wrong.Provincial centres like New Plymouth which some might describe in terms of “isolated” cities which really have only one road in from the south and one road in from the north are dependent on quality decisions being made under legislation like this and by agencies like the New Zealand Transport Agency. But nothing in this bill will improve the considerations and the quality of decision making when it comes to Taranaki roads. State Highway 3 south of New Plymouth has a highly problematic stretch at what is called the Normanby bridge. That is a 30-metre bridge as well but it happens to be on a dog-leg and it is the cause of many many accidents and many fatalities with another fatality—just another fatality—only earlier this year. Yet the Taranaki Regional Council cannot get this Government to understand that real funding is needed to correct that problem. That roading and the structure of that roading would be an easy problem to correct but it cannot get funding for it. Indeed the Taranaki Regional Council ended up having to challenge the New Zealand Transport Agency when it said: “Choose between your Waiwhakaiho bridge and your Normanby bridge.” Taranaki Regional Council said: “No we’re sick of having to choose between two difficult projects.”Of course what the Taranaki Regional Council could not also say was: “But we’ve also got just as much of a problem with State Highway 3 north.” That problem remains. There is only one MP in this House advocating the case for State Highway 3. It does not have to be a four-lane motorway into Waikato; it just needs to be a proper decent safe road rather than what is presently a very dangerous stretch of road. There is only one MP making that case and that is the list MP based in New Plymouth and that is me. The Government MPs in that area show no interest in standing up to the senior members of their caucus their members in Cabinet to say: “We need to fix this problem for the good of Taranaki.” The Government members will happily turn up to the opening of the peaker plants the new drilling rigs and all that sort of stuff but when it comes to infrastructure for Taranaki they turn a blind eye and they have nothing to say. Thank goodness for the list MP based in New Plymouth who is prepared to take on the hard issues and make the case.Debate interrupted.Sitting suspended from 1 p.m. to 2 p.m.Business StatementHon ANNE TOLLEY (Deputy Leader of the House): I seek leave to make the business statement for the next week of Parliament.Mr SPEAKER: Leave is sought to make the business statement? There is no objection.Hon ANNE TOLLEY: When the House resumes on Tuesday 14 May the Government will look to progress the Education Amendment Bill the financial reviewdebate on the performance and current operations of Crown entities State enterprises and other public organisations and Government notice of motion No. 1 relating to the budgets for the Offices of Parliament. Wednesday is a members’ day and Thursday is Budget day. With the agreement of the Business Committee Dr Jackie Blue will deliver her valedictory at 5.45 p.m. on the Wednesday.Hon TREVOR MALLARD (Labour—Hutt South): Can we have an assurance that there will be an opportunity for Mr Gilmore to speak if in fact he resigns over the weekend?Mr SPEAKER: I move to question No. 1 in the name of Jacqui Dean.Questions to MinistersState-owned Assets Sales—Progress Benefits and Costs1.JACQUI DEAN (National—Waitaki) to theMinister of Finance: What progress is the Government making with its share offer programme?Hon BILL ENGLISH (Minister of Finance): The Government is making good progress on the share offer programme. Last night the Government set the price for the Mighty River Power share offer at $2.50 per share. The 113000 New Zealanders were today allocated shares through the retail sales pool and by Friday night tomorrow night the Government will have collected $1.7 billion in proceeds which will be available to the Government for investing in other public assets.Jacqui Dean: How much did the Mighty River Power share offer raise for taxpayers and how will that money be invested?Hon BILL ENGLISH: There has been I think a misunderstanding that somehow in selling shares the Government and the taxpayer are losing an asset. In fact we are swapping shares for cash and by tomorrow night the Government will have $1.7 billion in its bank account ready to invest in those projects that will be outlined in the Budget through the Future Investment Fund. Future proceeds of asset sales will also go into that fund. Parties that want to buy back the assets or not sell them will have to borrow the same amount of money from foreign bankers if they want to invest in the same way this Government plans to invest in infrastructure in hospitals in schools and in better public services.Jacqui Dean: What are the benefits of the Government’s share offer programme?Hon BILL ENGLISH: There are many benefits. In the first place the Government achieved its objective of widespread New Zealand ownership—86.5 percent of this company remains owned by New Zealanders. Secondly it has provided an opportunity for New Zealand savers to invest their money in the share market many of them for the first time. Thirdly we have collected $1.7 billion in cash proceeds which are available to the Government for reinvestment in public assets. And finally it is a significant move in reinforcing our public capital markets where Mighty River Power will list as the fifth-biggest company on the stock exchange. A strong public capital market is one of the ingredients for higher incomes and more jobs.Dr Russel Norman: Is it not true that Treasury told the Government in the Budget Policy Statement that as a result of the Government’s privatisation programme the Government would be worse off by $90 million to $100 million every year on a net basis?Hon BILL ENGLISH: No that is not correct. Treasury provided a range of measures of the fiscal impact of the sales some of which were slightly positive and some of which were slightly negative. The Government has debated this issue for several years. We came to the view which I believe has been vindicated that the sale of49 percent of this company will be good for the company good for the economy and good for the Government’s books and will help us to avoid the kinds of high levels of debt that the Opposition seems to favour.Dr Russel Norman: Point of order Mr Speaker. I seek to leave—I seek leave to table—[Interruption]Mr SPEAKER: Order! I want to hear what the point of order is. [Interruption] Order! The member has called for a point of order. I want to hear what it is. It will be heard in silence.Dr Russel Norman: Thank you Mr Speaker. In light of the Minister’s denial I seek leave to table the Budget Policy Statement which shows that Treasury says—Mr SPEAKER: Order! The Budget Policy Statement is available to all members.Rt Hon Winston Peters: Will the Minister tell the country what the likely dividends are going to be from the replacement investments he has just mentioned in comparison with those dividends now lost from Mighty River Power; and if there is nothing that is—Hon Steven Joyce: It’ll be the interest on the wonderful schools and hospitals sunshine.Rt Hon Winston Peters: Oh so it is interest now is it?Mr SPEAKER: Order! Would the member please—Rt Hon Winston Peters: Well “Big Ears” keeps opening his mouth when I’m talking.Mr SPEAKER: That is true. It is not helpful for there to be interjection. Would the member please ask his supplementary question.Rt Hon Winston Peters: What will the likely dividends be from the replacement investment that he just referred to with respect to the cash he is getting from Mighty River Power as opposed to that lost from Mighty River Power; and if it is not in any way an equivalent why does he expect the public to believe the bulldust he is giving us now?Hon BILL ENGLISH: Well because it is not bulldust; it is a simple fact. The $1.7 billion collected will be invested through the Future Investment Fund and other public assets. Some of those assets will not pay dividends such as new schools new public buildings in Christchurch new hospitals and other infrastructure that the Government needs to invest in.Jacqui Dean: What reports has he received on alternative policies to the successful share offer programme?Hon BILL ENGLISH: I have seen reports—Chris Hipkins: Not to sell them?Hon BILL ENGLISH: That is right. I have seen reports of policies not to sell them and reports of a referendum to be held to try to prevent the Government from selling them which has so far failed because one in four of the signatures was dodgy.Hon Clayton Cosgrove: Will he give New Zealanders a guarantee that as a result of this float excessive power prices will not occur as Mighty River Power looks to pay out up to 110 percent of its profits as dividends to its previous owners as stated in the 2012 statement of corporate intent?Hon BILL ENGLISH: I can guarantee the member that the fact that the company has floated has no direct effect on power prices and that in fact the process of bringing it to the market has turned it into a very efficient cost-effective company that will need to compete in the market against other companies in a way that will tend to hold prices down from the very high increases that occurred under that Minister’s model for the electricity market.Wellington—Economic Growth and Employment2.GRANT ROBERTSON (Deputy Leader—Labour) to theMinister for Economic Development: Does he agree with the Prime Minister’s statement “The reality is even Wellington is dying and we don’t know how to turn it around. All you have there is government Victoria University and Weta Workshop”?Hon STEVEN JOYCE (Minister for Economic Development): As the member knows the Prime Minister himself has said that he could have chosen his words better and that he was referring to the fact that the head offices of large corporates have migrated from Wellington to Auckland over the past 45 years which of course I agree with because it is true. However we are very fortunate to have a number of thriving innovative and successful businesses in Wellington like for example Weta Workshop which may not have been the case of course if the Labour Party had gotten its way and we had driven theHobbit films offshore.Grant Robertson: Further to the Minister’s answer if the Prime Minister does not think Wellington is dying why did he say it was?Hon STEVEN JOYCE: I think I did answer that in the opening answer which was to note that the Prime Minister himself says he could have chosen his words better. But I have more good news for the member because the household labour force survey came out this morning and Wellington’s regional unemployment rate has fallen by 0.9 percent with an additional 14000 more people in jobs in Wellington than in the previous quarter. So the good news is that Wellington is picking itself up and growing well.Grant Robertson: What responsibility does he take for Wellington dying or being under pressure or whatever the Prime Minister’s latest phrase is today after his Government slashed thousands of Public Service jobs and failed to support manufacturing or other sectors in this city?Hon STEVEN JOYCE: It is very interesting the world that member lives in. But the reality is that this Government is investing—[Interruption]Mr SPEAKER: Order! I am sorry to interrupt the Minister but we must have the ability to hear the answer.Hon Trevor Mallard: I raise a point of order Mr Speaker. It was a pretty straightforward question and the answer was prefaced by abuse of the member.Mr SPEAKER: The difficulty was that it was a relatively straightforward question I agree but I was not able to hear the answer because of the noise. [Interruption] Order! I will now ask the Minister to continue with his answer.Grant Robertson: Responsibility Steven that’s it—what responsibility?Hon STEVEN JOYCE: This Government is taking responsibility for working very hard alongside Wellington to grow the Wellington economy in areas such as infrastructure with the ultra-fast broadband; roading which incidentally the member could help with if he gets some of his friends on the council to start supporting some of the transport projects around Wellington; innovation with our investment in Callaghan Innovation and our research and development co-funding for businesses in Wellington the Hutt Valley Porirua and so on; the development of Victoria University which is going very well and has just got an excellent result out of the Performance-based Research Fund; and of course industry development in areas like the movie industry tourism and international education.Grant Robertson: When the Prime Minister said “We don’t know how to turn it around.” is that a reflection on his Minister for Economic Development’s complete lack of any plan to help grow the Wellington economy?Hon STEVEN JOYCE: It is always difficult when I end up answering the question before the member asks it in his next supplementary question. I have just given him a huge list of things that the Government is working on to develop the Wellington economy. If it is helpful for the member I will repeat that list for him. There is the infrastructure we are investing in: the ultra-fast broadband the roading and in fact the commuter rail where we are helping Greater Wellington get a 100 percent modern fleet as a result of this Government’s investment. There is our investment in Callaghan Innovation which of course is headquartered in this city and our involvement in National Science Challenges where organisations like the National Institute of Water and Atmospheric Research and so on are participating. There is our involvement in the city’s business incubator the development of Victoria University the refocusing of the polytechnics to make sure they are—Mr SPEAKER: Order! That answer is quite sufficient. Thank you very much.Grant Robertson: What is his response to Wellington property developer Ian Cassels who said that John Key should resign because he is not representing New Zealand or valuing what Wellington has to offer?Hon STEVEN JOYCE: Mr Cassels of course represents the commercial property industry which has struggled with the fact that the Government has not kept building brand new office buildings in Wellington every 5 minutes like it used to under the Labour Government when it was setting itself up under Labour for a decade of deficits because of the amount of public sector spending it was doing. We are not doing that any more. We are not able to do that any more. What we can encourage is private sector investment and the growth of industries in Wellington and if the member would like I am more than happy to go through the list one more time.Hon Annette King: Does he stand by his comments this week on Newstalk ZB about Wellington when he said “Annette’s right. There’s very big investment going into the IT sector and the high-tech manufacturing sector. There are lots of staff based here.” and has he thought about how he could turn round the Prime Minister’s ill-informed views about Wellington?Hon STEVEN JOYCE: Well I do stand by my comments on Newstalk ZB this week including my offer to support Annette King in her campaign for the mayoralty. I have run a couple of campaigns in my time and I have to say Annette that you would do a moderately better job than the current mayor.State-owned Assets Sales—Costs and Investors3.Dr RUSSEL NORMAN (Co-Leader—Green) to theMinister of Finance: How much has the asset sales programme cost including but not limited to the expenditure on brokers’ and bankers’ fees the bonus shares advertising costs the Treasury’s internal costs the costs borne by the companies slated to be sold the water dispute costs extra fees to board members and CEOs and listing fees?Hon BILL ENGLISH (Minister of Finance): Treasury is currently pulling together information on brokers’ fees and other recent costs and like all other costs associated with the programme they will be released when they are ready. I can tell the member that the most recently published information on the costs reports spending by Treasury of just over $16 million and by all mixed-ownership companies of $8.4 million. The member may also be aware that this has been part of a process that will mean the Government in the next day or so collects $1.7 billion which will enable it to invest in other public assets.Dr Russel Norman: Given that the best estimate of the cost of the brokers’ fees is about $50 million—Rt Hon Winston Peters: How much?Dr Russel Norman: —$50 million—that the best estimate of the cost of the bonus share giveaway is about $25 million and that the Minister has just identified about another $25 million worth of costs has the asset sale programme not so far cost around $100 million?Hon BILL ENGLISH: That may be possible. The Government has said right from the start that the costs of the programme would represent 1 to 2 percent of the proceeds. We are on track for proceeds within the range that the Government laid out some 2 years ago of $5 billion to $7 billion.Dr Russel Norman: How does the Government justify spending around $100 million selling Mighty River Power when just 2.5 percent of New Zealanders took up the offer? How does he justify spending around $1000 per retail investor on this sale?Hon BILL ENGLISH: That is a bit rich coming from the member who tried to stop the sale which would have wasted the however many millions he thought that it might cost. The Government justifies it on the basis that we will get a better-performing company a better-performing electricity market and better investment opportunities—not just for those who bought shares directly but also for the 2 million New Zealanders who have KiwiSaver accounts. We also justify it on the basis that by the end of the week we will have $1.7 billion available to us in the Government accounts to invest in public assets. That is $1.7 billion we have not had to borrow from the foreign bankers whom this member seems to be sticking up for. Would he rather have us borrow it from his mates in foreign banks?Louise Upston: Has he seen any reports on the costs of the Labour-Greens referendum?Dr Russel Norman: I raise a point of order Mr Speaker. I fail to see the ministerial responsibility.Mr SPEAKER: I accept that. I do not believe there is any ministerial responsibility at all.Louise Upston: Has he seen any other costs associated with a Labour-Greens referendum?Mr SPEAKER: Again I do not believe that is a responsibility—[Interruption] Order!Dr Russel Norman: Given that the average retail purchase of—[Interruption]Mr SPEAKER: Order! We have still got a level of noise here that is making it hard for me to hear the supplementary question.Dr Russel Norman: Given that the average—[Interruption]Mr SPEAKER: Order! Would the member please start for a third time.Dr Russel Norman: Given that the average retail purchase of Mighty River Power shares was $8220 according to the Government yet the typical family has less than $2000 in the bank does he think that the less than 3 percent of Kiwis who bought shares in this company are a representative slice of middle New Zealand?Hon BILL ENGLISH: No they probably are not but that member did his best to make sure that people with $2000 to spend on this did not do so by scaring them with his stupid nationalisation policy. However we are not opposed to average New Zealand households having investments so we are going to offer them another opportunity to buy shares and we would hope that the member will this time encourage people with $2000 to invest in the share floats instead of showing his contempt for their aspiration to make their own decisions.Dr Russel Norman: What is his Government’s message to the 97.5 percent of Kiwis who have not bought shares in Mighty River Power and who now face higher power prices in order to increase dividends to the 2.5 percent?Metiria Turei: I raise a point of order Mr Speaker. My apologies to my colleague. The barracking that is coming from behind me is making it impossible to hear the question. I am sitting right next to the questioner. It would be much easier for the whole House to hear if this barracking was made to stop.Mr SPEAKER: There is a level of noise today from all parts of the House that is unacceptable. I do not want to ask anybody to leave—[Interruption] Order! But if the level of noise continues then I am going to have to ask somebody to leave the Chamber. I would be reluctant to do that but at this stage the noise coming from many quarters of the House is unacceptable and I think Russel Norman should be allowed to start that supplementary question again.Dr Russel Norman: What is his Government’s message to the 97.5 percent of Kiwis who have not bought shares in Mighty River Power and who now face higher power prices in order to pay dividends to the 2.5 percent who have bought shares in this company and is not his Government now a Government just for the 2.5 percent and showing contempt for the 97.5 percent?Hon BILL ENGLISH: Our message to them is first the Government owns 51 percent of this company on their behalf and I expect that within a matter of weeks that 51 percent will be worth considerably more than it was at the beginning of this year. Secondly our message to them is that those who manage their KiwiSaver accounts have probably made an investment in this company and it looks like that could probably be a successful investment. My third message to them is that if they are approached by parliamentary funded Greens staff looking for their signatures do not sign because it is a dodgy petition.Dr Russel Norman: Is it a fair statement of the Government’s policy to say it cut $2 billion a year in taxes on the wealthy it then found that the cupboard was bare because there was not enough money so it told us it had to sell assets in order to pay for schools and then it sold those assets to the very same people to whom it gave the tax cuts?Hon BILL ENGLISH: No that is not the case because none of that is true. But what we would say to them is that even if that was true—even if it was true—the alternative of printing money nationalising the electricity industry nationalising the housing construction industry and shutting down our primary production industry would probably lead to less income and fewer jobs. Those are Labour-Greens policies.State-owned Energy Companies Sales—Mighty River Power and Power Prices4.KANWALJIT SINGH BAKSHI (National) to theMinister for State Owned Enterprises: What reports has he received on the sale of a minority of shares in Mighty River Power?Hon TONY RYALL (Minister for State Owned Enterprises): Last night the finance Minister and I were pleased to confirm the completion of the book build of the Mighty River Power share offer which will see 113000 New Zealanders become individual shareholders in the company on Friday not to mention those thousands who will own the shares indirectly through KiwiSaver accounts and suchlike.Rt Hon Winston Peters: I raise a point of order Mr Speaker. That question asked him about what reports he has received. We are getting a recitation of last night’s history but nothing about a report.Mr SPEAKER: I thought the Minister was addressing the question quite adequately.Rt Hon Winston Peters: He is asked by the question to give a report it is the No. 1 objective of that question and all we are hearing is a litany of what happened last night. That is not a report at all. I want to know why he is not answering the question now.Mr SPEAKER: I will allow the Minister to continue the answer and I am sure we will get the answer.Hon TONY RYALL: Numerous reports I have read tell us that $1.7 billion will be returned to the Crown accounts allowing the Government to control debt and invest in important public projects such as the new Christchurch city hospitals. We are very pleased at the level of enthusiasm from New Zealand investors despite 18 months of politicking from the Opposition. We look forward to seeing the Mighty River Power name on the New Zealand Exchange tomorrow—Friday afternoon.Kanwaljit Singh Bakshi: Has the Government met its objectives in relation to the Mighty River Power minority share float?Hon TONY RYALL: Yes. Despite a year and a half of the Opposition politicking and trying to convince New Zealanders that the float was off-track and that they could not be trusted to try to buy shares in these businesses the Government has met its objectives. We have got over 86 percent New Zealand ownership. New Zealand is at the front of the queue. Now 113000 individual investors thousands more through KiwiSaver and the Government Superannuation Fund and many others have had the opportunity to get a good investment experience. As a country we are controlling our debt while providing around $1.7 billion of money for the Future Investment Fund to invest in important public assets like schools and public infrastructure such as the new Christchurch city hospitals.Kanwaljit Singh Bakshi: Were there any particular matters that impacted on the offer over the course of the share float; if so what impact did these matters have?Hon TONY RYALL: Just 3 days into the offer period the Opposition parties set about to sabotage the offer by proposed changes to the energy sector that would strip capital and value from their investments. This economic sabotage was not thought through and it is clear that it cost many everyday New Zealanders the opportunity to participate. It cost thousands of New Zealanders through their superannuation fund investments in already listed energy companies and it cost taxpayers many tens of millions of dollars that could have been released in the sale of these minority shares to invest in schools and hospitals—all for political gain and all in vain.Dr Russel Norman: If we accept the logic of the Minister’s argument that the NZ Power announcement reduced the value of those electricity companies does it not follow from the logic of his argument that the market accepts that NZ Power will reduce the price of electricity for ordinary Kiwi families and businesses?Hon TONY RYALL: No not at all. I do not think that is the case at all. I think what most New Zealanders realise is that this was a case of economic sabotage where the Opposition parties decided that they wanted to interfere with the ability of New Zealanders to make this decision. The fact is that the NZ Power proposal is not well-thought-through. The Opposition parties did not consider the consequences and I think more and more New Zealanders as time passes will realise it was simply a political stunt.Hon Clayton Cosgrove: Why does his Government insist on ploughing ahead with the sale of electricity assets when the market is not working fairly for consumers and electricity companies are making windfall super-profits or is the Nelson Grey Power president Neville Male incorrect when he says that many senior citizens cannot afford “crazy” electricity prices?Hon TONY RYALL: This Government has made changes to the electricity market that have improved the level of competition which was never seen when that member was in Government. Under his Government electricity prices increased by 72 percent in 9 years. The rate of increase now is much lower. The amount of switching and choice that customers have is very very considerable. That is the benefit of having a far more competitive electricity market and it is the benefit of a Government that is determinedto give New Zealanders an opportunity to invest in good quality infrastructure assets in partnership with the Government.Exchange Rate—Reserve Bank Intervention5.Rt Hon WINSTON PETERS (Leader—NZ First) to theMinister of Finance: What is his view of Governor Graeme Wheeler’s recent statement to the Finance and Expenditure Committee that with regard to the Reserve Bank’s recent activities “there has been some intervention” in the exchange rate?Hon BILL ENGLISH (Minister of Finance): My view is that the statement is probably correct if the governor said it. He would be following policy that has been in place since 2004.Rt Hon Winston Peters: Does he agree with the Minister for Economic Development Steven Joyce that intervention is “a bit of a fool’s paradise” and why is his ministerial colleague making comments about matters he patently knows nothing about?Hon BILL ENGLISH: In answer to the second part of the question Mr Joyce from my experience does know quite a bit about it and perhaps may even know as much as that member about it—possibly more. In respect of the first part of the question as the governor has said himself foreign currency intervention is unlikely to have a sustained impact on lowering the exchange rate but it can reduce pressures in the short term.Rt Hon Winston Peters: Does he recall the Prime Minister’s statement on the exchange rate that “the Government does not believe that it can influence that through intervention”; if so and in light of the Reserve Bank’s recent action and statement before the select committee has he informed the Prime Minister that his belief was demonstrably wrong?Hon BILL ENGLISH: I think the member is trying to make a mountain out of a molehill here. The fact is that the Reserve Bank—Hon Steven Joyce: That’s a surprise!Hon BILL ENGLISH: Not the first time—yes. At least he is starting with a molehill this time which is quite big really. The point here is that the Reserve Bank has always had the power of intervening. It has published the conditions under which it can make interventions. The bank itself has said that it believes the impact of those interventions is limited and short term. The member on the other hand and the Labour Party advocate that the Government can pick an exchange rate and the Reserve Bank can just push the market to that exchange rate. That is simply wrong. That is the context of the Prime Minister’s statement.Rt Hon Winston Peters: How can New Zealanders the market or anybody interested in this subject possibly have confidence in a Government that has such a dysfunctional relationship with the Reserve Bank in so far as the bank’s actions though they might upset “Big Ears” directly contradict the line spouted by senior Government Ministers?Hon BILL ENGLISH: The public do have some confidence in the Government and the Government has a good relationship with the Governor of the Reserve Bank. However he operates foreign currency intervention quite independently of the Government.Rt Hon Winston Peters: Is it not true that as the Minister of Finance he could have instructed the Reserve Bank to begin intervention in the foreign exchange markets earlier thereby reducing the devastating impact the high New Zealand dollar has had and is having on our export sector as the industries have evidenced in their public statements day after day?Hon BILL ENGLISH: The fact is no I have not issued any direction to it. The decisions have been made by the governor about his intervention and I am not always aware of whether he is or is not intervening.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I am not asking whether he has done anything because I know he has not. What I want to know is this: does he admit that he could have or that he had the power to do it?Mr SPEAKER: Yes. The Hon Bill English.Hon BILL ENGLISH: The answer to that is no and in respect of the damaging impact on the export sector the member should look at the household labour force survey figures today which show an increase in full-time jobs across the economy despite the fact that we have had a high exchange rate. The Reserve Bank Governor would not himself claim that his actions are somehow substantially realigning the exchange rate.Primary Sector Development—Lincoln Hub and Other Initiatives6.NICKY WAGNER (National—Christchurch Central) to theMinister of Science and Innovation: How is the Government working to encourage innovation in the primary sector?Hon STEVEN JOYCE (Minister of Science and Innovation): Last week the Minister for Primary Industries Nathan Guy and I unveiled the concept plans for a world-class agricultural research and education facility to be located at Lincoln just outside of Christchurch. The Lincoln Hub which is a partnership between and investment by Lincoln University Dairy New Zealand and Crown research institutes AgResearch Plant and Food Research and Landcare Research has the potential to transform New Zealand’s farming productivity by providing a one-stop shop single site that will allow information and ideas to be shared much more easily.Nicky Wagner: How will the Lincoln Hub benefit students exporters and the wider economy?Hon STEVEN JOYCE: There is obvious concern from the Opposition members about our investment in science and innovation—they are obviously thinking there is too much of it. The primary sector remains one of the powerhouses of the New Zealand economy with a 1 percent increase in primary sector productivity equating to an extra $4 billion in export earnings. The Government has set an ambitious goal to double primary sector exports to $60 billion by 2025. The Lincoln Hub and the investment in it will help us achieve that goal by bringing together our public research institutions private sector players farmers and producers to drive innovation and exports to maximise the opportunities for student learners to increase expertise in our research community and to provide valuable links between businesses and the public sector.Nicky Wagner: What other Government initiatives are supporting growth and innovation in the primary sector?Hon STEVEN JOYCE: In the words of Maurice Williamson more good news. Through the Primary Growth Partnership the Government and industry are investing $657 million in a range of primary sector research initiatives including research into new shellfish industries steep-land tree harvesting high-value marbled beef for premium markets and the reliability of supply and quality of medical-grade mānuka honey. We have created the National Science Challenges to encourage our scientists and researchers to tackle some of the biggest science-based issues New Zealand faces. A number of these directly affect the primary and rural sector. And of course we have increased funding for the Performance-based Research Fund to $300 million by 2016 to ensure that excellent research in the tertiary education sector is encouraged and rewarded including of course in the primary sector.Hon Damien O’Connor: How much of the $161 million of taxpayers’ money he has given to the meat industry is delivering benefits given the refusal of the Minister for Primary Industries to answer questions on any deliverable outcomes for the Primary Growth Partnership and the fact that hundreds of farmers have no confidence in the current structure of the meat industry?Hon STEVEN JOYCE: Well I think the world has known for a long time that there are plans to if you like alter the structure of the meat industry and the Government is being very encouraging of the industry to look at its possibilities and its future particularly around adding value and getting higher benefits for the exports that it produces. The Primary Growth Partnership is actually focused on a whole range of things that will encourage doing that and it is actually about getting co-funded research between the private sector and the public sector that leads directly—directly—to benefits in innovation and productivity. The insurance of that—Tracey Martin: The co-funding model is not working.Hon STEVEN JOYCE: —oh it is working—is that the private sector industries are putting up half the funding themselves so that they can get that benefit.Hon Damien O’Connor: I seek leave to table 18 questions put to the Minister for Primary Industries that the Minister has refused—Mr SPEAKER: Order! Are they questions for written answer which are then published and available to everybody?Hon Damien O’Connor: Yes but the Minister has not answered them and they are overdue.Mr SPEAKER: If the Minister has not answered them then that is a matter that you can certainly take up with me and I will look—Hon Damien O’Connor: I seek leave to table the questions Mr Speaker.Mr SPEAKER: The easiest way to resolve it is to allow the member to seek leave. Leave is sought to table some questions that have not apparently been answered at this stage. Is there any objection? There is objection.Solid Energy—Financial Position and Sustainability7.Hon CLAYTON COSGROVE (Labour) to theMinister of Finance: Does he stand by his statement regarding Solid Energy that “No we are not going to let it go into receivership”; if so is he committed to the ongoing sustainability of all State-owned enterprises?Hon BILL ENGLISH (Minister of Finance): Yes I stand by the statement in the context in which it was made which was the possibility that Solid Energy could have got itself into severe financial difficulty in a hurry. The Government will certainly be there to support Solid Energy if there is a viable business to support and we hope that that is the case. However we would expect that a viable Solid Energy will be a smaller business with a stronger focus on mining coal and we would expect others to help participate in the restructuring of the current entity. As I said yesterday if Solid Energy is not viable the Government is not prepared to create a business that is not sustainable in order to subsidise it. The same approach applies to all State-owned enterprises.Hon Clayton Cosgrove: Who is correct: the Minister of Finance who yesterday directly questioned the viability and sustainability of Solid Energy or Mark Ford the chair of Solid Energy appointed by the Minister’s Government who said that the core assets of the company are viable and that Solid Energy has a “good future”?Hon BILL ENGLISH: I think that the sustainability of Solid Energy was not just questioned yesterday it was questioned some months ago when the company got itself into pretty severe financial difficulty. We are going through a process at the moment which the chairman is closer to than the shareholders of working out whether and inwhat form Solid Energy would be an ongoing sustainable business. Over the next couple of months we will be able to answer those questions fully.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. My question was who was correct—Mr SPEAKER: Yes I heard the question.Hon Clayton Cosgrove: Yes. It was not addressed. I asked who was correct.Mr SPEAKER: I think it was very definitely addressed. The member may not get an answer that satisfies him but it was addressed to the point that they may well both be correct at this stage and that further work is ongoing.Hon Clayton Cosgrove: On what date did he advise the Solid Energy chair Mark Ford that he was going to make yesterday’s public statement questioning the viability of Solid Energy and if he did not advise Mr Ford why not?Hon BILL ENGLISH: I did not advise Mr Ford because I did not make a statement of the nature that the member is saying. If the member is not aware that the viability of Solid Energy has been in question for several months then he is not doing his job.Hon Clayton Cosgrove: Why is he questioning the future viability of Solid Energy and thereby undermining the efforts of the chair Mark Ford to give confidence to lenders as the chair tries to forge an agreement to ensure the long-term future of the company or is this all about the Minister’s political expediency?Hon BILL ENGLISH: This is a serious issue as the member will know. One hundred people in the company lost their jobs yesterday. You can be absolutely sure that there are a lot of questions in their minds even if he is unaware that the company is in trouble. The Government is fully supporting the efforts of the chair and others to find out whether there is an ongoing sustainable business in Solid Energy.Brendan Horan: Will the Minister give an assurance that the $1.9 billion of coal reserves in land controlled by Solid Energy will remain in New Zealand ownership?Mr SPEAKER: There was—[Interruption] Order! I am going to ask the member to repeat his supplementary question to the Minister of Finance.Brendan Horan: Will the Minister give an assurance that the $1.9 billion of coal reserves controlled by Solid Energy will remain in New Zealand ownership?Hon BILL ENGLISH: That sort of issue will no doubt be tied up with the future of the company and I do not intend to prejudge or guarantee any outcome from the process that we are currently going through. Our focus is to see whether there is a viable business there and if so to work with other parties to restructure the current version of Solid Energy into a sustainable business. I am not going to speculate on the results of that process.Budget 2013—Rheumatic Fever Prevention8.Dr JACKIE BLUE (National) to theMinister of Health: What investment will the Government make in rheumatic fever prevention as part of Budget 2013?Hon TONY RYALL (Minister of Health): The Government’s campaign to reduce rheumatic fever among children will receive a budget boost of $21.6 million over 4 years as part of Budget 2013. This new money almost doubles the already substantial $24 million investment we have made to combat rheumatic fever and will allow local communities and health providers to work together to make a real difference to these children’s lives. The Government has a target to reduce the incidence of rheumatic fever by two-thirds to 1.4 cases per 100000 by June 2017. This money will ensure that we remain on track to achieving this. I certainly would like to acknowledge the very strong and continuing support of my Associate Minister of Health the Hon Tariana Turia for this programme.Dr Jackie Blue: What will the Budget funding for rheumatic fever prevention include?Hon TONY RYALL: More than $11 million over 4 years is going to be invested in a nurse-led sore throat drop-in clinic which will provide improved access to families whose children do not attend school or during school holidays and access to free sore throat swabbing services. Nearly $5 million over 4 years will be invested in community awareness and home visiting support to ensure vulnerable families know and understand what they can do to help better protect their children. The Government is also going to invest almost $4 million over 4 years in supporting the Auckland-wide healthy homes referral and advice services.Hon Annette King: Can he confirm that the rates of rheumatic fever have increased in Northland over the last 5 years—the mean annual number between 2000 and 2006 was 9.2 cases per 100000 people and it has now jumped to 13.6 cases—Rt Hon Winston Peters: How much?Hon Annette King: —13.6 cases—and that the issues that need to be addressed are poverty overcrowding and better access to primary health care?Hon TONY RYALL: I do not have those specific Northland numbers with me but I do have the numbers under the previous—Hon Annette King: I raise a point of order Mr Speaker. I asked a straight question not about any other Government but whether he can confirm they have increased. He said he does not have the numbers. That is the answer.Mr SPEAKER: If the member is happy with that answer then we will move—Hon Annette King: I am happy with it.Mr SPEAKER: If the member is happy with that the question has been answered.Child Poverty—Measurement9.JACINDA ARDERN (Labour) to theMinister for Social Development: Does she stand by her recent statement that “there are children who are living in poverty and are doing it hard in this country”; if not why not?Hon TONY RYALL (Minister of Health)on behalf of theMinister for Social Development: Yes she does stand by her statement. She also stands by her statements today where she welcomed the household labour force survey which shows more New Zealanders are in work. It is very good to also see the continuing growth in the New Zealand economy which will provide more opportunities for more New Zealanders.Jacinda Ardern: Why is her Government content to measure and set a target for reducing rheumatic fever but it refuses to measure and set targets for poverty a key determinant of this disease or is she happy to stick with her position on this issue that “There is not a Government measurement for poverty ha ha ha ha!”?Hon TONY RYALL: I would certainly have to check the quote that that member wants to attribute to the Hon Paula Bennett but I can certainly say that the Minister has always made it clear that she does not believe there is one measurement of poverty in New Zealand. What the member should also know is that the Minister is very strongly supportive of the rheumatic fever programme because under that member opposite’s Government the rheumatic fever rates increased relentlessly particularly during the term of the Minister Annette King.Jacinda Ardern: How many measures of poverty are there and is the Government willing to pick at least one or even five of those measures?Hon TONY RYALL: This Government is determined to take a far more serious approach to dealing with poverty than participating in some argument about what the rate of poverty measurement is etc. We do not think we should be spending an inordinate amount of time debating that issue. We would rather put our focus on toactually dealing with the issues and this Government’s focus has been on providing opportunity through things like education and jobs and on ensuring that we get the best out of the many hundreds of millions of dollars being spent on social services delivery in New Zealand.Jacinda Ardern: I raise a point of order Mr Speaker. I asked the Minister how many measures of poverty there were and whether he was willing to work with one or a range of those measures. I did not get that response.Mr SPEAKER: Would the member please repeat the question.Jacinda Ardern: How many measures of poverty are there and is the Government willing to pick one or up to five of those measures?Hon TONY RYALL: I would repeat what I said earlier on. The Government is not going to get into this argument of how many measures there are or on what there is and what there is not. Our focus is not on spending a whole lot of time arguing about how we are going to measure it. Surely the focus must be on—Rt Hon Winston Peters: I raise a point of order Mr Speaker. If he is refusing to answer the question about the measurement of poverty then he should sit down—that is it.Mr SPEAKER: The member who asked the question asked for it to be repeated. It has certainly been adequately addressed this time. Are there further supplementary questions?Jacinda Ardern: What is the argument against measuring child poverty?Hon TONY RYALL: I think the argument against what that member is arguing in terms of the measurement of poverty is which measure one might want to choose and how much focus you put on a single measurement. I would rather the focus was put on dealing with the issues instead of on some argument about what measure is going to be used. This Government is focusing on the Better Public Services targets that our Prime Minister has set which we think will make a real improvement to the situation of many of New Zealand’s children who do live in poverty and who do live in hardship and that is our determination.Jacinda Ardern: I raise a point of order Mr Speaker. I still did not feel it was an adequate answer. The question was—Mr SPEAKER: Order! That question was very adequately addressed on that occasion. Has the member got a further supplementary question?Jacinda Ardern: I do.Mr SPEAKER: Then I suggest you use it.Jacinda Ardern: Do the Better Public Services targets require measurement?Hon TONY RYALL: Yes.Jacinda Ardern: If the Minister’s belief is that the argument against measuring child poverty is that there are too many measurements will the Minister accept the Children’s Commissioner’s recommendation that the Government measure against five measures of child poverty; if not why not?Hon TONY RYALL: The Government is considering a number of the recommendations made by the authority that the member has just referred to. We think this is a very important issue. We put a lot of time and effort into dealing with poverty and we consider it far more of a priority than the members opposite who have given their spokesman the opportunity to ask questions in this House on only three occasions this year.Power Prices—Effect on Vulnerable Households10.METIRIA TUREI (Co-Leader—Green) to theMinister of Finance: Does he stand by his answer “no they’re not” when he was asked whether New Zealanders arepaying too much for electricity in light of the 5.2 percent increase in power prices in the past year?Hon BILL ENGLISH (Minister of Finance): I stand by my statement in the context in which it was made which was in response to the following question: are New Zealanders paying too much for power as Grant Robertson suggests? Of course Grant Robertson’s suggestions were the usual combination of exaggeration and illogical statement and that is why I said “No they’re not.” I went on to say that of course New Zealanders would prefer to pay lower power prices but around the world the experience is that the best way to set power prices in the long run is to have a competitive market and all countries that we know of have been moving from Government-run monopolies towards more competitive markets. The Labour-Greens policy is the only political policy we have seen heading in the opposite direction. [Interruption]Mr SPEAKER: We will just wait until the Labour benches are quiet.Metiria Turei: Why is the Minister continuing to defend excessive prices for power for families and excessive profits for power companies when he knows that there is a direct link between cold and crowded homes and rheumatic fever in children?Hon BILL ENGLISH: I am not defending excessive power prices. It is—[Interruption] Well the power prices will be much higher under Labour-Greens policy because their climate change policies will cost the average household $500 per year. What we are arguing for is that in the long run competitive markets are the best way for consumers to get the lowest power prices. In fact you could almost guarantee that the Labour-Greens policy will lead to higher power prices; it is just a matter of when.Metiria Turei: Why does the Minister believe—[Interruption]Mr SPEAKER: Order! [Interruption] Order! Right now we will have the supplementary question.Metiria Turei: Why does the Minister believe that it is acceptable for a quarter of a million New Zealand children to live in households who pay too much for their power or worse live in cold homes and get sick because their families cannot afford to pay the big power bills that they face?Hon BILL ENGLISH: Of course it is not acceptable for people to be living in poor conditions that make children ill. That is why the Government has spent hundreds of millions of dollars insulating those homes—precisely to get the health benefits. The cost of living increase in those homes is not 5 percent as the member says; it is actually 1 percent for the last 12 months—in fact a bit less than 1 percent which is among the lower increases in the annual cost of living that we can recall. But if that member was that worried about it why did she support the previous Government which pushed up power prices by 8 percent per year for 9 years?Metiria Turei: How many cold unhealthy homes would have been insulated for the estimated $100 million that his Government has wasted on selling Mighty River Power?Hon BILL ENGLISH: I cannot give the member the details on that but I would ask her this: how many homes could have been insulated for the $400000 she has wasted on a dodgy referendum?Metiria Turei: Supplementary—[Interruption]Mr SPEAKER: We will just wait for Annette King. [Interruption] Order!Metiria Turei: Does the Minister believe that it is an acceptable trade-off to allow children to live in cold crowded homes and become ill because their families cannot afford the power bills while companies like Contact Energy make billions of dollars in excess profits because he will not do anything about the price gouging that New Zealand families suffer every month?Hon BILL ENGLISH: If you were going to look at the companies as a measure of what has happened to power prices and profits from them the Contact Energy shareprice I am advised is lower today than it was 5 years ago as is the TrustPower share price. If those companies were making super-profits then they would have super-sized share prices and in fact they do not. It does not matter how much the Greens say power prices are at some ridiculous or excessive level it is the case that they are rising much more slowly than when she was supporting a Government that pushed up power prices for the poorest households in New Zealand by 8 percent per year and burdened them with 5 and 6 percent increases in the cost of living rather than 1 percent. So she should stop being as moralistic as she is wanting to be.Mothers—Government Support and Reports11.SUE MORONEY (Labour) to theMinister of Women’s Affairs: Does she have any positive announcements to make for New Zealand mothers as families prepare to celebrate Mothers’ Day?Hon JO GOODHEW (Minister of Women’s Affairs): Yes there are a number of positive announcements. Mothers will celebrate an additional $21.3 million over 4 years to fight rheumatic fever amongst their children and an additional $70 million extra for aged care and dementia which will help older mothers and those mothers caring for their parents. They will also be celebrating the March 2013 household labour force survey showing an increase in female employment of 0.9 percentage points over the last year and a drop in the unemployment rate of 0.2 percentage points in the last year—the first quarter since December 2011. I would like to take this opportunity to wish all of the mothers present in this House a joy-filled day on Sunday.Sue Moroney: Thank you to the Minister but has she seen the report from Save the Children on the state of the world’s mothers that shows New Zealand in 17th place in 2013 plummeting from fourth place in its 2012 report?Hon JO GOODHEW: Yes I have seen reports about that report and I am aware that the chair of our very own Perinatal and Maternal Mortality Review Committee has disputed the figures in that report and says that for the majority of women we have a very safe and effective system. In fact the actual figures for New Zealand are very different from the figures in that report. In our first Budget we committed more than $103 million over 4 years to improve maternity services. In 2011 this Government committed in this area an extra $54 million and in 2012 an extra $20.5 million. No one could say that this Government is not doing more for mothers and babies.Sue Moroney: Well how does she then explain Australia being—Mr SPEAKER: Order! This time the noise is definitely coming from the far right-hand corner of the Chamber. Sue Moroney—[Interruption] Order! Now it is coming from the front bench of the Labour Party. Can we please have—[Interruption] Can we please have consideration for the member asking the question.Rt Hon Winston Peters: I raise a point of order Mr Speaker. When a Speaker gives a ruling that seems to be unfair to some person I think it is beholden on a member of Parliament to raise the issue as to whether it was fair. If you look at the far corner of the House that is Mr Gilmore and he was not making a noise at all.Mr SPEAKER: And I was not referring to him. That is not a valid point of order.Sue Moroney: Thank you. Does she attribute the staggering decline of 13 places in New Zealand’s ranking as a country for mothers to the fact that the 2012 report relied on data from 2007 onwards when Labour was in Government whereas the 2013 report used data gathered since 2010?Hon JO GOODHEW: I can answer the member that what I am relying on to keep this report in perspective is the comments from the chairwoman of the Perinatal and Maternal Mortality Review Committee who says that its own report shows about one in 8000 women dying in pregnancy or childbirth which varies greatly from the one in3300 in that report. The additional information that the chairperson Cindy Farquar was able to give was that we have a comprehensive data collection system unlike Australia which may account for why it is rated better in the report.Sue Moroney: Does she agree with the Prime Minister when he said he thought paid parental leave would increase one day; if so does she think that that “one day” will be while she is the Minister of Women’s Affairs or will families need to elect a Labour Government to extend paid parental leave?Hon JO GOODHEW: I am in agreement with what the Prime Minister said. He has said it publicly several times. The Government still plans to veto the bill to extend paid parental leave. As he has said we are not opposed to paid parental leave. We already have it in New Zealand and more would be better. What we are saying is that an increase now in paid parental leave will mean that we have to either forgo our goal of getting back to surplus or stop spending money on something else. We are not ruling out an extension at some stage when the books are back in surplus. We are just saying that it is not the right time to do it now.Sue Moroney: When will the right time be Minister?Hon JO GOODHEW: We all look forward to the day that we are back in surplus.Schools Digital Learning—School Network Upgrade Project and Other Initiatives12.TIM MACINDOE (National—Hamilton West) to theAssociate Minister of Education: What recent announcements has the Government made regarding improving school IT networks?Hon NIKKI KAYE (Associate Minister of Education): Last week I announced that an additional 80 schools have been invited to upgrade their IT network through the School Network Upgrade Project. This means that under a National-led Government over 1400 schools are now involved with the School Network Upgrade Project. That translates to over 60 percent of all eligible State and State-integrated schools in New Zealand. Our Government is focused on providing the best information and communications technology infrastructure and modern learning environments to enable better learning resources and more opportunities for young New Zealanders.Tim Macindoe: What other recent announcements has the Government made regarding digital literacy and 21st century learning environments?Hon NIKKI KAYE: Recently I announced that the Government will be setting up a 21st century learning reference group. This will help us provide greater learning opportunities. Alongside this we have committed to producing a digital education strategy. Recently we released the results of theSchool ICT Infrastructure Survey. This is the firstSchool ICT Infrastructure Survey to be conducted since 2002. This has given us a better understanding of schools that are embracing digital learning and those schools that need greater support. In addition I am working with the Ministry of Education to ensure even more schools can upgrade their IT networks more quickly. By doing this young New Zealanders will have a brighter and more connected future.Chris Hipkins: Why was the contract for the Network for Learning—an information and communications technology project announced in last year’s Budget—not awarded by the end of last year as expected and what delay will this mean for the Network for Learning’s target to be progressively available to kura and schools from the middle of this year?Hon NIKKI KAYE: The Network for Learning company was formed in July 2012. It is currently working on its business plan and offerings. There was not a date given at that time in terms of when it would sign the contract in terms of its preferred supplier. I am currently doing some due diligence on that. I have announced publicly that within the next 6 weeks there will be further announcements on that issue.Land Transport Management Amendment BillSecond ReadingDebate resumed.Dr CAM CALDER (National): There was a long and winding road of a discourse from the previous speaker on the Land Transport Management Amendment Bill Andrew Little who was regaling us with stories of State Highway 3 in Taranaki an area commonly known as “Taradise” by those of us born there or those who may have discovered the joys and charms of the area and choose to live there now.This Government is committed to the constant improvement of our arteries of commerce—our roads and highways—and the extensive work on State Highway 3 just north of New Plymouth the Bell Block Bypass is testament to that. The Mount Messenger road which used to strike fear into my aged grandmother when she remembered later on in life incidents of travelling over it when she was a young girl is now being tamed curved and smoothed into docility despite the treacherous substrate of greywacke. Work on the northern outlet has gone on and is due to be completed next summer along with the stretch between Vickers Road and Elliot Street. Work that was ignored by the Labour Government in the times of unparalleled surplus has been undertaken by this Government in stages despite the global financial crisis.This Government believes that the Land Transport Management Amendment Bill will facilitate our aims of simplifying and modernising New Zealand’s transport system nationwide so that it is efficient and cost-effective and able to better serve the needs of growing our economy. I commend this bill to the House.KRIS FAAFOI (Labour—Mana): Wow—limited applause for the member Dr Cam Calder who just took his seat. In the regulatory impact statement for this bill the Land Transport Management Amendment Bill one of the first bullet points where they say what the main objectives of this bill are emphasises value for money within each activity class. That is very interesting given that the Kapiti Expressway has a benefit-cost ratio of just 0.2 percent and that it is one of the projects that the Government is crowing about—the roads of national significance. A leaked report last year by the engineering consultants Beca Group showed that the $515 million investment would yield a return of just $118 million over 30 years or as I said a cost-benefit ratio of just 0.2 percent. So I wonder in terms of the Government’s objective of emphasising value for money within each activity class in this bill whether the Kapiti Expressway meets that objective. Because it would seem to me on the face of it that when you are spending $515 million on something and you get a cost-benefit ratio of $118 million over 30 years that is a pretty awful investment.I want to acknowledge the people in the communities of Raumati South Raumati Beach and the Kapiti Coast because this bill proves the fear that they have held since December 2009 that this Government is blinded by its roads of national significance agenda pushing through massive roading projects against economic argument against environmental argument and most of all what is most concerning against the communities and the communities’ transport needs. This bill shows that this Government is hell-bent—come hell or high water—on huge roads of national significance going through and ruining people’s lives people’s communities and they make no economic sense.This bill will allow the Government to do more borrowing for this roads of national significance scheme. We were already told that the cost-benefit ratio of these roads simply does not stack up—simply does not stack up. I just want to again repeat the leaked report from Beca Group last year that a $515 million investment would yield areturn of just $118 million over 30 years. The economic case does not stack up with the Kapiti Expressway and the environmental case does not stack up.I have here with me just in front of me the signatures of 4072 people mostly from the Kapiti Coast who are opposed to the Kapiti Expressway—opposed to the Kapiti Expressway. Let me go through some of the comments that have come through here. I have picked just a random page but I am sure it will be awful for the Government: “To Minister Steven Joyce”—it is quite simple—“Stop the proposed motorway going through the Kapiti Coast.” Another one is from Joe Donovan: “I agree with this petition and hope that the Government will think carefully to do what’s best for this thriving community.”—I agree with this petition and hope the Government will think carefully to do what’s best for this thriving community. But as we know this Government has not done so; it has pushed on with the Kapiti Expressway.I find it very interesting given some of the messages that were sent to the people of the Kapiti Coast by the Government in terms of what the roading solution was going to be for the Kapiti Coast. In December 2009 Steven Joyce dropped the bombshell on the people of Raumati South and Raumati Beach that the expressway was coming but let us look at what Nathan Guy said in February of that year: “I am working hard with Mayor Jenny Rowan to get this project started this year as the funding has already been allocated. The transport Minister”—sorry he says here “Steve Joyce”; they must be friends—“will be briefed on this project when he visits the Ōtaki electorate next month to understand how important it is.”As we all know Nathan Guy got rolled. The last and I think the most important quote here from his press release says: “I see the Western Link Road rail electrification to Waikanae and extending the safety barrier from MacKays Crossing to Paekākāriki as a really important package for our region.” Well in February 2009 Mr Guy thought that but in December 2009 this Government changed its tune and broke its promise to the people of Kāpiti.JULIE ANNE GENTER (Green): Tēnā koe Mr Speaker. I rise to speak on the second reading of the Land Transport Management Amendment Bill. I have to say that sitting through the select committee process on this bill was quite discouraging. Similarly to the Government’s asset sales legislation its gutting of the Resource Management Act and its gutting of the Local Government Act it was another example of a charade of democratic process.During the select committee process the Transport and Industrial Relations Committee heard a large number of really excellent submissions and I have a huge stack of them right here. They were well informed. They were made by people who work on the ground on transport issues—people in regional councils and local councils. We heard submissions from very concerned citizens who are wondering how New Zealand is going to respond to climate change with its transport spend; how New Zealand is going to reduce the burden of chronic disease on the health system which is actually increasing because of our transport system; and how New Zealand is going to deliver a transport system that works for everyone including the elderly the very young those on low incomes and those with disabilities.Despite some very strong consistent themes in the submissions there were very few changes made to the first draft of the bill. I regret to say that some of the very young and earnest submitters—ordinary citizens who care enough about New Zealand to participate in the supposedly democratic process we have for improving legislation—were treated very poorly by some of the Government members on the committee. As with so much else the Government did not listen to stakeholders. It voted on every part of the bill with its one-seat majority on the select committee—it was a 5:4 split on every part of the bill. Like so many other controversial things this Government is doing it hasused its very narrow majority to force changes that do not reflect the views or concerns of most New Zealanders.I will talk in detail about the parts of this bill that are the most problematic during the Committee stage of the bill today. There are quite a few of those parts and I will just touch on a few right now. In my minority report I highlighted my concerns with the lack of response to the submissions about changing the purpose of the Act; changing the make-up of regional transport committees; borrowing to pay for projects in the national land transport programme; going to public-private partnerships which are essentially a more expensive way of borrowing for some very low-value highway projects like Transmission Gully; and removing the regional fuel tax which would have allowed a region like Auckland and perhaps other regions to raise revenue that it desperately needs for its transport priorities.Right now I would like to speak to my concerns about the new Public Transport Operating Model that the Government has spent so much time on with existing bus operators. The purpose of the Public Transport Operating Model is supposedly to improve the competitiveness of public transport operators when in fact we see it does the exact opposite. Much of the detail is not in this legislation. It will be set by Order in Council by the Minister. But what I have learnt through talking to specialists in the area is that the new Public Transport Operating Model entrenches the existing monopolies of existing bus companies. What it does is protect existing bus companies from having to compete in the provision of bus services and this may be true for other providers as well.Essentially what is going to happen if there is not proper competition in the provision of public transport services? For example we are not even going to have tenders; we are going to have negotiated contracts on competitive routes like the Northern Express. At the moment average tenders are only 1.1 so obviously there is no competition in most regions. There is not gross cost contracting in Wellington and Auckland which has led to bus operating costs being 40 percent higher in those two cities than in Christchurch where there was gross cost contracting.The Government has not listened to economists or public transport specialists. It has listened to the bus companies which naturally want to maximise their profits by avoiding competition. So what we have seen is a model tailored to their needs and to their desire to maximise profit. It is going to increase public transport fares for users. It increases the public transport subsidy that must be paid by regional councils and the New Zealand Transport Agency. Ultimately it is not good for New Zealand’s economy. It is good for the bus operators—the private monopolies that National protects.SIMON O’CONNOR (National—Tāmaki): I am very pleased to take this call. Once again we see inconsistencies in thinking. We have heard from the member who just sat down Julie Anne Genter that we want more competition in the bus market but then of course hers is a party that has been arguing against competition when it comes to the electricity market. It is quite confusing. We also had an idea of democracy that really comes down to it being democratic only if the Green Party agrees with it.The Land Transport Management Amendment Bill is a good bill. It is ultimately about movement. As sort of an homage if you like to that aspect of movement I would like to move that this bill progress to the Committee stage.The question was put that the amendments recommended by the Transport and Industrial Relations Committee by majority be agreed to.A party vote was called for on the questionThat the question be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes59New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Question agreed to.A party votewas called for on the questionThat the Land Transport Management Amendment Bill be now read a second time.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes59New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Bill read a second time.In CommitteePart 1 Amendments to Land Transport Management Act 2003IAIN LEES-GALLOWAY (Labour—Palmerston North): In this call I would like to specifically address Supplementary Order Paper 235 in my name. It is clear that the divisions across the Chamber on this bill the Land Transport Management Amendment Bill are pretty strong. The Government has just the narrowest of majorities on this bill and the Opposition parties—and in fact even the Government’s support party the Māori Party—are opposed to this bill. I imagine that a lot of the debate this afternoon will be of a fairly political nature but I do ask members to consider this Supplementary Order Paper closely because this is a constructive change to the legislation that has been asked for by regional councils that will need to operate under this legislation. It refers to transitional arrangements moving from the current parameters under the Land Transport Management Act as it currently stands through to the new Public Transport Operating Model that is contained in this amendment bill.Under the new provisions the regional councils will need to have in place a new regional public transport plan before they can contract any new public transport services. However those plans are not due to come into place until 1 July 2015. That is the latest that the legislation allows for them to come into place. Having spoken to the regional councils that is the appropriate time. There is a considerable amount of work required to get those regional public transport plans written up and in place. They will not be in place before then.However for at least seven of our regional councils their current contracts with public transport providers are going to come to an end after the amendment bill is passed but before the regional public transport plans are in place. That means they have some difficulty in determining under what parameters they are contracting those new services. In fact in discussions with the New Zealand Transport Agency and the Government the regional councils have been advised that the best way forward for them is simply to roll over the current contracts.In the first reading debate Julie Anne Genter talked about how the Public Transport Operating Model supports the current operators. It is monopolistic in its tendencies. This transition period is even worse for that because essentially the operators will beable to dictate terms to the regional councils about how those contracts are rolled over. There will be no competition at all if this transitional period is not agreed to and that means that ratepayers are going to be paying far too much for their public transport. It means that the operators will have the regional councils over a barrel. I do not think that is the situation that anybody seriously wants to have happen.In the spirit of constructive bipartisan efforts to try to make what is a bad bill as good as possible I have tabled this amendment to bring exactly that type of transitional period into place whereby the regional councils would be able to contract new services under the current arrangements provided for under the current Act up until the new regional transport plans are brought into place and then those contracts can run through only until 30 June 2017 so by 30 June 2017 everybody will be operating under the new Public Transport Operating Model.I think that reflects the consensus that the operators certainly believe exists out there. The regional councils want to work with the Government. They do not want to be kind of in opposition to the Government. They do not want to be seen to be working against central government; they want to work alongside it. But the only way for regional councils to effectively work alongside central government is for this amendment set out on Supplementary Order Paper 235 to be passed. So I do ask that members give it serious consideration particularly Government members. I know there has been a lot of conversation between the regional councils and the New Zealand Transport Agency but this is an opportunity.JULIE ANNE GENTER (Green): I will also speak to Supplementary Order Paper 235 brought to the Committee by Iain Lees-Galloway. I have to commend Mr Lees-Galloway for bringing this Supplementary Order Paper to the Committee. I do hope that the Government will be listening with an open mind because I know that the Government says that one of its priorities is to get good value from the amount of money that taxpayers are putting into public transport and also to get good value for money for those public transport passengers who are paying fares.As Mr Lees-Galloway quite rightly explained the impact of the transitional measures in this bill the Land Transport Management Amendment Bill at the moment will be that many regional councils will have to roll over existing contracts for a period of several years. This could end up costing them millions of dollars. The only people who benefit from the transitional measures are the existing bus operators. They will essentially be in an extremely strong position where they will be able to negotiate what is good for them at the expense of ratepayers and at the expense of taxpayers.It is very perplexing to me that the New Zealand Transport Agency has not listened to the concerns raised by regional councils on this issue as the New Zealand Transport Agency is using some of its own money to pay for public transport services. What we saw earlier this year was that the Otago Regional Council went ahead to tender for contracts for some of its bus services. It was able to negotiate savings in the order of millions of dollars. Then the New Zealand Transport Agency told the Otago Regional Council that it would not be providing the council with a subsidy for its public transport services which normally it has as of right because it did not follow the model that the agency had decided to go with. That would have meant rolling over contracts for the Otago Regional Council until 2016 rather than going to competitive tender.If this Government actually believes in competition and in getting good value for money then I think it must support these absolutely reasonable changes put forward in Supplementary Order Paper 235 because they will enable regional councils to tender for contracts in the interim period until they have gone ahead and established their new public transport plans and are able to contract under those in several years’ time. At stake is millions of taxpayers’ and ratepayers’ dollars. It is really an opportunity I thinkfor the Government to show its commitment to value for money and to demonstrate that it is not actually going to simply listen to the demands of profitable bus operators that do not want to have to compete.Speaking to other parts of Part 1 I would like to raise the issue of the purpose of the Land Transport Management Act. A number of submitters on the bill understood the Government’s interest in simplifying the existing purpose but it is important to realise that actually the land transport system has a wide variety of effects on New Zealand’s well-being. The land transport system cannot be considered alone when in fact the land transport system—the roads that we put in place the public transport that we have in place the rail network all of that—contributes to a number of other areas that the Government is directly responsible for. For example in the area of public health there has been an enormous amount of research demonstrating that the transport choices that people have available to them impact directly on their health. This is a ticking time bomb for the New Zealand public health system because in neighbourhoods where children are unable to walk and cycle safely to school and they have to be driven they are much more likely to be overweight and to not get enough activity. Therefore in the future they are much more likely to suffer from chronic diseases and we all know that chronic diseases like diabetes and heart disease are on the increase in New Zealand. They are on the increase in most rich countries and a certain portion of that increase is directly due to the lack of activity that happens when you have a transport system that is entirely or overwhelmingly reliant on private vehicles—there are decreasing levels of physical activity. I encourage the Government to listen carefully to the recommendations of doctors nurses and other public health professionals associations that have been speaking out on this issue and saying that actually we do need to take into account the health impacts of our transport system.There are a number of other co-benefits that need to be taken into account when we are deciding what transport projects we invest in and prioritise. One of these is carbon emissions. Our transport sector is the single biggest contributor to our carbon emissions. It has been the fastest-growing area of carbon emissions and the overwhelming majority of our imports of oil goes on transport. This has a wide variety of impacts such as the need we have to reduce our carbon emissions in the future—that is undeniable. We will have to do that. We need to take that into account when we are planning transport projects that are going to last 30 40 50 or 100 years into the future. How are they going to enable New Zealand to reduce its carbon emissions?But there is an added economic benefit to reducing carbon emissions and that is that we reduce our oil imports. New Zealand’s oil bill last year was $8 billion. For the past decade we have not increased much if at all the amount of oil that we have been importing. We are using the same amount of oil that we did in the early part of the last decade but we are spending more than twice as much on it. Our oil imports have gone from under $4 billion to $8 billion last year. All of that contributes to our current account deficit. It is not good for the New Zealand economy to be so reliant on imported oil. If the value of the New Zealand dollar was more realistic than it is at the moment—it is hovering towards 0.9 on the US dollar—petrol prices would be through the roof and we would have significant harm to our economy because households and businesses simply would not be able to get where they need to go without spending a ton of money on petrol. We are already spending a lot of money on petrol—$8 billion. We would be spending even more if the New Zealand dollar was at a more realistic exchange rate.So changing the purpose of the Act to consider only a few narrow transport criteria rather than the broader impacts that transport has on our public health system on New Zealanders’ well-being and on our economy is very short-sighted. Unfortunately it is quite a typical characteristic of this Government to not understand the interrelationshipsbetween the different things that we are doing. It may make decisions now that seem to make sense from a transport point of view but actually they do not because the vast majority of the transport budget is being spent on a few big motorway projects that do not even come out good on the Government’s own narrow assessment of transport benefits. Those projects have very low benefit-cost ratios even when you do not consider the wider impacts. So maybe it is not a problem of the Government not understanding the interrelationships but one of simply not caring about what the economic impacts of our transport spend are going to be and instead wanting to build a few big shiny new projects because it thinks they will make it look good.I was really struck by the submitters who came to the Transport and Industrial Relations Committee who all seemed to sing from the same song sheet. Submission after submission after submission said that it is really important to consider the wider impacts of transport in the purpose of the Land Transport Management Act. Amending the purpose of the Land Transport Management Act to reduce it to get rid of words that are really important like those about affordability and about the impact on public health and environmental sustainability and safety is going to very much narrow the considerations that should be and can be taken into consideration when we are prioritising our transport budget for different projects. Thank you.KRIS FAAFOI (Labour—Mana): Taloha ni Mr Chairperson. Thank you very much for the chance to speak at this Committee stage. Iain Lees-Galloway and Julie Anne Genter started their contributions by speaking to Supplementary Order Paper 235 I believe but I would like to start by addressing Supplementary Order Paper 234 which is still in the name of my colleague Iain Lees-Galloway. It talks about the amendments that are being made in the Land Transport Management Amendment Bill around the purpose.So I am starting at the start—a good place to start. At the moment the bill as reported back from the Transport and Industrial Relations Committee has the purpose set out as: “The purpose of this Act is to contribute to an effective efficient and safe land transport system in the public interest.” We are not happy with that on this side of the Chamber obviously so that is why Iain Lees-Galloway has put forward this amendment in Supplementary Order Paper 234 where the purpose should read—and we would hope that the Committee would adopt this—“The purpose of this Act is to contribute to the aim of achieving an affordable integrated safe responsive and sustainable land transport system.” It is a very good amendment and we do hope that during this debate—and perhaps a Minister in the chair could comment on whether the Committee could pick this up.I want to look at each one of these aspects that Iain Lees-Galloway has put in his Supplementary Order Paper on changing the purpose to affordability being integrated being safe being responsive and being sustainable and I want to put that into the context of the Kapiti Expressway which the Government is forcing upon the people of the Kapiti Coast.Let us start with the first one and that is affordability. As I said earlier in the previous stage of this bill the Government is spending $515 million on this Kapiti Expressway and a leaked report from Beca Group last year revealed that the benefit-cost ratio for this investment was $118 million over 30 years. The rough maths in my department says that that is a benefit-cost ratio of somewhere around 0.2:1. So in terms of an investment it is a dog. The economics case or the affordability case in terms of Mr Iain Lees-Galloway’s Supplementary Order Paper does not stack up in that sense.When you put that next to what was proposed before the Kapiti Expressway—when Steven Joyce changed the tack of the National Government—the plan before that was the Western Link Road which was costed at around $300 million I believe and wasfully consulted on with the people of the Kapiti Coast. All the permits and all the official documents were signed off and things were pretty much ready to go and everyone on the Kapiti Coast thought that this Western Link Road would go ahead. But no in December 2009 Steven Joyce rolled Ōtaki MP Nathan Guy and decided to go with an option which we now know as the Kapiti Expressway which is roughly $200 million more than what was planned.When you put that into the context of the Government being quite tight in the fiscal department especially in terms of land transport—and this bill itself allows the Government to borrow more for transport—and when you go from a $300 million project to a $500 million project that makes the project much more unaffordable for the Government. So to help the Government Iain Lees-Galloway has put forward this Supplementary Order Paper to ensure that any project that it undertakes is affordable. So there you have it.In terms of the Kapiti Expressway we could have saved the Government $200 million in one fell swoop by making sure there was a roading solution that was not just a big concrete ribbon through the Kapiti Coast but it was an upgrading of State Highway 1 it was a local road for the locals and it was making sure there was a better focus on public transport through the increased electrification of the rail network on the Kapiti Coast. So in terms of affordability that would have been a much better option for the people of Kāpiti but the Government of the day has chosen to ignore that and go ahead with the Kapiti Expressway. We will not quit in our opposition to—you know there are some people who should be quitting—this expressway because in the affordability stakes it certainly does not match up.The second point that Mr Lees-Galloway makes in Supplementary Order Paper 234 is about an integrated transport system. I have already touched on this ever so slightly earlier—[Bell rung] I am only on point two of five points so I had better get a move on. In terms of integration the solution for the Kapiti Coast would have been what Labour had proposed towards the end of 2008 and that was to upgrade State Highway 1 to build a link road for the Kapiti Coast—so we separated the local traffic from the through traffic who are dead set on heading further north even though they should have stayed and spent some money on the Kapiti Coast—and also to upgrade the rail link and make it much more accessible and I guess affordable for those people who are going to use public transport.The Government has gone against that. It is gone against integration. What it has done is say: “We only really care about the big stuff the big traffic so we are going to build this $515 million road through the Kapiti Coast.” So what you have now instead of integration is the local and the through traffic going on a four-lane motorway that has crashed right through the Kapiti Coast. Anyone who knows the Kapiti Coast well will know that there is a mixture of both young and old. A lot of people head up to the Kapiti Coast to retire. What you are going to get now is unfortunately some people who would probably prefer not to go on a four-lane monstrosity mixing with the big trucks that are heading either north or south through the Kapiti Coast and probably feeling very worried about that. So that is not necessarily the best in terms of safety and not the best in terms of an integrated service.Also the Government is not looking at upgrading the rail network. There is no focus on that and I think that is a real loss given the number of people who are now making their homes on the Kapiti Coast and are commuting to Wellington—which is not a dying city I should add; it is not dying city—heading south to work. More and more people are doing that and more of them would prefer a much more integrated public transport system. Our option the Western Link Road would do that. If the Government did have integrated transport systems at the purpose and at the very heart of this billthen maybe it would have been able to do that with the Western Link Road plan instead of the Kapiti Expressway.No. 3—I think I am a bit behind—is safety. I have already mentioned the fact that this road that the Government wants to build is a four-lane monstrosity. Everything will be travelling on it as opposed to what I said before—you know the local traffic on the local road and State Highway 1 being for a lot of the commercial traffic heading further north or further south. In a safety sense I would prefer if I was a local to be on the local road not mixing with the two-rig trucks that are speeding at 100 kilometres an hour—or maybe a little bit more—down State Highway 1. I think that is awful in terms of a safety sense. The Western Link Road addressed that because the locals did not want to be mixing with that through traffic but the Government has decided to go against that in terms of safety.Now on to responsiveness. With me here I have the signatures of 4072 people from the Kapiti Coast. These are the people who were pretty much opposed to—not pretty much but dead against—the Kapiti Expressway. Instead of being responsive—Mike Sabin: Did the Greens help collect those?KRIS FAAFOI: —the Government ignored these people and is still going through with the Kapiti Expressway. Mr Sabin wanted me to choose a page so I will for his pleasure.Mike Sabin: A random one.KRIS FAAFOI: I will choose a random one. Here we go.Terry Smith from Wellington—a very good man Terry Smith; could be a lady—said: “Bad idea. High impact on local community. Already have transport corridor.” Good on you Terry. That is a very good representation of what the situation is. OK let us go over here. Susan Ansell from Kāpiti in New Zealand said: “You can serve the needs of the local community and provide an efficient sustainable transport solution improve rail two-lane Western Link Road improvements to make...the community has not been fully informed on the effect of a four-lane highway. Many are unaware of the negative impact it will have on their community at all.”So in terms of responsiveness this Government has absolutely and utterly ignored the people of theKapiti Coast. Sure they want a transport solution but what this Government has put in front of them and will force on them is not what they wanted. What they wanted was the Western Link Road route the one that would have had a local road an upgrade of State Highway 1 for safety and also for capacity and also an upgrading of the public transport route. This Government—Hon MARYAN STREET (Labour): I rise to speak to this Land Transport Management Amendment Bill. There are two issues that I wish to cover and in the course of addressing those two issues I want to refer to the situation in Nelson. I trust Mr Chair that you will bear with me as I explain it a little bit for the benefit of members so that they can see why this applies and why this particular bill causes members on this side of the Chamber such anxiety.It certainly causes me anxiety on two counts. One is about environmental provisions and the other is to do with the curtailing of local community input. So it is those two points that I wish to make in particular.I see this bill as a Trojan Horse. It is a Trojan Horse because there are provisions in it that although they may not apply to examples such as those my colleagues have already given they are absolutely critical for proposals that may be considered in the future.The example I am thinking of in particular is a southern motorway through the Victory community in Nelson. The Hon Nick Smith the member for Nelson has been defeated three times in his desire to get a southern motorway through this Victory community centre. On two occasions he has been defeated by the council which hasgone out and done its homework consulted with the communities measured traffic flows and decided that such a motorway is not required. The trouble is that the main road State Highway 6 which goes through Nelson goes round the beautiful waterfront. Who owns the houses on the beautiful waterfront? Well squillionaires own the houses on the beautiful waterfront. Many of them are very strong contributors to Nick Smith’s campaign funds and they vote National. But I have to say that not all of them vote National. Not all of them vote National but they will not tell Nick that. They will not tell Nick that because—The CHAIRPERSON (H V Ross Robertson): Order! The member’s full name.Hon MARYAN STREET: I am sorry. They will not tell the Hon Nick Smith that because they know that they are surrounded by his supporters in that area. So their push and it is renewed time and time again—in fact as recently as just a week ago or 10 days ago now there was another front page article in theNelson Mail about how they want to get the logging trucks off State Highway 6 and in fact resurrect the idea of a motorway through the southern link road.This bill does two things that make the Hon Nick Smith’s desire to please the wealthy funders of his campaign possible. The first and the most dangerous is the limitations to community input. The bill gets rid of the obligation to consult communities on regional transport plans arguing that consultation is done anyway under the Local Government Act. It removes from regional transport committees representatives of the social environmental and safety criteria leaving just elected representatives from the councils.There is a vibrant community called Victory in Nelson—and you can join the dots easily enough to see why it is called that but that is an aside—which comprises people who are in lower socio-economic areas which houses most of our refugee and migrant population in Nelson and which really deserves to be consulted and to have a proper and adequate say in whether or not a roading project of the future should go through the middle of its community. This bill is just what Nick Smith needs in order to ensure that there is no input or minimal input from local communities and that there is every chance that central government could nominate that as a road of national significance change the designation of State Highway 6 from Rocks Road to this new project and drive a motorway through the Victory community.Hon Trevor Mallard: Better not.Hon MARYAN STREET: It had better not as my colleague Trevor Mallard says. That is absolutely right.Hon Trevor Mallard: There should have been a railway there.Hon MARYAN STREET: Indeed. What I am concerned about in addition to this impact on community input is the environmental impact and this goes to the point in the bill that takes out the original purpose of the Land Transport Management Act which had as its purpose statement the requirement for an integrated approach to the transport system including environmental responsibility and rail and coastal shipping. That disappears.Rail coastal shipping and care for the environment are things that would impinge directly on the development of Rocks Road. Rocks Road is a shabby little road. It does get logging trucks up and down it but it could be beautiful. What is beautiful about it is its view. It keeps getting torn up by logging trucks that is true but things could be done if we were to have an integrated transport system and not a Land Transport Management Act whose purpose is “to contribute to an effective efficient and safe land transport system in the public interest.” Gone are environmental responsibilities. Gone is the imperative to integrate transport options. Coastal shipping in Nelson is absolutelya possibility. It is entirely possible to shift logs by sea. It is possible to reinstate a railway.This bill is a Trojan Horse. Although my colleagues have outlined particular current proposals that are on the drawing board such as theKapitiExpressway which Kris Faafoi mentioned a moment ago there are proposals that are not on the drawing board yet but are a twinkle in the eye of the Hon Nick Smith and his supporters in Rocks Road who fund his campaign. His campaign would struggle for funds if it were not for these people in Rocks Road. He depends on them. This is exactly the kind of legislation he requires in order to push through something that is hugely unpopular. If he can limit and restrict the input of community groups through the provisions of this legislation then he will—he will.I can see the Hon Nick Smith’s fingerprints all over this as well. He will just be biding his time and waiting for the next opportunity when he cannot put additional funding into beautifying the Nelson waterfront which is entirely possible now with half the contribution from the Nelson City Council and half from central funding because it is a State highway. No he would like the State highway to go through the middle of a community that in large measure does not vote for him. That should not be allowed.This bill can be used for destructive purposes and I would ask the members opposite to consider that and consider whether what they are setting down here for the future is going to be constructive or destructive. Take away community input take away environmental responsibility and we are left with a roading programme that detracts from our environment that ruins our environment and that does not advance alternative and integrated systems of transport. We are left with an impoverished future as a result. Thank you.JULIE ANNE GENTER (Green): I rise to speak on Part 1 of the Land Transport Management Amendment Bill particularly right now on clause 9 which amends section 10 of the principle Act to allow the Government to borrow for the National Land Transport Fund. I would like to talk about my concerns about allowing the Government to borrow to pay for projects in the National Land Transport Fund.Firstly at the moment the Government has a very unbalanced transport spend. Over $1 billion is being spent on new State highways. That is over a third of the total transport budget and very small amounts of money are being allocated to all the other areas that we need to attend to as part of our transport network. That includes the maintenance of our existing local roads the maintenance and renewals of our existing State highways and there is a tiny tiny proportion of money going into walking and cycling.If you look at the National Land Transport Plan for the next 3 years there is actually almost no money being put into new public transport infrastructure. At the moment we have a Government that does not understand that the transport system is a network and the best way to get a good outcome from a network is to make sure that it is balanced. The best way to free up our existing roads for those who need to drive is to allow a small number of people to be able to walk and cycle safely—like children walking and cycling safely to schools so their parents do not have to congest the roads at peak time because they have to drop them off—and to allow a small number of people in our congested urban areas to switch to public transport. Not everybody needs to use public transport walk or cycle to benefit from the investment in having that alternative. Unfortunately there is no evidence anywhere in the world that expanding road capacity or building new roads will improve economic productivity or reduce congestion. In fact there was a letter written to the secretary of transportation in the UK just a few months ago by 32 leading transport professionals and academics people who have worked in this industry for 40 years saying actually “We are concerned that our current methodsof planning for transport infrastructure and evaluating the economic impacts do not take into account the reality that has been observed everywhere that building new inter-urban roads worsens congestion and does nothing to improve economic productivity.”So essentially by allowing this Government to borrow to pay for its unbalanced and backwards transport priorities what is going to happen is future New Zealanders and future Governments will have less money available to spend on the transport projects we actually need. That is because none of the projects the Government is proposing and is going to spend billions of dollars on will actually generate new revenue. Although in theory it may make sense for example to borrow to pay for some of Auckland’s transport infrastructure because we are expecting huge growth in Auckland and therefore there will be future ratepayers and taxpayers who will benefit from that infrastructure investment and we need to plan ahead of that growth what the Government is planning to do is to borrow to pay for Transmission Gully. It is going to borrow through the private sector through a private-public partnership which actually is essentially just taking out a loan from the private sector. So instead of paying 4 percent—and the Government could realistically borrow at 4 percent—it will be paying 12 percent to 14 percent or 10 percent to 12 percent so that the private investors have a guaranteed return for the 25 years of the life of the project.What National is doing is spending future taxpayers’ money now. It wants to expand the amount of money available to them to throw away at senseless transport projects that will not benefit the economy unfortunately and yet future taxpayers will have to pay these back with interest—with excessive interest in the case of the public-private partnerships—and they will not have the money available to maintain our existing road network. They will not have the money available to invest in the very vital alternatives that people in urban areas are crying out for. Everywhere we have invested in congestion-free public transport alternatives it has been wildly successful. We can see that with the northern busway and we can see that with the investments that have been made in the Auckland rail network so far. We have had huge growth in both of those areas much higher than what was modelled. That has led to declining traffic volumes on State highways which means there are fewer problems with congestion.Hon TREVOR MALLARD (Labour—Hutt South): I note that no National Party member contested the call with me. I note that no National Party member is prepared to defend Gerry Brownlee. I note that no member with any responsibility for the transport area has bothered to sit in the chair or to defend the Land Transport Management Amendment Bill. That is probably because it is more or less indefensible and they are waving the white flag on it.I do note the comments that my colleague Maryan Street made with regard to the Victory area. As the successor to the member for Pencarrow I note that my predecessor Sonja Davies cut her political teeth on the ripping of the railway line out of the Victory area. Now I understand Nick Smith wants to put a motorway through there. I think we might be past putting a railway back into that part of Nelson but I think this is the sort of bill that would allow a motorway to go through that community and that would be something that would be absolutely wrong.In making that comment my colleague was referring to the importance of integrated transport planning and spending. I do want to commend the Greens speaker who made the last speech Julie Anne Genter because I think she has got her head around the importance of having integrated planning as far as transport is concerned. I think all of us in our electorates have areas where if things were done more logically we would have less spending on roads and more on the alternative to roads.In my electorate Hutt South clearly an increase in public transport is warranted. An increase in alternatives to our roads would include in my area the Wainuiōmata Hillbridge—a bridge across the top of the hill that would mean that people could walk over the hill take the bridge over the top of the road and then walk down the other side. At the moment people have to dodge their way across the road slightly blind to transport coming from both directions and it is quite dangerous for people to either bike or walk on the paths and to cross at the top. A bridge was going to be available and was heading for the top of that hill—I think a bridge actually used to be proposed at Pētone before they made the changes at Pētone—and the National Government changed the rules as to the alternatives to roads. It meant that the money that would otherwise have been available was no longer available. I just think that that is wrong. It creates danger for individuals and it means that a lot of people who would bike do not bike because it is seen by them to be dangerous.In a similar way the focus on having more and more motorways means that some of the logical things such as the improvement of the railway links around the Wellington wharves have not happened. I think for a long time now probably for at least a decade there has been a focus on getting grade separation—that means bridges and overpasses—around the ferry terminal in Wellington in order to be able to bring in much more freight into the Wellington waterfront by way of train rather than truck thereby freeing up the motorways and freeing up the road from the Wairarapa so that things can come down—logs in particular—on the train and be there immediately in time for the ships. There is a lot of logic to it but the problem at the moment is that the trains and the road traffic conflict and when a train comes in you have a massive traffic jam. What is needed obviously—[Interruption] Sorry?Simon O’Connor: A log jam.Hon TREVOR MALLARD: The logs are jammed up in both senses. Both the ones on the trucks and the ones on the trains end up getting jammed up and as a result of that there is clearly a much more logical way of using the money.The changes in the ratios mean that the Cross Valley Link which would take a lot of traffic off The Esplanade which is again another jammed-up point in the Hutt Valley and would feed across Whites Line East off the Wainui Hill out of Naenae and across a new bridge and into the Dowse Interchange—$40 million spent on the Dowse Interchange—Brendan Horan: How much?Hon TREVOR MALLARD: Forty million dollars was spent on the Dowse Interchange and what is it? It is an interchange to nowhere because the road that was meant to come off it has been cancelled by the National Government—cancelled by the National Government. You know it is just a silly approach.The last point that I want to make I make more with my sports spokesperson hat on. I refer to the definition of “event” here and the change in policy with regard to sports events which has been very recently drawn to my attention. Previously what used to happen—and I think this was probably under the leadership of the Hon Annette King although it possibly happened earlier—was that there was some funding going out of the land transport budget and into the police budget for the police to do safety work which included work around sports. I as members know have an interest in cycling. But that funding has been changed by the National Government from I understand only about 1 March this year or it might have been 1 April this year so that the police are no longer contracted—they are no longer funded—in order to do their police work around sporting events.I have got an example of this. It is one of the long-term examples just north of Mr Faafoi’s electorate Mana. For years during a local cycle race that goes round Akatarawa and up the Paekākāriki Hill the local policeman has come out for about an hour and overridden the traffic lights to let the cyclists through as they come through inbunches in order to not have 400 or 500 people together in a group on the road as a result of the lights turning red and the cyclists having to stop. This was a logical safety measure that allowed the traffic and the cyclists to flow and not to end up being many abreast and becoming a massive safety factor.The ruling of the Government means that that work is no longer done. At the first instance of that race happening after that ruling about 5 kilometres down the road afterwards because of a massive bunch of cyclists and the pressure from cars and trucks there was an accident that involved I think about 37 cyclists—37 cyclists—being knocked out of the race and two of them being hospitalised. Four ambulances were required and two of the cyclists were hospitalised all because the National Government in order to try to save a wee bit of money in this area said that the local policeman was not allowed to go there for an hour to do the safety work for which the police had previously been contracted.These people opposite know the cost of everything and the value of nothing. I am not even going to say that they were conscious of the effects that they were making when they changed their rules because I am not sure that they actually read the papers that are put in front of them that make this sort of change. I appealed to Hekia Parata. I would have thought that Mr Brownlee the current Minister of Transport would have been across it—although it might have happened in the time of Steven Joyce and we knew that he did not read his papers properly. That was certainly the case with him. But we have got to know that safety is important to this Government. We have got to know that we have integrated transport planning and this bill gives us no hope whatsoever that the Government knows what it is doing.SIMON O’CONNOR (National—Tāmaki): I moveThat the question be now put.BRENDAN HORAN (Independent): Speaking to Part 1 of the Land Transport Management Amendment Bill I must say that I absolutely agree with all of the speakers on this side of the Chamber and—Iain Lees-Galloway: We’re the only ones who’ve spoken.BRENDAN HORAN: Absolutely but I think they would still be the only ones whom I agreed with. However as did the honourable Mr Faafoi I would like to speak about the change from an affordable integrated safe responsible and sustainable land transport system to—and this is where they just play on those words over on that side—“an effective efficient and safe transport system in the public interest.” What is the public interest? Well the public interest is certainly not the danger of having this collapsed funding for sustainable transport and sustainable transport programmes. In the city that I dwell in Tauranga that would wipe out walking school buses for children programmes kids on feet programmes kids on bikes bikeways and everything that is associated with getting rid of the congestion around schools and with making it safer around schools and making our children safer. This bill has the potential to completely collapse that funding.The Government does however talk about exhibiting a sense of social and environmental responsibility but again it is just talk and it is not in the objectives statement. The new Government policy statement also removes affordability which may enable the Government to justify building new roads that do not have a cost-benefit ratio factor outcome like the Auckland “Holiday Highway”.I think I will touch on some of the roads around Wellington because it is obvious that members on that side of the Chamber know very little about Wellington and I will say that the only thing dying in Wellington is support for the National Party. But let us talk about Transmission Gully and the Porirua bypass. When we talk about Transmission Gully the only way that fits into the cost-benefit ratio is when you extend it through Ōtaki and all the way to Taupō and then it fits and then you can have it. If welook at the Porirua bypass what about the people from Porirua and some of those areas who may not be able to afford the road toll that is inevitably going to be thrust upon unsuspecting motorists there? They are going to have to do this massive dog-leg to get into the city. I mean it is absolutely ridiculous.I would also just like to touch on the undemocratic way in which this Government seems to be operating. I would like to ask some of our Labour members who are far more experienced than me whether they have ever heard of a Minister preventing a local MP from getting a traffic briefing from the New Zealand Transport Agency on the future of roading in their area because that is what happened to me. The Minister of Transport stopped the officials from briefing me on the plans for roading in the Bay of Plenty and the Western Bay of Plenty. I think that is just another indication of what this Government is all about. It is just trying to railroad through bills with very little scrutiny. At the end of the day it is New Zealanders who pay the cost and it is a massive cost. I would say please do not play with the safety of our children and the future of New Zealand.IAIN LEES-GALLOWAY (Labour—Palmerston North): First I would like to say that in my first contribution on this Part 1 of the Land Transport Management Amendment Bill in the first 5 minutes that I got I spoke to my Supplementary Order Paper 235. That is a very serious Supplementary Order Paper. It is a serious amendment that regional councils want to see happen and I think that the Government members owe it to regional councils to get up and say what their position is. So whether you are for it or against it please let us know and please let local government know what your position is what the position of the Government is and why. I think that is the very least that Government members could actually undertake. But no what we have had is Mr O’Connor taking a closure motion and it looked like Mr Sabin was quite keen to take one as well without a single member of the Government benches taking a single call on this bill. That I think tells you exactly how ashamed they are of this legislation in the fact that they do not even want to get up and tell us about it.I want to talk about my other Supplementary Order Paper 234 which would restore the original purpose of the Act. Basically what National is doing by changing the purpose of this Act is giving central government absolute control over what roading projects—sorry a slip of the tongue there but it really does reflect what this Government wants which is roads roads roads and mega-roads. Actually it is not about roads; it is about mega-highways and that is it. That is what the purpose is.The word in particular that I think is really missing from the new purpose which would be restored if my amendment was adopted by the Committee is that word “integrated”. Probably the most important word that is going to be missing from the Act now is having an “integrated” transport system. I thought that some of the contributions from the National Party members in the second reading of this bill were a bit thick to be honest—a bit thick. I know what they are trying to do. They are trying to position Opposition parties and trying to play politics here. But let us have a sensible serious conversation about our transport needs because what David Bennett tried to say is that the Opposition parties hate roads. Well guess what Mr Bennett? Under that Government under the National Government local roads up and down this country are being completely overlooked. There are roads in my electorate that need to be built and need to be maintained and they will not be. The New Zealand Transport Agency has turned down the funding it has said no to the local councils because all the money—all the money—is going to the roads of national significance.So I do not accept it when National Party members get up and say they are interested in roads and they are interested in economic development and they are interested in supporting the regions when regional roads and local roads up and down New Zealandare falling apart and not being supported. This Government does not care about an integrated transport system. It does not care about an integrated transport system and it refuses to have a law that says that when funding decisions are made about transport the economic viability the environmental viability and the social sustainability of infrastructure need to be taken into account—not even economic viability. Of course we know that the only projects that this Government supports—its monster motorways—are not even economically viable let alone considering their impact on the environment or their impact on local communities. That is why this Government does not want to support the idea of having an integrated transport system.Any transport system needs roads. If you look at a transport need and you look at the variety of solutions available sometimes it will be a highway. Sometimes that will be the right response. Sometimes it will be a road. I think of the Western Link Road which Mr Faafoi’s electorate is not going to get—the Western Link Road which Mr Faafoi’s electorate is not going to get. There are the roads in Palmerston North that would support the central distribution transport hub which we are not going to get. There is the road that Andrew Little wants in Taranaki which Taranaki is not going to get under this Government. All the Government is interested in are the roads of national significance not local roads not regional roads and certainly not rail or coastal shipping—certainly not rail or coastal shipping. Sometimes those will be the answers as well. Sometimes if we think about the economic benefits or we think about the social benefits or we think about the safety of getting freight off roads and on to rail or on to coastal shipping that will be the right answer.But what this bill does is it creates a situation where that will never be the answer. The analysis that the New Zealand Transport Agency has to undertake will never come up with the answer that a railroad is the right answer or that greater use of coastal shipping is the right answer. That is because the National Party wants to control the National Land Transport Fund so that it can look after its mates—its mates in the trucking industry and its mates who want to make money out of public-private partnerships.The other thing that this bill does is it supports greater borrowing to pay for those unaffordable roads and it supports uneconomic ludicrous economically mad public-private partnerships like the one at Transmission Gully. Let us look at Transmission Gully as an example of the foolishness of this Government. Labour actually supports building Transmission Gully. Labour supports building Transmission Gully; it is something that we would do. But we think it should cost $1 billion not $3 billion. The National Party wants it to cost $3 billion. It wants to charge New Zealanders $2 billion more than is necessary to build Transmission Gully. Why? So it can do it by public-private partnership. There is no evidence. The Government has not been able to produce a shred of evidence that building Transmission Gully by public-private partnership will be safer more efficient more effective or most important cheaper. It cannot demonstrate that. In fact Government members are so nervous about this that when the Labour Party requested information under the Official Information Act they gave us information but they removed the public sector comparator. They removed the bit that says how much it would cost to build under the traditional procurement model. I wonder why that is. I wonder why they are not prepared to tell us that number. I bet—I bet anything you like—that the reason is that the public sector comparator comes out much much better than the public-private partnership. You do not even need to guess at this. You have just to look at the New Zealand Transport Agency’s predictions for transport costs over the next 30 years. It put in a special line that accounted for building Transmission Gully by public-private partnership and that line showed that it was going to cost $2 billion more than building it under the traditional model.So the New Zealand Transport Agency knows it. Government members know it. Why on earth are they doing it New Zealanders can only guess but I would like to offer one possibility and that is that they like providing low-risk high-return investment opportunities to their mates in the banking sector. That is what they have done with Mighty River Power and that is what they are doing with the Transmission Gully public-private partnership. This bill is all about National tightening its control over the land transport system so that it can look after its mates and cherry-pick projects for itself not run a sensible analysis of each project and choose them on their merits.David Bennett was going on about the Waikato Expressway and my position on that. I came to Hamilton I spoke to people and do you know what I said? I said: “We have to take a look at this Mr Bennett. We have to take a look at this and we have to run a sensible economic analysis of the project.”David Bennett: You’re not going to do it.IAIN LEES-GALLOWAY: If you do not like that Mr Bennett if you do not like the idea of a sensible economic analysis being run on a transport project that simply reveals that this Government just wants to cherry-pick projects whether or not they make sense whether or not they are good for the taxpayer whether or not they are good for local ratepayers whether or not they are good for the environment whether or not they are socially acceptable and whether or not they are the socially right thing to do. This National Government just does not believe in evidence and proper analysis; it just picks ideas out of the air and picks and chooses its own ideas. That is what this bill is all about. We had a system whereby the New Zealand Transport Agency had to sit down and do a rigorous analysis of what projects should be supported. That is what Labour had to bring in after 10 years of National building road after road after road after road. Labour came in and said we needed an integrated transport system and that is what we set up. But all this does is go back to the old days the fossilised view of the National Party of the 1950s—MIKE SABIN (National—Northland): I moveThat the question be now put.JACINDA ARDERN (Labour): I appreciate the ability to take a call on this Land Transport Management Amendment Bill particularly given that I have Supplementary Order Paper 238 which I would like to share with the Committee and which relates specifically to the notion of exempt services. I have not heard too much discussion in the time that I have been in the Chamber around the debate that I am sure was had amongst Transport and Industrial Relations Committee members on exempt services but it is an area that has the potential to derail our ability to create integrated public transport in critical areas like Auckland. New Subpart 2 in clause 69 of the bill contains the detail around exempt services. They are essentially those services that will not be able to be required by councils to be privy to all of the things that they have in their transport plans.Previously before the bill went to the select committee the criteria for an exempt service were contained in new section 129(2)(a) through to (e) in new Subpart 2 in clause 69. They have been struck out. Previously an exempt service included “a ferry service registered with the regional council as a commercial public transport service under the Public Transport Management Act”. It then included certain types of bus services and so on. They have been struck out. Now the criterion for an exempt service is a public transport service that for instance operates without a subsidy for the provision of the service. That is a key little indicator in there that no longer are we being explicit about exemptions being specific to ferry services. Now we are saying that one of the main criteria is that you do not receive subsidies.The reason I raise this is that there is a somewhat controversial provider of transport in Auckland that provides ferry services to Waiheke Island. Waiheke Island ispredominantly serviced by a sole provider. Some will argue that there are other options. Those who take that service daily will argue that they have very few options other than those provided by Fullers ferry services. Fullers ferry services very early on in the discussion around this bill directly approached Steven Joyce and asked Mr Joyce whether it could be exempt from the provisions of this bill and be considered an exempt service. Clearly it was given an indication by Mr Joyce that that was going to be acceptable because when Fullers then went to the select committee it included in its submission that it had already been given assurances that it would be an exempt service to the degree that it had purchased additional infrastructure which it implied it otherwise may not have invested in.Why is this interesting? Well for one thing some people would think that Fullers actually does receive a subsidy from the Government. It receives a hefty amount through the SuperGold Card. Many SuperGold Card holders use Fullers ferry services. Secondly by being exempt from this bill we will continue to have an operator—with Auckland Council having very little ability to ensure that the operator provides the kind of service that commuters require. If Fullers was not in the game of providing that service the council argues that in some form it would have to step in.The council argued on that basis that Fullers should not be an exempt service but unfortunately that was an argument that given Fullers had gone directly to the Minister clearly was lost. Why? Why should it not be an exempt service? It would argue that it is a private operator and there is no reason why it should be included.Well when you look at what the content of a regional public transport plan includes it includes the ability to provide an outline of the routes the frequency and the hours of operation. It would give for instance Auckland Council the ability—if for any reason the service dropped below what it would consider necessary for a fully integrated public transport network to be sufficient it would at least have some grounds for engagement around that. Secondly for those that are included and covered which an exempt service would not be it allows the council some ability and say over accessibility quality and performance—an issue that is of major concern for commuters from Waiheke Island who do not always believe that they get that level of service.It also allows transparency around fare setting the method or formula and around the reviewing of fares. This is not to say that you suddenly have the council coming in and being able to set the service’s fares but it at least adds a layer of transparency around that. That is certainly something that has been demanded for some time.I think Auckland Council was right to say Fullers should not be an exempt service. My Supplementary Order Paper would remove it from being an exempt service. It would allow for integrated fare structures and that is what I think we need.Dr JACKIE BLUE (National): I moveThat the question be now put.The CHAIRPERSON (Lindsay Tisch): No. I am going to hear from Dr Megan Woods.Dr MEGAN WOODS (Labour—Wigram): I am very happy to take my first call on this Land Transport Management Amendment Bill because I think it is really important and I think it is important for us to get on record why it is that all over the country Labour has a problem with this bill. My main two problems actually are covered by my colleague Iain Lees-Galloway’s Supplementary Order Papers 234 and 235. I want to focus particularly on this: the constraints within the purpose of the bill and the limits of local input—so Supplementary Order Papers 234 and 235—and to talk about these particularly in relation to transport planning which is integral to the rebuild of Christchurch and the transport planning that is happening there at the moment.If we have a look at the first of these the bill as it currently stands removes the purpose statement of the Land Transport Management Act which sets out the integratedapproach to the transport system. Many of my colleagues have talked about this and what it will mean at a local level and the problems that this puts in place. We have specifically touched on how removing the integrated approach to transport—including the environmental responsibility that goes with that along with rail and coastal shipping—is a backward step and I want to show how this will be the case in Christchurch. The other thing that I want to touch on is the changes to the make-up of the regional transport committees and talk about the importance of local community input into planning effective transport systems that will operate well in certain localities. After all Labour does believe very strongly that local communities need to have a strong say in their local futures and transport is very much one of those areas where we would like to see this happening.In Christchurch as we plan our recovery we see transport as absolutely central to this recovery. One of the key things that we are grappling with and that the Government opposite is grappling with as well is how the Canterbury Earthquake Recovery Authority the New Zealand Transport Agency Environment Canterbury and the Christchurch City Council are all going to fund different elements of the transport recovery strategy and the transport recovery plan—different agencies have different responsibilities for different parts of this—and how all this is going to fit together. I think the case of Christchurch shows very clearly the need to have this very integrated approach to transport because we cannot think of just one mode of transport as we think about transport recovery.So the Christchurch Central Development Unit has just drafted a transport chapter as part of its plan for the recovery of the central city of Christchurch but within this—I mean in many ways there are some very positive steps about what transport in a recovered Christchurch is going to look like. But one of the things that we in Labour have signalled as a really strong concern that we have with this chapter is that there is no detail about how it connects up with other elements of planning within transport. So how does it connect with Christchurch City’s transport strategy? How does it link with theCanterbury Regional Land Transport Strategy? How do all these things go together?Going back to my colleague’s second Supplementary Order Paper in terms of the make-up of the regional transport committees and the need to have this local input into them we have real concerns. One of the things we know is that the majority of submitters who came to the Transport and Industrial Relations Committee including representatives from the regional transport committees really wanted to maintain the status quo of requiring specialist experts including the police disability experts—and I would like to come back to that about the need to have a city with very accessible transport in the 21st century—and representatives from walking and cycling groups on regional transport committees as they have valuable input to make. Having this wide variety of experts and perspectives in the transport planning and funding process at the outset ensures that far more robust discussions are had about priorities and about projects. But the concern is that if the funding is not there it is not actually going to have this diversity of views that will lead to the integrated approach to transport.So what is it that we are hearing from Christchurch residents on what they want in their recovered transport plan? Well one of the things that we are hearing very loud and clear and that the Christchurch City Council heard really loud and clear and also the Christchurch Central Development Unit when it put its transport chapter out for consultation is that Christchurch citizens very much want—ANDREW LITTLE (Labour): I am pleased to take a call on Part 1 of the Land Transport Management Amendment Bill. What this bill seeks to do is very important particularly when it comes to local input into roading priorities. That is a system thathas been very important in the last few years as regional councils and district councils have come together with their roading committees and with local interested groups—the Road Transport Forum I know in Taranaki plays a big role—and other interested parties to discuss what should happen in our roading priorities in the area of Taranaki. This bill will take that away.This bill will take away the stake that those people—the major users of roads whether they are commercial or non-commercial users—have; their right to have a say on what those priorities should be. That in my submission is what damns this bill. For all the good parts in it—the public transport operating mechanism that is provided for in the bill which is not a bad thing—it is the failure to allow local and regional input into roading priorities that is fatal along with the much narrower brief drive and purpose of the bill that is provided for there. It is for that reason that I support Iain Lees-Galloway’s Supplementary Order Papers 234 and 235 which seek to change those provisions of it.Maintaining the quality and the standard of roading whether it is new roads—and the Green Party certainly has a view about whether or not we need to break into new roads—or existing roads and above all the safety of them still remains a crucial responsibility of the Government and because the funding comes through central government it is the responsibility of central government. This bill takes away the opportunity for local solutions even for roading upgrades and roading improvements by abolishing the regional fuel taxes. That is not an option that has been widely taken up since it has been on the statute book but it has always remained a possibility as something that is there.I know that over the last 3 or 4 years the regional councils have been grappling with roading issues and roading priorities have had to use the regional funding that they have had access to effectively to work on State highway roading that is properly the responsibility of the New Zealand Transport Agency. So they had less to put into what are truly regional roads.I come back to the issue I raised about State Highway 3—certainly that section north of New Plymouth. That is becoming an issue that is demanding great priority. It is screaming out for attention and yet of all the Government MPs who live in and around that area not one has seen fit to address this House and give some reassurance to this House and the people of Taranaki / New Plymouth that they are taking that issue seriously—not one MP from that area except me. I am the only MP in this House connected with Taranaki who is prepared to stand up and argue that State Highway 3 north of New Plymouth must be a priority for the New Zealand Transport Agency and for this Government.Dr Cam Calder stood up earlier today to apologise for the failure of the Government to give it proper attention. He is an apologist. He has become an apologist for doing nothing as indeed has Jonathan Young as indeed has Shane Ardern as indeed has Chester Borrows—apologists for doing nothing. David Bennett who lives in Waikato is an apologist for doing nothing for Taranaki because he knows that if he can suck up as much money as possible for the Waikato Expressway that is all good for him. Well it is not good for the people of Taranaki and frankly the people of Taranaki deserve better. They deserve better. They deserve a better bill. They deserve a bill that allows for much greater local input leaves the opportunity and the options for genuine local solutions in place and provides in its purpose a provision that will allow a broad range of solutions—roading and integrated transport—to be considered at a local level. This bill does not do that and that is why we remain opposed to it. It is a bad bill and it should be opposed.JULIE ANNE GENTER (Green): I am very pleased to have another opportunity to take a call on Part 1 of the Land Transport Management Amendment Bill as there are so many different changes happening in Part 1 of this bill. I have already spoken about my concerns with the changes to the purpose of the principal Act and the lack of the Government’s willingness to listen to the many submissions that were opposed to that. I have talked about our concerns with the transitional measures and other elements of the Public Transport Operating Model that are going to entrench existing bus monopolies. I have talked about the problems with borrowing or going to public-private partnerships to fund transport priorities when those new projects do not generate new revenue.Further concerns that I have are to do with clause 14 and clauses 66 and 67. These are related to the core requirements of the regional land transport programmes prepared by regional transport committees and the make-up of the regional transport committees. During the select committee process we heard from a number of regional councils people who have sat on regional land transport committees and in almost every single case perhaps every single case they said that they benefited greatly from the additional members such as representation from the police representation from the disability community and representation from cyclists and walking advocacy groups because all of those different perspectives were able to provide the regional transport committee with solutions to problems before projects were implemented. So even though it may have taken a little bit more time having that broad perspective from a number of different areas resulted in more robust decisions being made. When we see the sort of horrific accident that happened at the KiwiRail level crossing in Morningside where there was not adequate disabled access and a woman in a wheelchair was trapped and hit by a train that sort of problem with the design of transport projects is exactly what can be avoided if you have robust input into the projects and into the prioritisation of projects.Although I expected regional land transport representatives to tell me that there was some problem with having these additional representatives on their regional and transport committees in fact every single one of them when I asked them about it said that no they really valued it and they did not want the change that the Government was proposing. So it does not seem like there was actually any problem with having that broad representation or requirement for broad representation in the principal Act. The problem or perception of a problem came from the Government which simply wants to streamline everywhere. The results of streamlining and making this change despite the fact that the individuals directly involved said that it was beneficial will be that we will see more of these problems where regional land transport committees will not have the diverse interests of end-users put into the planning and programming of the regional land transport priorities.A further problem that was raised by my colleague Andrew Little just a moment ago was the fact that there is actually a downgrading of the ability of regional councils to set their own priorities. We see this in clause 14 with the changes to the core requirements of regional land transport plans. They are going to be required to be consistent with the Government’sPolicy Statement on Land Transport Funding. So what the Government is essentially doing with this bill is concentrating more and more decision-making power at the central level as to which transport projects will get funding.There are a couple of different problems with this. Firstly regional and local ratepayers are major contributors to the money that is going into transport projects. They really should have some say as to what their priorities are. But secondly it is actually taxpayers all over the regions who are paying the road-user charge and the fuel taxes that are going into the central government’s transport budget. Ironically when the previous Minister of Transport Steven Joyce asked the Ministry of Transport foradvice on the amount of vehicle trips that were being taken on local roads which are half-funded by ratepayers not by road users and how many were being taken on State highways which are 100 percent funded by the Government but are basically funded by road users everywhere asking whether they are driving on local roads or on State highways what it showed was that the number—SUE MORONEY (Labour): It is a pleasure to take a call on the Land Transport Management Amendment Bill as a new member of the Transport and Industrial Relations Committee which considered the bill. I am sad to say though that I rise to reiterate Labour’s opposition to this bill because of the narrowness for which this Government has now become famous in terms of how it deals with many issues locally. We know that it narrowed the local government bill down so that social well-being and people’s wellness were not part of what was taken care of and here it goes again with land transport management.I want to speak specifically to Supplementary Order Paper 234 in the name of my colleague Iain Lees-Galloway and support this Supplementary Order Paper being voted through. This would actually fix up the very problem I have just highlighted. What Iain Lees-Galloway’s Supplementary Order Paper 234 does is restate what the purpose of land transport management legislation should be. It would bring back the purpose of the Land Transport Management Act to being “to contribute to the aim of achieving an affordable integrated safe responsive and sustainable land transport system.” Why would any Government not vote for a purpose statement like that for land transport management legislation? Why would it not vote to make sure that our land transport management system achieved affordable integrated safe responsive and sustainable land transport?If we think about sustainable land transport systems in the Waikato area where I come from it reminds me of a push that has come locally to have a commuter passenger train between Hamilton and Auckland. This is so popular that 13800 people signed a petition asking the Transport and Industrial Relations Committee to look at the issue of establishing such a service. That member opposite the chair of the select committee David Bennett who is from the area actually made sure that the select committee did not hear that petition. He as a local Hamilton member made sure that those 13800 people did not have their views heard in front of the select committee. I think that was a sham in terms of democracy. I have never seen a select committee that has turned down and stopped so many petitions from being heard as the Transport and Industrial Relations Committee under David Bennett’s chairpersonship. It has been quite shocking. Those 13800 people were after a sustainable land transport management system.David Bennett likes to go on about the billions of dollars spent on the Waikato Expressway which actually by his own Government’s admission would save only 10 minutes’ drive time between Hamilton and Auckland in 10 years’ time—in 10 years’ time. That is the thing that we are spending billions of dollars on: saving 10 minutes’ drive time between Hamilton and Auckland in 10 years’ time. Well if we spent a tiny tiny proportion of that actually supporting a commuter passenger train service between Hamilton and Auckland we could save 10 minutes right now. We would not have to wait 10 years for it. We could save 10 minutes’ drive time right here right now with much less taxpayer money being spent on it and have a sustainable transport system with road and rail working together to complement each other.When people get on the Waikato Expressway and in 10 years’ time save their 10 minutes’ drive time only to sit in that southern motorway car-park—the great car-park at the end of the southern motorway; it is clogged up because they have not got public transport working well in Auckland—there will be no benefit whatsoever. They aregoing to spend 10 minutes more sitting in traffic on the southern motorway to get to work in Auckland in the morning even though billions of dollars will have been spent on the Waikato Expressway. It just is not the best spend of money that could be happening—it is not the best spend of money. We could have already fixed it in the time that it took David Bennett to stop those 13800 people from having their voice heard over getting a passenger train service in place.LOUISE UPSTON (Senior Whip—National): I moveThat the question be now put.A party vote was called for on the questionThat the question be now put.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Gerry Brownlee and the amendment set out on Supplementary Order Paper 231 in his name to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Amendments agreed to.The question was put that the amendment set out on Supplementary Order Paper 234 in the name of Iain Lees-Galloway to clause 4 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes55New Zealand Labour 33; Green Party 13; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 238 in the name of Jacinda Ardern to clause 69 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes55New Zealand Labour 33; Green Party 13; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 235 in the name of Iain Lees-Galloway to clause 69 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes55New Zealand Labour 33; Green Party 13; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party vote was called for on the questionThat Part 1 as amended be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Part 1 as amended agreed to.Part 2 MiscellaneousA party vote was called for on the questionThat Part 2 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Part 2 agreed to.ScheduleThe question was put that the amendment set out on Supplementary Order Paper 230 in the name of the Hon Gerry Brownlee to the schedule be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Amendment agreed to.A party vote was called for on the questionThat the schedule as amended be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Schedule as amended agreed to.Clauses 1 to 3A party vote was called for on the questionThat clause 1 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Clause 1 agreed to.The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Gerry Brownlee to clause 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Amendments agreed to.The CHAIRPERSON (Lindsay Tisch): The next typescript amendment is in the name of Brendan Horan. It replaces clause 2(1). The:tion is that the amendment be agreed to—Brendan Horan: I raise a point of order Mr Chairperson. I would just like to clarify whether I can speak to this amendment.The CHAIRPERSON (Lindsay Tisch): No you cannot. The reason you cannot speak to it is that I moved at the beginning that clauses 1 to 3 stand part. At that stage you had the opportunity to debate clauses 1 2 or 3. No one did and that is why we are now going through the votes. So you have actually lost that opportunity and I am now going to put the question on your amendment.The question was put that the following amendment in the name of Brendan Horan to clause 2 be agreed to:replace subclause (1) with:(1)Sections 42 and 70(2) come into force on the earlier of—(a)a date appointed by the Governor-General by Order in Council:(b)31 December 2013.A party vote was called for on the questionThat the amendment be agreed to.Ayes55New Zealand Labour 33; Green Party 13; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party vote was called for on the questionThat clause 2 as amended be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Clause 2 as amended agreed to.A party vote was called for on the questionThat clause 3 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 33; Green Party 13; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.Clause 3 agreed to.Bill reported with amendment.Report adopted.Trustee (Public Trust) Amendment BillFirst ReadingHon JUDITH COLLINS (Minister of Justice): I moveThat the Trustee (Public Trust) Amendment Bill be now read a first time. This bill clarifies the process for appointing a replacement securities trustee. Section 46 of the Trustee Act allows the High Court to appoint Public Trust as replacement trustee for any trustee who wishes to retire or resign. This rule was first enacted in 1899 to ensure that family trusts or estates did not fail for lack of a trustee. Trusts have significantly changed since then. Trusts have become increasingly popular for commercial uses including raising money for the public. Some of the rules applying to traditional trusts are out of place when applied to corporate trusts. A trustee of a failing or failed finance company trust can ask the court to appoint Public Trust as replacement trustee. This was not envisaged when the rule in section 46 was enacted. To date this rule has never been used to appoint Public Trust as a securities trustee. If it is used in this way securities trustees will be able to walk awayfrom their responsibilities by asking the court to have Public Trust appointed in their place.There may be very good reasons for appointing Public Trust to stop a family trust from failing but we need a different approach for appointing a replacement trustee for a finance company. That approach is coming in the Financial Markets Conduct Bill which is currently before Parliament but it will not begin to come into force until 2014 and we need change now. The law puts Public Trust on an unequal and unfair playing field. It is unequal because the existing trustee is not required to contact other trustees in the market and try to negotiate terms with them to act as a replacement trustee. It is unfair because the current legislation does not ensure that Public Trust’s reasonable fees and expenses will be met. Although the court has discretion to award costs to Public Trust it is unclear whether and how this discretion will be exercised. This is not a hypothetical risk; it is real and it is happening now.Perpetual Trust is trustee for the failed finance company Capital + Merchant Finance. Perpetual Trust has applied to the High Court to have Public Trust appointed as replacement trustee. Public Trust is unlikely to recover its expenses from the company. This bill does not seek to affect those court proceedings. Public Trust will have to wear the cost if it is appointed. The bill will remove the risk of the case setting a precedent. Public Trust could be appointed as replacement trustee for many more failed finance companies. There are 60 finance companies currently in receivership liquidation or moratorium. It would take only a few appointments of the same scale as Capital + Merchant Finance for Public Trust to incur more than $1 million of unanticipated and unfunded costs. Furthermore Public Trust may incur more than a significant financial burden. Being a trustee for failed finance companies may impact on Public Trust’s reputation and brand. It will put Public Trust at a competitive disadvantage. Its current business activities will need to be reprioritised. Public Trust is required by law to operate as a competitive business. To place on it the burden of acting as a replacement trustee for securities trustees puts it at an unfair disadvantage in the competitive market.This bill makes an urgent amendment to the Trustee Act. The amendment will clarify the process for appointing replacement securities trustees. Securities trustees are those who supervise offers of securities to the public under the Securities Act 1978 and are licensed by the Financial Markets Authority under the Securities Trustees and Statutory Supervisors Act 2011. Instead of allowing a securities trustee to merely resign or retire and ask the court to appoint Public Trust as a replacement this bill requires more effort on behalf of the retiring trustee. A retiring securities trustee must make reasonable endeavours to appoint a replacement trustee. Reasonable endeavours include offering to pay the replacement trustee’s reasonable fees and expenses. If it is impractical or difficult to appoint a replacement trustee the court may assist. Public Trust may then be appointed as a replacement trustee.The requirement on the retiring trustee does not end there. If the trust cannot cover Public Trust’s reasonable fees and expenses the retiring trustee must do so itself. These changes place an appropriate responsibility on the retiring securities trustee. The trustee of last resort should really be the last resort. The retiring trustee should demonstrate that it has made reasonable endeavours to find an alternative trustee and Public Trust should not have to incur the costs without being compensated for them. The retiring trustee should ensure that Public Trust’s reasonable costs are met in taking on this role. If the trust cannot do so it is not fair that one licensed trustee that just happens to be owned by the State should have to underwrite the risk that private sector securities trustees take on when they become trustees of finance companies and for which they have been compensated. This amendment is needed and it is needed now to protect Public Trustfrom the significant burdens of being required to act as a replacement trustee for retiring securities trustees. I commend this bill to the House.Hon TREVOR MALLARD (Labour—Hutt South): The Labour Opposition will support the first reading of this bill the Trustee (Public Trust) Amendment Bill and will be interested in explanations from other Ministers and those who are supporting the bill. I do not think there is any doubt around the principle of the bill. The fact is that currently the Public Trust looks like it is the designated receiver of hospital passes in a rugby sense. If there is something going badly wrong and there is going to be a loss involved toss it to the Public Trust because it will carry it. I think it probably comes from the days of thinking that when there is a problem give it to the Government. The private sector especially people involved in this sort of industry—and we saw it in South Canterbury Finance and a number of other places—thinks that if something makes a profit it is capital and if it makes a loss let us socialise it and get the Government to pay for it. I think the Public Trust was treated as that sort of organisation.I have had a lot to do with the Public Trust over many years. I used to get involved in delivering scripts to it when I still had short pants on. I think it is seen as an organisation that is upright and has integrity and should not be placed at risk of having to demand some sort of Government support as a result of the activities of organisations that have made a lot of money out of being trustees and have basically sucked organisations dry. When they work out that the cash flow is likely to stop they then seek to offload to what is seen to be a public organisation. I think that is wrong.My question for the Minister of Justice and for others goes to process and the necessity of using urgency to pass this bill. I mean I think the Minister does make a good point. She does not want to open the floodgates to similar organisations passing off their responsibilities as they see the gate closing. But my question to the Minister—and it goes to our support of this bill at its later stages—is for her to give a good explanation as to why an alternative approach could not have been taken. I know that she is deeply involved in important conversations but as the length of the sitting time of the House—Hon Judith Collins: I’m listening.Hon TREVOR MALLARD: Well the question I have got for the Minster is why she did not include in this bill an effective date of today for the shutting off of the gate and then send it to a select committee to make sure that there were not any unforeseen circumstances so that we knew exactly what we were doing so that the other organisations that she is seeking to shut out would have the opportunity to have their say and so that we could also make sure by getting the Law Society and others involved that we had the legislation absolutely right. Doing that—shutting the gate as at an effective date and maybe sending it off for a shortened period to a select committee and giving people the chance to have their say—in my opinion would have made Parliament look better.It would have meant that we had not rammed things through under urgency. It would have meant that the public could look at the process but we could have had the gate shut because the effective date could have been well probably today. It would have been appropriate for it to be 9 May rather than 8 May. That is the date on the wall but 9 May is the day of the introduction of the bill. In fact if the bill was tabled yesterday we could still have had the date of 8 May in the legislation as being the effective date. People know that the principle of retrospectivity does not apply when notice is properly given on the introduction of a bill. It would have been retrospective in effect in its coming into force but not retrospective in that people would have been aware of it coming into force from the date of its introduction.I know that it is you know relatively finely tuned. I know that it is certainly easier for the Government to ram it through like this. It gets it out of the way some time—you know 10 o’clock tonight or something like that the law will be changed it will go off to the Governor-General and will get signed tomorrow and that is the effect of all of that. But the question that I would like to get answered is whether the Government considered the alternative approach especially given the lack of consultation which is apparent from the regulatory impact statement—the fact that people who are affected by it have not been consulted. We know why they were not consulted because they could have shot in and lodged their papers—I understand that. But given the opportunity of having the select committee process to give the Government some consultation at that point but not to open the door to others why did the Government not take that approach?SCOTT SIMPSON (National—Coromandel): It is a pleasure to rise in support of the Trustee (Public Trust) Amendment Bill. The Public Trust of course plays a very important role and it has done so since its inception back in 1873. I am delighted to hear that the Hon Trevor Mallard is endorsing—Dr Cam Calder: Was he there then?SCOTT SIMPSON: No he was not there then but he was not far from it. I am delighted that he is endorsing the bill through its first reading. That is welcome because I think as further speakers and I go through this debate that we will be able to answer his questions.The Public Trust is the only Crown-owned trustee serving the corporate and business market in New Zealand and it is the largest trustee organisation in New Zealand. It is of course best known for services that it provides around wills and estates and administration as well as the work it does for New Zealanders around legal financial investment home loans conveyancing and estate protection.So what does this bill do? Well it will close a loophole to the principal Act the Trustee Act 1956. In particular this bill will clarify the process for appointing a replacement securities trustee for financial products regulated by the Securities Act 1978. The bill will shield the Public Trust from wearing the costs of having to step in and replace trustees of failed finance companies. Currently trustees can apply to the High Court and have the Public Trust replace them without any agreement by the Public Trust itself. Doing so exposes the Public Trust to the costs and risks of sorting out these trustees’ tangled failed financial affairs all on the tab of the long-suffering taxpayer via the Public Trust. So with 60 failed finance companies currently in receivership liquidation or moratorium the potential exposure for the taxpayer is simply unacceptable.The Hon Trevor Mallard asked why we should adopt this process. The reason is quite simple. It is that this bill provides an interim solution until the Financial Markets Conduct Bill which is currently before the House is enacted and comes into force. The Trustee (Public Trust) Amendment Bill makes it clear that if the court appoints the Public Trust as the trustee of last resort for securities offered to the public then retiring trustees must indemnify the Public Trust for its reasonable fees and expenses. This ensures that the Public Trust’s fees and expenses will be met by the retiring trustee if the trust cannot cover them itself. That seems to me to be eminently sensible and worthy of this House’s support and I commend the bill to the House.ANDREW LITTLE (Labour): I am happy to take a call on the Trustee (Public Trust) Amendment Bill. I can say this of the bill: we are supportive of the policy behind the bill and we will support the bill. I think the policy is a very sound one that if the Public Trust is to be called upon as the trustee of last resort in the case of collapsed finance companies or collapsing finance companies it is only correct that when theretiring trustees who wish to wash their hands of their responsibilities are looking for an alternative they should be required to have used their reasonable endeavours to look for an alternative other than the Public Trust. Then if in an application to the High Court the Public Trust is the only one left standing the Public Trust should be reimbursed or at least indemnified for the cost of taking on that responsibility.The truth certainly in relation to finance companies is that we are talking about corporate trustees. They are there in the good times and they charge fees and generate an income while the finance company is doing its best to take money and lend it. They may have whatever care or regard for the investors and depositors with them; they are quite happy to be there at that time and fleece the finance company and its depositors and creditors. But when it all gets too hard they want to flick responsibility and wash their hands of it. So I commend the Minister of Justice for adopting that policy and taking that approach.The question remains however as to why this bill has to be considered under urgency. There are two principal reasons. One is that the issue that underpins this bill is not new. The finance companies have been collapsing since 2008. The risk of an application to the High Court to nominate the Public Trust or appoint the Public Trust as a securities trustee for a failing finance company has been there at least since 2008. A question obviously arises as to why the Ministry of Justice the other appropriate authorities or indeed the Minister herself or her predecessor have not seen the risk and sought to move on it earlier. In that regard we have the Financial Markets Conduct Bill which is under way. In any event if it is passed it is not intended to take effect until next year.But this is not a new issue; it has been around. What we have is one application to the High Court by Perpetual Trust to appoint the Public Trust as a trustee for Capital + Merchant Finance. The other policy aspect is of course that if this bill should be passed if the Public Trust is appointed then the risk of loss to the Public Trust is mitigated by the indemnity. That however will not apply in the case of Capital + Merchant Finance and Perpetual Trust because the bill does not seek to be retrospective. That application has been with the court. It is due to be heard in a few weeks’ time. So any appointment of the Public Trust by the court cannot or will not take effect under this bill.The interesting thing about that is—and I have said this before about some of the personalities behind Capital + Merchant Finance—that one of them is Trevor Janes who was a director of Capital + Merchant Finance. Many directors in fact all the directors of Capital + Merchant Finance have been the subject if not of prosecutions by the Serious Fraud Office—and by that I mean successful prosecutions by the Serious Fraud Office—then of civil action by the Financial Markets Authority. The one director who has escaped attention for reasons that no one can understand and for reasons that have never been given is Trevor Janes.The interesting thing about Trevor Janes is that he is a favoured appointee of this Government. He was most recently appointed to the board of none other than ACC by the present Minister of Justice when she was Minister for ACC—she still is the Minister for ACC—as a consequence of the clean-out of that board following its crisis last year. Of course not only was he appointed to the board of ACC but he was made its deputy chair and the chair of the investment committee. He was a director of a failed finance company a finance company whose other directors have been the subject of prosecutions by the Serious Fraud Office and civil action by the Financial Markets Authority who found himself excluded from those actions and appointed by this Government to the board of ACC and as the chair of its investment committee. In thewords of that great English comedienne Catherine Tate I say: “What a liberty. What a liberty.” that that should happen.Mike Sabin: Give us the full version.ANDREW LITTLE: There is another word in that phrase but I understand that it is considered to be unparliamentary so I will not use it. But I simply say: “What a liberty.”Scott Simpson: It has something to do with ducks—something to do with ducks.ANDREW LITTLE: It might do. It might rhyme with it. I am not quite sure. It is a derivative of a word used I think by Aaron Gilmore not two weekends ago. But the point is that Capital + Merchant Finance and Perpetual Trust which was trying to absolve itself of any further responsibility for Capital + Merchant Finance will not have this bill applied to them. They have escaped the net. And it is only after they had escaped the net that the Minister the same Minister who appointed Trevor Janes a former director of Capital + Merchant Finance should seek to act under urgency to pass this legislation. I just go back to what the Hon Trevor Mallard said. That is not necessary. There is already legislation being considered by this House that would cover this situation and that is good. As I say the underlying policy is good but this could have been dealt with in a way that could have allowed proper and full consideration.It is interesting seeing the regulatory impact statement on this bill. It became available to us mere mortals in the Opposition only today. It is interesting seeing the regulatory impact statement because it refers to the limited amount of time the Ministry of Justice has had to consider the matter. It says that it has not been able to fully develop even one of the options that it was considering. It talks about the inability to consult with other trustees who will be affected by the proposed options and it talks about the inability to consult because of the litigation presently in the High Court. It talks about the lack of information about the financial implications of each of the options it was asked to consider before giving its report on this bill and notes that the Public Trust has had no experience up to now of acting as a trustee for a failed finance company.These are matters upon which there should have been proper evidence given to a select committee. These are matters upon which there should have been proper and considered deliberation by members of this House. Because of urgency we will not have that so we are flying blind. Not a blind trust of course but we are flying blind on this particular issue. That is a matter of concern when the issue could have been dealt with by simply saying in a bill that it will take effect from a particular given date so that should legal proceedings by other failed finance companies and their trustees follow there was then a clear signal and a clear warning that their legal action would be affected by the legislation before the House.Hon Lianne Dalziel: It has been done before.ANDREW LITTLE: It has been done before my colleague Lianne Dalziel tells me. So there is no need for urgency. All stages of this Trustee (Public Trust) Amendment Bill are expected to be passed now under this urgency motion. We will not have the benefit of considered evidence from experts and those experienced in the field. We are in that position because of dilatoriness on the part of either the ministry or the Minister of Justice and/or her predecessor and we are simply no better off. This is not good lawmaking. We are in the unnecessary position of having to consider this legislation under urgency.So although we will support the bill and we support the policy and the direction it is taking it in we do not support the process. The Minister is deserving of the harshest of criticism for adopting this process in this particular way.Hon Judith Collins: Ha ha!ANDREW LITTLE: She can laugh and giggle. She is looking after her mate Trevor Janes as she has done all the way along by appointing him to statutory roles. Of course her track record in statutory appointments this year alone is not a very good one but she has made it worse. She has exacerbated it by the passage of this legislation which was totally unnecessary.JULIE ANNE GENTER (Green): I rise to speak on behalf of the Green Party on the Trustee (Public Trust) Amendment Bill. The Green Party saw a copy of this bill only very late in the day on Tuesday. Today is the first day that I have had a chance to look at the regulatory impact statement and I would not say that I have had enough time to look at it thoroughly. As Andrew Little mentioned earlier even in the regulatory impact statement it says that officials have not had the opportunity to fully evaluate all the options they would have liked to deal with the problem that has arisen.The Green Party will be supporting the bill because we agree that there is a problem. We do think it is very important to protect the Public Trust from unforeseen financial liabilities that would arise from being appointed as a trustee of last resort for failed finance companies. However I have to agree with Andrew Little in saying that the process being adopted by the Government to put this bill through under urgency does not allow us to fully scrutinise and evaluate all the options. It is unclear to me at this point that the option that has been chosen and put forward in this bill is actually the best option for dealing with the problem.There is a very serious and significant question as to why the Government was not aware that this could become a problem until Capital + Merchant Finance applied to the High Court for the Public Trust to be appointed as a replacement trustee for Perpetual Trust. Why did it not realise that this was going to be a problem when the failure of finance companies has been going on for a number of years now? There is a huge number—60 failed finance companies as the Minister of Justice referred to and Perpetual Trust is a corporate trustee for 22 of these companies. I would have thought that it would be obvious that there would be a danger of something like this arising and the Public Trust suddenly having to become the trustee of last resort for companies that simply have not taken responsibility for their own risks and no longer have the money or resources available to handle all of the costs that are incurred as a result of their poor decisions.It is really important when dealing with the types of failures that we have seen coming out of the financial crisis that the public sector and Crown-owned entities are protected from having to bail out or otherwise incur financial liability for decisions that were made by the private sector—decisions that made some people a whole lot of money in the short term but now have resulted actually in a destruction of wealth. It is really important that the public sector is not stuck with that risk and forced to pick up the tab.We constantly hear from this Government that it is important to support the private sector and to support private business. That sort of model can work only if the risk is fully borne by the private sector and not the public sector when bad decisions are made.On the one hand we hear arguments that the public sector should not be putting money and investment into those who are the worst off and into public infrastructure that everyone can benefit from and the Government is looking for every opportunity to get private sector capital involved in what really should be public infrastructure projects like prisons schools and transport projects. It wants to get private sector capital involved not because there will be a cost saving to the taxpayer and not because there will be a benefit to the economy but because it simply guarantees a return for private investors over the long term.As we have seen the private sector has provided fewer and fewer opportunities for low-risk long-term sustained growth and returns. Now the private sector is looking for every opportunity to secure assurances that it will get returns on what are actually opportunities where the public is going to end up taking the risk and the private sector gets to benefit from it taking that risk.The Green Party is very happy to see that the Government is willing to take some steps to protect the Public Trust from financial liabilities incurred from these developments with the failed finance companies but we remain unconvinced that this is the best process that could have been taken in order to ensure that we do have a robust protection for the Public Trust. It remains to be seen whether this will indeed solve the problem. We will just have to wait and see. Until then the Green Party will be supporting the bill. Thank you.ALFRED NGARO (National): The Public Trust has been looking after the interests of New Zealanders since 1873. It is a Crown entity that is New Zealand’s largest trustee organisation and it provides for wills estates and administration services as well as services around legal matters financial matters investment trusts and home loans. The intent of this bill the Trustee (Public Trust) Amendment Bill is really to close a loophole to ensure that the Public Trust does not bear the financial burden of acting as a trustee for products regulated by the Securities Act if an existing trustee seeks to retire and apply to the court to have the Public Trust appointed in its place. In particular the main provision of the bill makes it clear that if the court appoints the Public Trust as a trustee of last resort for securities offered to the public the retiring trustee must indemnify the Public Trust for its reasonable fees and expenses. This in turn will ensure that the Public Trust’s fees and expenses will be met by retiring trustees if the trustee cannot cover them.This is a bill that has wide support across the parties. It is a good bill. It is small and technical in its intent but it definitely does serve a purpose for the wider part of New Zealand as well. I commend this bill to the House. Thank you.ANDREW WILLIAMS (NZ First): I will take a brief call on behalf of New Zealand First on the Trustee (Public Trust) Amendment Bill. We also will be supporting this bill. So it is being supported completely across the whole of the House which is a good thing. We have said in the past that New Zealand First will support good Government policy but oppose poor policy. In this case we believe this is good policy.The bill ties up and sorts out some loopholes to ensure that this taxpayer-supported entity the Public Trust is not exposed in any way. That is a good thing. It ensures that there are more safeguards to ensure that the public interest is put at the top of the list in terms of making sure that nothing untoward would happen to the Public Trust if something rebounded on it. This bill achieves that. It is only a very small technical bill. It is very much an administrative matter in that respect. It clarifies a situation and improves a situation that otherwise would have left the Public Trust perhaps exposed. In that respect New Zealand First will be supporting the bill.Hon KATE WILKINSON (National—Waimakariri): I just want to take a very short call to support the first reading of the Trustee (Public Trust) Amendment Bill. It has been very elegantly and efficiently described by the Minister of Justice earlier. There is not really much we need to do to elaborate on that. I would just like to say though in terms of process that I am not sure that there is any alternative if we are to avoid a queue of section 46 applications at the courtroom door. The Public Trust does not have a choice. It is only fair and reasonable that this loophole is closed. I support the bill.Hon LIANNE DALZIEL (Labour—Christchurch East): I have read the regulatory impact statement for this bill the Trustee (Public Trust) Amendment Billand I think that it is important to refer to it. It does traverse the history of the legislation. The legislation is doing something in this particular instance for which it was not originally intended. Originally it was intended to ensure that private trusts would not fail through the lack of a replacement trustee and I guess as we have moved into a modern environment with securities now having trustee appointments the potential for what has actually occurred in this one instance has in fact arisen. I think it is appropriate for the Government to act to cut it off at that point. So we are in agreement on this side of the House in respect of the intent of the legislation and the fact that it would apply from today’s date.But there are two different ways that you can make legislation apply from today’s date. One is to do what the Government is doing and that is to pass it under urgency through all of its stages without the benefit of a select committee hearing without advice from the Law Society and without advice from any trustee company. In fact the trustee companies could not be consulted on this bill when it was being developed because of course of the conflict of interest and the fact that it would alert those companies to the fact that the Government was going to do precisely this. So I actually think that the second option would have been the preferred way to go given those limitations and that was to announce that today would be the operative date for the legislation—that it would come into effect from today even though it would be passed in a fortnight’s time.I like everyone else would rather see the certainty of having the time-scale truncated but I for one would always prefer to hear what the Law Society has to say in a considered submission to a select committee and then have the officials respond to that and provide the committee with advice. Maybe it would have been more than a couple of weeks but with the date in concrete that would have prevented any other application being filed because at the simple transition point—and I can see Kate Wilkinson is shaking her head but the transition clause could simply say that any case filed after today’s date would not have the benefit of the application of that particular provision. So with a good deal of working through these issues I honestly think we could have come to the best of all worlds.The only thing that just concerns me is that we are now going to substitute that select committee process with a Committee stage where we will ask questions about amending the wording of section 46 of the principal Act. I guess that one of the questions that I will be wanting to know the answer to is whether this is the same provision that is due to come into effect with the provisions of the Financial Markets Conduct Bill which I understand the Government hopes to have passed by June and have come into effect later on. If that is the case I mean that would be incredibly useful information but on the face of it it does not seem to me to explain whether this is in fact the wording that has been taken out of there. I do not know. So there is detailed stuff that I would like to know because the last thing that we would want to do when we are addressing the unintended consequence of perfectly good legislation which has just become outdated because of the circumstances that we now find ourselves in is to create the potential for another unintended consequence down the track if we have not got the wording quite right. It is very difficult to amend these things. Obviously it is much easier to amend these things with a select committee process. So I agree with my colleague Andrew Little that this is very much a case where we are on all fours with the Government in terms of policy—the outcome that we want to achieve—but we are not entirely happy with this process because it just brings such risks with it.The last thing that I just wanted to comment on was the finance company failures which actually led us to this position today. I just want to make this point. I have given the odd speech in the past because I was the Minister of Commerce at the time that theoriginal finance companies started their cascading effect into failure. The point was often made that the finance companies were not regulated. That actually is not correct. The finance companies were under-regulated. The supervisory role of the trustee was what was supposed to protect the investors from what actually happened. I want to remind this House that when Neville Harris reported to the select committee that I chaired after the fact he said at the time that at least 25 of the failed companies at that point had used just two trustee companies: Perpetual Trust and Covenant Trustee.I think that we actually have to think long and hard about how we let that area which was supposed to exist as a regulatory protection for investors so utterly fail in this particular instance. I do want to place on record again my absolute concern for those who lost a substantial amount of money in all of those company failures. There were people out there who had roles that were supposed to act towards protecting those investors’ interests and they simply failed to do so.Dr JACKIE BLUE (National): I am very pleased to speak to the first reading of the Trustee (Public Trust) Amendment Bill. It is an interim bill and it amends the Trustee Act 1956. It closes a loophole as we have heard to ensure that the Public Trust does not bear the financial burden of wearing the costs of having to step in to replace trustees of failed finance companies. This is an urgent bill. We have heard that there are potentially 60 failed finance companies that are seeking to have the Public Trust appointed as the trustee of last resort. It is unacceptable that the taxpayer has to in effect pay the bill for that. It is a good bill. I commend it to the House. Thank you.Clare Curran: Mr Speaker—Mr DEPUTY SPEAKER: Is this a split call?Clare Curran: Yes a split call—Mr DEPUTY SPEAKER: No it is not. Clare Curran.Chris Hipkins: It’s going to be short anyway.CLARE CURRAN (Labour—Dunedin South): Short. Thank you Mr Deputy Speaker. Thank you “Mr Whip”.Mr DEPUTY SPEAKER: You have the call—proceed.CLARE CURRAN: Yes I have the call Mr Deputy Speaker thank you. I would just like to make a few comments about this bill the Trustee (Public Trust) Amendment Bill which Labour is supporting. As you know this amendment in front of us is not absurd. It is not preposterous. It is a sensible move and it is something that we think is basic common sense. Labour supports this bill. As you know it is necessary and logical in its provision to ensure a comprehensive trustee policy agenda. I do not really want to go too much into the substance of it other than to say those things but I also want to talk about the importance of the regulatory impact statement when tabling a bill in the House and introducing it in the House and ensuring that it accompanies a bill into the House.Although this bill cements the endowment that turning to the Public Trust must be seen as a last resort when seeking to retire there is the financial burden of finding a replacement which has grown exponentially as trusteeship becomes increasingly focused and complex. Those things are absolutely important but we have had—is it five new bills introduced into the House in the last 2 days? How many of those bills have been accompanied by a regulatory impact statement? What—[Interruption] How many? What is the importance of the regulatory impact statement? Why is it so important? In relation to this particular bill there was a regulatory impact statement introduced within just hours maybe 24 hours around the—Andrew Little: Today.CLARE CURRAN: Today?Andrew Little: Today.CLARE CURRAN: Today which—Mr DEPUTY SPEAKER: Order! The time has come for the dinner adjournment.Sitting suspended from 6 p.m. to 7 p.m.The ASSISTANT SPEAKER (H V Ross Robertson): The House is resumed. Kia ora tātou nō reira e te Whare e ngā iwi e ngā reo e ngā hau e whā. Tēnā koutou tēnā koutou tēnā koutou katoa. Prior to the House suspending at 6 o’clock for the dinner break the honourable member Clare Curran was addressing us with her dulcet tones. She has 7 minutes and 40 seconds remaining to speak. Does she seek the call?CLARE CURRAN: Thank you Mr Assistant Speaker. It is lovely to be in the House listening to your dulcet tones. As I was saying before the dinner break Labour supports this bill. Labour supports the underlying policy behind this bill but the Government on the other side has failed in a number of ways. First of all it has failed to provide an adequate assessment to justify why this bill should be put through under urgency and second it has failed as it has failed on a number of other bills that have been before this House this week to provide adequate regulatory impact assessment and to provide time for the Opposition and the public to have discussions and consideration around these bills before they are actually brought before the House for debate. This bill’s regulatory impact statement which was prepared by the Ministry of Justice reflects concerns from the ministry that National’s reactionary approach means an adequate risk assessment has not been conducted which suggests that the Minister of Justice’s public justifications are mere scaremongering.On this bill which we support there are things to be said but the fact is that on two other critical pieces of legislation before this House yesterday particularly—one around the Government Communications Security Bureau and one around our telecommunications networks—no regulatory impact statements were supplied at all. None. That meant that there was no ability to get any sort of independent assessment that had been prepared by officials before those bills were brought to the House. One of them is being rushed through with a truncated select committee process which we have said is a travesty of process and is a very strong indication of an authoritarian approach to running the Government.In this particular case the Minister’s public justification as I have said could be mere scaremongering in an attempt to gain support. The regulatory impact statement states that the nature and rigour of the analysis has been affected by the limited amount of time. This is fact. This is written down in the regulatory impact statement. Further it expresses concern that because the ministry has not consulted with trustees who will be affected by the bill the risk of further applications to the High Court has not been quantified. As we heard earlier I think the regulatory impact statement was produced yesterday or today—anyway in a very short amount of time. That has minimised the length of time for Opposition parties to scrutinise the Government’s policy rationale for this bill. This is a trend. It is a trend that this Government has I suppose we could say set in stone now. It is a trend that is being extended through other ways of withholding information blocking information and obfuscating the Opposition’s and the public’s ability to access information through the Official Information Act and through other mechanisms. It is a trend as I have said that is towards a much more authoritarian way of running the Government.Bill read a first time.Second ReadingHon JUDITH COLLINS (Minister of Justice): I moveThat the Trustee (Public Trust) Amendment Bill be now read a second time. Since the House is in urgency I do not wish to take too much time but there have been some issues raised by members opposite and I think that they deserve to be answered. For a start I do not know why Ms Curran asked whether or not I was rushing the Trustee (Public Trust) Amendment Bill through for some reason. Well yes the reason is very much is that I want to save the Public Trust actually. I am not going to stand by and I do not think Parliament wants us to stand by and let it be basically the taxpayer having to pay absolutely millions of dollars out to fund the Public Trust to take on public responsibilities around trusteeships when this was never ever intended.The question was asked tonight why this was not done before. Well actually in the 114 years that the provision has been in the law for the Public Trust to be a trustee of last resort—in 114 years—nobody has ever before sought to make the Public Trust the trustee of last resort for a corporate trustee failure. That is why. It has never been done before. Nobody ever thought this could be done and certainly in Parliament no Minister of Justice thought that—in fact that is why. As for the situation of why now it is actually because the advice is we cannot risk it. We cannot risk it.The case that has brought this to a head is the Capital + Merchant Finance case which is actually due to be heard in the High Court on 6 June. Of course this bill does not purport to apply to that case. I think that would be unfair. It has been in the court for some time. But the advice that I have been given is that we cannot risk it. Of course what has really happened in this case as well which may not have been disclosed by me yet in the first reading is that the receivers of Capital + Merchant Finance have sought to bring in and to hold to account the corporate trustees. That has therefore allowed the corporate trustees to say that actually strictly according to law and rightly they have a conflict of interest and therefore cannot retain the trusteeship of Capital + Merchant Finance. So the action from the receivers—and I am not criticising them for it they are entitled to do that under the law—is something we have never seen before actually in 114 years—so even longer Mr Assistant Speaker than you have been at this place.Chris Hipkins: Only just.Hon JUDITH COLLINS: Only just says Mr Hipkins. In addition there have been some questions raised about—and I would say too that the Perpetual Trust which is clearly not that perpetual after this behaviour has 22 other failed finance companies that it is currently corporate trustee for. We are looking in that case at 22 companies and there are actually 60 failed finance companies that this could well apply to across the board including those 22. So this is not a risk that I as the Minister of Justice believe is one that we can take to sit back and wait to see whether this test case that is before the court is successful. It might be; it might not be. I cannot risk it and I do not think the Public Trust can risk it.An issue has been raised I think particularly by the Green member who spoke as to whether or not this matter could be dealt with in some other way whether or not we could have a select committee process. Because of the nature of what we are talking about proceedings could be filed pretty quickly particularly by a company or lawyers who are currently before the court right now on a similar matter. So I am not really prepared to allow this to go on.We could possibly as Mr Mallard suggested take some moves saying it could go to a select committee and then come back and then have the effect of it backdated. I think whatever we do in this matter we would be subject to criticism be it either of a retrospective nature or the fact that we are moving to have this through in urgency.Whatever we do we are going to be criticised but I am not prepared to stand back and let this happen and do nothing about it and then say “Woe is me!”.But in addition to that we also have—and this is I think the saver for those who are so worried about process—the Financial Markets Conduct Bill which is currently before Parliament. That bill is expected to be enacted in a few months’ time but it does not come into force until 1 April 2014. The Supplementary Order Paper to the Financial Markets Conduct Bill will provide a longer-term solution by permitting the Financial Markets Authority or the FMA to appoint a replacement trustee from amongst all available licensed trustees so that the Public Trust is treated equitably and to require an indemnity from the resigning trustee as a precondition of the appointment. This provides the longer-term solution.I make no bones about it: this is a stop-gap measure but it is one that we need to have in force. When the Financial Markets Conduct Bill comes through and takes effect from April next year should it be passed by this Parliament then that will in fact supersede what we are doing this evening.I would also like to take the opportunity just briefly to thank all parties for their support for this bill. I understand it is a very difficult situation but I am sure everyone here understands this is something that needs to happen. It is not the ideal situation but frankly we have not been served up an ideal set of facts so thank you everybody. I know everyone has some concerns about some aspects in terms of process but I hope that you understand and respect the fact that there is the Financial Markets Conduct Bill and that will in fact take over from this provision. I commend this bill to the House.ANDREW LITTLE (Labour): I appreciate the opportunity to take another call on the Trustee (Public Trust) Amendment Bill. I want to take issue with some of the points made by the Hon Judith Collins in her last address and simply say that I am afraid that what was news in Ms Collins’ presentation was that the application by Perpetual Trust to the High Court has been in court for some time because that undermines the case for urgency. We know that the application is there we know that it has been prompted by the challenge that Perpetual Trust faces from the receivers and that is entirely appropriate. Hopefully that piece of litigation will be a trendsetter because for far too long we have had trustees of finance companies who have been quite happy to clip the ticket and earn their fees but when everything turns to custard they are nowhere to be seen. So I congratulate the receiver certainly on challenging the trustees because hopefully it is litigation like that that will start to lift the standard of those trustees.But that litigation as the Minister of Justice has said has been on foot for some time. So why has her ministry or why has she not taken action before now? Suddenly we are presented with this impending crisis because we are 4 weeks out from the actual trial and the application being heard in the High Court. Why has not action been taken before now? I think the fact that that application and those proceedings have been on foot for some time illustrates the point that we are making that urgency is not justified. Those proceedings have been on foot for some time in relation to a trustee company that is the trustee for 22 other failed companies about which no proceedings have been issued. So where is the urgency? There is only one case and had this legislation proceeded in the proper way with a date in it from which its jurisdiction would take effect then we would have had the benefit of a proper process proper scrutiny and most important the input of those in the sector—those experts the professionals who are routinely dealing with this—so that we could fully understand the risks. Even the Ministry of Justice in its regulatory impact statement cannot tell us what the full risks are. It has not had time. It has not had time to engage with the professionals it has not had time to talk to others so we simply do not know.The Minister is entitled to credit for taking an approach on the issue that is at least from our point of view a good approach. It is fair it is proper and it mitigates the risk for the Public Trust and therefore for the public purse and the public interest. It seeks to impose the cost where it properly belongs and that is on the periphery of the finance sector. That is quite correct; that is proper. But our job when we stand here and the Crown’s job when Government members sit over there is to protect the public purse to the best extent. Our job as a Parliament is to protect the public interest to the best extent. But we cannot properly do that until we hear from those who have an interest in this legislation—those who have a stake in it.That is the reason we have the sorts of processes and procedures that we do. That is the reason we claim to be democratic when we have select committees and we have input. Even in truncated select committee processes where we might invite just a select few who the parties can agree might have something useful to say over a couple of weeks—even a truncated select committee process would be of some benefit and of some help to us. But that is not what we have got. We have got panic reaction knee-jerk reaction and the claim that the floodgates will open when there is no evidence of that happening at all—and when there are other means to mitigate the floodgate argument—but we are rushed into a panic action and we have no means of knowing whether what we are doing is proper or fair or whether indeed we have taken account of all the risks.This is the problem. This is the problem that we face and that is the reason why notwithstanding that we support the policy of the bill and we will support it we do not wish to let it go by without putting firmly and squarely on the record our concern and our objection to the process that is being followed. It is simply unnecessary—it is simply unnecessary. We do not want to be faced with this again when there is some other unforeseen litigation happening in that sector and a Minister gets panicked and the whole House is thrown into urgency and rushed into this and we do not have the benefit of full and proper and considered scrutiny which is our job which is our duty as public servants to the nation. We have considerable anxiety about that and we received no assurance in the words of the Minister and the explanations such as she has given that this is necessary because of present circumstances.The circumstances as we see them are not as drastic as she makes out. There is one case one piece of litigation which has been on foot for some time against a company that is the trustee for 22 other failed finance companies; no evidence or indication that there are 22 other proceedings in the wings or indeed have been filed; and no indication that of the other 38 failed finance companies and their trustees there is litigation pending in relation to them. So we do not buy the argument that this is time for panic. To the contrary even if this is a stopgap measure even if we still have the Financial Markets Conduct Bill to come this is not a reason not to give proper and due consideration to the full circumstances and the full issues surrounding this bill and what it is trying to address. It is important that we get that on the record.Perhaps this can be a plea a public plea to this Minister—and frankly unfortunately and regrettably most that she touches tends to turn to custard—to let us not be put in this position again. It is not good for Parliament and its standing and the public respect—or the respect that the public ought to have of it although of course that has been sorely tested because of members on that side of the House in the last couple of days anyway. Let us not be put in the position where we are compelled because of the power of the Government of the day to have to rush through legislation without full consideration of its implications and ramifications. That is our issue. Perpetual Trust is the only trustee company facing litigation. It is in relation to one failed finance company—a finance company clearly well-known to the Minister because she knows at least one of its directors because she keeps appointing him to things. But no othertrustee company appears to be caught up in the same net so we do not see the need for urgency and we think that considering this under urgency all stages within a matter of hours is a highly improper use of that procedure of this House of the members of this House and of the reputation of this House to act properly and democratically.SCOTT SIMPSON (National—Coromandel): It is a pleasure to speak in the second reading of the Trustee (Public Trust) Amendment Bill. There is a need for urgency for this bill and the urgency that is required is to protect the public purse from flagrant abuse by negligent trustees who absolve themselves from their responsibilities financial and try to shaft those responsibilities on to the long-suffering and hard-working taxpayer. So there is a need for urgency. This is simply a prudent measure taken on behalf of a careful thoughtful and understanding Minister who has taken the initiative.I can just hear the Labour Party now moaning whinging and bleating if this bill had not been taken under urgency and we had a queue of trustees absolving themselves of their responsibilities and thrusting themselves upon the long-suffering taxpayer. It would be the Labour members then who would be whinging and moaning mercilessly about a lack of active foresight on the part of the Minister of Justice.I am very pleased that she has taken an opportunity to fix this loophole because the rule allowing the High Court to appoint the Public Trust as a replacement trustee was originally enacted to ensure that family trusts did not fail for lack of a trustee. It was never intended to operate in a commercial situation of the sort that we are seeing before the courts right now. A failed finance company using section 46 of the Trustee Act to save itself was not the intention of that section. If used it enables securities trustees to walk away from their financial obligations and responsibilities and that is just not on on behalf of the New Zealand taxpayer.So it is a great pleasure to support this bill to give it my strongest commendation and recommendation to the House and also to thank the Minister for her very good and thoughtful foresight in this matter. It is very deserving of the urgency that we are according it this evening. I commend it to the House.JULIE ANNE GENTER (Green): I rise to take just a short call on the second reading of the Trustee (Public Trust) Amendment Bill.I guess what I would like to respond to are comments that were just made by the Minister of Justice the Hon Judith Collins and the member Scott Simpson who was previously speaking. Obviously the Green Party very much supports the policy direction set by this bill to protect the Public Trust in the case of the abuse of the loophole that exists in what is admittedly a very old piece of legislation. However I do not feel that we have heard enough about why the urgency is necessary in this particular week why we were not able to find out about the bill a little bit more in advance and why the regulatory impact statement lists four limitations—I think there were three or four limitations—on the ability to assess what all the options were and all the different impacts of those options to address the problem that is at hand. So although I thank the Minister for her explanation the Green Party still has reservations about the process of urgency being used and about the incompleteness of the assessment of options.The Minister has stated that it is just a stopgap measure and I appreciate that. I think we can understand that it is necessary to have a stopgap measure until the Financial Markets Conduct Bill passes into law. It will be interesting also. One of the recommendations of the regulatory impact statement is a longer-term review of the appropriateness of the role of a trustee of last resort and we will be looking with some curiosity and interest at the Law Commission’s review of the Trustee Act 1956 which is referred to in the regulatory impact statement.So just to reiterate the Green Party supports the bill and understands that there is definitely a need for a stopgap measure but we merely question the process and we wish there had been a little bit more transparency. We hope that this bill does indeed achieve its aims and that other longer-term potential loopholes are able to be addressed as well. Thank you.Bill read a second time.In CommitteeJAMI-LEE ROSS (Junior Whip—National): I seek leave for all five clauses of the Trustee (Public Trust) Amendment Bill to be taken as one question.The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.Clauses 1 to 5ANDREW LITTLE (Labour): Thank you very much for the opportunity to speak yet again on this important bill the Trustee (Public Trust) Amendment Bill. Really I want to take this opportunity just to prevail upon the Minister in the chair the Minister of Justice to answer the question that I think has been put in both the first and the second readings even though we have not had the benefit of closely studying the transcripts of each of those readings. The question does remain of why urgency was taken on this provision when there are alternative ways that would have allowed appropriate scrutiny of it and at least have allowed members of the House if not the officials themselves through their regulatory impact statement to take a considered view and hear from the professionals who are routinely dealing with these issues in the field every day.We did not need to hear from Perpetual Trust. It clearly is taking its action. Were it not for the urgency the Minister would stand to be fully wholly and unequivocally congratulated on the stance she has taken. It is right that she has taken the view that notwithstanding how unforeseeable it might have been—the Trustee Act might have been used by securities trustees or trustee companies—she should seek to protect the public entity that is being invited to step in as the trustee of last resort. That might never have happened in the 130-odd years of the Public Trust and in the many pieces of governing legislation for that office but in any event it clearly was a possibility which is what the lawyer for Perpetual Trust is banking on and is relying on. When you look at the Act and when you apply the black-letter law of the Act there is nothing there to exclude a securities trustee. It simply refers to trustees of a trust—of any trust. That particular provision of the 1956 Act is very widely drawn. So it was certainly a possibility on a simple reference to the Act.The fact that we had a whole swag of failing finance companies from 2008 I would have thought would have prompted someone in the bureaucracy if not in Cabinet the executive to think about the potential risks of just this sort of thing happening. Each of those finance companies was required to have a trustee. The basis on which deposits were to be taken was that there would be a trust sitting over them so that the deposits could not be used for anything other than the purposes for which they were provided or sought. That clearly has been a weak regime.In any event trustees were in place and there were failing finance companies. I thought it would have been obvious that the trustees were going to be under some pressure. Receiverships have been created and receivers have been appointed since 2008. The issue should have been triggered at least within that part of the bureaucracy that deals with commercial issues—the old Ministry of Commerce the old Ministry of Economic Development now the Ministry of Business Innovation and Employment.The fact that it took until there were legal proceedings afoot for the bureaucracy to be alerted I think causes us some alarm. But even then the proceedings were afoot and it was not noticed until just recently which has prompted this flurry of activity and urgent action. That is equally alarming.But then when it comes to the executive and the Minister considering what steps to take I think we are entitled to expect alternatives to urgency to be considered. The question remains for the Minister in the chair to answer the question of what alternatives other than urgency were considered and why urgency—in the event that other alternatives were considered—was preferred because there are alternatives that would have preserved the position. Clearly Perpetual Trust in relation to its failed trusteeship of Capital + Merchant Finance is outside the net and there is a risk to the public purse at least to the Public Trust and the public purse that it holds. Perpetual Trust is off the hook in that regard and we want to prevent other finance companies and their trustees from being in the same position. That could have been achieved simply by the draft legislation having a start date and that date being effective once the legislation took effect even if it was retrospectively. That would have been a fair and appropriate signal to give to potential litigants or those who were considering following the same line as Perpetual Trust. That is the question that needs to be answered and we eagerly await the answer.Hon JUDITH COLLINS (Minister of Justice): The question has been raised again about the urgency. I am happy to address it again and hopefully more to the member’s satisfaction. I think there are always options around this and this is certainly not a step that I have taken lightly. But the advice has come to me in only the last few weeks or so that the situation could become quite serious and that this is not something that we could leave for the normal select committee process. The Committee will be aware that this Government has not taken urgency for some time which would give an opportunity for this. I would actually think that this bill the Trustee (Public Trust) Amendment Bill is exactly the sort of bill that should be going through under urgency.I take on board the concerns that Mr Little has raised about urgency and why we could not just put a start date in that is essentially retrospective to the legislation coming into force. That is absolutely an option but what we are dealing with here are 60 finance companies all failed. What is being achieved by that? I would be more inclined to do that although I am not someone who generally believes in retrospective legislation. For me that is a very difficult step to promote. I think it inherently has issues particularly around process.In addition to that in this case I was also given some comfort from the fact that this bill is only a stopgap measure. We do in fact have the Financial Markets Conduct Bill coming through the House through the normal process and it does not come into effect until April next year should it be passed by the House. As the Green member Ms Genter raised earlier will it be in contravention of this bill or will there be any issues with it? Oh no I think Ms Dalziel did sorry. Will it be in contravention of this bill? It will actually replace this bill. So really this is very much a stopgap measure.If we were looking at urgency urgency is often around issues that must be dealt with and certainly in all stages like excise tax issues where behaviours will change. I do not think I could trust frankly that the lawyers for these failed finance companies or rather the trustee companies would not charge off to court tomorrow to file proceedings under the existing law if they had the notice. We are not making this law for them; we are actually making this law for the public of New Zealand the taxpayers and the Public Trust which has actually done nothing wrong—not a thing. It has not done anything wrong. It was not paid large fees to be corporate trustees. It did not fail in its duty. It did not mislead or do anything wrong. It is an innocent bystander andfrankly I do not think that we can risk having it put further to the test when it comes to this sort of litigation that that would ensure. Yes this is a test case that we are looking at which is due for hearing on 6 June this year so we do not have a lot of time.Knowing the legal profession as I do and with the greatest respect for it I am sure that there are people right now preparing documents to be filed if this bill does not go through tonight. But I would like to take the opportunity again to thank the Committee for taking such a mature and responsible attitude to this legislation which is entirely necessary.Clauses 1 to 5 agreed to.Bill reported without amendment.Report adopted.Third ReadingHon JUDITH COLLINS (Minister of Justice): I moveThat the Trustee (Public Trust) Amendment Bill be now read a third time. This bill has gone through the House under urgency and it is urgent. This bill provides a quick interim solution to a potential floodgate of expenses for the Public Trust and to the public purse if securities trustees walk away from their responsibilities.Without this amendment the Public Trust faces a potentially significant financial burden. Capital + Merchant Finance is unlikely to be able to pay Public Trust fees and expenses so the Public Trust is likely to have to meet the cost itself. However there are currently 60 finance companies in liquidation receivership or moratorium and if even a fraction of the trustees of those companies attempt to hand their roles to the Public Trust the cost could be enormous—and of course that is not only the case should they be successful; even litigation has its expense and the Public Trust is not able to continue to fund this.It is not only the financial burden. The Public Trust faces damages to its reputation and its brand. It would be responsible for communicating with thousands of dissatisfied investors. They may not appreciate the distinction between a retiring trustee and the Public Trust as replacement trustee. By law we require the Public Trust to be a competitive business and yet our current law without amendment is putting the Public Trust at an unfair disadvantage.This is all because of one small rule—the trustee of last resort rule. Section 46 of the Trustee Act allows the High Court to appoint the Public Trust as replacement trustee for any trustee who wishes to retire or resign. The Public Trust has a statutory duty to accept the appointment. The rule does not require the retiring trustee to find other replacement trustees first by indemnifying their fees and expenses that the trust or the company being supervised cannot pay. This bill will rectify this. It will require a retiring trustee to make efforts to find another replacement trustee and to pay the replacement trustee’s reasonable fees and expenses.The Public Trust can still be appointed as a last resort trustee. I think that is a very important point. If this happens the resigning trustee will meet Public Trust’s reasonable fees and expenses as the trustee for the trust in question if the trust or the company being supervised cannot cover them. The bill will only apply to licensed trustee appointments for products regulated by the Securities Act. It will not apply to family trusts. This is only a short-term solution but it will fix the problem right now. The Financial Markets Conduct Bill will provide a longer-term solution. This bill applies prospectively. It does not affect the Capital + Merchant Finance case; Public Trust will bear this burden.The Government does not want to undermine business confidence in the law by changing the rules midstream and without notice. Instead the bill will change the rules into the future. It will stop the risk of significant burden being imposed on the Public Trust and it will be doing so in the nick of time and for that I very much thank this House. I commend this bill to the House.ANDREW LITTLE (Labour): Kia ora. I rise to once again pledge the Labour Party’s support for the bill the Trustee (Public Trust) Amendment Bill but to also express our continuing concerns about it. The Minister of Justice says that there are 60 failed finance companies now that are known and recognised. Twenty-two of them had Perpetual Trust as their securities trustee Perpetual Trust being the trustee company that is presently before the High Court seeking to have Public Trust appointed as the trustee because of the conflict of interest that Perpetual Trust now has as a defendant in litigation by the receivers of Capital + Merchant Finance for which it was the trustee. If we can get our heads around that string of relationships life would be a lot easier.But the reality is that there is only one application before the court to appoint Public Trust as a securities trustee and that is the application by Perpetual Trust in relation to Capital + Merchant Finance. None of the 22 other finance companies also having Perpetual Trust as their trustee has any application and none of the other 38 of the 60 failed finance companies has any application before the court. So let us not overstate the risks and therefore justify urgency when urgency may not be justified.Putting aside the aspect of urgency we do accept that as a matter of good public policy protecting Public Trust in relation to these applications is a good idea. Trustee companies are the very ones that are quite happy to clip the ticket and watch the lucre rolling in during the good times and then when it gets too hard when the finance companies are up against it when the borrowers they have lent money to fail to repay their loans and when the depositors are demanding their capital back they are the first ones to try to get off the scene and absolve themselves of responsibility. If they find as a little trick they can now get Public Trust to step in and therefore the public purse and the State to step in and protect or shore up the failed private sector—which the private sector is notoriously good at doing—then I agree with the Minister that they will no doubt try to do so. But at this point in time given all the facts about litigation by Perpetual Trust we see no impending sign of that. Introducing this Trustee (Public Trust) Amendment Bill with a specified date so that we could go through a proper process take advice talk to the professionals in the field and understand the true impact of what we are doing and the risk associated with it would be much more preferable.I would like to think that if the Minister or any member of this executive is in the same situation in the future when it comes to a choice between seeking the urgent attention of this House and looking for the alternatives that provide the sort of protection that could be given by specification of a date in this bill and allowing a proper process the executive and any Minister will always err on the side of a more open and fulsome process. That must be a driving principle when it comes to the management of legislation through this House. No matter how quickly it needs to pass no matter the issue and no matter the perceptions about the magnitude and the significance of the issue we must be assured and the public of New Zealand must be assured that the executive does not take for granted the time of this House our goodwill and our ability to provide proper and decent scrutiny of important legislation such as this.We understand the public policy and we hope that that will be translated into a more progressive view about regulation and intervention in the finance markets. The truth is that they have for a long time been the cowboys of our economy and many of them stillremain so. They were allowed to get away with it. We had the financial collapse in 2008. The risks that this bill is addressing have been known since then but we are still plunged into urgency to address that issue. We simply should not be put in that position. This is a bill funnily enough about last resort. It is appointing a trustee of last resort. Well when it comes to last resort urgency in this House should be an option of last resort for those who have the responsibility for managing legislation through it. We have to place that on record. That remains a very clear and unequivocal objection that we have that this House should be treated in that way on matters such as this.The risks that this bill is trying to manage and deal with can be mitigated in other processes that this House typically employs and could have employed in this particular case. We understand the issue about not wanting to expose Public Trust to having to pick up the tab for failing finance companies. The reality is that the very application that is on foot in the High Court presently will not be covered by this bill so Capital + Merchant Finance once again will find itself off the hook Perpetual Trust will find itself off the hook and Public Trust will no doubt be put to expense and inconvenience in picking up this role if indeed it is appointed by the court as the trustee for Capital + Merchant Finance. That is a cost that will be borne. That one has escaped the net. The public purse will be affected. We have not acted fast enough to prevent that from happening. But there is no evidence of any other proceedings on foot or that could be on foot. The regulatory impact statement acknowledges that it is inadequate but it also does not advert to any other proceedings on foot. So we simply do not accept that there is that level of risk there.We just want to make the message very clear. We understand the importance of this. We understand the importance of having good regulation around the finance markets. The last Minister of Justice shepherded through legislation in part to achieve that. This Minister of Justice is managing through the Financial Markets Conduct Bill. That will make a difference too. But the question remains whether this particular bill being dealt with under urgency is a matter that needs to be dealt with as urgently and as precipitously as it is being dealt with at the moment. That is what we object to. Good parliamentarians should always object to being put upon by the executive in this sort of way. Perhaps backbench members of the party opposite the party in Government will as good and honourable parliamentarians express the view that they also do not wish to be treated in that sort of way. Urgency I repeat ought to be a procedure of last resort and not a matter of first resort as it appears to be in this particular bill.We will support the bill. We support the underlying policy in the bill. But let us not again be put in the position of dealing with these issues when we have not had the benefit of hearing from others in the sector apart from Perpetual Trust even the receivers of the various finance companies others in the finance sector and indeed trustees who have been put in the position of being a trustee of a finance company on the implications for them. We have not had the benefit of their insights and their experience. That is a dangerous position for us to be in. So we underscore that clearly we highlight it with the biggest highlighters and we underscore it with red ink. Please ensure that this House and every member in it is not again put in this position because it is not good for Parliament it is not good for parliamentarianism and it is not good for New Zealand.ALFRED NGARO (National): Kia orana. I rise to take a call in this third reading of the Trustee (Public Trust) Amendment Bill. I want to acknowledge the previous speaker Mr Little. He talked about the honourable backbenchers being in a sense cognisant of their responsibility to be prudent and wise when enacting the political mechanism of urgency. I do agree that it is important that we do this as a matter of last resort. I think we have been cognisant of that. The Minister of Justice has and has actedprudently and wisely. The reason why we know it is the right thing is that despite all the talk about concern at the end of the day there is still support and the support is right across all parties because there is greater gain to be had than there is risk. I think that is what we are talking about. We have traversed all the key issues around closing the loophole. We have talked about the provisions of the legislation that will protect the public purse. We have also talked about the importance of the concerns from the regulatory impact statement not being such that they have warranted a vehement response or opposition from the parties opposite. Instead they have noted their concerns but most important they will support this bill.There is much less to be said now. I simply say that we see this as an important bill. I want to acknowledge firstly the Minister who in her wisdom sought to ensure that this would go through in urgency. It is the right move. It is the right thing to do. The New Zealand public will not be upset about this; in fact they will see this as the right step for us to take. We commend this bill to the House. It is the right thing to do for New Zealand. Thank you.CHRIS HIPKINS (Labour—Rimutaka): I am happy to take a brief call in this debate under urgency on the Trustee (Public Trust) Amendment Bill in what has been a relatively civilised and dignified debate so far. This being urgency I object to that so I thought I would make a brief contribution to this particular debate.I want to pick up on a comment that the Minister of Justice made in her speech when she talked about finance company directors jumping ship and not being held accountable when the companies collapse. That is certainly the public perception and in many cases people have lost significant amounts of their money—[Interruption] It might have been someone else in the debate so I might be attributing that comment to the wrong person. OK it was Andrew Little. I accept that.Andrew Little: Andrew Little Judith Collins—it’s an easy mistake to make.CHRIS HIPKINS: That is right. But actually it does stick in the public’s throat. When people invest their money with finance companies the directors are quite happy to accept that money while the going is good and then when the proverbial hits the fan those people take the money and run. They disappear. The people who have lost their savings are left with nothing while there seem to be very few consequences for the people who have ultimately presided over that failure. That does really stick in the throats of the people at home who are investing in those companies.It is not just the finance companies that frustrate people in that area either; it is regular companies that frustrate people. For example when a construction company collapses and the directors jump ship immediately before it collapses and the subbies lose access to their tools and lose all of the payments that they are due—the directors have jumped ship and abandoned them right before that company collapses—that really sticks in people’s throats as well. What is the National Government’s approach to that? Well it has done absolutely nothing about that. It does not really seem to care about that—Andrew Little: Half of the directors are members.CHRIS HIPKINS: —because half of the directors are National members. In fact the National Party’s approach to that is to appoint those directors to State-owned enterprise boards in preparation for the privatisation of those State-owned enterprises. One of the worst examples of course is the former Prime Minister Jenny Shipley who when Mainzeal Property and Construction collapsed literally hours before it went under jumped ship. She was quite happy to take the directors’ fee when the going was good quite happy to have the status of being a director of a big construction company but the minute the proverbial hit the fan or actually before the proverbial hit the fan—right before—she jumped ship. She did not want to know about it. She took the money and ran. That is the sort of thing that really really annoys the New Zealand public.Actually it is more serious than that. When people take on these responsibilities that is exactly what they are doing—they are taking on responsibilities. Finance companies regular companies—it does not matter which they are; if people take on a responsibility and they are willing to accept the directors’ fees then they should accept the accountability that goes with that. They should not be jumping ship when the going gets tough because that is just fundamentally wrong. Too often that has happened recently. Finance companies have been the worst example. Mainzeal is another example that has been a shocker. It is happening across the board. The people at the top of the pile the people who are getting those directors’ fees should be held accountable and they should accept some responsibility for that.The Labour Party is supporting this bill through all stages today with some reluctance because although we understand the problem and we see the need to plug the gap and we do not want to see exploited this particular loophole that has been established we are very uncomfortable about the notion that a bill will be put through all stages in Parliament under urgency. I do not think that in the time I have been in Parliament 4½ years now I have attended a select committee for any bills—I have sat through some pretty turgid bills including some Statutes Amendment bills and the like which are very technical bills and generally pretty dry—where there has not been something useful that has come out of that process whether it is a very minor technical amendment or some other clarification. There can in fact always be improvements made to a bill through the select committee process.I guess the clincher for me though in agreeing that the Labour Party should support this bill through all stages is that it is very much a short-term measure and it is going to be replaced by another bill that will go through the proper process in a very short order of time—although having said that Gerry Brownlee is still in charge of the House so we do not quite know. There are no guarantees that anything will progress particularly fast while Gerry Brownlee is in charge but we live in hope. We live in hope that through the gerrymandering process something useful might finally come out at the other end. The Labour Party is supporting this legislation with some reluctance but we do agree that the loophole should be plugged.JULIE ANNE GENTER (Green): I rise to take a short call on the third reading of the Trustee (Public Trust) Amendment Bill. The Green Party will be supporting this bill. Under current law as we have heard a retiring trustee may make an application to the courts under section 46 of the Trustee Act to have the Public Trust undertake the trust in their place. This very old law was originally designed to protect the interests of beneficiaries and the continuity of their family trusts. This legislation is before us today because of other cases in front of the courts in which the trustee of a failed finance company Perpetual Trust has declared that he has a conflict of interest and has applied to the court to have the Public Trust appointed as the trust of last resort. This would incur some financial liabilities for the Public Trust for a problem that was not its problem in the first place.The legislation is very short and simple. It adds a few new tests to help ensure that the Public Trust does not bear any financial burden of acting as a trustee for a failing investment for a failed finance company of which we know there are very very many. There are already 60 so we could see more litigation of this type incurring financial liabilities for the Public Trust. The changes in this bill say that the court may only appoint the Public Trust as a replacement trustee if the resigning trustee has made reasonable endeavours to appoint a replacement trustee and the resigning trustee indemnifies the Public Trust for reasonable fees and expenses and provides security forthat indemnity. The Green Party looked at the proposed legislation and thought that although we have concerns about the process because we saw this draft legislation only on Tuesday evening and I saw the regulatory impact statement only today actually this is quite a reasonable test that should be considered by the courts. This stopgap measure could prevent potentially the floodgates opening up for other failed finance companies to apply to the court to have the Public Trust take on their trusteeships.The Green Party is very happy to see the Government acting in the interests of the Public Trust and taxpayers to protect them from financial liabilities caused by failed finance companies. We think that is actually quite a different move a different direction for this Government which up until now has not really proposed legislation that would protect the taxpayer. In effect it seems to systematically prefer to protect the interests of monopoly private interests. For example earlier today we had the Committee stage of the Land Transport Management Amendment Bill where we have seen changes to the regulations for public transport that will actually entrench the dominance of existing bus operators and the Government has declined to alter the transitional measures in that particular legislation in a way that would actually save taxpayers’ money save regional councils ratepayers’ money and result in lower bus operating costs. Presumably it has done this because it is really on the side of the shareholders of the private bus companies not on the side of the ratepayers and the taxpayers who deserve to get good value for money.Similarly there are changes in that legislation that will open up the possibility of going to the private sector to finance some very dodgy motorway projects like Transmission Gully which essentially means that we get the same projects but we pay an extra $2 billion. So instead of paying $1 billion for a project that is worth about $500 million in benefits we will get to pay $3.4 billion—that is future New Zealand taxpayers will pay $3.4 billion for a project that is worth $500 million so that the private overseas banks financing the company have a nice solid and safe investment over a 25-year period and they can earn 10 to 12 percent returns.It is an unusual step for this Government and I commend the Minister of Justice for looking after the Public Trust and trying to put in place a stopgap measure even though it will not affect the case that is currently before the court if the court does decide to appoint the Public Trust as the replacement trustee of last resort for Capital + Merchant Finance. There will be costs incurred and this legislation will do nothing to protect the Public Trust from this particular case but we do hope it will protect the Public Trust in future cases. Thank you very much.Bill read a third time.Insurance (Prudential Supervision) Amendment BillFirst ReadingHon NIKKI KAYE (Minister for Food Safety) on behalf of theMinister of Finance: I moveThat the Insurance (Prudential Supervision) Amendment Bill be now read a first time. At the appropriate time I intend to move that this bill be referred to the Finance and Expenditure Committee and that the committee present its final report on or before 13 September 2013.The amendment bill contains amendments to the Insurance (Prudential Supervision) Act 2010 in nine areas and one consequential amendment to the Reserve Bank of New Zealand Act 1989. It aims to reduce or eliminate unnecessary compliance costs and address technical issues identified during provisional licensing to ensure a smooth transition to full licensing of insurers.By way of background the Insurance (Prudential Supervision) Act which received the Royal assent on 7 September 2010 establishes a licensing and prudential supervision regime for insurers carrying on insurance business in New Zealand. The Act represents a significant step forward in terms of delivering comprehensive prudential regulation of insurers carrying on insurance business in New Zealand. The Act provides for a transitional period towards full compliance that runs through to 7 September 2013. Most insurers carrying on business during the transitional period are operating under a provisional licence whereby the full effect of the Act is delayed. At the end of the transitional period all provisional licences will have expired.The Reserve Bank has reviewed the operations of the Act during the transitional period. Although the Act has proved to be generally effective and robust it is not unexpected that some provisions have been identified as appropriate for reform. In particular two provisions in the Act could expose insurers or the Reserve Bank to operational complications at the end of the transitional period and for this reason these amendments would ideally come into force before 7 September 2013. The amendment bill proposes to extend the term of provisional licences of insurers who enter into an insolvency procedure before 7 September 2013. At this date insurers that are subject to an insolvency procedure will not qualify for a full licence. The inability to extend a provisional licence will result in the insurer not being subject to distress management provisions prescribed under the Act and the Reserve Bank may wish to continue to have a role for regulatory purposes.The second proposal relates to interim financial reporting requirements. Some overseas insurers are concerned about the cost of complying with half-yearly insurer and group financial statements prepared in accordance with New Zealand generally accepted accounting practice where branches and subsidiaries are operated in a number of countries. The proposed amendment is to allow the Reserve Bank to specify another basis for reporting by overseas insurers. For example in appropriate cases overseas insurers may submit half-yearly insurer and group regulatory financial reports in accordance with home jurisdiction requirements. It is anticipated that the Reserve Bank would receive the same information provided to the insurer’s home regulator.Two other proposals are expected to reduce or eliminate unnecessary compliance costs. Certain provisions under the Act have been identified to be too onerous in circumstances where policy holders are not expected to gain material benefits or additional protection even if the insurer complies with the requirements. The first of these allows the Reserve Bank to exempt an insurer that is running off its liabilities from the requirement to have a current financial strength rating. Often there will be limited public benefit for an insurer to hold a financial strength rating where it is required to cease to enter into new contracts of insurance. The second clarifies that in respect of contracts of insurance that renew more frequently than annually disclosure in writing of the insurer’s financial strength rating to the policy holder will be made on at least an annual basis rather than on every renewal. This proposal would stand in addition to provisions under the Act requiring the insurer to give notice of a rating downgrade to the public or policy holder within a prescribed period and to disclose its current financial strength rating on its internet site.The amendment bill also takes the opportunity to address technical issues—for example providing a limitation period of 5 years within which the Reserve Bank may file a charging document against an insurer that has committed an offence. A limitation period of 5 years for all types of offences against the Act is considered appropriate to improve consistency in the enforcement of the Act to reflect the nature of operation and risks in the insurance sector and to improve consistency with provisions in other statutes administered by the Reserve Bank.The amendment bill also empowers the Reserve Bank to publish and maintain on its website an official register of licensed insurers with additional content to be determined by regulations. This will result in a consequential amendment to the Reserve Bank of New Zealand Act 1989 where the current provision is confined to the determination of form and will set a common standard across the Insurance (Prudential Supervision) Act and the Reserve Bank of New Zealand Act 1989.In conclusion the proposals included in the amendment bill will enhance the effectiveness of the Insurance (Prudential Supervision) Act without the imposition of unnecessary compliance costs on insurers. To date there has been general industry acceptance of the Act. The amendment bill does not involve significant changes to existing policy and is expected to continue to benefit from the industry’s support.Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to confirm that the Labour Party will be with some reluctance supporting this bill the Insurance (Prudential Supervision) Amendment Bill. This bill extends the transitional period established under the Insurance (Prudential Supervision) Act 2010 that would otherwise expire in September of this year and the bill does need to be enacted before this date.I could not hope to match the comprehensive and exciting presentation by Minister Nikki Kaye. There will be a quiz at the end of this debate for people watching Parliament tonight to test their memory of the points that the Minister made in her opening address. My remarks will be limited to two broad sections. Firstly I am going to note some of the provisions of the bill that have no doubt been made with considerable input from the insurance industry. I think it is important that the House checks off that input. Secondly Mr Assistant Speaker if you will allow me I will note some contextual matters to do with Reserve Bank prudential supervision which provide some of the framework within which this bill has occurred.On to the first matter which is that this bill might have been named the “Insurance (Prudential Supervision—The Industry Made Me Do It) Amendment Bill”. The reason for that characterisation is that it contains a number of provisions that might be kindly described as business-friendly. In other words judging by the Minister’s enthusiasm for her speech she was probably handed a list by the insurance association and told: “Please enact these.” That seems to be what is happening and I draw the House’s attention to but a couple of examples.The first is in the genteel language of officials: “The Bill … contains amendments that extend the term of provisional licences of insurers that enter into an insolvency procedure before 7 September … Extending the term of … [these licences] ensures that the distress management tools made available … will reduce unnecessary costs and improve administrative efficiency …”. In other words it is a free extension. Here is another example: “Other amendments will reduce … costs and improve administrative efficiency”—the same language again—“(for example a formalised register administered by the Bank and an ability to exempt insurers in run-off from the requirement to maintain a current financial strength rating).” Why have a current financial strength rating if you are simply going to exempt the insurers? This is rather interesting—“The Industry Made Me Do It Bill”. I will not go on because of course there are valid reasons to have the bill. We do not want the current transitional period expiring and the industry simply being left in the lurch and for that reason Labour is supporting the bill.It is very important to note if I might some of the context within which this has occurred. This has been a very very big week for the Reserve Bank. It was only yesterday that we discovered despite the continual protestations of the Minister of Finance that New Zealand had hitherto had the very best monetary policy in the entire world which included no intervention in currency markets and no macro-prudentialtools that guess what? The Governor of the Reserve Bank confirmed to the Finance and Expenditure Committee yesterday that virtually as the Minister was speaking the bank was busy intervening in the New Zealand dollar. Goodness me! What the Minister refused to countenance the governor was already doing. How very very interesting. So there is the Reserve Bank selling New Zealand dollars like it is going out of fashion to drive the Kiwi dollar down—and in fact it did because as soon as that was announced the Kiwi dollar dropped like a stone by about a cent.But the interesting thing here is that Labour has been calling for exactly that kind of intervention—and so have our Green colleagues—for about the last 3 years and the Government of the day has said it was unnecessary. Here is the embarrassing thing for the National-ACT Government: the Governor of the Reserve Bank hardly a noted Marxist revolutionary has gone on and done it behind the Government’s back—leapfrogged the Government and agreed with the Opposition.What an interesting week for the Reserve Bank to be debating the now rather exciting Insurance (Prudential Supervision) Amendment Bill. Who knew that this bill would be a show-stopper? Who knew why the Government buried it at the very end of the long list of matters to be covered in urgency? Because it is embarrassed—deeply deeply embarrassed. It is so worried that Tim Groser has been brought back from Geneva or Ouagadougou where he was busy marshalling votes to be the Secretary-General of the South Pacific Forum just so he could save the Government for this bill. I commend his action I hope someone gave him a decent visa and I look forward to running against him in the good seat of New Lynn in a mere 18 months’ time.The second signal achievement of this week in regard to the Reserve Bank is the governor’s admission that in a few days he will be signing with the Minister of Finance a memorandum of understanding on the subject of macro-prudential supervision—a matter not unrelated to the content of this bill but rather more exciting. That is things like loan-to-value ratios and other tools that will compress the rapid rise of the housing market. Again the Labour and Green parties have been calling for the increased use of these tools and the consequential amendment of the Reserve Bank of New Zealand Act for the last 2 years. We are on record. What did Mr English say? “Oh no!” he said “There is no need. We already have the best monetary policy in the whole wide world and that would be unorthodox!” Well how very interesting that in a short few days’ time he will be signing off on the very same amendments that the Opposition has long mooted and that he has long denied. What a very interesting week for the Reserve Bank.The third leg of the treble for the Reserve Bank is the contribution of notedNew Zealand Herald economist Brian Fallow who today has declared that “Austerity’s for booms not slumps.” This is important because the Government is embarking on a veritable austerity programme soon to be confirmed by another miserly and unfair Budget in just a few days’ time. Does the Government believe that we are in a boom? If it does it must be living on a different planet. Should we call it “Planet Gilmore”? On “Planet Gilmore” everything is rosy! The waiters deliver on time and they do not answer back. On “Planet Gilmore” New Zealand is blooming. It is just that on the real planet Earth in the real Aotearoa it ain’t booming. There are 270000—here is the serious bit—children growing up in poverty and many many tens of thousands more unemployed than when this Government took office. This is something closer to a slump for real New Zealanders than a boom and this is no time for austerity. [Interruption] Todd there is time for the noted chairman of the Finance and Expenditure Committee to refresh the coiffure of his pate before he leaps to his feet and demands the attention of the viewer.May I sum up. There are three elements to this debate. The first is—as the Minister with such sparkling repartee has outlined to the House—that this is a boring bill.However it is boring particularly because she is merely reading the shopping list from the insurance industry association. She is so afraid; she is now slumping down behind her chair. She is so ashamed to have been the tool of the industry. The second main point is that there are some significant holes which Labour will do its best to reconsider in 18 months’ time when we take the Treasury benches. The third is that it has been a huge week for the Reserve Bank. It has finally come out. It is appropriate to use such terms in the House of course noting recent achievements. It has come out and said that it likes to intervene in currency markets—that it is good for it it puts hairs on its chest it makes money out of it and it drives down the Kiwi dollar so we can export more. That is all good stuff. The only person who disagrees is Bill English but Graeme Wheeler has seen to him. Finally he is seeing to him next week when he forces the Minister to sign off on the macro-prudential tool box which Labour and the Greens have long been calling for. I would say this is a week in regard to the Reserve Bank’s supervision role where you could say Opposition one Government nil. The people of New Zealand live in hope.TODD McCLAY (National—Rotorua): There are people in New Zealand living in hope now that that last speech has finished. We will get on very soon I am sure to the quiz that was announced but I think the number of people taking part in the quiz at this stage will be many fewer than at the beginning of the intervention.Can I just address one point from that last speech very briefly before I get into talking about what is a significant piece of legislation the Insurance (Prudential Supervision) Amendment Bill. The last speaker in the debate the Hon David Cunliffe spoke of 200000 children in poverty in New Zealand. I do not want to debate around what that word “poverty” means but what I do want to say and what I want to recollect is that over 9 years of a Labour Government there were more than $20 billion worth of surpluses and at the end of that 9-year period there were the same number of children in poverty as there were at the very beginning. I just wanted to address that. I will put it aside because the House is harmoniously moving towards a short adjournment.Can I say again that this amendment bill is another significant step towards achieving clear and robust regulatory arrangements across our financial sector. Although the original Act of 2010 has proven to be effective it is not unexpected that some provisions have been identified as appropriate for reform and therefore this amendment bill does that.I did say this is a significant piece of legislation; therefore I want to reserve my substantive contribution until the second reading. But can I say to Minister Nikki Kaye that that was one of the more enlightening speeches I have heard on legislation that is likely to come to the Finance and Expenditure Committee. I want to thank her for her great knowledge in this area.RAYMOND HUO (Labour): I rise to take a call to support this bill the Insurance (Prudential Supervision) Amendment Bill especially as delivered by the Minister for Food Safety Nikki Kaye. This is a sensible bill and we will be supporting it through to the select committee stage. The bill makes a number of technical amendments to the prudential regulatory framework for the insurance industry. The Insurance (Prudential Supervision) Act 2010 received the Royal assent on 7 September 2010. It established a licensing and prudential supervision regime for insurers carrying on insurance business in New Zealand. In other words the insurers carrying on insurance business in New Zealand are required by the Act to participate in a licensing and prudential supervision regime.There is a transition period in the Act and that runs through to 7 September 2013. Most insurers carry on business during the provisional period operating under aprovisional licence whereby the full effect of the Act is delayed while insurers follow the path to full compliance. At the end of the transition period all provisional licences will have expired. Needless to say this bill needs to be enacted before that date and this bill should have had its first reading months ago.Through the licensing phase of the 2010 Act a number of technical issues have been identified as appropriate for reform. This bill brings amendments relating to these technical issues. The key amendments proposed in this bill include firstly requiring the Reserve Bank to keep a register of licensed insurers. Secondly it allows overseas insurers to report with the Reserve Bank’s consent by entering financial information that complies with their home jurisdiction requirements rather than New Zealand’s International Financial Reporting Standards generally accepted accounting practice. Thirdly it extends the term of provisional licences of insurers that enter into an insolvency procedure before 7 September 2013. Extending the term of the provisional licences of those insurers would make sure that the distress management tools made available under Part 4 of the Insurance (Prudential Supervision) Act remain available to the Reserve Bank and liquidators. It is intended that the amendments proposed under this bill will come into force before 7 September 2013. However this has yet to be confirmed or cannot get confirmed because it is having only its first reading tonight.JULIE ANNE GENTER (Green): I rise to take a call on the first reading of the Insurance (Prudential Supervision) Amendment Bill. I will begin by saying that the Green Party has decided that we cannot offer support to this bill at the first reading and there are several reasons for this.Firstly the principal legislation the Insurance (Prudential Supervision) Act was supported by the Green Party. We think it is extremely important to have good regulatory oversight and good prudential requirements for the insurance industry so we were very supportive of that bill throughout the whole process. What this amendment bill seeks to do is make nine very technical dry changes to the prudential requirements for the insurance industry which are set to come into law in September 2013. The changes were recommended by the Reserve Bank. They include things like allowing the Reserve Bank to exempt a licensed insurer from the requirements to have a current financial strength rating if the insurer has stopped writing new contracts. It allows overseas insurers to use accounting rules that apply in their home country for interim financial reporting rather than adhering to New Zealand’s accounting practices. It requires the Reserve Bank to keep a public register of all licensed insurers while dropping the requirement for it to be made available on the bank’s website—interestingly. It makes any offences under the principal Act category 3 offences as defined by the Crimes Act creating a statute of limitations of 5 years.The main changes recommended in the bill move in the direction of lighter regulation in some highly specific circumstances such as the case of an insurance company that has stopped issuing new insurance. This controlled relaxing could make sense; however our concern is that it is happening in an industry that is characterised in New Zealand by a few dominant foreign-owned players that are too big to fail. We believe that particularly in a post - global financial crisis world in a world where the insurance industry globally is facing increasing threats—and in New Zealand we saw after the natural disaster of the Christchurch earthquake that it had quite serious repercussions for AMI which was our largest New Zealand - owned insurer. In the post - global financial crisis world and in a world where we can anticipate more frequent serious severe weather incidents that will undoubtedly result in insurance companies having to pay out more it is not the time to be moving towards lighter regulation. We could be convinced through the select committee process but it will take that processfor us to fully understand the total ramifications and implications of the changes in this bill.I note that another reason for not supporting it tonight is that there was no regulatory impact statement accompanying this bill so we have got no reason for these particular changes that is fleshed out in detail and fleshed out in a way where we feel we have been able to understand that the officials have looked at the changes have thought about all the implications and have assessed the risks and the advantages of these changes. Given the dearth of information about the bill we simply cannot support it this evening. That is all I have to say. Thank you.ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the Insurance (Prudential Supervision) Amendment Bill. New Zealand First will be supporting it through to the select committee. We believe that it is a fundamental situation in New Zealand that we must have a good well-functioning insurance sector. It has been proven over recent years that unless we do New Zealand is at great risk. It is most important—I think all parties in this House would agree—that we must have a very sound well-functioning insurance sector and that includes our own Earthquake Commission measures as well. The insurance sector underpins the basics of our modern economy. If we do not have a sound insurance sector our whole economy could suffer as a result. The public must have confidence that this sector is sound and appropriate prudential supervision of the sector is an important regulatory function that this Parliament must ensure is done to the highest level.The Christchurch earthquake demonstrated the critical role of insurance and it highlighted some concerns as were illustrated in the situation with AMI. It would be so easy for situations like that to occur if there was not oversight by this Parliament and by the Government to ensure that the right safeguards were put in place in terms of the insurance sector. But it also revealed some aspects of the insurance sector that may not be working optimally for New Zealand. With so much of the insurance sector dominated by overseas companies it is essential that the regulatory framework is comprehensive and up to date and that it works well. New Zealand First appreciates the significance of the insurance sector that it operates well in New Zealand and that at the present time we do seem to have it well and truly in hand. That is not to say that things cannot fall through the cracks. This bill goes a long way towards tidying up areas of that.We have a few questions which when the bill goes to the Finance and Expenditure Committee I am sure will be answered such as about financial standards not being required of the insurance provider if it is in a run-off period. If the licensed insurer is described as being in a state of run-off and is not entering into new contracts for insurance the Reserve Bank will be satisfied that it does not therefore have to have a current financial strength rating. We sort of have some doubts about that and we would welcome the Minister of Finance and the Government explaining that a little bit further because we believe that the highest financial ratings should be required even at a time when an insurance company is running down in New Zealand. We would not want it to slip out the back door so to speak because its financial ratings were not held to the highest level throughout its activities in New Zealand.This is a little bit like the bill that we addressed prior to this one the Trustee (Public Trust) Amendment Bill. The Insurance (Prudential Supervision) Amendment Bill is very much an administrative bill. It is a technical bill. It tidies up areas through the Reserve Bank to make sure that our insurance industry in New Zealand has better governance and better oversight. New Zealand First will be supporting the bill through to the select committee.A party vote was called for on the questionThat the Insurance (Prudential Supervision) Amendment Bill be now read a first time.Ayes93New Zealand National 59; New Zealand Labour 22; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1; Independent: Horan.Noes13Green Party 12; Mana 1.Bill read a first time.Billreferred to the Finance and Expenditure Committee.Hon NIKKI KAYE (Minister for Food Safety)on behalf of theMinister of Finance: I moveThat theInsurance (Prudential Supervision) Amendment Bill be reported back to the House on or before 13 September 2013.Motion agreed to.The House adjourned at 8.30 p.m. (Thursday)