Volume 691 Week 47 - Tuesday 2 July 2013(continued on Thursday 4 July 2013 )Text is incorporated into the Bound VolumeVolume 691 Week 47 - Tuesday 2 July 2013(continued on Thursday 4 July 2013 )[Sitting date: 02 July 2013. Volume:691;Page:11665. Text is incorporated into the Bound Volume.]Tuesday 2 July 2013(continued on Thursday 4 July 2013 )State Sector and Public Finance Reform BillIn CommitteeDebate resumed.Part 2 Amendments to Public Finance Act 1989(continued )IAIN LEES-GALLOWAY (Labour—Palmerston North):It is a pleasure to take a call on Part 2 of the State Sector and Public Finance Reform Bill. Should any notes become apparent in front of me in the near future that would be excellent. I know that members have made a considerable contribution to this debate and that Labour members have come to be able to support this bill thanks to some robust discussion at the Finance and Expenditure Committee.Of particular interest in Part 2 is the fact that there are adjustments being made to the Public Finance Act that allow for a more multi-sectoral cross-departmental approach to a range of issues. I certainly welcome that. I think of issues such as mental health which obviously sits firmly in the health budget—and it is good to see the Minister of Health in the Chamber today. I personally would like to see mental health as more of a priority in the health system but there is no doubt that factors that contribute to good mental health sit in the education sector they sit in the employment sector—they sit across a range of different departments. The idea that these amendments to the Public Finance Act would allow for perhaps a single budget that draws together a package involving a range of different departments and agencies with a single focus and a single line of reporting—with a focus on something like reducing the incidence of mental illness or better managing the incidence of mental illness or supporting people with mental illness into work and using that range of departments in that way—is I think an excellent step forward.It is actually fantastic that the aspects of the bill that the Labour Party was not able to support at the first reading have been tidied up because I think this is something that many many people working in the Government sector and many people working in non-government organisations that deal with the Government sector will be very very pleased to see. I think every member of this House will have heard people say that they want to see the breaking-down of the silos between Government agencies and this would certainly support that happening. The fact that the information in the estimates and supporting information would be more closely aligned with that cross-sectoral approach would I think be welcomed by members as well because there are often times when we really want to drill down to an issue and look at all the different factors relating to that issue and to be able to see in a simple document and in simple terms how the different agencies and departments of the Government are working together to alleviate that issue.That just simply has not been clear in the past. Often something like mental health might be discussed at the Health Committee it might also be discussed at the Education and Science Committee and it might also be discussed at the Social Services Committee. Members would not have a full understanding of what was happening across those different agencies. So the idea that that type of reporting would be able to occur is an important step forward and well supported by this side of the Committee. Standardising the governance and performance reporting requirements for companies currently listed in schedule 4 of the Public Finance Act and proposed to be moved to a new schedule 4A to make the framework more consistent with the provisions that applyto Crown entities companies covered by the Crown Entities Act is also I think a sensible move. Standardising practices across agencies is very helpful. I listened to the Hon Trevor Mallard last night talking about his frustration—Hon Ruth Dyson: It was a very good speech.IAIN LEES-GALLOWAY: It was a very good speech. He talked about his frustration as a Minister at discovering that people employed in different agencies were essentially doing the same job and not talking to each other and not reporting back to Cabinet in a way that made it clear that that kind of redundancy was occurring within the Government sector. So with those few comments I would certainly like to add my weight to this piece of legislation.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to Part 2 be agreed to.Amendments agreed to.A party vote was called for on the questionThat Part 2 as amended be agreed toAyes95New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independents: Dunne Horan.Noes24Green Party 14; New Zealand First 7; Māori Party 2; Mana 1.Part 2 as amended agreed to.Part 3 Amendments to Crown Entities Act 2004The CHAIRPERSON (H V Ross Robertson): I advise members that the debate on this part also includes the schedules 3B through to 4.Hon DAVID CUNLIFFE (Labour—New Lynn):Tēnā koe Mr Chairman. It is delightful to see you at this hour of the morning which I think is still technically part of Tuesday but you are looking in pretty good shape. I am so pleased that you have mentioned the schedules because I am sure that they are going to excite a lot of attention from members on our side of the Chamber. Part 3 is a very important part of the State Sector and Public Finance Reform Bill and I hope that with your good grace Mr Chairperson we will have ample time to scrutinise its clauses because this is fundamental legislation. This might sound like housekeeping but believe me it is not. This is some of the core legislation that amends the Public Finance Act the State Sector Act the State-Owned Enterprises Act and other core Acts that actually determine the machinery of government so that when the Ministers of the day the Cabinet of the day pull the levers of power something happens and we can tell what happened. For that to occur we need to make sure that the rules of delegation of financial probity of accountability all are tight as a drum and work as they should.In the past one of the things that has happened is that in an effort to make sure that the Public Service and the public sector operate efficiently and accountably there has been a tendency for departments to work on an individual basis and for their differing views to ultimately be brought together around the Cabinet table if they have not been harmonised prior in a Cabinet committee. For many many years Governments of both sides have viewed that as an imperfect state of affairs. We look forward to hearing the Minister in the chair the Minister of Immigration with his long experience give the Committee the benefit of his views as to how this could be made to work better. But for members opposite the objectives set out in Part 3 of the bill are incontrovertible. That is that the Government should be able to issue whole-of-Government directions andemploy a range of new legislative powers set out in this part of the bill to require if persuasion has not already done it Government agencies to work together for a common cause.It might be for example—let us think of a random example—border security requiring immigration and customs to cooperate by data sharing to pool their information to better identify risks coming across the border. A lot of that happens anyway. I do not wish to create any false impression. There is excellent cooperation between those two agencies but at the level of detail if necessary this part of this bill will give the Crown the authority to legally require cooperation between departments which is particularly important for enforcement agencies.Of course this is an interesting week to be discussing this bill because outside the Chamber in media-land public attention has been focused on cooperation between a number of other agencies some of which have been decidedly outside the law where some of our security agencies have been subcontracting to others without legal authority. There is now a desperate scramble by the Government to legalise activities that have hitherto by its own admission been outside the law in some 88 known cases. That is certainly something that neither side of the House could countenance. The question is whether the solution to that is actually to rein in some of those behaviours or otherwise to adjust the law to catch up with reality. The Labour Opposition believes that the rule of law should be paramount and that at no time should there be any actions outside the law but that is a debate for another day.The amendments to Part 3 are crucial. They are just aspects of the Crown Entities Act 2004 and they bring that alignment to bear not only on Government departments but on entities that are one step removed from departments—Crown entities. This is also an extremely interesting avenue for debate because there is a well-known and very visible oxymoron going on on the part of the National Government here. On the one hand it is passing this legislation which we heartily agree with that there should be ways of improving cooperation between core Crown agencies and Crown entities and getting Crown entities to work together and on the other hand it has embarked on a partial privatisation programme for the State-owned entities which will make it harder for the Crown to govern those State-owned enterprises as a portfolio and puts them further away from cooperative effort.The key example is the electricity system. We are an energy-dependent country. Right around the country New Zealanders are either shivering through the winter or facing bigger power bills and the Prime Minister thinks that that is just fine and dandy and that power prices are not too high. He thinks they are “about right” but New Zealanders know they are not about right at all. Power prices have been going up faster than wages faster than incomes and they are putting huge pressure on our families. Last weekend I was doorknocking in Upper Hutt and I had the privilege of meeting some families who are doing it tough in flats that looked more like dog kennels that leak that had mould growing up the walls that had children growing up in them with respiratory disease. Every time I go out doorknocking in areas of high deprivation I am shocked all over again by the way some people live. Why do I mention that? Because energy poverty is part of the bigger picture. Privatising our energy system as the Government is trying to do is going to be putting more pressure on family budgets because power prices are going to rise.What is the relevance to this bill? The relevance is very clear. In this bill the Government is trying to draw Crown entities into closer cooperation by requiring that cooperation through whole-of-Government directions. At the same time it is removing the existing power to direct State-owned enterprises the power companies currently residing in the State-Owned Enterprises Act and scrubbing that out because they willjust be publicly listed companies like any other in which the Crown happens to hold 51 percent. But there is no power to direct no no-surprises rule no portfolio synergies no sense of strategy—that will be the oxymoron at play. The Government is probably doing the right thing in this bill but it sure as heck is doing the wrong thing with the privatisation of State-owned enterprises.Broadening the grounds as this part does on which the Minister of Finance and the Minister of State Services can issue whole-of-Government directions and allowing those directions to be issued either to all departments or to a smaller group of entities including Crown entities presupposes a more important point a prior point: does the Government have a strategy upon which to direct? We have a Government here which at best resembles parts of the Holyoake Government of the 1960s—steady as she goes don’t fiddle with it she’ll be right. I have never seen four less effective more boring Budgets than the last four that Bill English has brought down. The bits that were not boring and meaningless were positively downright awful like giving huge fiscally negative tax breaks to rich people and putting GST up on everybody else. What has this Government actually done in the way of economic strategy other than making New Zealand’s incomes more unequal through the tax system and putting off paying for superannuation so our children face higher taxes?The Government wants to issue whole-of-Government directions. This part of this bill gives it the power to do so. We think that is a good thing. But in order to issue whole-of-Government directions it has got to have a direction to travel in in the first place and the problem with this good-for-nothing lackadaisical lazy useless National Government is that it would not know a direction if it tripped over it. Government members would not know a strategy if it bit them on the behind. They would not know an economic plan if it fell off the top of Steven Joyce’s glossy head. I have seen so many glossies out of “MoBIE Dick” the Ministry of Business Innovation and Employment that I am so sick of public relations spin rebranding and reissuing things that have been done since Adam was a cowboy. What I am still waiting for is a real plan that will grow jobs and incomes and employment and well-being. It is all very well in this part of this bill—Part 3 of the innocuous boring State Sector and Public Finance Reform Bill—to give themselves the power to issue whole-of-Government directions but there is no direction to issue because they have no idea what direction the country should be heading in.Hon MARYAN STREET (Labour):It is a pleasure to rise to talk on Part 3 of this legislation the State Sector and Public Finance Reform Bill. [Interruption ]The CHAIRPERSON (H V Ross Robertson): Order! Order! I know it is Thursday morning—Hon Member: It’s not Thursday.The CHAIRPERSON (H V Ross Robertson): Well Tuesday morning then. I know that everyone is in jovial spirits but the reality is that we have one speaker addressing Parliament and when members who do not have the floor interject on each other it is not permitted. All of you may have a call or take one shortly.Hon MARYAN STREET: I raise a point of order Mr Chairperson. I wonder whether you could clarify for the member opposite which part—[Interruption ]The CHAIRPERSON (H V Ross Robertson): Order! There is a point of order on the floor. The member is a long long experienced member and he knows.Rt Hon Winston Peters: Point of order.The CHAIRPERSON (H V Ross Robertson): I already have a point of order from the Hon Maryan Street. [Interruption ]Hon MARYAN STREET: I think he has just recognised my point of order.The CHAIRPERSON (H V Ross Robertson): I cannot take two.Hon MARYAN STREET: Thank you very much Mr Chair. I wonder whether you could clarify for the members opposite which part of the bill we are discussing. Is it Part 3?The CHAIRPERSON (H V Ross Robertson): It is Part 3.Rt Hon Winston Peters: I raise a point of order Mr Chairperson. I hate to interrupt my colleague but that was in part what my point of order was because I was actually shocked to find out that across the Chamber someone thought it was Part 2. But then again that is the person who would have things not happen over her dead body.The CHAIRPERSON (H V Ross Robertson): Thank you. As I said it is Thursday morning but we are still in Tuesday.Hon MARYAN STREET: Thank you very much Mr Chairperson. In case some of the members opposite who were also here in the Chamber late last night when I spoke on Part 2 of the bill which we have just passed were asleep at that time I would like to repeat the importance of this legislation and the timeliness of it. I glossed over the fact that it is 100 years this year of good-quality public service in New Zealand. That is being celebrated by Transparency International New Zealand as it moves to do its audit on our processes and the apparatus that keep us at the top of the indices on transparency and on the perception of a lack of corruption. Those are parts of our reputation that I personally—and I know my colleagues also—hold very dear. That reputation is absolutely predicated on the transparency and the quality of the Public Service.So it is 100 years of public service and simultaneously 100 years since the formation and of the work of the Public Service Association. In case people were not up at midnight last night when I said that I would like to draw that to people’s attention again. I would also like to invite people to come to the opening of the exhibition of 100 years of the Public Service Association’s banners at the Nelson Provincial Museum in a couple of weeks’ time. If people wish to have a weekend in Nelson—which of course is a lovely place to be—come on the Friday night and come to the opening of that banner exhibition which is part of the history of the Public Service Association an organisation that has always prided itself on defending the quality and the independence of our Public Service.In accordance with this bill that is apposite because amendments that have been made to this legislation have been done with agreement across the House and have also been taken to the Public Service Association and the Council of Trade Unions as appropriate stakeholders in this legislation. That is important and it is one of the things that allows us to have a robust Public Service—that it also has union representation that not only protects the terms and conditions of the people who work in the Public Service but also works to ensure the highest level of integrity of that service. So I would like to pay my particular tribute to the Public Service Association in its centennial year.But one of the things I want to focus on especially in Part 3 is the point that my colleague David Cunliffe has been talking about just now in a slightly different context. It is the requirement that boards of statutory Crown entities—and this is the relevant part because we are talking about amendments to the Crown Entities Act—ensure that those entities collaborate with other public entities where appropriate.Again I would like to give an example that may highlight the importance of this. That example is that for the moment in time—the moment in history—when I was the Minister for ACC a portfolio that I really loved one of the things I enjoyed about it was the fact that I chaired a cross-government working group. In those days we had an Injury Prevention Strategy. We no longer have an Injury Prevention Strategy under this Government which is a tragedy. But when we did there were six work streams in that Injury Prevention Strategy and they covered a huge array of Crown entities and ministries and departments so they covered all kinds of interests.When that committee met to consider the Injury Prevention Strategy and its success or otherwise in each of those streams it meant that the people in the room were from the Ministry of Justice they were from the Ministry of Transport they were from the police they were from Water Safety New Zealand they were from the Ministry of Health and they were from mental health organisations in particular. They were from a whole range of interests. If this is one way of getting the Government to work more horizontally than vertically then I welcome it. That committee I am using as the example worked horizontally because it needed to look at suicide prevention it needed to look at deaths and injuries caused by water and it needed to look at road transport accidents. It needed to look at six areas where injuries could be prevented. It had a work stream on falls. Well it is unfortunate that this Government has now taken away the funding for the National Falls Prevention Strategy that was in place. It really enabled lots of elderly people to prevent themselves from falling and having those injuries that we know are so tragic and difficult in older age.So the point is that in this committee room—and yes it was almost bigger thanBen-Hur —to have all these people talking to each other was critically important. The prime example I give which will be of interest to my colleague Iain Lees-Galloway is that across each of those work streams 28 to 35 percent of the accidents if I remember correctly were caused by alcohol. In seeing that synergy across six different work streams of injury prevention it was patently obvious that an area that the Government needed to focus on was harm caused by alcohol. That I have to say is another lost opportunity that this Government has committed in recent months—that it did not take the opportunity to reduce the harm caused by alcohol in the way that it could have.When I as a Minister was sitting there with all of those departments there they could all listen to each other. In transport we could talk about road transport accidents. We could talk about deaths by boating injuries from boating or water-related accidents and so on. Then it became clear that there was an underpinning commonality amongst all of those that should become a priority for Government action and so it did with our Government with the inquiry and the report on alcohol reform from the Law Commission.I use that as an example in order to point out why this legislation is important. It is so that we can ensure that requiring the boards of statutory Crown entities not even departments or ministries but just Crown entities to talk to each other—like requiring Housing New Zealand for example to talk to other parts of Government apparatus—would be an advantageous thing for the people of New Zealand. I welcome this provision in particular and I welcome it as a little step. I do not see it as a huge cataclysmic step or an improvement in Government administration but I do see it as an important small step to learning how we might govern horizontally across portfolios and Government departments and Crown entities rather than vertically in the silos that we have been accustomed to administering in the past. I think this is a useful harbinger I hope of change—PAUL GOLDSMITH (National):I am very pleased to take a quick call on Part 3 of this bill the State Sector and Public Finance Reform Bill. We have had a very long and thorough debate on this legislation so far and—Hon David Cunliffe: More to come.PAUL GOLDSMITH: I am looking forward to further comments from the honourable member Mr Cunliffe. I was just interested to see that the main point of Part 3 is to create a range of public sector management tools to foster an innovative effective public sector to deliver better-identified results for New Zealanders. What we mean by that is that all these public entities these Crown entities have grown likeTopsy over the years. Some of them are doing their own thing and it is not unreasonable—indeed it is a perfectly reasonable idea that we would—Hon David Cunliffe: I raise a point of order Mr Chairperson. The Standing Orders provide that in instances where a member is reading from an official document there is an opportunity for that document to be tabled so that the Committee might have access to the underlying information. If the member is reading from an official document I seek leave for it to be tabled.The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for that. The member should know that normally a request like that is done at the end of the member’s speech.PAUL GOLDSMITH: Given the fact that we have heard many lengthy comments from that member perhaps he might have the courtesy of listening to the short and succinct comments that I prepared to make on this bill. As I was saying the member did ask and question—Hon David Cunliffe: You write books.PAUL GOLDSMITH: Well yes but I write about successful people; that is the difference there. I want to remind the Chamber that we are talking about—Hon David Cunliffe: John Banks.PAUL GOLDSMITH: That was one of the earlier ones. I want to remind the Chamber that the member was talking about the lack of overall direction by this Government so I thought I should just remind him that there is no lack of direction. It is very clear that we are focused on those four things: getting the books in order creating a competitive economy building better public services and rebuilding Christchurch. That direction is very well articulated and it is consistently prepared and consistently driven forward by this Government.This legislation is one piece of the jigsaw one piece in that delicate lattice structure that is the arrangements of the Government in order to enable the Government of the day where it has worked out what its priorities are to effect those priorities through the work not just of Government departments but also of Crown entities so that we working together and pulling in the same direction.One of the details is around the area of statements of intent and one of the proposals in this bill is to enable a Crown entity’s responsible Minister to require the entity to prepare a new statement of intent at any time. Again this is just another mechanism by which we can call the parties to account and make sure that everybody is singing from the same song sheet at the same time. So on that basis I am very keen to have continued with this detailed discussion of Part 3 of this bill this morning. Thank you.Dr Rajen Prasad: Mr Chair.Jacinda Ardern: Mr Chair.Dr Rajen Prasad: Oh a difficult decision.The CHAIRPERSON (H V Ross Robertson): Front bench.Dr Rajen Prasad: I was first.The CHAIRPERSON (H V Ross Robertson): It is not a race. I call the honourable member Jacinda Ardern.JACINDA ARDERN (Labour):Thank you Mr Chair. It is a gamble every time but I appreciate the opportunity. And I know that this only gives Mr Prasad more time—Hon David Cunliffe: Dr Prasad.JACINDA ARDERN: —Dr Prasad; what an outrage of me—to prepare further queries for the Minister in the chair. I certainly have some of my own. I think though just for the purposes of those who may be watching this crucial debate and may be seeking a summary perhaps of what we are debating here—Part 3 of the State Sectorand Public Finance Reform Bill—obviously my colleague the Hon David Cunliffe has already talked about the ability for the Government to set whole-of-Government directions. There is some debate around whether or not that is indeed possible. He has set that out. I will have a little bit more of a discussion about that but other elements of this part include requiring the boards of statutory Crown entities to ensure that the entities collaborate with other public entities where practicable. I wonder whether or not the Minister in the chair could talk us through some examples that may have been canvassed at Finance and Expenditure Committee level of what that collaboration may look like and some situations where we could have benefited from that previously but without having that set out clearly in the Crown Entities Act which is what that amendment amends we were not able to. I think it would be beneficial to the Committee if we had some tangible examples there to work from.Equally Part 3 enables the broadening of the grounds for which the Minister of Finance and the Minister of State Services as I have already said can issue whole-of-Government directions and allow directions to be issued to smaller groups of entities. I do have some questions at that point around the degree to which that then hands over I guess the discretion or the power of the primary Minister who oversees a particular department by broadening the role of the Minister of Finance. For instance clause 162 amends section 107 and that is about the whole-of-Government directions which of course have been changed to directions to support the whole-of-Government approach. It sets out there that “The Minister of State Services and the Minister of Finance may jointly direct Crown entities to support a whole of government approach by complying with specified requirements for any of the following purposes: (a) to improve (directly or indirectly) public services: (b) to secure economies or efficiencies: (c) to develop expertise and capability: (d) to ensure business continuity: (e) to manage risks to the government’s financial position.” That is quite a broad set of criteria that would allow that specific intervention.I raise this because I have seen particularly in recent times with the management of the Ministry of Social Development that recently the Minister undertook a process where a company by the name of Taylor Fry carried out an actuarial evaluation of the future liability of welfare essentially in New Zealand. It put a figure on it and the reason that the Government claimed that it wanted to do that was to put requirements set directions for the Ministry of Social Development by Treasury as to what it then had to achieve to bring that future liability down. Potentially the Ministry of Social Development could lose future funding baseline funding almost putting it on a whole-of-Government performance pay. That whole ministry could lose future funding if it did not reduce its future liability. You can raise significant questions over that. As soon as you hit financial trouble or you hit a recession and you have an increase in the number of people placing demands on the welfare State and then suddenly you have a department unable to meet its requirements as set out by Treasury its baseline drops as does its ability to then do its work and reduce its future liability and it becomes a self-fulfilling prophecy if you will.But my concern is that all of this actually has been governed has been driven by the Minister of State Services and the Minister of Finance. In fact Cabinet papers that I have read on this particular issue have all been signed off by the Minister of State Services and the Minister of Finance. They are the ones driving an agenda within the Ministry of Social Development to the degree that now their departments have significant oversight significant power—which has always existed but this is much more explicit now—over the operations of the Ministry of Social Development to the degree that it almost feels like the chief executive is secondary in their own department to the Secretary to the Treasury. That is almost how the hierarchy now seems within theMinistry of Social Development. I have concerns about that in itself. That has already happened. Now with these directions to support the whole-of-Government approach I guess my concern is to what degree our own ministries are able to manage internally their own statements of intent and to what extent this is actually now being overseen by the Minister of State Services and the Minister of Finance. And as I say it is already happening to a degree so it is hard to necessarily know whether or not this changes that that much or actually just sets out the legislative framework for that.I did want to also point out that we do have some changes to the statement of intent. It looks like there was some select committee debate around the issuing of statements of intent. Obviously a statement of intent sets out not just the priorities for a Government department but how it will get there. In the summary of the Finance and Expenditure Committee discussion on the changes to the issuing of statements of intent there have been changes it appears to ensure that there is transparency if there is ever any recommendation by a Minister to extend the amount of time available to issue a statement of intent or indeed issue a waiver for an issuing of a statement of intent. I applaud the attempts to ensure that there is transparency when those decisions are made. I will just cover off where that is covered in the bill. New section 139A “Minister may grant extension of time for or waive requirement to provide statement of intent” states: “If a Crown entity is likely to have a significant change in the nature or scope of its functions the responsible Minister may grant the Crown entity an extension of up to 1 year of the period specified …”.I thought it would be useful for the Committee to hear perhaps the process that was undertaken for “Mobie”—we do not call it that any more. What are we meant to call it now? Is it “M-bie”? What process did the Ministry of Business Innovation and Employment the new giant entity go through for its reissuing of a statement of intent? I think it would be useful to know how it managed that process and what kind of time period was required because that was a significant change. I would assume that there would not be much beyond that scale so if it was able to complete that within a specified time frame I wonder whether a year is perhaps too generous a time frame to be issued. I would be interested in the view of the Minister in the chair on that.But the legislation also states that “the responsible Minister must not grant an extension unless he or she is satisfied that the extension will enable the entity to improve the quality of the statement of intent that it provides.” That seems to me to be quite a broad provision because surely any Minister could create justification that in just looking at a statement of intent they need extra time because they think it can be better than this. You do not really need much beyond just the opinion of the Minister to decide under that quite broad set of criteria.But I am satisfied that even though that is broad there is the transparency around when they are making that decision that it must be published and I think probably the balance there is about right. My question though is this: if it does seem clear that there is some kind of stalling tactic at play around a statement of intent what right of redress to keep in check the use of the Minister’s power and discretion in that regard is appropriate? It is a genuine question. It may well indeed be contained in the legislation that for instance an appeal could be made to the State Services Commission or the Minister of State Services to check that the discretion had been used appropriately around that extension of time. But is that indeed intended to be the way that you would seek redress if an extension or a waiver was granted and there was concern that that power had not been used appropriately? How is that redress sought particularly when one assumes that to improve the quality of the statement of intent one would be able to access a draft?Dr RAJEN PRASAD (Labour):There you go. Thank you very much. You cannot pull rank all the time. That is great Mr Chairman.I am pleased to take a call on Part 3 of the State Sector and Public Finance Reform Bill. I want to refer to a number of the provisions here. I will put them in the context of the independent Crown entities and the autonomous ones in the advocacy area if you like: the Human Rights Commission the Privacy Commissioner the Children’s Commissioner and the Families Commission. That is the context in which I want to make my comments.Clearly these provisions in Part 3 around Crown entities begin to codify a number of the aspects of Crown entities’ practice and particularly in relationship to their purchasing ministry and the Minister. It is codifying. A lot of this is happening already and here it is now translating into legislation. Many of these changes started my recollection is around 2004 and it is now that we are seeing them coming through in legislation. Some of them are tried and true.But along the same lines as my colleague Jacinda Ardern who just sat down I will talk about clause 162. These are the directions to support a whole-of-Government approach that is possible. My colleague took the line that two Ministers now have the ability to direct in any number of different ways. I agree with those kinds of comments. But in section 107(1) as amended by clause 162(1) paragraphs (a) to (e) in themselves are actually quite broad. We do not have an idea as to what the limits are of some of these directions. Look at the first one in clause 162(1) section 107(1)(a). We can direct independent Crown entities for example “to improve (directly or indirectly) public services:”. That could be anything. There are no limits to what is being suggested here. Indeed Crown entities generally in terms of the delivery of public services cannot be directed as such and many Crown entities actually do not offer a public service in terms of the traditional sense. I wondered what the limitations there were.The second purpose is “to secure economies or efficiencies:”. That also is so broad. Will the two Ministers be able to take under this provision very specific directions on how an independent Crown entity might want to use its resources for structuring itself? I see some difficulties and some dangers here.Some of the others are so self-evident it is difficult to understand why they are being included here. The third purpose is “to develop expertise and capability”. It is self-evident that Crown entities Government departments and ministries will develop expertise and capability. In fact that is why they are appointed but here is the ability to give another direction. Does the Minister have some other ideas in mind about these directions?Without any qualifications from paragraphs (a) to (e) on those kinds of provisions I see some difficulties some dangers probably and some difficulties in the future if these provisions were going to be relied upon by a Minister to instruct a Crown entity to do or not to do certain things. Therefore I see some difficulties in that particular area.Moving on to the provisions of clause 164 here we have again codified procedures for ministerial directions on Government policy. Ministers under the present Crown Entities Act have the ability to direct. Indeed there is quite a well set out series of steps in the Crown Entities Act on what the procedures are if the Minister intends to direct and then how it is to be reported to the House or gazetted. Some of that is being restated here again.I can see how officials have worked on this as a provision but there is another parallel track that operates and this is the very subtle almost surreptitious way in which currently Ministers direct Crown entities. If we take for example the Families Commission here over a period of the last 4½ or almost 5 years the Minister has been directing that commission and reshaping it in a very different way. Much of that is byway of “direction”—in quotes. Yet nothing has been gazetted about what those directions are. There is a bill before the House at the moment where all of that comes together. But the Minister has shaped it by the appointment of the chief commissioner. The Minister has shaped it by the appointment of other commissioners and putting in the kinds of commissioners who have been put in there in probably not so subtle ways has begun to shape that particular Crown entity and indeed others.So although the provisions here are clear and precise and I support them I would expect the Minister to actually follow this and not go along the parallel track that currently is in vogue which is the surreptitious and subtle shaping of the role and activities of Crown entities. I hope the Crown entities will rely upon this much more than the Ministers might to say: “Well if you’re going to direct me there are particular ways in which you might need to do certain things.” according to the provisions of section 115(3A) amended by clause 164.Then section 115 and subsequent sections begin to talk about the review of those directions. Quite interestingly the Crown entities I have been talking about in the advocacy area in the rights area have rarely received a direction from the Minister and the subtle ones have never been reviewed. I know that for a fact. What is the Government contemplating here? What is being signalled here? How can you review something that in a sense you have rarely if ever used on these particular entities that I am talking about?Then under section 115A(3)(b) in clause 165 if there is to be a review the expectation here is that there will be consultation with key people outside. I hope that the Government intends to follow those because in many of the changes it has made to Crown entities particularly to the Families Commission there has been no consultation with the stakeholders outside and yet they have been restructured and reorientated in quite significant ways and they will be a shadow of what they were before if the bill currently before the House is passed.So both the codification of the opportunity to direct and the review of those directions and the time-limited nature of those directions are very good provisions. They are now here they are now codified and I encourage Crown entities to actually utilise them and Ministers to utilise them. I rather suspect that Ministers and heads of Crown entities in the human rights area and the rights and advocacy area will find this a very very useful and transparent process which is what is being talked about here rather than the underhand secretive almost surreptitious way in which some of those Crown entities have currently been shaped.I want to talk a little bit now about the provisions of clauses 168 and 169 about office holders in Crown entities. I am glad to see this particularly clause 168 because it was just a month or two ago that the Social Services Committee was doing the financial review of the Retirement Commissioner. It amazed me that this was actually there—that in answer to questions for written answer the Retirement Commissioner had refused to give information to the select committee saying that this was the privacy of contractors. It took a couple of goes going backwards and forwards to say: “Well hang on they are still working as public servants.” which is what is clarified in section 135(1A) inserted by clause 169. Those provisions are particularly useful and now make it very clear as to the kind of information that select committees can have on these Crown entities.I want to talk a little bit now about the obligations to prepare and report statements of intent. Again this is simply—The CHAIRPERSON (H V Ross Robertson): I call the Hon Philip Goff.Hon PHIL GOFF (Labour—Mt Roskill):It is always nice Mr Chairman to be addressed in such a formal manner. That is what my mother christened me. The Labour Party is supporting this bill the State Sector and Public Finance Reform Bill as awhole and in particular it is supporting the third part of the bill relating to Crown entities.The reason why we are supporting the bill and the section is that the Finance and Expenditure Committee was allowed to act in a more independent way to listen to evidence to respond to evidence and to correct basic flaws in the legislation. That meant improved legislation and to give credit to the Minister of State Services he went along with what the select committee recommended. As a result we have a bill that does achieve support from across the House. I think that is particularly important in terms of the State sector because we want to see continuity and we want to see the State sector working as effectively and as efficiently as possible and not subject to the whims of a changing Government and being a political football.There has been flexibility shown by the Government in responding to evidence on the ground but I have some questions for the Minister in the chair the Minister of Immigration about how this section will work in relation to the performance of Crown entities. I hope that the flexibility shown on this bill might be shown in regard to the Crown entities and the Government’s intention to dispose of Crown entities when all evidence suggests that that will not be in the public interest.Under Part 3 the amendments to the Crown Entities Act do a couple of things. In the first instance they support sectoral leadership by requiring the board of the statutory entity to ensure that the entity collaborates with other public entities where practicable. I think that is important because too often what happens in the public sector is that you have a silo mentality and each organisation goes its own way does not think about the wider picture what is in the interests of the country and what the Government wants across the board. I think that that is a very good principle that is set down in the bill. It also supports functional leadership by expanding the scope for the use of whole-of-Government directions and that really goes down the same track—it follows the same theme. I think those two aspects in this section of the bill are really important.What I want to ask the Minister is for him to perhaps give some practical ideas about how these new powers might operate. In particular I want him to address the Crown entities in the energy sector—Meridian Energy Genesis and Mighty River Power. These are three Crown entities—no I am sorry these are now 2½ Crown entities so I want to know how this bill deals with the other half that the Government has sold off. The Government has established in this bill the principle that it would be really good to get the Crown entities working together for the good of New Zealand and now it has sold off half of one of them. I wonder how that sale might undermine the principle that is set out very clearly in Part 3 of this bill.I want to ask the Minister how these principles will work in relation to the problems that we find in the areas that relate to these three Crown entities. It is about energy generation and it is about energy prices. The Minister is perhaps aware that since 1997 the prices for power to households have increased at double the rate of inflation. This must be a real worry to the Government and even more of a worry because in the last year I think power prices to households have gone up at five times the rate of inflation. We are debating this bill in the middle of winter and although those on ministerial salaries of a quarter of a million dollars probably do not even know what they are paying on their power bills people on this side of the Chamber represent electorates where households are really feeling the pinch. Old people are suffering we have the problems of hypothermia and we have young people children living in cold damp conditions. Those young people are being hospitalised they are missing out on school time and they are missing out on career opportunities.I want to bring this bill to bear on those particular problems that are worrying so many New Zealanders. We have got this problem that we have 2½ Crown entities inthis area of producing electricity yet the prices have run at double the price of inflation for about 16 years. They have been doing that since there was another change by Government in the way the Crown entities operated which was the Bradford reforms which were supposedly about competition. But the Minister will be aware that there was a formal report sought and commissioned by the last Labour Government called the Wolak report. The Wolak report found that the four power generators made super-profits over a 6-year period of $4.3 billion—Hon David Cunliffe: What?Hon PHIL GOFF: —$4.3 billion. The only upside of that was that that money went back to the taxpayer because the companies were Crown-owned. So it was a bit of a cycle. We paid more for our power but we got the dividends back to the Government. That is not going to happen with the sale of the assets. Those super-profits are going to go to those wealthy enough to invest in the shares and to the overseas investors indeed as they did with Contact Energy—you know $200 million a year flowing out of the country to the Aussies making them rich at the expense of the New Zealand taxpayers who paid for the dam on the Clyde.This bill is about getting collaboration. I wonder whether the Minister has considered using the provisions of this bill to set up a single buyer of wholesale electricity. That would seem to be really sensible if we wanted to tackle the problem that ought to be worrying the Government of escalating power prices. The gap between what the household consumer and the industrial consumer pays is one of the biggest—the second biggest—in the OECD. The cost of electricity is going up at a faster rate than in almost any other country notwithstanding the fact that we produce this electricity through water which is free in assets that we invested in 60 years ago.I agree with this bill that you actually need to have collaboration. You need to have the Crown entities working together but I am asking the Minister whether there is a fundamental contradiction between that very good objective in this bill and what the Government is doing in selling off the State assets so that that collaboration will no longer be possible. New Zealanders ought to be worried that the price of electricity has gone up five times faster than the overall rate of inflation in the last year. They ought to be worried that the super-profits from these companies are now going to private investors and to overseas investors. Here we have a bill that potentially has a solution to the problem of electricity prices but it is being undermined by another set of policies that the Government is pursuing.I go back to what I said about the select committee. It made sensible changes because we looked at the facts and the Government was in this instance prepared to respond to evidence on the ground. I wonder whether the Government will likewise respond to evidence on the ground about the failure of its Bradford reforms which will be exacerbated by the privatisation of half of the Crown entities in that regard.There is a second area set out as the objectives of the changes to the Crown Entities Act that occurs in Part 3. That is to formalise the role of the monitoring department and the ability of the Minister of State Services to request information and also to make provision for more meaningful performance information to Parliament. Those are absolutely appropriate goals but I wonder how those goals sit alongside the privatisation of the Crown entities which takes them out from the Official Information Act and takes them away from the role of the Ombudsman.We have in the bill good sound objectives about greater accountability. That is why we are supporting this bill. But at the same time the Government is doing exactly the opposite in privatising these companies so that they are no longer accountable to the New Zealand taxpayer who paid for their construction. We no longer get the information we need and there is no longer the protection of the Ombudsman and theother things that apply to Crown entities. We have in essence very sound provisions in Part 3 of this bill. We absolutely applaud the objectives of greater collaboration and greater openness but those goals are fundamentally undermined in regard to those objectives by what the Government is doing against the public opinion in privatisation.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):I appreciate the wisdom of my colleague Mr Goff but I have to say that on reading through some of the provisions of Part 3 of the State Sector and Public Finance Reform Bill I am starting to wonder whether the Opposition should indeed support the bill. Following on from his statements and our belief of course that this might bring better accountability I went to section 139 in clause 179 “Obligation to prepare statement of intent”. This goes right to the heart of what the Government is trying to do here and that is to privatise every single thing it can get its hands on. It is good to see the “Minister for Private Prisons and Prison Riots” in the chair and I am sure that she can get up and answer this question.What this effectively does is move away from the current obligation of Crown entities to provide a statement of intent every year where every single taxpayer who is a part-owner of these entities can ask the question: “What is this organisation this entity doing?”. As a former Minister I can appreciate the oversight of a Minister through this process. The ability to check the statements of intent for Crown entities and be assured that they are heading in the right direction has now been shifted to a 3-year and possibly a 4-year statement of intent process because the Minister—Hon David Cunliffe: Three.Hon DAMIEN O’CONNOR: Three and if you go to section 139A the Minister may grant an extension of time of up to a year. So what we have is potentially one statement of intent for—Hon David Cunliffe: Two parliamentary terms.Hon DAMIEN O’CONNOR: That is right. Or indeed the question is whether the National Government has an intent to shift to a 4-year parliamentary term. That is maybe something the Minister can come back to because if we are shifting from an annual statement of intent to a 3-yearly one with the possibility of a 4-yearly one then is that what the Government is intending to do? Is it intending firstly to reduce the accountability for agencies that it intends to partly privatise as the obligation to have a yearly statement of intent might be a little onerous for some of the wealthy shareholders who come in to buy these entities? They may see it as a bit too much taxpayer scrutiny.I say that without the ongoing oversight of a Labour Government—that is a Government that is here for the good of all taxpayers—then in Part 3 the objectives and the statements of intent of these partly privatised Crown-owned entities might be different from those of the fully taxpayer-owned ones; in fact we know that. We know that the partly privatised State-owned enterprises and Crown entities will in fact be there to maximise profits end of story—end of story. The statement of intent—that is the focus on providing services providing reliable electricity supply and providing sound infrastructure which has always been a core part of Governments’ intent or certainly of a Labour Government’s intent anyway—may in fact be diluted.I am concerned that the provisions in sections 139 and 139A shift from a clear annual statement of intent of what this organisation is about to one possibly every 4 years. That is a huge change in the way that any entity can account back to its core shareholders. I guess in a modern dynamic economic which we have where we have markets that change in milliseconds and trading that occurs at the push of a button then I would have thought that we should move to a more direct accountable system and one of maybe on an annual basis as has been the case.Although I applaud strategic planning long-term planning this may be a step backwards. I accept the wisdom of the Finance and Expenditure Committee which hasmade a lot of very sound changes and maybe a Government member over there might want to get up and explain why these changes have occurred and how this can—David Bennett: Get in there Hayes.Hon DAMIEN O’CONNOR: And I welcome that opportunity from Mr Hayes because as I say the Opposition is supporting the general intent of this bill on the basis that it does provide a better accountability regime. But from my reading of sections 139 and 139A in Part 3 we are stepping back from the intent of this and certainly from the reason that the Labour Party is supporting this bill. So if Mr Hayes wants to get up and answer that question that is great. It is clause 179 and it is replacing section 139.The other issue in here which should not be overlooked is section 139(2)(b): “no member of the Crown entity group other than the parent Crown entity needs to prepare a statement of intent”. This may seem like an innocuous little clause here that does not mean a hell of a lot. It means that if a Crown entity or Crown-owned enterprise can set up a subsidiary company there is no obligation whatsoever on that company to provide a statement of intent. I see that as a serious step back and maybe it is a question the Minister can answer—maybe it is the one that Mr Hayes is going to answer. But that specific section 139(2)(b) in clause 179 says “no member … needs to prepare a statement of intent.”So how many subsidiaries can a Crown entity set up? I guess that under the new partial privatisation arrangements that the Government is going to put in place for many of the Crown entities it can get on and roll out a number of companies none of which has an obligation to tell us what they are about or what they are intending to do. Even if it is just for the 4-year period that this bill can now extend them out to there is no obligation for that subsidiary to provide a statement of intent. What shareholder would buy into a company or be part of a company that does not have to tell them what it is going to do? So maybe Mr Hayes can get up and answer that very clear question—in my view. I think I will leave it at that.I come back to the point that Labour is supporting this bill on the basis that we believed we were getting better accountability regimes. But from my reading of clause 179 it says that in section 139—actually section 139 of the principal Act is replaced in clause 179. I should clarify that; sorry if I got a little confused. Under clause 179 of this bill—that is the replacement of section 139 of the old Act—we are indeed stepping back because of the extended time lines of statements of intent and the removal of the requirement of any subsidiary to provide a statement of intent. I think that is a retrograde step for Crown accountability and taxpayers should have a clear explanation as to why that has gone ahead.JOHN HAYES (National—Wairarapa):Maybe I can help the member Damien O’Connor. One would have thought that a man of his experience with many years as a Minister in our system of Government would actually understand the day to day mechanics of how the Government’s finances work. Every one of the public servants whom you will find in this country knows that when you have a 12-month budget May and June are spent furiously trying to get rid of all the unspent money because if it is not spent by 30 June you lose it. This is an incredibly inefficient and stupid process because the world operates on a much longer time frame.If you think about the problem—let us take for example the aid programme where you are spending $600 million - plus a year on aid projects—it is really difficult to spend that sort of amount of money annually on an annual budget. You have got to have a longer time frame because you will get much more sensible spending of taxpayer money. That is why you and I are in this Chamber. That is why we are held accountable as electorate MPs because our communities expect us to be here doing the right thing making sure that their taxes are being spent wisely. That is what the changes in this billare going to provide for. They provide for a much more rational time frame and they get rid of the irrational huge expenditure that is very often on wasted items because you are trying to get rid of the money within 12 months when the real world does not work in 12-month segments.Hon David Cunliffe: I raise a point of order Mr Chairperson. The member who is addressing the Committee is a new member but he should know not to bring you into debates.The CHAIRPERSON (Lindsay Tisch): Look I am listening very carefully and that point of order was just an interruption of the member’s speech. I will take note if I am offended by the speech. I call John Hayes.JOHN HAYES: Thank you Mr Chair. One would have thought that the interrupter as an ex - public servant himself would know that what I am saying is absolutely straightforward is absolutely straight up and down and is in the taxpayer’s interest. So my only conclusion is that the comments that are coming from these very experienced people are simply filibustering. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):Firstly I would like to pay a compliment to several previous speakers—not the one who has just immediately resumed his seat John Hayes so much as the Hon Damien O’Connor and the Hon Phil Goff. Both I thought gave absolutely outstanding contributions which really nailed two key points. Mr Goff said—and I think it is a hugely important point—that there is a huge irony in this State Sector and Public Finance Reform Bill quite rightly conferring the power on the Crown to issue whole-of-Government directions but at the same time removing Mighty River Power from the State-Owned Enterprises Act by its partial privatisation and thus removing a core ability of the Crown to issue directions across the energy sector. If that partial privatisation programme continues that will be a terribly risky thing for our energy sector and flies completely contrary to the intent of this bill which we strongly support.However the Hon Damien O’Connor has raised a very important point which I would like to turn the Committee’s attention to further. This is in relation to the statement of intent provisions which are vested in clauses 178 and 179 and so forth of the bill. This was a matter of some debate at the Finance and Expenditure Committee. It was indeed a matter that we sought additional advice for and have made amendments on.Can I introduce listeners to the issue by telling a very brief war story from a time when I was one of the then economic development Minister’s team. There was a habit for draft statements of intent to arrive in Ministers’ offices for signature the day before the deadline. It may be that civil servants were watchingYes Minister  the TV series which the public thinks is a comedy members of Parliament think is a documentary and the Public Service thinks is a training video.Yes Minister behaviour is not unknown. The statement of intent is absolutely crucial but “Oh Minister this is just a routine piece of correspondence. Sign here.” is too often being heard in the Beehive.I can tell you that when it was my turn having watchedYes Minister  I rang the chief executive of a department and said: “Why don’t you pop over for a cup of tea and a chat”—this was about 6 weeks before the deadline—“because I would like to co-draft the statement of intent with you in person.” This caused a long silence on the other end of the phone. When the chief executive was departing my office after the first 3-hour session he was heard to mutter to one of his colleagues—fortunately in the hearing of one of my staff: “We’ve got a real problem with this one.” So we invited him back—[Interruption ] Yes. He would not be the only one to have reached that conclusion. But I intend to continue to be a problem for as long as I have the privilege of being in this House.Hon Lianne Dalziel: What took him so long?Hon DAVID CUNLIFFE: My colleague asks what took him 3 hours to work that out. So we had a couple more sessions. I see that the Minister in the chair the Minister of Police is smiling benignly because I think all politicians of whatever stripe have shared some of these experiences. There is always a little bit of a polite and constitutional arm wrestle in Wellington between the political layer and the professional Civil Service. We are very well served. Again I would like to record the select committee as being excellently served by our highly skilled civil servants and advisers on this bill so there are no complaints there.But it is not just National versus Labour left versus right thoughtful versus shallow or whatever you would like to—David Bennett: Oh communist versus capitalist.Hon DAVID CUNLIFFE: Sorry that you reacted to that one Mr Bennett. It was not intended for you. But the other aspect of this is always the political layer versus the Civil Service layer and it is in that context that these provisions of this bill are actually really really important.What the Civil Service has recommended is that there really is no need to have a compulsory formal contractual statement of intent updated every year. Unfortunately John Hayes who has never been a Minister swallowed that line and thought it was about just reducing paperwork. But actually there is a real risk as the Hon Damien O’Connor has pointed out. He has been a Minister and he understands that unless there are required contractual processes to nail people’s feet to the ground with hard-wired key performance indicators things can slip and that is why the statement of intent provisions were so hotly debated at the select committee.We reached a compromise which was that Ministers will have the ability to require a new or an updated statement of intent a renewed contract at any time at least annually or more frequently should they require it and that there be an obligation on the part of their Civil Service advisers to advise Ministers of that right. Although flexibility is being introduced here the obligations on the system to have clear and binding performance agreements have not been gainsaid.The incoming Labour Government will in a year or so’s time be watching this extremely carefully. If it is our experience that these clauses have weakened the contracting process with the professional Civil Service they will be reviewed. But for now we are happy to give this compromise a good chance to work. We believe it is being entered into across the Parliament in good faith and we think that there is the potential for it to be streamlined and effective. But we are not blind to the possibility of slippage as the Hon Damien O’Connor from experience has pointed out to the Committee.I think it is helpful that in new section 141 in clause 181 the content of the statement of intent is well set out. If I could direct members’ attention to that new section 141(1) places a big emphasis on strategic objectives. What we are trying to do here through this law is lift the gaze of the system from the trees to the wood from the minute to the fundamental from the operational to the strategic. We are writing here in quite clear language that Ministers and their advisers must be focused on the strategic goals. The rest of the design of this bill supports that with its interagency cooperation its multi-category appropriations its enhanced reporting requirements and its full traceability of appropriations. All of those things come together here to try to hit a sweet spot. It is a sweet spot that combines flexibility and acuity. That is our shared goal—shared between National and Labour shared between politicians and officials. That is where we are trying to aim: a modern streamlined flexible delegate-able interactive and community-integrated Civil Service that achieves more with not much more moneythat achieves better outcomes for the public and yet is parsimonious—there is a good word for a morning session—with the taxpayer’s dollars. In so doing if we can cut some red tape that would be nice too—if we can cut some red tape that would be nice too.We look forward to the Minister of Police who is an experienced Minister—I note that as this debate has hotted up the Government has put a more experienced Minister in the chair and we look forward to her sharing her experience with the Committee on the intent of this bill and how she believes it is going to work. I am sure members on this side would love the Minister to take a quick call and respond to the points that the Hon Damien O’Connor has made and if she is feeling really brave she could respond to the points that the Hon Phil Goff has made.The CHAIRPERSON (Lindsay Tisch): Order! You cannot say that.Hon DAVID CUNLIFFE: I cannot say “the Hon Phil Goff”?The CHAIRPERSON (Lindsay Tisch): No the word you said before.Hon DAVID CUNLIFFE: Brave?The CHAIRPERSON (Lindsay Tisch): Yes. That is a reflection on the member.Hon DAVID CUNLIFFE: I was emphasising her courage.The CHAIRPERSON (Lindsay Tisch): No.Hon DAVID CUNLIFFE: But I take your guidance Mr Chairperson.Hon Member: You were being snide.Hon DAVID CUNLIFFE: Never.Maggie Barry: And devious.Hon DAVID CUNLIFFE: Never. Would members opposite like to add any other adjectives to their morning pot-pourri? “We love you too Mr Lange.” Ah yes.New section 141(1) sets out the strategic objectives of the statement of intent. The Committee has debated at some length its provisions. New section 146(2) in clause 184 indicates the process that must be followed. What is really interesting about clause 184 is its degree of prescription; for example clause 184(2)(a) says: “the Crown entity must provide a draft statement of intent to its responsible Minister (i) no later than 2 months before the start of the first financial year to which the statement of intent relates;” and it even provides sub-subclauses for the cases of newly established Crown entities. That is how careful we are all trying to be to ensure that no delegated instrument of the Crown can escape the chain of accountability either for good outcomes or for the wise use of public money. The reason that this is so prescriptive about Crown entities—MAGGIE BARRY (National—North Shore):When we look at Part 3 of the State Sector and Public Finance Reform Bill it falls really into three main areas. This includes subsidiary reporting where the reporting regime focuses on a group reporting and auditing with the Minister of Finance. That group will have the power to require reporting from any member of the group so that is a tightening up of those procedures. The group reporting change does not apply however when you have school boards of trustees or tertiary education institutions that have an investor or a multi-parent subsidiary—enough said really on that aspect of it.Another aspect is greater reporting flexibility which is going to provide more meaningful information. This is an area that my colleague John Hayes dealt with a little bit earlier—the reporting changes at the start of and at the end of each year. Those are not dissimilar to other provisions in other Acts.But it is the first aspect of Part 3 and the amendments to the Crown Entities Act 2004 that I wish to concentrate on in my call and that is the collaboration with other public entities. The thing about this bill is that it amends the collective duty of statutory Crown entity boards relating to how the board is to perform its functions. Under these changes boards will be required to ensure that the entity collaborates with other public entitieswhere practicable. That is a very important measure that comes up in these amendments because it really helps break down the silo approach to providing services which this Government has identified as being part of the problem with public services. So we have a situation where we need to have these entities working much more in combination with other agencies. The limitation of the phrase “where practicable” really gives the board the ability to determine the efficiency and the effectiveness of collaboration with other agencies in any given situation.That once again is in keeping with the overall policy of our Government that there are directions to support a whole-of-Government approach. This whole-of-Government approach is very much at the heart of this piece of legislation and at the heart of Part 3. In particular there will be two smaller groups of Crown entities than currently. There is also going to be a broader range of objectives including to secure economies or efficiencies which is something we commend; to develop expertise and capability and who amongst us would argue with that; to ensure business continuity; or to manage risks to the Government’s financial position. These are all very sound policies and philosophies that underpin the legislation and that are spelt out in this amendment.The amendments will also make the use of Government directions more useful and more selective but in a way that respects the entities’ legal separation and arm’s-length relationship. These directions to entities will not come as they have in the past from public servants in part but will come much more appropriately from the Minister of Finance and the Minister of State Services.Those are the three main elements of Part 3—the amendments to the Crown Entities Act 2004. I am not going to dip into the petty politics as have others in the Chamber before me. I will leave my call at that. Thank you.GRANT ROBERTSON (Deputy Leader—Labour):It is fantastic to be present in the Chamber and for Maggie Barry to break the habit of a lifetime and not go into petty politics. It is a moment that I will truly remember for many many years.Hon Member: It’ll only be a oncer I’m sure.GRANT ROBERTSON: It will never happen again that is right so I am delighted to have made my way to the Chamber to hear that beautiful moment.It is a pleasure to take a call on Part 3 of the State Sector and Public Finance Reform Bill. As somebody who has been a public servant here in Wellington and who represents public servants as the MP for Wellington Central and also as a former spokesperson on State services I want to say there is a lot in this bill to be very happy about. This is a bill over which I know some concerns have been raised. They have been worked through in the Finance and Expenditure Committee. The idea the principles that lie behind this bill of trying to create a more responsive and more integrated State sector that can be more flexible and responsive to the needs of our communities is a goal that I do think is shared across the Parliament and I want to say from this side of the Chamber that there things in this bill that we genuinely believe will be very helpful to those overall principles.If we refer specifically to Part 3 of the State Sector and Public Finance Reform Bill I want to make a couple of comments. The first of those is around the question of whole-of-Government directions. This is what is covered by clause 162 of the bill and in this case we are talking specifically about Crown entities and the ability of the Minister of State Services and the Minister of Finance to jointly direct Crown entities to support a whole-of-Government approach. This is a very good clause in my view because one of the things that anybody working both inside Government and also with Government agencies and Crown entities hears—the criticism that is so often directed at them—is that there is a silo mentality. All of us will have in our lives interacted with a Government agency that says quite simply “I cannot help you because that is not myresponsibility.” That is something that members of the public struggle to understand. Members of the public do not wake up in the morning and think: “Today I am going to deal with the Ministry of Social Development followed by Inland Revenue Department followed by another.”; they think about the Government. They think about the Government acting as a single entity. People who use the services of the Government and who interact and have to come up against those silos are frustrated. We need to be able to create a public sector and a wider State sector that actually meets the needs of those individuals and communities.But for politicians and as public servants there is a whole other level of frustration that is created. I can remember as a staff member in the Prime Minister’s office having to come up with creative ways of trying to get the public sector to work together. Anyone who was in the public sector in the first decade of the 2000s will quake with fear at the phrases “economic transformation” “families young and old” and “national identity”. I had three little boxes on my desk in the Prime Minister’s office with information on each of those and we did actually sit down and say: “How are we going to get the Public Service to work together on the priorities of the Government?”. It does not matter whether it is a National-led Government or a Labour-led Government. Whatever the Government’s priorities are how do we shift the ship of State to support the things that the Government wants to do?Hon Lianne Dalziel: By turbocharging the economy.GRANT ROBERTSON: For instance that may well be one of the phrases: turbocharging and finding a brighter future.Hon Lianne Dalziel: They haven’t switched on the engine yet.GRANT ROBERTSON: Well unfortunately I think that at this very moment the ship has run aground so that is not even a concern. But if we generalise it enabling the Government agencies to get out of the silos—we took that approach with those three themes—was what we chose to do. And we actually went as far as saying the Budget bids had to come through one of those three themes and they were consolidated. That actually cuts against the Public Finance Act and some of the amendments in this bill start to deal with the problem that was underlying that. The problem was that each Public Service chief executive through their statement of intent had set themselves up in an agreement with the Minister and that was it. They were the apex of everything. The amount of money that they could share between agencies was severely restricted severely limited and in many ways actively discouraged. So the fact that this bill is putting in place some mechanisms that will break up some of those silos is a very good thing.Dr Richard Norman who is an academic at Victoria University talks about the fact that the State Sector Act and the Public Finance Act written as they were in the late 1980s are products of a time that he says was the time of the spreadsheet. In other words it was all about rows and columns and if you added it all up at the end of the day you would come up with the answer that you needed. We now live as Richard Norman would say in the age of Google when it is actually all about the networks and the connections between issues rather than setting up artificial barriers. At the moment the structure of our State sector lives in the age of the spreadsheet and we do need to move it into the age of Google where we focus on the networks and we focus on the connections between the issues that face our communities. This bill—and in fact Part 3 in terms of Crown entities—does go some way towards doing that. The idea of whole-of-Government directions is a useful way of going about that but I would venture to suggest that actually we could go much further. We could go much further by saying what the problems are that we want the public sector and the State sector to address what the structures are that best address those problems and then work onthem that way. At the moment form is still leading function. If the State sector is going to deliver to the needs of New Zealanders function needs to get out in front. At the moment we still struggle with that inside the State sector. This bill does good things to move us in the direction of breaking down those silos but it fails in my view to go as far as it might.I want just in the time remaining to me to briefly talk a little bit about the question of statements of intent. I know that my colleague David Cunliffe was speaking about this at some length earlier on. All of us—former Ministers current Ministers and people who have been public servants—are aware that there is a danger in the statement of intent process that it simply becomes a box-ticking form-filling - type exercise. Again there are good things in this part—John Hayes: You’d certainly know about that—box-ticking and form-filling.GRANT ROBERTSON: John Hayes and I both worked for the Ministry of Foreign Affairs and Trade and we know a good deal about form-filling and box-ticking. Actually Mr Hayes to his credit was never very interested in form-filling or box-ticking at the Ministry of Foreign Affairs and Trade. As somebody who occasionally had to go around the Pacific in the wake of Mr Hayes I can say that he was much more focused on function than form—John Hayes: Outcome.GRANT ROBERTSON: —and outcomes at that point and that is to his credit. [Interruption ] That is right—no the wake was sometimes quite large and I am not referring to size at all here; I am just referring to the impact of Mr Hayes arriving in a community. But he was focused on the outcomes and I think the statement of intent does run the risk of being less about the outcomes and more about the process. I think there are some things in this part that do go to that. The note of caution that has already been raised is the fact that what the statement of intent process usefully does is open up to the rest of us what is going on and what the priorities are. If we can get that process—the development of those statements of intent—right then I think we will go a long way towards actually having a meaningful document.Again a big part of that is ensuring that the statement of intent when it is drafted and created takes into account the views of other relevant entities and agencies. We have all had that feedback about the 10 cars in the driveway. When you have got the family with the complex messy and difficult problems you arrive along and there are the 10 cars in the driveway from the 10 Government agencies. Does Child Youth and Family know what the police have done? Does the Ministry of Education know what Work and Income is doing?Hon Member: Or what the school’s doing.GRANT ROBERTSON: Or what the school is doing indeed. We all know that those are difficult problems but if we take that all the way back to the statements of intent of those agencies when the agencies are talking to one another on the creation of those documents and they are creating those documents on the basis of the issues and the outcomes that we want that is what will get us there. If we start at that point we will get a good outcome. If we start at the point of “Here is our formulaic statement of intent that we must produce on our own and we must look good about.” then we will not get anywhere.What I am saying here is that Part 3 of this bill I believe does offer us some positive ways forward for creating a more integrated and more responsive State sector. I believe we could go significantly further in that. I encourage the Government to adopt a cross-party approach to find a way in which we can focus on the outcomes of the State sector and the way in which it serves our communities and break down the silos. If we do thatI believe that we will be proud of our efforts. But I do believe that in Part 3 there are some good measures that we can and should all support.Hon LIANNE DALZIEL (Labour—Christchurch East):I could not agree more with my colleague Grant Robertson when he says that the need to focus on breaking down those silos is fundamentally important which is why I am pleased that this part of the State Sector and Public Finance Reform Bill deals with the whole-of-Government approach that we so need.If there is one place in New Zealand that needs a whole-of-Government approach it is Christchurch. What we have had established there I think was a mistake in terms of the nature of the organisation. I think there have been a few comments lately about my views around the recovery effort and I want to place it clearly on the record that the Government has to be involved in Christchurch. It is so big and that whole-of-Government focus that is dealt with in this part of the legislation is fundamental to getting it right. But the model chosen for the Canterbury Earthquake Recovery Authority which sounds like it is an independent Crown entity or an autonomous Crown entity—in fact it is not; it is a Government department. It has a direct line of reporting to the Minister for Canterbury Earthquake Recovery. It has a statement of intent as set out in this part of the legislation as well but not as a Crown entity; it is as a Government department. It should have been a Crown entity. Everyone in Christchurch who has any understanding of the need for good governance in a recovery situation agrees that there needed to be a layer of governance between the Minister and the Chief Executive of the Canterbury Earthquake Recovery Authority.But the real problem lies in the fact that there is not the joined-up approach that we have been looking for. I was speaking to an engineer recently a geotechnical engineer when I was up in Auckland and I said to him: “I have discovered the problem. I have discovered why things are not working in Christchurch and why we have not got the joined-up approach.” I said it was here in the report of the Controller and Auditor-General:Roles responsibilities and funding of public entities after the Canterbury earthquakes  which is of course extremely relevant to Part 3 of this bill because it is precisely the issue that is concerned. I said it was all on one page. He actually could not believe me that I could have found the solution for the problem—the statement of the problem—in such graphic terms until I opened the report like this. This diagram shows what the Canterbury earthquake recovery looks like.I think that everyone on that side of the Chamber should take a very careful look at this document—a very careful look at it. What it identifies is the whole range of public sector entities private companies Ngāi Tahu and Canterbury earthquake recovery tasks as they are undertaken by regional or local public entities and whether they are part of the central government entity. So we have got Treasury the State Services Commission the Ministry of Social Development the New Zealand Transport Agency the Tertiary Education Commission the Ministry of Education schools and tertiary providers Housing New Zealand Corporation the Ministry of Business Innovation and Employment Southern Response Waimakariri District Council the Earthquake Commission the Ministry of Business Innovation and Employment—it appears again because one represents when it was formerly the Ministry of Economic Development and one when it was formerly the Department of Building and Housing—Selwyn District Council the Department of Internal Affairs Te Rūnanga o Ngāi Tahu Christchurch City Council Canterbury District Health Board the Ministry of Health the Department of the Prime Minister and Cabinet and Environment Canterbury.You know if anything is screaming out for a joined-up approach for a whole-of-Government direction it is the Canterbury earthquake recovery. In fact when the Canterbury earthquake recovery legislation was passed in this House its intention wasclear. It was to facilitate to coordinate and to direct the recovery—anything that supported the recovery. And yet we have not got anyone in charge. Still there is no authority; nobody stands in charge. So you have got the Minister for Canterbury Earthquake Recovery not knowing what is happening under the Minister of Building and Construction’s watch. We have ended up with a situation where the Christchurch City Council loses its accreditation on Monday next week and it is losing it because of a report that was prepared for International Accreditation New Zealand back in September last year. It was sent to the city council in October and it was copied to the Ministry of Business Innovation and Employment.I cannot for the life of me understand why there has been no connection made no joining of the dots. Yes there are lots of dotted lines lots of squiggles but guess what is completely missing from all of this? What is completely missing from all of this is people the community the people who live in Christchurch.The CHAIRPERSON (Lindsay Tisch): The member must relate this back to Part 3. To use Canterbury as an example is fine but you must bring it back to the content of Part 3.Hon LIANNE DALZIEL: In clause 162 amended section 107 states: “(1) The Minister of State Services and the Minister of Finance may jointly direct Crown entities to support a whole of government approach by complying with specified requirements for any of the following purposes: (a) to improve (directly or indirectly) public services: (b) to secure economies or efficiencies: (c) to develop expertise and capability: (d) to ensure business continuity: (e) to manage risks to the government’s financial position.”I would say that a direction to the Canterbury Earthquake Recovery Authority—which OK is not a Crown entity it is a Government department but it should have been a Crown entity—could actually have brought this whole thing together. But given that it is not there are many Crown entities that are operating in the Canterbury region but they are not joined up. They have not received a direction around the whole of Government or if they have it is not obvious to anyone. People who ring the Earthquake Commission EQC for example are told to ring Fletcher’s—Fletcher EQR. Then they are told by Fletcher EQR: “No it’s really still an EQC matter.” So they ring back EQC and it says: “Well ring the Christchurch City Council.” So there is this lack of a joined-up approach.The ministry—formerly the Department of Building and Housing—issued new guidelines part-way through the process of the rebuild and that has led to people having to go to the Ministry of Business Innovation and Employment as it is now. That is the problem. We do not have this whole-of-Government direction approach. So it is important that we have this not just within Government departments because Government departments themselves are operating in silos but within Government entities and where they connect in.So another Crown entity that could really benefit from a whole-of-Government direction is International Accreditation New Zealand. That is New Zealand’s accreditation body which enables an organisation to have confidence in its processes and provide assurance to customers and clients. It is part of Telarc the Testing Laboratory Registration Council which is an autonomous Crown entity that was established way back in 1972. It has a really important role around accreditation. But now we have got a huge question mark over what buildings are safe and what buildings are not safe in Christchurch. It should be in there as part of a whole-of-Government response to the issue leading the issue alongside the Christchurch City Council and the Canterbury Earthquake Recovery Authority and obviously the Minister of Local Government will now be in there today with a Crown manager.I presume that that will have a similar role or maybe even a more extensive role than the monitor’s role which is also provided for in Part 3 of the State Sector and Public Finance Reform Bill and what it is allowing itself to do is to assist the responsible Minister to carry out his or her role. The trouble is that sometimes there is not a responsible Minister when there are many Ministers who cut across and I think we heard that from the Speaker the other day when I tried to get a snap debate on the issues that were occurring in Christchurch. We could not get that responsible Minister and the failure to take any action was not regarded as a matter of recent occurrence because the failure to take action did not form a ground for a snap debate.That is the problem that we have got. I hope that this legislation has been designed with addressing problems like we have in Christchurch in mind. I hope that it does and I am really looking forward to seeing how it works in practice. But it really cannot come soon enough for Christchurch. We have had enough of the silo thinking and the inability to bring everything together for the sake of Christchurch.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to Part 3 be agreed to.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 259 in the name of Te Ururoa Flavell to Part 3 be agreed to.Amendments not agreed to.Part 3 as amended agreed to.Schedule 1The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 1 be agreed to.Amendments agreed to.Schedule 1 as amended agreed to.Schedule 1AThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 1A be agreed to.Amendments agreed to.Schedule 1A as amended agreed to.Schedule 2The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 2 be agreed to.Amendments agreed to.Schedule 2 as amended agreed to.Schedule 3The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3 be agreed to.Amendments agreed to.Schedule 3 as amended agreed to.Schedule 3AThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3A be agreed to.Amendments agreed to.Schedule 3A as amended agreed to.Schedule 3BThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3B be agreed to.Amendments agreed to.Schedule 3B as amended agreed to.Schedule 3CThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3C be agreed to.Amendments agreed to.Schedule 3C as amended agreed to.Schedule 4The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 4 be agreed to.Amendments agreed to.Schedule 4 as amended agreed to.Clauses 1 and 2Hon DAVID CUNLIFFE (Labour—New Lynn):This has been an important and lengthy debate on a framework piece of legislation the State Sector and Public Finance Reform Bill that is critical to the efficient and effective functioning of our Civil Service. It may not be at first glance the sort of legislation that someone might pick up and find exciting to read but it is none the less fundamental to how we do our job collectively of serving New Zealanders to the best of our ability and extracting the very best value that we collectively can from their hard-earned tax dollars.This has been appropriately a reasonably wide-ranging debate and I appreciate your willingness Mr Chairperson to accommodate the various issues that have arisen. Let us cast our minds back to the original process that this bill went through. The Labour Opposition opposed this bill strongly at first reading. It did so because the bill as drafted particularly through the amendments to the State Sector Act would have gutted the rights of civil servants—their negotiation rights their redundancy provisions and a host of other hard-earned employment obligations and privileges.I am very very happy to reiterate that as a result of a careful and good-faith negotiation with the Minister of State Services which was led by the Labour Party and supported by the Public Service Association and the Council of Trade Unions the Government has seen fit to introduce extensive amendments that now allow us to support the legislation with the support of those union representatives. Let me clarify that that is not to say the unions themselves think this legislation is a wonderful thing. They still have as we do significant reservations about the potential interpretation of some aspects of it.When the bill is taken as a whole we are now in the position where we are satisfied with language like a State servant facing a transfer must be offered a position that is “no less favourable” than what they have in order not to be given their full redundancy entitlements. We are reasonably satisfied that the changes to the Government workforce orders which now make them workforce statements and the explicit language written into the bill during the select committee process protects and preserves all existing employment rights in that process and offers sufficient protection to State servants for us to be able to confer support for the bill.There are a number of other similar changes made at the select committee particularly in relation to the State Sector Act provisions that have given us sufficient comfort that at this stage we can support the bill again with caution with some reservations with a careful eye to how it is implemented by the current Government and with a view to potentially reviewing it when the new Government comes in in just 15 months’ time. But we do offer our support for the bill at this point.Having disposed of those very serious reservations and acknowledging the good work of the Minister the Hon Jonathan Coleman and the then chairman of the Finance and Expenditure Committee now the Hon Todd McClay let us move back to the central purposes of the bill which we commend and support. Through this legislation we will help to modernise the public sector. I think our deputy leader Grant Robertson made a very good point when he talked about moving from the age of the spreadsheet to the age of Google. We are seeking to build a flexible networked interactive service-oriented lean-but-not-mean public sector that will serve the interests of all New Zealanders while being careful and prudent with the expenditure of public moneys. It has been a shared goal of both sides of this House for many years now that the Civil Service would be able to move towards a more collective enterprise in the best sense of the word and that agencies of the State whether they be Government departments Crown entities or contracted agencies work together to achieve common goals. And it has not been that easy. Managing for Outcomes has come and gone. The Government is having real trouble I understand with its Better Public Services programme where at least half of the objectives soon to be revealed are not on track.It is not that easy to bring Government departments together in common goals and this legislation will we hope make a real contribution in that regard. There are several ways in which it does that. The first is the multi-category appropriation. That allows agencies to receive a common funding pool across traditional silos. As introduced the bill sacrificed the specificity and accountability requirements in the name of that cooperation. As amended at the select committee and with the further useful advice of our high-calibre officials there is a better balance because we now have full traceability of funds from year to year including when they have changed the jargon from output class to output class and including where they move to a multi-category appropriation as provided for. We are now comfortable that we have not sacrificed the accountability to get the flexibility.Another aspect of trying to build a more flexible Public Service has been to make somewhat less prescriptive the provisions around a statement of intent. For the public the statement of intent is one of the key contractual documents alongside a chief executive’s performance agreement by which Cabinet and the political layer which is the people’s representatives bring the direction of the Government of the day to the Civil Service and they are absolutely essential documents. What is important is that in this bill although the Government has sought to reduce the requirements to make that an annual process the Finance and Expenditure Committee has reinserted the option for Ministers to make those statement of intent updates annual. In its commentary the select committee emphasised that civil servants need to make clear to Ministers that thatannual update provision or ability still exists because we do not want to lose accountability in the search for flexibility.As a number of my colleagues have noted there is a certain irony in the Government moving to introduce legislation that provides for “whole-of-government directions” at a time when it is busily seeking to privatise part of our energy system and to gut the State-owned enterprises portfolio. Why is that ironic? Because the power to direct those crucial entities—and energy security is going to be one of the key strategic issues facing our future—is already there in a fundamental piece of legislation. It is called the State-Owned Enterprises Act. But when Mighty River Power for one is partially privatised it is no longer in law a State-owned enterprise so the power to direct is rescinded. The obligation of no surprises is rescinded.Look how important that was in the case of Solid Energy a huge black elephant—now a white elephant—on the Government’s books. It should have been even more prescient in its advice to Ministers and Ministers should have been even more hands-on to avoid the blood bath of taxpayers’ money that has occurred in relation to that entity. But to make those rules looser by partially privatising the entity as was announced—even though the Government now cannot because it is such an embarrassment—while introducing this responsible legislation to allow for whole-of-Government directions I think the public will get the irony in that situation. I see members opposite kind of shuffling looking at their feet. They have got their heads down. That is the traditional reaction when you know you are up the legislative creek without a paddle.But enough on that; back to this bill. This is responsible legislation. I am very pleased that it has the overwhelming support of Parliament and that there has been a good-faith negotiation process between the Opposition and the Government. That has I think in everybody’s understanding resulted in a better piece of legislation. Is it perfect? No. Will there be implementation issues? Yes. Will the incoming Labour-led Government watch it like a hawk? Of course it will. Will it be prepared to fine-tune it with further amendments if necessary? I am sure that the future Government will want to do that if required.We believe that this is a step forward not a step backwards now that the employment rights of civil servants have been protected. It is a step forward because it gives more flexibility. It is a step forward because it confers a greater sense of common purpose. It is a step forward because it allows for flexibility and includes some limited forms of delegation of powers and functions to interactive work with the community.CLARE CURRAN (Labour—Dunedin South):I am really pleased to take a call on these final clauses in the Committee stage of this bill the State Sector and Public Finance Reform Bill. I would like to reiterate some of the things that have been said by my colleagues and put the emphasis on the importance of transparency and accountability in this bill. I certainly think that the Government through the negotiations that have occurred around trying to come up with a solution to the problems that were obviously apparent after the first reading of this bill has seen an enormous amount of hard work that has gone on and I certainly think that the members on this side of the Chamber have put the Government on notice around how this bill is actually implemented and how it will actually work.We certainly do want legislation in this area that is geared towards a flexible interactive Public Service. It certainly is the age of Google. Technology is driving so many of the changes that we are seeing in legislation. We certainly need the joined-up-ness between Government agencies and the directions that Government agencies are receiving from Ministers but along with that comes the absolute importance of the transparency of those instructions and changes and the accountabilities back to the public. I have been looking closely at some of the provisions throughout the discussionon this bill and I remain with some serious concerns around how those transparencies and accountabilities will actually be delivered to the public of New Zealand.I do want to say that it is important that the work that has been done by the members on the Finance and Expenditure Committee—in particular the Labour members on the select committee—on trying to come up with real solutions to get this piece of legislation through the House should be commended. We know as there has been much discussion that this bill was heavily amended by the select committee. There were some very tough negotiations on that committee around trying to make this a better piece of legislation which is ultimately what the work of this House should be about.I just want to reiterate some of those things that have resulted from that because we support—and absolutely support—an enhanced focus on the need to deliver value for money for taxpayers’ funds. We absolutely support the principle of developing and coordinating leadership across State services and the intent of amending the Public Finance Act to provide for those multi-category appropriations. I know my colleague David Cunliffe has talked about that at length. But clarifying and enhancing the expenditure tracking and accountability within revised budget and performance management documents is also so important which is why there were so many problems with this bill.The progress made during the select committee really has been around those conflict of interest provisions which were strengthened around where the delegation of powers were proposed for any State Service entity and improvements around the provisions for strategic intentions through those statements of intent. I would just like to say with regard to those statements of intent that the potential for conflict between the statements of intent the ministerial expectations and the actual legislation on which they are based is of absolute importance. It is of absolute importance that the people of New Zealand can be reassured that those conflicts are able to be managed and are transparent and that officials are able to provide advice—and have to provide advice—where there are conflicts.We have seen countless occasions where the way an entity is operating appears to be in conflict with the legislation that it is actually based on. The Television New Zealand Act is one of those very good examples. Before the Television New Zealand Amendment Bill actually went through this House the way that the entity was operating was in direct conflict with the legislation upon which it was based because of expectations that had been put on it from Ministers. It was therefore operating completely on a commercial basis which was in direct conflict with the legislation. We have to ensure that that does not happen and that people then do not start to believe that Government is operating its entities in conflict with the legislation upon which they are based. Those things and those accountabilities are absolutely critical.The full traceability of those votes and appropriations have been clarified in the provisions relating to Budget documents including where the title of appropriations and the output and sub-output classes have changed and where those multi-category appropriations have been instituted. Another improvement has been balancing the efficiency objectives within a broader notion of effectiveness which includes the procedural and substantive fairness considerations. We do support this bill. We have serious reservations that I know we have outlined at length in this Chamber over the last 12 hours or so and the reason why we have outlined them is the nature of those reservations. They need to be on the record so that if it is demonstrated through the implementation of this legislation that there remain substantive issues we can come in as the next Government and change them and have the mandate to change them because we have outlined what our concerns are.We remain concerned that the protections in redundancy provisions relate only to the Public Service. We remain concerned that the delegation of powers from the core State sector to non-State partners in implementing agents is constructed too broadly. We think that close monitoring will be required to ensure that this practice is used only in circumstances where benefits to the public clearly outweigh the costs and the risks. We remain concerned that immunity from suit rather than indemnity is being afforded and we note as we think the Government should note the Law Commission’s concerns in this regard.Amendments to the Public Finance Act that will assist in removing barriers to greater cooperation between public sector entities need to be balanced in practice with greater clarity of the financial accountability documents.So returning to those statement of intent processes we know that it is important that there is a clear contractual arrangement a relationship between the Ministers and public sector executives. We know that this is a crucial link in the accountability chain to Parliament and the public but the reduction of the frequency of required statement of intent updates to 3 years risks diluting that ministerial accountability for the agencies. We absolutely believe that it is important that we keep a close eye on how that plays out.The amendments to this bill we believe have given us cover to provide support. We know how important it is to get cross-party agreement on these sorts of pieces of legislation. They are absolutely foundational pieces of legislation for the ability to run Government and to run accountability right across Government. But we remain absolutely vigilant on a number of these issues and will be keeping a close eye on how they play out.Hon LIANNE DALZIEL (Labour—Christchurch East):As colleagues have said Labour actually opposed this bill the State Sector and Public Finance Reform Bill at its first reading. I think it is significant that we are now in a position to support its passage through the remaining stages in the House and speaking to clauses 1 and 2 I think that it is an important point to place on the record of the House. It was really picking up the point that Clare Curran ended on and I refer to the commentary from the Labour minority view where we stated that the amendments to the bill provide sufficient protection for Labour to be able to support it as a whole acknowledging that bipartisan consensus on framework legislation of this type is desirable where broad agreement can be forged. Can I just say that that is really important. I think it is absolutely vital. If we can get cross-party consensus on framework legislation then we end up having debates about the detail as it were rather than about the most fundamental aspects. If we can get agreement across party lines on the framework then in fact that is good for New Zealand it is good for certainty it is good for business and it is good for the community as a whole. So that is why I am very pleased that we are able to support the passage of the legislation.But I have been asked to display one more time why this could not come soon enough. Perhaps the Minister in the chair the Minister of Conservation would like to cast his eyes upon this document because this diagram is the Canterbury earthquake recovery. It is actually pretty obvious what is going wrong with the Canterbury earthquake recovery when one looks at this web of particular agencies that do not all connect with each other and certainly do not all connect with the people.When I was the Minister for Small Business and the Minister of Commerce I had undertaken a quality regulation review. What I came out with was a very simple phrase because—and colleagues and Ministers on the other side of the House will know this as well—we do think in silos because we are responsible for an individual silo. We are responsible for the Department of Labour or we are responsible for foreign affairs or weare responsible for a different component of Government. But when Government actually sees itself as all these individual arms that is not how the public sees them. So when business looks at the Government it sees the Government and it says: “Why on earth is the Government asking me for exactly the same information we provided it with last week?”. That is because the public do not see the Inland Revenue Department they do not see ACC they do not see all these individual departments and Crown entities—all of them covered by this legislation. They do not see individual departments and Crown entities; they see the Government and they ask it why it is putting them through the mill yet again. The simple solution that I came up with which I think is a very simple solution is to ask why the many arms of Government cannot extend a single hand to business. Why can they not?In the Canterbury earthquake recovery why cannot the many arms of Government extend a single hand to the people? I personally think actually that in this legislation as we have debated it that has become crystal clear. That is exactly what we need in Christchurch. So I actually think we are on the same page. We actually do understand that the framework has to be across these silos. It has to break down all of the silos. But in Christchurch what has become crystal clear is that it is not just with the Government departments and the Crown entities; it is also all of the organisations that they interact with as well and in Christchurch it is the councils that have to have the silos broken down. So what we have got in Christchurch is we have got the council with its own silos we have got the Government with all of its silos and we have got the Canterbury Earthquake Recovery Authority which looks like it is the overarching organisation because its purpose is to coordinate facilitate and direct all of the issues that relate to the recovery. [Interruption ] Well the Canterbury Earthquake Recovery Authority is in there but it is only one of the many things. All of these squiggly lines tend to lead to the Canterbury Earthquake Recovery Authority but the Canterbury Earthquake Recovery Authority does not have any overarching authority and that is the problem.The Minister for Canterbury Earthquake Recovery does not know what the Minister for Building and Construction has been discussing. That has been obvious over the last few weeks. But there are so many other things. The Minister for Canterbury Earthquake Recovery did not know that the Minister of Education had not consulted with the schools before announcing the massive shake-up of the schools. It is not knowing what the left hand and the right hand are doing it is not knowing what the impact that will have on the recovery of Christchurch that is the fundamental flaw. All of that can be fixed if we have our focus on the framework and the framework cannot—cannot—be like this one. We cannot have all of these different lines operating in this particular way. We actually have to have the whole thing as a coordinated whole and meeting the objectives of the recovery.I think that Canterbury has served to provide a very clear example of why this legislation and the approach that this legislation is adopting is so needed. The cross-agency breaking down of silos is absolutely fundamental but I think that you also have to think about the silos that exist within the Government departments themselves. In the Canterbury earthquake—Hon Trevor Mallard: Especially “MoBIE”.Hon LIANNE DALZIEL: Yes—the Ministry of Business Innovation and Employment. I have never understood why the Government decided to put the Department of Labour into a brand new huge expanded organisation after the two reports—Hon Trevor Mallard: It’s because of Steven Joyce.Hon LIANNE DALZIEL: Yes but the Pike River coal mine tragedy report would have actually said: “No. Hold off. Do not put the Department of Labour in there rightnow. It might be the right thing to do later but do not do it now.” The second group that you would not put into the Ministry of Business Innovation and Employment right now is the Department of Building and Housing. The royal commission report on the building collapses in Christchurch—it is just crazy to have all of these different departments come together.I think this is the fundamental problem: the Government thinks that by putting the departments together it solves the silo problem. It does not. Silos exist within Government departments. All that has done is made the silos less obvious but they exist all the same. If I use as an example the Canterbury Earthquake Recovery Authority which has been set up for a single purpose it is riddled with silos. It has got one silo for economic development it has got one silo for the central city development it has got one silo for social recovery it has got another silo for the built environment and the natural environment and it has another one for cultural matters. So what it has done is manage to create silos in a brand new department where it actually could have ensured that there were no silos to have to break down. That is the problem that we have got in Christchurch. This legislation—Hon Trevor Mallard: What happened to the doctrine of the indivisibility of the Crown?Hon LIANNE DALZIEL: The indivisibility of the Crown?Hon Trevor Mallard: What happened to that doctrine?Hon LIANNE DALZIEL: Well I know it is a doctrine but I do not know how it is relevant to this.Hon Trevor Mallard: Well the silos.Hon LIANNE DALZIEL: Yes I know but the silos—Hon Ruth Dyson: Trevor will take a call.Hon Trevor Mallard: I will.Hon LIANNE DALZIEL: Oh Trevor is going to take a call to explain the doctrine of indivisibility.I actually think that one of the problems that we have had and I think Ruth Dyson could also comment on this is when you have got reporting lines that do not allow for the money to flow with the decision making. For example back in 2000-and-something we managed to get a high and complex needs formula which had funding directed to it from health education and Child Youth and Family and we got the three together. It was a massive change. We broke down the silos. How long did it take to write the rules for access to the fund? It took 2 years—2 years—to write the rules and that is the problem. We have got to fundamentally change the culture and the cultural change will come about if we start to think about those whole-of-Government outcomes that are so fundamental. Christchurch I think would be a classic case where we could start right away. We do not actually have to wait for the legislation to be passed to do the right thing. Canterbury is waiting for this mishmash to be resolved and—Dr DAVID CLARK (Labour—Dunedin North):There have been several points raised by the Hon Lianne Dalziel that I wish to pick up on. The first amongst them is the shambles that is “MoBIE”—the Ministry of Business Innovation and Employment. She spoke about how the Department of Building and Housing would appear to be out and the Department of Labour would appear to be out. It is true also that health and safety is something that needs specific attention. This Government is talking about pulling that out. It has folded things in; it is pulling them out. There is a huge amount of cost that has gone into that particular organisation over recent years.Minister Joyce has until now avoided answering questions on the costs of restructuring and rebranding the Ministry of Business Innovation and Employment. It is an organisation that is not performing terribly well. Mr Joyce himself was unable toanswer questions before a select committee recently in a public session on the costs of restructuring in the organisation. We had the Ministry of Research Science and Technology and the Foundation for Research Science and Technology or “MoRST” and “FoRST” as one limb in there. They got divorced and then we had the Ministry of Science and Innovation which could not reconcile them and so on and so forth. There are a bunch of departments shoved in together with no seeming logic to it and they are not performing well. There are ones that should come out. It is a shambles what is going on in the Ministry of Business Innovation and Employment and we are only just touching the surface of it.This bill the State Sector and Public Finance Reform Bill is one that we will of course be supporting. The title could be different. To bring it into the title and commencement clause discussion we could call it the “Ease of Good Government Bill”. We are delighted that the Government has seen fit to include changes that were put through in the Finance and Expenditure Committee at the behest of Labour and the State sector unions that have averted disaster for Government workers who were set to lose their redundancy entitlements and employment rights. We are pleased that members of that committee could work together to ensure that those things did not happen. We voted against this bill initially and now we are supporting it and that is as a result of that committee taking a longer view and saying that this legislation needs to survive different Governments. So those things have made this a better bill.We could also call it the “Can’t Stop Bad Policy Bill” because no matter how good the regulations are and how smoothly the apparatus of Government works you cannot account for bad policy. You just simply cannot. Nobody can—not even you Mr Chairperson. If the Government wishes to push bad policy through it can do that despite legislation. It can pursue anything it wants to. We know for example that in the electricity sector power prices are going up and up and up and up. John Key says that Kiwis are paying about the right amount for power; most of New Zealand disagrees with him I think. This Government is pursuing that same strategy with the same electricity sector that it has always had with prices continuing to rise. That is something that Labour thinks we need to do something about.This kind of bill will actually enable good policy to be put in place more cleanly. It will mean that the apparatus of Government is not tied up with unnecessary reporting or overly burdensome reporting. It will hopefully be more effectual in reporting the kinds of things that the public needs and wants to know about. The Government will be held accountable to the public in an appropriate way with a minimum burden on officials to deliver accountability mechanisms but an appropriate one. It is a balance as I have said earlier. Again we could call it the “State Sector and Public Finance Reform (Providing Balance) Bill”. We could put brackets in there and that would be an alternative name.I think that some of these names I am discussing will be considered by the Minister in the chair the Minister of Conservation who I can see is deep in thought. I would welcome the Minister in the chair’s views on the appropriateness of these names as he thinks them over.Part of the job of us here in Parliament is to decide just which names for bills are appropriate. As people search through them online—and I know as I have searched through bills online—sometimes they are hard to locate. Sometimes it is hard to find the bill you are looking for because it is named in a way that is not intuitive. I think that bills ought to be named in a way that is accessible for the public.This bill here does pick up good governance practices. It attempts to make sure that things are done in a transparent way that there are sanctions and rewards for departments that those are clearly laid out that they are reported that there is transparency and that there are clear lines of accountability.We see in this bill the State Services Commissioner’s role outlined for the first time ever in a way that now means that we can better understand what his or her role is in the State sector and we can see how chief executives can move their own resources around from one area to another much more easily as a vacancy arises and so on. This smoothing of the paths of Government should indeed over the longer term make for a better Government.The point I raised earlier though is incredibly relevant which is that the actions taken in this bill will not stop a Government putting bad policies in place. They simply cannot.If a Government like this one thinks that the current housing shortage in New Zealand is simply unavoidable and that if we carry on with the same policies suddenly magically houses will appear despite the rate of new house builds dropping steadily over the last 20 years that may be its ideology and it can stick to it. This bill will do nothing—absolutely nothing—to address that. Labour on the other hand thinks that we need proactive policies. So for example the KiwiBuild policy which Mr Peseta Lotu-Iiga over there is admiring from afar but knows he cannot publicly endorse is a policy that will improve the lot of Kiwis. For those who currently cannot afford housing we know that this kind of policy the New Zealand KiwiBuild policy will actually make the world a better place for them. So that is what Labour is committing to—10000 new houses a year with the KiwiBuild policy affordable houses. That is 10000 new houses a year and affordable housing for New Zealanders because we think that that is a priority.Likewise in the energy sector with the NZ Power proposal we will make sure that ordinary Kiwi families pay $300 less a year for their power bills. That is significant because New Zealand families are struggling.This Government has the worst economic record of any Government in the last 50 years—Peseta Sam Lotu-Iiga: How many?Dr DAVID CLARK: —50 years Mr Lotu-Iiga; I am glad you asked—and that terrible economic record needs to be addressed but this Government seems to have no plan to do that. This piece of legislation will not give the Government good ideas; it will only enable Governments that have good ideas to put them into practice in a timely effective and efficient way. So the real effects of this legislation will have to wait for a future Labour Government I suspect.This Government is doing the right thing by putting the conditions for good government in place but unfortunately it seems to lack a plan that will really appeal to New Zealanders and make New Zealand a better place for ordinary New Zealanders to live in. As inequalities rise the Government does not seem willing to put in place the kinds of necessary economic changes such as more savings a pro-growth tax policy and monetary policy reform that would actually improve the lot of ordinary Kiwis. Instead we see median wages dropping in New Zealand consistently under this Government. Kiwis are struggling small businesses are struggling and that is because this Government is prepared to sit on its hands and stick with the policies of the 1980s which have not been working for so very long now sadly.This legislation will mean that policies that are good like those that Labour has can be introduced in an effective and efficient way in years to come. It will not help this Government which has no plan to reform the economy in the meantime because it will carry on doing what it is doing which is just taking a hands-off approach—hands off the steering wheel—as the economy goes further towards the interests of those who already have and further away from the interests of the have-nots in our country.Labour is very happy to support this legislation. As I said at the beginning we are pleased with the changes that have been made in the select committee to avert the disaster for Government workers who were set to lose their redundancy entitlements and employment rights. We congratulate the New Zealand Public Service Association and the Council of Trade Unions on their good work and I congratulate the members of the committee who worked together to make sure that this legislation did not end up dividing the House but instead ended up being legislation that with some reservations the Labour Party will happily support. I am looking forward to the Minister in the chair’s contribution. Thank you.Hon TREVOR MALLARD (Labour—Hutt South):It is my pleasure to take well three or four calls on the concluding stage of this legislation.John Hayes: Only three or four?Hon TREVOR MALLARD: Yes only three or four. One of the things that I might say I am slightly perplexed about is that we have sitting in the chair the Hon Nick Smith.Hon Ruth Dyson: Well at least he’s good compared with the others.Hon TREVOR MALLARD: Well I would not go that far and I do not know him that well. But we have sitting right at the back of the Chamber a newly minted Minister who chaired the Finance and Expenditure Committee and actually knows about the bill.Hon Dr Nick Smith: He’s good.Hon TREVOR MALLARD: Sorry?Hon Dr Nick Smith: He’s good.Hon TREVOR MALLARD: Well I am told he had potential. I would have picked Sam Lotu-Iiga to become a Minister ahead of him. My understanding is that he is going to get his best publicity ever next week when he becomes the “Minister in charge of Killing Dogs So Drug Dealers Can Make Bigger Profits”. That is Todd McClay the Minister who is going to take responsibility for that going through this House with advice from a number of departments under this legislation. He is going to be the Minister who says: “We will kill dogs so that drug dealers can have bigger profits.” I know that if Sam Lotu-Iiga had been the Associate Minister of Health he would never have had a bar of that sort of policy.Hon Ruth Dyson: He’s the only one who thinks he should be Minister.Hon TREVOR MALLARD: Who?Hon Ruth Dyson: Sam.Hon TREVOR MALLARD: No no. I think Sam would have been a better Minister than Todd McClay.Hon Ruth Dyson: Well that’s two of you.Hon TREVOR MALLARD: Well no no. That is not true. A number of the member’s colleagues tell me that they think that he would be a much better Minister for Pacific Island Affairs than for example Hekia Parata. I mean for goodness’ sake! [Interruption ] Well no I am praising the member opposite Mr Chairperson. And actually the responsibilities of a Minister of the Crown and how they are discharged are very much a part of this bill.Members opposite invited me earlier to talk to them a little bit about the divisibility of the Crown or what used to be when I was first a member of Parliament the indivisibility of the Crown. And you know it is relatively historic. It dates from the days when the Crown in the United Kingdom—probably the English Parliament at the time—was the agent for the King or the Queen on occasion. And because it was acting in the name of the monarch it could not have internal divisions. What it had to do was sort it out: “This is the Government division and that cannot be divided.” You did not have the nonsense of one Government agency suing another Government agencybecause they could not sue each other. They should not have been able to sue each other because they were a part of an undivided Crown. Obviously now with the National Government’s splits and divisions and stuff like that that doctrine has become slightly dated. I think the time of Ruth Richardson was the time when it took its biggest dive downwards.But I want to say it is relatively good that there is a tiny step back towards the concept of the Government working as a team working together and working out what is the best thing for the people of New Zealand rather than heading as it had been into the many many agencies all heading off in their own directions sometimes quite independently. I am sure all those people who have been Ministers in the past would have found agencies actually working in contradiction to each other. One of my colleagues Lianne Dalziel reminded me earlier about high and complex needs and just really the inability of the agencies to come together and to work properly as a team to get something that was logical for those young people who were really at most risk and amongst the most marginalised people in the country. The agencies could not do it.The other point that I would like to make is that sometimes some of the best policy advice does not necessarily come from the big agencies which sometimes get caught very much in their own ruts. I noticed this as the Minister of Education and the Minister for Sport and Recreation. Actually some of the best policy advice came from a tiny policy team of three four or five people because they could cut through cut to the chase work out what the issue was get the evidence and you could have evidence-based decision-making. Whereas in education especially in the early days when I was Minister there was so much long-term prejudice and not the ability not the habit of looking at the evidence. They were tied up in what had been the policy of the agency for a long time rather than working necessarily for the best for the young people of New Zealand.This State Sector and Public Finance Reform Bill is a tiny step and I do not think it goes far enough. I would like to refer to new section 47(1) of the bill “Responsibilities of Commissioner”. I am now going to plead guilty as I did to the Hon Stan Rodger a month or two ago for being the Minister of State Services who abolished the senior executive service because basically it did not work. It was a very good idea as part of the original State Sector Act to build up a team of senior people who got some special training and were more available for secondment to move from one agency to another. People who were being if not targeted if not anointed chief executives of the future—John Hayes: Groomed.Hon TREVOR MALLARD: Sorry?John Hayes: Groomed.Hon TREVOR MALLARD: Yes well grooming is a word that has different connotations these days. I think the idea that John Hayes was grooming public servants is probably not quite the approach that is appropriate. In the old sense of the “groomed” word then certainly that was the idea—that you were building up a team of people from whom the vast majority of the future chief executives would come because the skills had been developed. Basically it did not work. It did not work because of the very narrow approach of the majority of the chief executives of the Public Service who were focused on their own agency on their own outcomes and on their own statements of intent rather than considering the good of New Zealand and the quality of the Public Service both immediately but more especially in the medium and the longer term.Clause 38 of the bill puts back on to the commissioner the responsibility for developing and implementing a strategy for senior leadership and management capability in the Public Service. But what it does not do is give the commissioner any authority to actually implement it. What it says is that if a chief executive gives theState Services Commissioner two fingers then they are allowed to get away with it. The bracketed phrase at the end of new section 47(1) “(with the agreement of the relevant chief executives)” essentially goes back to the failed senior executive service model whereby they will I am sure focus more on their own agencies rather than the overall good of the Public Service. In my view—and Todd McClay might want to take responsibility for this—there is a failure within that provision to actually achieve what is a noble objective.I think all of us now agree that we have had far too many chief executives come in from offshore who do not understand the New Zealand culture. I am not going to use Lesley Longstone as an example. I do not want to go into it in any depth. As far as that one is concerned if you are working for Hekia Parata you basically have to be a saint in order to cope. It may well be that the new chief executive is a saint and he will be able to cope or more likely actually he will be able to manage the Minister in order to achieve the outcomes that are required.The CHAIRPERSON (H V Ross Robertson): I call the honourable member Darien Fenton.David Bennett: Excellent choice. Excellent choice.DARIEN FENTON (Labour):Excellent choice. Thank you to the member for that.Hon David Cunliffe: What are all those backbenchers doing just sitting there?DARIEN FENTON: That is right. It has been a very very interesting discussion in the Committee stage of this bill the State Sector and Public Finance Reform Bill. I have been listening as I have been working in my office as people have been talking about silos and their experiences with the State sector. I wanted to remind my colleague Trevor Mallard of one of the things that he tried to do I think when he was Minister of State Services. You were Minister of State Services?Hon Trevor Mallard: I was. Only for 6 years though.DARIEN FENTON: Yes I remember one of the things that he tried to do was to get the chief executives together and do a simple thing like having common leave provisions across the State sector. There was enormous resistance to that as I understand it. It was the most difficult job because the chief executives could not get their heads around doing something together. They were all precious about their departments. They all thought that they should just have the direct say on whether their staff should have I think it was 4 weeks’ annual leave then. They did not actually want to be—Hon Trevor Mallard: Some of them had 4 weeks and a day for this reason or that and they’re all bloody different.DARIEN FENTON: Oh OK. Yes they were all bloody different as Trevor Mallard just said. All the leave provisions were different. But it was such an enormous job for a very sensible proposition. I would have thought that that would be something that chief executives in the State sector would embrace actually—that they would actually embrace that. I am not convinced that the State Sector and Public Finance Reform Bill will actually change that culture. If anything I think it has gotten worse.But I should say that I am pleased that we have made progress on this bill and we have got to a point where we can support it. I am pleased that part of the hard work done by the Labour members on the Finance and Expenditure Committee in negotiation with the National Government has ended with a conclusion where we can accept—I will say it is not perfect—the changes made particularly around redundancy entitlements and workforce policy statements where the State Services Commission cannot interfere in wage bargaining.I will say again as I said in one other speech about this though that I find it very confusing that on the one hand we can get the Government to the point where it acceptsthat redundancy and redundancy entitlements are fair for public servants. We on this side of course think that is very right. But it does not think it is fair for other workers who work outside of the State sector. It continues to oppose basic redundancy entitlements for all workers throughout New Zealand. It has done that through a bill that I brought to the House as a member’s bill which is now back in the House under the name of Sue Moroney. The Government will continue to oppose that so I get confused about the conflict that there seems to be in the Government’s mind. It can have one set of rules on the one hand for public sector workers but it is not good enough for other workers throughout the country.The same goes for collective bargaining actually because there is an acceptance in this bill that collective bargaining is a good way of reaching agreement across the State sector. But then on the other hand we have Simon Bridges’ bill to completely undermine collective bargaining for all workers including State sector workers as well. So I get very confused about the Government’s messages. I think that it is not only a silo mentality in the State Service but a silo mentality amongst Ministers where they do not seem to be able to bring their policies together. They have some alignment between them and it is a little bit like that with the Employment Relations Amendment Bill as well and the health and safety reforms that the Government is bringing through. Health and safety reforms are great but then on the other hand we have the same Minister bringing forward reforms that will completely undermine health and safety by reducing workers’ rights.Talking about silos too I also heard my colleagues talking about the Ministry of Business Innovation and Employment that mega-monster that creation of Steven Joyce which he has put together which is gradually being taken apart. I like my other colleagues never saw why the Department of Labour—a department that we have had dedicated to workforce policy issues and workplace relationships for more than 100 years; for more than 100 years we had a Department of Labour in New Zealand—has disappeared and been swallowed up into the Ministry of Business Innovation and Employment. It is even hard to know what to call it any more. I think the inspectors the miserable number of 35 labour inspectors that we have throughout New Zealand still call themselves labour inspectors. But there is no resemblance in the ministry to that wonderful—Hon Trevor Mallard: “Mobie” inspectors.DARIEN FENTON: They may well be “Mobie” inspectors I am not sure but all I do know is that there is only 35 of them and they are supposed to enforce labour rights for all workers.Hon Ruth Dyson: Isn’t there meant to be more than that?DARIEN FENTON: Well there are meant to be more health and safety inspectors and that is another matter because what is happening now is that the Ministry of Business Innovation and Employment and the Department of Labour part of that is being unwound as the Government is forced to set up a new agency for health and safety. It started this brave new world on 1 July Monday this week. There were supposed to be more than 150 health and safety inspectors in place in this Lifting Our Game programme that they have been going through—yet another restructuring—that has become known as “shifting the blame” by the health and safety inspectors. It has been very disgraceful—one of the worst restructurings and botch-ups that has ever been seen. The Minister in the chair the Minister of Revenue agrees with me. I can see him nodding. This restructuring that has gone on has been an absolute botch-up. What we have in place are 74 inspectors fewer than half of what we had 2 years ago.Here we are creating a Crown agency for health and safety and moving over the health and safety enforcement part or the direction part of the Ministry of BusinessInnovation and Employment or what used to be the Department of Labour. But the transition is awful—the transition is awful. It is scary as well because how on earth are we going to make sure that people are kept safe and healthy at work in the next 12 months while the new Crown agency is established? The Government is gutting the Department of Labour part of the ministry and it is getting smaller and smaller and I really have to wonder what its purpose is. I do wonder actually whether the real agenda of the Government is to not have anything like a Department of Labour not to have anything that is responsible for making sure that workers’ rights are enforced and making sure that employment legislation actually works.Of course what we find is that because the department is so short on resources now it cannot even tell us for example whether the legislation this Government has brought in around employment rights actually works. I asked a question the other day about the 4 weeks’ annual leave that can be cashed up and the other changes that were made in 2010. The department has done no research on that. How can a Government and a department in the State sector bring forward legislation argue it and push it through because the Government has the numbers and then do no follow-up to see whether it is working or whether there is a problem? It cannot even tell us whether there have been any complaints about it. This is shocking—this is shocking. Although I am pleased we have got to a point where we can support the bill because of changes that were made during the select committee process—as I said it is not perfect; there are still some issues here—I am not convinced that this is going to change first of all the Government’s attitude to making sure that people are provided with proper information and the proper policy and guidance but second of all the attitude of chief executives.As I started out by saying in my contribution chief executives in Trevor Mallard’s time openly resisted changes that we were trying to make around having common leave provisions. I also know that they openly resisted collective bargaining which was a policy of the Labour Government and part of our legislation. They openly resisted it and they refused—and still to this day refuse—to include wages in collective agreements. That fight has been going on for 10 years because chief executives came out of the 1990s had an ideology do not believe in collective bargaining and do not believe wages should be included in collective agreements and that battle is still going on 9 years later. What I can say is that if we are the Government next year that will change—that will change. It is not acceptable to have direction from a Government and have so much resistance because of the particular ideology of the State sector executives. As I said I do not believe this will change the attitude. I think it is good that we have got to a point where we can vote for it. I do think there are ongoing problems in the State sector.I am looking forward to seeing what develops with health and safety. I am looking forward to the Ministry of Business Innovation and Employment—the old Department of Labour—recommending there should be an inquiry into forestry safety after the forestry owners came out last night and said they supported one. There is some good advice that they could get and it could be given to the Minister of Labour. He should be acting on that today.The CHAIRPERSON (H V Ross Robertson): I call the Hon Nanaia Mahuta. Tēnā koe. Kei te pēhea koe?Hon NANAIA MAHUTA (Labour—Hauraki-Waikato):Ka nui te ora. Pēhea tērā ki a koe mō tēnei wāhanga o Te Wiki o Te Reo Māori?[Very well thanks. What do you think about that for this part of Māori Language Week? ]I just wanted to pick up where my colleague Darien Fenton left off. There are some issues with the State sector and if the intention of this legislation the State Sector andPublic Finance Reform Bill is to enable Government departments to work more collaboratively together by way of merging some of the aspects of their statements of intent to some higher-level priorities then that will be a positive thing. The Government must have mechanisms through the State sector to be able to drive its priorities. That is absolutely clear. But if the Government is unclear on the nature of its priorities we have got some big problems.When I think about I guess the litmus test from a perspective that I bring to the Chamber for Māori that would be how the Government would work in partnership with Māori to advance economic and social development. It is a very important space to be considering the nature of this legislation because what we know is that since the emergence of Treaty settlements and more definitely in the post-settlement landscape significant resources have been transferred to iwi who are then in a position to take on some quite critical partnerships with the Government and with third-sector parties to focus on regional growth strategies and outcomes to invest more in social development outcomes and to be innovative in a very different way. The interface between the State sector and iwi I believe is part of what could be a litmus test as to whether or not what we are trying to do here today will achieve some broader outcomes.As I said I have listened to the debate all the way through this particular bit of legislation and it got me considering a number of things. If the Government has a priority around Māori development Māori economic growth and social development why then did National reject the proposal of Te Ururoa Flavell in terms of making some stronger recommendations around the way in which the Treaty would be recognised within this legislation? Silence. So that then urges me to ask that if the intent of the Government—Hon David Cunliffe: It’s not question time.Hon NANAIA MAHUTA: Silence except from the backbenchers who will not take a call on the bill. If the intent of the Government is to ensure that there are going to be productive collaborations with iwi and iwi who have growing economies—Tainui just this week announced it has got around about a $780 million asset base and Ngāi Tahu will be slightly over that amount. There are significant opportunities for the Government to partner with iwi to be able to better effect transformational change within specific regions so that we are looking at innovative solutions to some very age-old problems not because the Government is taking a parochial approach to these challenges but because it is expressing itself in ways that are actually more reflective of what is being urged through a regional community iwi type of perspective. On that basis alone I would have thought that the Government would consider quite seriously what the positive implications of Te Ururoa Flavell’s amendment to the legislation could provide for.The next point I want to raise is in relation to the task force that the National Government set up and that is the Crown Māori Economic Development Panel that was established looking at priorities between 2012 and 2017. It outlines six particular goals: in the area of education lifting educational participation; lifting the skilled workforce and certainly the skill sets amongst Māori; improving the financial literary and savings aspects amongst Māori especially at the grassroots; invoking more collaborative relationships with iwi and Māori; developing natural resources and having an ongoing dialogue about how that could coexist with strong kaitiaki principles amongst iwi; and having a concept of where the “Māori Inc.” strategy sits within the broader Government growth strategy. All of those have been identified by the National Government as key priorities to lift Māori economic growth and to support it but the way in which this legislation seeks to try to achieve that is unclear.It is unclear because obviously this provides structural change for inter-agency collaboration but it is unclear also because the Government on the one hand will have a certain conversation with iwi and Māori around the necessity to ensure a collaborative relationship for growth but on the other hand when it has the instruments or mechanisms to try to achieve that through legislation like this it does not make some of the hardest yet most important calls so that we can get to a really good point where actually the Government is saying that we must work differently together just as we need to get out of that silo way of thinking. That whole bringing the whole of Government approach together engaging in critical partnerships and in this instance with iwi and certainly with Māori—that whole aspect of the nature of relationships going forward for the State sector is not contemplated within the context of the changes and the amendments that were rejected.I am slightly sad by that silence over there in the corner from people who initially criticised my comments. I would say that going forward the real litmus test for Māori on the effectiveness of the changes that have been achieved and promoted today will come back to some very critical points of convergence: where there is a common interest to have a growth strategy that is more aligned and where there is a common interest to have a social development strategy that lessens the level of inequality and poverty in our communities. That is a point of convergence between the Crown the Government and iwi where the necessity to improve the skills of our people is not just a Government objective; actually it is a nationwide objective where iwi can play a critical role to help achieve that outcome.At the end of the day we have heard colleagues certainly on the Labour side of the Chamber say that the new normal for the State sector is a stronger reporting framework around outcomes. I would have to absolutely endorse that. If we take an outcomes perspective in the way in which the Government asserts its leadership on fundamental priorities of economic growth and development and social advancement then the extension of changes to the State Sector Act could go a little bit further taking into account the role—the critical and positive role—that iwi and Māori can play in this space.I had said that I wanted to comment very briefly—I have taken two part-calls on this. I want to say that although this is a start this is by no means a finish. This is an opportunity to have in the top of our minds the question of what some of the litmus tests are to ensure that the State sector is operating in a way that will I think change the nature of the way the Government interfaces with iwi but also with community. Kia ora koutou.Hon MARYAN STREET (Labour):I rise to take a call on clauses 1 and 2. It is worth restating the significance of this legislation the State Sector and Public Finance Reform Bill as I have mentioned in previous contributions but the thing that is becoming increasingly apparent as the speeches unfold is a point I referred to earlier. This is only the beginning of something that could be a substantial rethink of the way we actually administer the Government in this country and administer those parts of Government activity that receive Government appropriation and therefore taxpayers’ money.This bill will of course become three bills—the State Sector Amendment Bill the Public Finance Amendment Bill (No 2) and the Crown Entities Amendment Bill. In each of those respects it takes us further along. It takes us further towards an integrated system of administration. We have administered Government for the last umpteen decades in this country according to siloed portfolios and people have made a lot of the fact that this is a course of action that has probably run its time. I think that this bill presents a novel opportunity but it is still just a small step in the direction of alternativeways of running the Government that could in fact deliver more integrated services to New Zealand citizens.As far as the State sector amendment part of this legislation is concerned I just want to reiterate one of the old principles. I was put in mind of this by the Hon Trevor Mallard’s discourse on the indivisibility of Government. This is that in my view the Public Service the State sector not only delivers the programme of the democratically elected Parliament of the day but it also acts as a buffer between executive power and the citizenry. So it is there and it has several things that it is charged to do. Of course it must implement the Government’s programme because one would assume that the Government has been elected to implement the programme. That is of course less decisive under MMP than it was under first past the post.Often we hear the Government taking liberties with that notion of having been elected with an overwhelming mandate. Certainly if a party goes to the polls saying it is going to sell State-owned assets and it gets 40-something percent of the party vote—even if it is 44 percent of the party vote—that is still not a majority in favour of that mandate. One would assume that if it wanted to really be honest about getting a mandate for a divisive policy such as the selling of State assets it would try to go for a 50 percent or greater portion of the vote in order to be able honestly to say that it had a majority mandate for that policy.But the point behind this is that the State Service the Public Service has operated and accumulated knowledge and wisdom over time. Our Public Service is held in extremely high regard by all of those agencies that measure such things. The integrity of our Public Service and its independence are critically important to our ability to score highly on the lack of corruption index and on the transparency index which Governments are measured by around the world. It is in large measure that our reputation and our scoring highly on Transparency International’s various indices including the lack of corruption one have us coming at first or first-equal position in successive years.I trust that this piece of legislation will actually enhance the operation of the Government’s departments and ministries so that integrated services which are increasingly being seen as necessary can be delivered for the effective provision of those services to New Zealand citizens. But I do not want to leave that point just yet about being a buffer between executive power and the rights of the citizens. I think the State Service the Public Service has sat there for a long time as a buffer between overwhelming and dictatorial executive power. There are things that the Government cannot do because of the rights and the structures that are in place in our democratic system and that is how it should be.So this is important in that it changes the workings of the apparatus of government. Whether it is a Crown entity or whether it is reporting mechanisms—as in the Public Finance Act amendment part of this legislation or as I say Crown entities in the Crown Entities Act amendment part of this legislation—the principle is the same. If we can begin to integrate appropriations operations and accountabilities of government through these mechanisms then that is to be applauded. I use again the example I used late last night of the appropriation for Whānau Ora. Being a health initiative one would have thought that it could have come before the Health Committee for scrutiny. One could have thought that the Minister of Health would be able to say to the Health Committee that this is how the appropriation around Whānau Ora has been expended and these are the accountability mechanisms and the performance indicators around that appropriation. But no because it is not something the Minister of Health was very fond of it was sent out to the Minister of Māori Affairs and to Te Puni Kōkiri when really the people who had a serious interest in scrutinising it were not only the members of theMāori Affairs Committee but the members of the Health Committee as well. So if there can be better ways of ensuring that appropriations are both reported on and accounted for and made more transparent by the provisions of what will become the State Sector Amendment Bill and the Public Finance Amendment Bill (No 2) then let us proceed with that.But let us not imagine that we are there yet. What we do need is a new way of looking at how to deliver integrated services. This is particularly apparent in health but also it is really apparent in the social development portfolio. It is very apparent there. It became apparent to us when we were delivering the Strengthening Families initiative that in fact numbers of organisations needed to be involved and engaged with the welfare of a particular family and a particular child. So not only did we need to have police justice corrections education and health organisations involved but we needed to ensure that they were singing off the same page and that they were able to deliver the services that that family needed at that time. So I am hopeful that this is the beginning of something new.As far as the Crown Entities Act part of the bill is concerned the more of those entities that talk to each other and that operate in conjunction with each other the better. This is simply a subset of that working across ministries departments and other parts of Government. I welcome this bill and I look forward to what it may bring next.Hon TREVOR MALLARD (Labour—Hutt South):I want to thank you Mr Chairperson for giving me another call even if it is slightly before when I thought I was going to have it. I would like to focus in this call back where I completed my previous call and that is on the responsibilities of the State Services Commissioner with regard to the development of senior leadership in the Public Service. I want to reiterate the comment that in my opinion quality leadership in the Public Service is important.In the end despite the interjections from some of my colleagues we are never going to compete for chief executives on the basis of the money that they get. I do not have much doubt that the particular individuals in the private sector could earn more than they do in the public sector and repeated Hays surveys have shown that to be the case. In fact there is a pretty clear hierarchy of incomes in senior positions which goes first private sector; then after that generally State sector organisations other than the Public Service; then the Public Service; then local authority politicians; and then central government.Andrew Little: Community organisations.Hon TREVOR MALLARD: Well community organisations like Parliament as the member said. But there is a hierarchy that works in that way vis-à-vis the Hays surveys. Therefore when the State Services Commissioner is fulfilling his tasks under this legislation the State Sector and Public Finance Reform Bill money is not going to be the main thing that is going to get people across the line into senior Public Service positions.It is worth looking at those two words “public service” because there is a major element of public service involved in this. Although it is my opinion that having loyalty to a particular agency for which you are working at a specific time is important what is more important is that the individuals within the Public Service are in fact loyal to the Public Service overall and to the common good of the Public Service rather than to the particular agency that they are working for at that time.Although some things probably go beyond some of the privacy things that we find acceptable today back in the not too distant past—certainly within my memory—they had a thing called a stud book whereby you could look up people who were employees in the Public Service and you could see when they became public servants. You could see their career history and their particular level of appointment and what their currentsalary was. Apparently we have moved on from that level of transparency. I am not sure why because I think—Andrew Little: They’ve got Novopay now. You can do it on your own.Hon TREVOR MALLARD: Well the problem with Novopay of course is that people do have the ability to adjust their salaries. Unfortunately the ability to deliver is not particularly good.The point I am attempting to make is that we have to be offering to the people whom we expect to be leaders in the Public Service something that is challenging where they feel that they are doing some things that are extra and that involve basically making New Zealand and making the world a better place. I hate to do it but if I move over slightly to my left and look across the Chamber I can see—Hon David Cunliffe: Move to the left?Hon TREVOR MALLARD: There is not much room on my left politically.Hon David Cunliffe: There’s me. There’s me.Hon TREVOR MALLARD: The member is certainly not on my left politically that is for sure. We just need to see the policies he implemented when he was in Government. We will just leave that on one side now. Interjections like that are not helpful Mr Cunliffe. I am actually looking at John Hayes at the moment. I think he is a very good example of someone who was a relatively senior public servant and who in his area of work and especially in the western Pacific made a real difference.John Hayes: And the Middle East.Hon TREVOR MALLARD: Well I do not know the member’s details. That might have been before my time. I think he managed to get some peace in the western Pacific. I do not know whether he totally succeeded in the Middle East though I understand that his close friend Mr McCully is about to bring peace to the Middle East. I just want to say one thing. I am not going to hold my breath. I am not going to hold my breath for that.Andrew Little: Let him have a go. Let him go over and have a go.Hon TREVOR MALLARD: In fact I think he is there. Well I do not know. He is either there or he is going or he has come back.The point I am making—and I am almost inviting John Hayes to take a call—is to say to him that the difference that he made as a public servant in the world was more important than some marginal cash that there was some degree of job satisfaction that was involved. I can see that he is nodding and it is not through sleep. That is the case for many people who are true public servants. There are a lot of them who could earn significantly more money in a private sector situation.One of the unfortunate things that is happening under the policies of this Government is that as these massive mergers changes and reconfigurations occur people are effectively invited to apply for redundancy—I think they call it “rightsize” now. Back in the day it used to be called firing people. As these ministries are being downsized far too often there is a general invitation to people to take redundancy. Unfortunately often the people who take redundancy are those people who have the skills and talents that are vital to the organisation. They take redundancy and generally it takes about 2 weeks sometimes 6 weeks for the organisation to work out that it has a gap that it is required to fill and what does it do? It contracts the person back in often for 3 days a week often for more than it was paying them before anyway and they have got a redundancy payment as well.Hon Shane Jones: They’re mates of the Government.Hon TREVOR MALLARD: Well some of them are mates of the Government and some of them are just people who are sick of being treated badly by Ministers and like to have the option of providing the advice which generally goes through senior peoplewithout the indignity of having to attend on Ministers’ offices which I understand in a number of cases is something that is dreaded by public servants. Again I make no reflection on the Minister of Revenue who is currently in the chair.You just have to wander up Lambton Quay often enough and have a number of friends—I have friends whom I have known for 35 40 or 55 years in some cases—and you can just sense this from their body language. They are all proper public servants but you can sense from their body language as they come out of the Beehive when the meetings that they have had have been proper and courteous and professional and when they have been in a meeting with Tony Ryall or some of the other people who are not good Ministers. To be fair to the Minister in the chair the Minister of Revenue I make no reflection on him yet. The only comments that I have had about that Minister are about a total lack of understanding and people are just beginning to understand the issue and questions about where he got the advice—was it joined-up advice to cut puppies up?The CHAIRPERSON (Lindsay Tisch): Order!Hon TREVOR MALLARD: I ask the Minister in the chair: has he been applying the rules that sit within this legislation to get the advice that would sacrifice dogs for drug dealers? That is a relatively simple question. We want to stop drugs but where do Ministers these days get such silly advice—Hon DAVID CUNLIFFE (Labour—New Lynn):Thank you very much for the opportunity to contribute to this clause 1 debate. Thank you to the member to my right Mr Mallard who has just resumed his seat. His was a very useful summary of the issues. I join him in inviting the Minister of Revenue to explain to the Committee his use of these rules in reaching his extraordinary decision about puppy poisoning—but anyway.The clause 1 debate provides an opportunity for us to sum up the arguments that have been deployed through the Committee’s consideration of the State Sector and Public Finance Reform Bill. I would like to take this opportunity to thank our colleagues who really debated this bill with I think considerable depth over the last 24 hours. It is instructive to note that the Labour benches are relatively full and the Government’s benches are relatively empty on a bill that is supposedly a Government bill but that has actually I think benefited quite significantly from the efforts of the Labour team to redraft it.I want to recognise the excellent input of officials who have served the Finance and Expenditure Committee very well and have facilitated significant—significant—amendments to the bill. I thank the Minister of State Services Jonathan Coleman and the Minister of Revenue for his work when he was formerly in his role as the chair of the Finance and Expenditure Committee which undertook some significant changes.I would just reiterate that when the bill was introduced Labour opposed it. It is not very often that an Opposition will start out opposing a bill and then change its mind and end up supporting it. Quite often an Opposition will reserve its position during the first reading of a bill let it go to a select committee hear the submissions and then form a final view. Occasionally it will support a bill to go to a select committee to allow the public to have its say and then end up opposing it. But very rarely does it oppose and then support. That is what is happening today and that is because some very significant amendments have been made that take the rough edges off the bill and allow it to better achieve the purposes which we agree with.I would like to quickly touch on some of those significant amendments because they are also sources of ongoing concern. I do want to emphasise that our team although we are supporting the bill is going to be watching its implementation very carefully to ensure that the issues that were the cause of heavy amendment in the select committeeprocess actually work out the way that they are supposed to. The first of those was of course the redundancy provisions in the State Sector Act changes. Tough negotiations resulted in a better bill with employees’ rights now better protected. The bill as introduced did present a considerable danger to redundancy provisions. The key words here are that in order for a State servant not to qualify for their full redundancy package on a situation of transfer or job change they would have to be offered a package that was “no less favourable”. It is not “no less favourable overall” and not “sort of close to the current package” but “no less favourable”. They should not be worse off than they were before the change. That is a core principle of our support and we will be watching very closely to see how that is interpreted.The second issue was the use of Government Workforce Policy Statements originally orders. In the original draft of the bill those orders could well have been construed as conferring legal weight to a Government’s central direction to its various agencies and to chief executives to bind the hands of those chief executives in wage and salary negotiations and terms and conditions negotiations. The select committee has turned that on its head. It has explicitly ruled out the use of Government Workforce Policy Statements—as they are now called—to do anything that would affect wages and terms and conditions and it has explicitly written in a provision that will enshrine all of the existing bargaining rights that currently apply to State servants and Crown entity servants. We have taken the presumption that was in the draft and turned it on its head. The bill now specifically protects and enshrines those issues. But like the Public Service Association and the Council of Trade Unions we retain a degree of reservation about how that will be implemented in practice and we will be watching very carefully.There was also significant discussion and amendment at the select committee in respect of the ability of chief executives to delegate functions or powers. We join with the Government in wishing to see a more flexible responsive and networked public sector. Notwithstanding that and while recognising the importance of being able to delegate functions and occasionally powers to hybrid agencies subsidiary agencies and possibly non-governmental entities it is very important that that chain of delegation is rigorous so that the accountability back to Parliament and to the taxpayer to the citizen is unbroken. For that reason the select committee supported amendments to the bill that tightened the conditions and placed restrictions on when and how such delegations could happen.Labour supported the committee’s amendments to increase the accountability of the delegations including an amendment that the delegation must be in writing—that sounds obvious enough but it was not there at the start—and that the functions or powers delegated to a chief executive by a Minister or the State Services Commissioner may not be delegated further without their prior written approval. That is like a tenant not being able to sublet a flat without the prior approval of the landlord. The sub-delegation that we are seeking to make sure is rigorous is the powers of the Crown which are legitimate only because they go through the electoral process—Parliament is accountable to the people. Parliament vests that authority in Ministers of the Crown and Ministers in turn vest it in departments. The State Sector and Public Finance Reform Bill allows departments’ chief executives to vest some of those functions and powers in subsidiary entities or agencies. So we are just being very careful with that. It is a bit of an innovation but we think it could work provided the powers are rigorously mandated.A fourth area of ongoing vigilance will be in the area of multi-category appropriations. We have had quite extensive debate on this through the Committee stage of the bill. I think there is general agreement in the Committee on the idea although itis to be fair experimental that we would allow multi-category appropriations—that is Budget lines that are shared between different departments or entities. So it might be the Ministry of Fisheries which is now a part of the Ministry for Primary Industries—it might be the Ministry for Primary Industries and the Ministry of Business Innovation and Employment sharing with Callaghan Innovation a new research budget. We want those agencies to work together. We are allowing them to share a common pot of money but several things follow. The first is it must in all cases be possible for the public through Parliament to see where the money came from and where it went. That includes being able to trace back from Budget 2014 to Budget 2013 and Budget 2012 so we can see the time line. The amendments require what we call strict traceability of funds including how they got into and out of the multi-category appropriations right down to the nitty-gritty which in our language of the bill is called sub-output classes. What we are trying to enshrine here is that the accountability to Parliament through the Budget cycle is no less than it was even though we are allowing for a new hybrid funding instrument called a multi-category appropriation.There have been a number of Supplementary Order Papers brought to the Committee and we have received explicit assurances from officials and the Government that there are no new policy issues embedded for example in Supplementary Order Paper 262 which is a multi-page Supplementary Order Paper. It is quite a large one. We are advised that it is purely consequential partly because of date changes and technical in nature. We are of course willing to take our highly qualified advisers at their word but we are acting in reliance on that advice in conferring our support for the bill and we will be aware of the possibility that there could be subsequent issues that arise in respect of those Supplementary Order Papers. We will give them the benefit of the doubt.We would note also that the Green Party has brought Supplementary Order Paper 265 to the Committee in support of further enshrinement of State sector employees’ rights. We supported that Supplementary Order Paper even though it was not passed by the Committee. The Government voted it down and we think that was a shame although the Green Party might have brought that amendment to the Finance and Expenditure Committee for earlier consideration. We might have been able to swing it as part of the earlier negotiations but we recognise the Green Party’s good intent in bringing it to the Committee at this stage.Clause 1 agreed to.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to clause 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes94New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independent: Dunne.Noes23Green Party 13; New Zealand First 7; Māori Party 2; Mana 1.Amendments agreed to.A party vote was called for on the questionThat clause 2 as amended be agreed to.Ayes95New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independents: Dunne Horan.Noes23Green Party 13; New Zealand First 7; Māori Party 2; Mana 1.Clause 2 as amended agreed to.The Committee divided the bill into the State Sector Amendment Bill the Public Finance Amendment Bill (No 2) and the Crown Entities Amendment Bill pursuant to Supplementary Order Paper 261.Bill to be reported with amendment presently.Plumbers Gasfitters and Drainlayers Amendment BillIn CommitteePart 1 Extension of purposes for which Board may impose levyRAYMOND HUO (Labour):Tēnā koe Mr Chair and good afternoon to all parliamentary colleagues. I am enjoying this urgency session as I always do and I am not quite sure whether—Hon Trevor Mallard: It is still the 2nd—it still says “Tuesday” on the wall.RAYMOND HUO: Of course it is Tuesday. Of course it is Tuesday because it is an urgency session. I am not quite sure whether we will carry on into Friday or Saturday but if we do it will be more exciting. Just imagine—a group of parliamentarians engaged in a kind of a fierce debate but a quality and a fair debate on the Plumbers Gasfitters and Drainlayers Amendment Bill on a Saturday for the purpose of protecting the public safety and all other good things associated with this particular bill.To the surprise of the Minister for Building and Construction the Hon Maurice Williamson I did read his second reading speech. I was not in the House when the bill received its second reading because I was overseas as part of the Prime Minister’s business delegation. Three or four people from the sector—probably three because one of the emails was sent twice—believed or decided that I should read the Minister’s speech so they sent the speech notes to me by email and I did read it. Juggling between functions events and meetings I did read the Minister’s speech and I enjoyed it. There is merit in his speech and on that basis I should acknowledge that the issues or problems around the Plumbers Gasfitters and Drainlayers Board and the entire sector are historical. So the issues or problems are not necessarily associated with one particular board or one particular Minister and I believe that is a fair comment. Fairness or a lack of fairness is one of the reasons why this sector or a significant number of tradespeople from the sector have taken the case so far and why many of the tradespeople in the sector have chosen to oppose the bill.I should congratulate theCampbell Live team on its television report “The politics of plumbing” which picked up some interesting points that I had not picked up. The confession from me is that I did not pick up the show and I did not watch it until yesterday afternoon—until a group of people again from the sector decided that I should watch the show. This was because my mind was directed to some other issues and some other bills so I had not followed the developments of this particular bill that closely.The show addressed some interesting but important issues. First of all who are the cowboys? One of the purposes of this bill is to ensure that the Plumbers Gasfitters andDrainlayers Board is properly funded to carry out its statutory duty in order to protect public safety and health. In order to carry out its statutory duty including the board’s prosecution function it must be funded in some way. Nobody would argue against that. Nobody would disagree with that. But who are the cowboys? Yes there are a number of untrained unregistered and unlicensed tradespeople in the sector but if we look a little bit deeper into this particular issue concerning this particular bill the matter is not that clear-cut regarding the so-called cowboys.In no way would I defend cowboys if they are genuine cowboys but as presented in the television show among the tradespeople in the sector a number of good competent and skilled tradespeople like Mr Allan Day who have chosen to boycott what they call unlawful levies and fees in whatever form—or to borrow the Ombudsman’s words it is a new form of tax. They have chosen to boycott it because what the board has been doing was against the law. This bill is intended to validate the board’s unlawful action—Hon Ruth Dyson: Retrospectively.RAYMOND HUO: —exactly as the Hon Ruth Dyson says—and to make retrospectively what was unlawful lawful. If “retrospective” “ultra vires” or “validation” are too much like legal jargon simply watch theCampbell Live show “The politics of plumbing”.Where there is a breach of law by the tradespeople there is a prosecution from the board and by the board and the entire sector is being asked to fund the prosecution. But where there is a breach of law by the board we have now a Minister for Building and Construction trying to ram through this legislation in an urgency session to validate retrospectively what was unlawful and make it lawful. That is exactly why we have been asked to be here today to debate a bill that is being rushed through in an urgency session.Secondly the information made available to the Government Administration Committee was shocking. In 2001 the cost to relicense for two trades—I am not quite sure which two trades; they could be gasfitting drainlaying or plumbing—was around $50 and $75 for three licences. But today a 5-year licence configured around the board’s regime costs $10000.Andrew Little: What?RAYMOND HUO: It is $10000 according to the information made available to the select committee. Many of the tradespeople who are employed or self-employed have no choice—Andrew Little: No wonder we’re running out of tradespeople.RAYMOND HUO: —exactly as Mr Little says—but to pass on the cost to consumers. Many cannot afford it and some have chosen to boycott. Therefore they become unregistered and unlicensed and therefore they are nicknamed cowboys. The same 5-year licence in Australia costs only $330. It is no wonder that we are losing quality tradespeople to Australia and our housing prices are getting higher and higher. I welcome and urge the Minister to rebut the claim. But what is more scary and what should cause more concern is that if we let the sector carry on under the leadership of the Minister and the leadership of the board sooner or later to get a plumber gasfitter or drainlayer to your doorstep will be as expensive as it is to instruct a lawyer.I feel so sorry for the Minister for Building and Construction the Hon Maurice Williamson who is one of the most experienced and longest-serving MPs in New Zealand. But watching him onCampbell Live  where we saw a picture of him framed by a toilet seat too I felt saddened. I felt saddened when I watched the television show yesterday and I still feel saddened. Although politics is not designed for the faint-hearted or the thin-skinned this is not a good look for his National-led Government supported by ACT and Mr Peter Dunne. This reflects to a large extent the level offrustration of the sector. Again I feel saddened because it is not a good look for the Minister it is not a good look for the Government and it is not a good look for all politicians. Again this reflects to a large extent the level of frustration of the sector and this is one of the many reasons why Labour finds it hard to support this bill.In my subsequent contributions I would like to touch upon some details in this bill. Thank you.HOLLY WALKER (Green):Well Mr Chair this is your favourite bill no doubt and mine and it is one of the most interesting and unusual bills I have had to deal with in my short time in this House. The Green Party opposes the Plumbers Gasfitters and Drainlayers Amendment Bill and we will continue to do so in this Committee stage for a number of reasons. Probably actually chief amongst those is the incredibly poor process that has been followed with regard to this bill.I thought I would begin my contribution by outlining briefly just what that process has been. The bill was introduced in March as we know with an incredibly short select committee consideration period of initially just 1 week. It was later extended to 2 weeks but it was still an incredibly short period of time. That was due to the apparently urgent need to pass this legislation—Hon Ruth Dyson: Sorry when was that?HOLLY WALKER: Before 1 April apparently. Very urgent—before 1 April we needed to pass this legislation. I know that the dates on the walls here are slightly behind today but they still say 2 July and 1 April was quite a long time ago. Here we are in the House with the bill at only its Committee stage yet the Government Administration Committee has done quite heroic efforts I think to consider this bill in an incredibly short period of time due to its apparent urgency.Due to that constrained period of time many submitters were unable to be heard. Many had to have their submissions recorded as correspondence rather than as submissions because they were received after the closing date. They had very little notification of the time available in which to make those submissions. Given that we know that what in part has given rise to the need for this bill is a large amount of dissatisfaction in the plumbing gasfitting and drainlaying sector the incredibly short time that was applied to the select committee process and the fact that many individual stakeholders who felt that they had a very strong interest in this were not able to make submissions and had very little notice of the bill coming up in the House will have only added to that high level of dissatisfaction in the sector.As we have said to add insult to that injury despite the rush and the select committee reporting back in time that deadline of 1 April came and went with no change and the bill has been languishing for months since its second reading. It is now July and we are finally having the Committee stage. Despite the fact that we are sitting under urgency clearly no urgency has actually been accorded to this bill in terms of the priority given to it by the Government after that initial panic of its introduction and short process. Clearly it could have had months longer at the select committee it could have had a proper period of scrutiny it could have had a proper period of submissions and we could be back here right now in a much different position.I want to acknowledge at this point the pressure that such shortened select committee periods place not only on submitters and members of the public but on the select committee staff on the Parliamentary Counsel Office drafters and on the officials who advise the committee. It is not actually really the members of the committee who suffer the most—although we often go to considerable efforts to make sure we have read all of the submissions in a short period of time—but the staff and the advisers who quietly get on with it and bust a gut behind the scenes to meet these urgent deadlines. In this case it appears that it was all completely unnecessary because here we are monthslater with absolutely no priority having been given to the bill since then. So those are the procedural reasons for our opposition to this bill.In terms of the substantive reasons for our opposition they are very clear. It comes down really to the point that retrospective legislation should be extremely rare in this House and that when it occurs it should be subject to a very high bar. It is not clear at all in this case that that bar has been met.As we know this bill retrospectively validates fees and levies that have been collected in what turns out to have been an unlawful manner since 2006 by the Plumbers Gasfitters and Drainlayers Board. This unlawful practice has been the subject of complaints to every available adjudicator. The matter has been to the Regulations Review Committee it has been to the Ombudsman it has been to the Auditor-General and it has been back to the Regulations Review Committee and in every case those complaints were upheld. They were rightful complaints they had a right to take them and the adjudicators in every case upheld those complaints. So there is a real issue of natural justice when after someone’s complaint has been upheld by every channel available Parliament simply legislates to make it go away. It said: “Ah there is a problem there. Congratulations on taking this complaint. Thank you for bringing it to our attention. We are now going to retrospectively validate this unlawful conduct so that your complaint will go away.” That is not acceptable. It is unfair and it should not be happening in this case.Even if the Plumbers Gasfitters and Drainlayers Board believed—and I believe the board to be frank and honest when it says it believed it was acting lawfully. But believing one is acting lawfully is not the same as acting lawfully. Much in the same way as we are seeing at the moment with the Government Communications Security Bureau believing one is acting lawfully does not make it so. It is offensive to the rule of law for Parliament to come in and say effectively: “Well we have to make the law catch up with the practice.” It should not be done lightly and we think it is being done lightly in this case.We do agree—and this is where we do agree with parts of the bill—that there is a need for legislation to validate the collection of the offences fee by the Plumbers Gasfitters and Drainlayers Board in the future because we agree that the board should be able to prosecute non-licensed practitioners when complaints about them are received. Indeed we think it is in the interests of the whole industry to ensure that that can happen—to ensure that the so-called cowboys are regulated. It has negative consequences for all plumbers and gasfitters when those unregistered unlicensed practitioners bring their industry into disrepute and it is a logical natural thing that the board should be able to prosecute those complaints. So we could absolutely support legislation of this nature if it applied only to how the board collects levies and how it prosecutes complaints in the future. But we cannot support its retrospective application.The reason we have been given as to why it is so important to apply this law retrospectively is that if the board was required to pay back the unlawfully collected levies and fees it might be left bankrupt. We can agree that it is not a desirable outcome obviously for that to happen. But our question is why should the Government not provide the board with some financial support to ensure that this does not happen? After all it was poorly drafted legislation in 2006 that led to this problem in the first place. It created the situation where the board thought it was acting lawfully but it turned out that it was not. Surely there is some responsibility on the part of the Government of the Crown to help put that right including making a financial contribution to ensure that if the board was required to pay back those fees and levies there would be some financial support from the Government to enable it to do that without falling over financially.The best estimate we were able to obtain at the select committee was that in order to do that we might be talking in the vicinity of $1 million. I know that $1 million is a lot of money but in the scheme of the Government coffers it is hardly going to break the bank. It seems like a perfectly reasonable thing to do in this situation given it was a Government error in the first place that the Crown should help with some of the financial liability if indeed those fees and levies need to be paid back.Those are the substantive reasons why the Green Party continues to oppose this bill. We have both procedural and substantive reasons for doing so.The Committee is in quite an interesting position because it has a select committee report where the select committee said that it was “unable to agree” on whether the bill should pass. That I think is indicative of what a mess this whole process around this bill has been.There was one substantive amendment that the committee could agree on. That was an amendment to clause 5 to insert new subsection 171B(2) to make it clear that although the board could continue to collect the offences fee in future it could not change the fee and that in order to change the fee it would need to replace the fee with an appropriate disciplinary and prosecution levy imposed under section 143. This change I think speaks to the need to get the process right for the future collection of fees and levies and that is why the Green Party can support that one technical amendment to the bill.But we cannot support the bill as a whole because of its retrospective nature. We will continue to oppose it in this Committee stage and in the third reading because of both the process and the substance of this rather interesting bill.Tēnā koe.Hon RUTH DYSON (Labour—Port Hills):I am really pleased to be able to contribute in the Committee stage of the Plumbers Gasfitters and Drainlayers Amendment Bill. Can I begin by commending the members of the Government Administration Committee two of whom have already spoken and I certainly hope that the National members of the select committee are able to contribute later in this debate as well. We worked really hard on this bill because we all agreed there was a problem. We heard from the Minister for Building and Construction when the bill was referred to us that this was a matter of some urgency. When the Hon Maurice Williamson introduced the bill on 14 March he actually said that the bill would be reported back to the House by 22 March just 1 week later. He expected the select committee to call for submissions to ask for and receive advice to consider the submissions to then get the officials’ comments on the submissions and to deliberate at one meeting. We agreed to try to do that even though we thought it was pretty impossible to ask for advice and receive it on the same day and call for submissions and receive them within a week let alone deliberate carefully on what was clearly a very contentious issue.We then asked the Minister for another week which made it 2 weeks in total and we reported the bill back to the House. We were unable to reach agreement. Holly Walker has very eloquently outlined our deliberation including the amendment that we made to Part 2. We got it back to the House in good faith believing that the matter was urgent and that it had to be all done and dusted by 1 April. I resent standing here on 4 July in the real world—2 July in Parliament’s terms—debating a bill that we had given such a high priority to at the select committee because the Minister said it was a matter of critical importance to have it back done and dusted in this House before 1 April. So here we are under urgency 3 months after the self-imposed deadline debating this matter.Debate interrupted.Sitting suspended from 1 p.m. to 2 p.m.MotionsUnited Nations Security Council—New Zealand’s CandidatureH V ROSS ROBERTSON (Labour—Manukau East):I seek leave for a non-debatable notice of motion No. 14 in my name supporting New Zealand’s bid for a non-permanent seat on the UN Security Council.Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There appears to be none.H V ROSS ROBERTSON: I moveThat this House support New Zealand’s candidature for a non-permanent seat on the United Nations Security Council for the 2015-2016 term and note the important contribution made by New Zealand in its last term on the Council in 1993-1994; and express the determination that New Zealand will again be a distinctive independent principled voice on the Council and will bring to that Council the qualities for which it is known at the United Nations namely those of a small diverse country which listens to others and is a fair-minded and reliable partner in world affairs .Motion agreed to.Points of OrderBusiness Statement—Delivery During UrgencyHon TREVOR MALLARD (Labour—Hutt South):I raise a point of order Mr Speaker. I just wonder whether notwithstanding the fact that we are in urgency the Leader of the House might like to share with the House his plans for next week which is the normal practice.Questions to MinistersState-owned Energy Companies Sales—Benefits and Use of Proceeds1.DAVID BENNETT (National—Hamilton East)to theMinister of Finance: What are the advantages of using proceeds from selling minority shareholdings in energy companies to buy new public assets instead of borrowing that money from overseas lenders?Hon BILL ENGLISH (Minister of Finance):Very significant advantages. In the case of the share sales programme the Government is swapping one asset—that is a minority stake in an energy company which it can only hold and collect dividends—for another asset which is cash which it can use for all sorts of purposes. Over the entire programme we expect to free up between $5 billion and $7 billion of cash as a replacement for the asset that we are selling. This will be invested in schools hospitals irrigation schemes the rebuild of Christchurch and other infrastructure projects. The alternative is to borrow the money from overseas bankers rather than get it from New Zealand savers.David Bennett: How are proceeds from the share sales programme being allocated to reinvest in other priority public assets?Mr SPEAKER: Order! The level of interjection coming from this side of the House is excessive. Could it please be toned down.Hon BILL ENGLISH: The Government has set up the Future Investment Fund. The money going into that fund comes mainly from New Zealand savers who have had the opportunity and chosen to invest in large New Zealand companies. The Opposition despises them for this but we think it is good for the country. The Future InvestmentFund will show transparently where that money is going and it is going to other public assets.David Bennett: What investments in new public assets has the Government so far confirmed will be made from the Future Investment Fund using proceeds from the share offer programme?Hon BILL ENGLISH: As the Opposition has pointed out it is amazing just how many new public assets you can procure. Last year’s Budget allocated $33.8 million for modernising schools $250 million towards a KiwiRail Turnaround Plan $88 million for health sector capital and $76 million for the new Advanced Technology Institute. This year’s Budget allocated $426 million for the Christchurch and Burwood hospitals $50 million to speed up the School Network Upgrade Project $94 million for the 4th year of the KiwiRail Turnaround Plan $80 million for irrigation projects $700 million in contingencies for projects such as new schools in Christchurch Christchurch’s justice and emergency services precinct and supporting Canterbury’s tertiary institutions to recover from the earthquake. The Government also agreed that over the life of the fund $1 billion will be allocated to other health capital projects.Rt Hon Winston Peters: I raise a point of order Mr Speaker. Unusually I am seeking leave for an extension of time so the Minister can outline the other hundred projects the money is going on as well.Mr SPEAKER: Order! That is not a helpful point of order.Hon Clayton Cosgrove: Does he stand by his statement yesterday that the forecast $5 billion to $7 billion raised from asset sales will pay for “almost all of those promises” including Kiwibank irrigation schemes schools and hospitals the rebuilding of Christchurch KiwiRail paying down Government debt and building the City Rail Link which totals up to a grand total of $84 billion; if so does he agree that asset sales cash is the National Government’s version of printing money?Hon BILL ENGLISH: No I disagree with that and it just shows how little respect the Labour Party has for New Zealand’s savers. We did not print the money; they saved it from their hard-earned weekly wages and decided to invest in it. If the Labour Party cannot tell the difference between that and the Greens’ mad scheme to print money it will never be the Government.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. It is a simple point of order. Given the noise I just want it confirmed: is the Minister disagreeing with the statement he made yesterday?Mr SPEAKER: Order! If the member listened he would have heard that the Minister said he disagreed with that right at the start.Hon Annette King: Well you couldn’t hear.Mr SPEAKER: Well I could hear it on this occasion.David Bennett: How does New Zealand’s approach to investing in new public assets while limiting extra debt compare with approaches in other countries?Hon BILL ENGLISH: Although some regard this idea as extreme in fact it is very common around the world. The following OECD countries have Governments that partially own companies that are floated on the stock exchange: Austria Belgium Chile the Czech Republic Finland France Greece Japan Korea Norway Poland Slovenia Switzerland and the United Kingdom. Unfortunately the Labour Party models itself on Albania which does not have any of these sorts of companies.Dotcom Case—Prime Minister’s Statements2.GRANT ROBERTSON (Deputy Leader—Labour)to thePrime Minister: Does he stand by all his statements on the GCSB and Kim Dotcom?Hon BILL ENGLISH (Deputy Prime Minister)on behalf of thePrime Minister: Yes.Grant Robertson: Does he stand by his many statements that 19 January 2012 was the first time he had heard the name Kim Dotcom?Hon BILL ENGLISH: The Prime Minister does stand by his statements.Grant Robertson: I raise a point of order Mr Speaker. That was a specific question about a statement.Mr SPEAKER: And it was answered—the Prime Minister does stand by it.Grant Robertson: By that answer does he mean that it was simply the name Kim Dotcom that he had not heard but that he was aware of a person in New Zealand whom the FBI and other American authorities had an interest in pursuing over copyright-related issues?Hon BILL ENGLISH: I can only repeat that the Prime Minister stands by his statement. If the member wants to know what was in the Prime Minister’s mind he would need to ask the Prime Minister directly.Grant Robertson: Does he stand by his statement on 24 January 2012 in relation to the Coatesville Mansion in the Helensville electorate: “I was aware that there was a German resident living in the house.”?Hon BILL ENGLISH: The Prime Minister stands by his statements.Grant Robertson: Is he telling the House that having become aware that “a German resident” was living in the largest property in the Helensville electorate he was not told or did not seek out the name of said German resident?Hon BILL ENGLISH: Unlike the deputy leader of the Labour Party the Prime Minister focuses on the big issues. [Interruption ]Mr SPEAKER: Order!Grant Robertson: Can he confirm that none of the list of people thatCampbell Livedrew up who knew about Kim Dotcom before 19 January 2012 ever mentioned Mr Dotcom to him as Prime Minister with that list including John Banks Maurice Williamson Jonathan Coleman Simon Power his deputy chief of staff his electorate office staff the Solicitor-General the police the Immigration Service the 80 contractors who worked on Mr Dotcom’s property in his electorate and the hundreds of thousands of Aucklanders who witnessed the fireworks display paid for by Mr Dotcom? Can he confirm that none of those people mentioned him to the Prime Minister?Hon BILL ENGLISH: The Prime Minister stands by his statements and I would repeat what I said before. Unlike John Campbell or the deputy leader of the Labour Party the Prime Minister focuses on the big issues.Grant Robertson: In light of that answer does the Prime Minister agree with John Armstrong that if Mr Dotcom’s allegations stand up his resignation will be in order?Hon BILL ENGLISH: Certainly not.Grant Robertson: Does he believe that if a Prime Minister does not tell New Zealanders the truth about a matter of public interest then the Prime Minister should resign?Hon BILL ENGLISH: Certainly that is the reputation of the current Prime Minister. I would be hesitant for the Labour Party to apply standards that it may not have applied to the Prime Minister who led its party recently.Rt Hon Winston Peters: Does the Prime Minister still stand by his statements—numerous statements—that none of his ministerial colleagues talked to him about Kim Dotcom before the raid?Hon BILL ENGLISH: The Prime Minister stands by his statements.Benefits—Outstanding Arrest Warrants3.MARK MITCHELL (National—Rodney)to theMinister of Police: What announcements has she made to hold people with outstanding arrest warrants to account?Hon ANNE TOLLEY (Minister of Police):Yesterday the Minister for Social Development and I announced that beneficiaries with outstanding arrest warrants will have their benefits stopped if they fail to clear their warrant within 38 days. At any one time there are about 15000 people with outstanding warrants and 8000 of those are on a benefit. This Government believes that it is totally unacceptable for the taxpayer to continue to fund the activities of those avoiding the law and we are putting a stop to it. This initiative delivers a very clear message that people need to be responsible for their actions and comply with the law. As the police say no show no dough.Mark Mitchell: What benefits will this initiative deliver to the police?Hon ANNE TOLLEY: These changes will free up significant police time and resources. The risk of having their benefit cut provides a strong incentive for an individual to turn up to court when required resulting in fewer arrest warrants being issued by the courts. However if an individual fails to turn up there is a high chance that they will contact the Ministry of Social Development or the police when their benefit is stopped leading to quicker apprehensions. This means that police do not have to spend as much time running around looking for people who have failed to appear in court and they can spend more time out preventing and fighting crime.Ship GroundingRena —Removal of Wreck4.BRENDAN HORAN (Independent)to theMinister of Transport: Is he aware of reports that the owners of theRena may prepare an application for resource consent to leave the remaining part of the wreck of theRena on the Astrolabe Reef and if an application is lodged will the Crown oppose such an application?Hon GERRY BROWNLEE (Minister of Transport):Yes and if an application is made the Crown will look at the application before judging its merits. I made all of those positions clear in a press statement on 2 October 2012.Brendan Horan: On what occasions did the Minister or his officials consult with local iwi and/or the Department of Conservation regarding a confidential agreement between the Crown Maritime New Zealand and the owners of theRena to consider supporting the owner’s pending application to leave the rusting wreck of theRena on the Astrolabe Reef?Hon GERRY BROWNLEE: I am unaware of the circumstances that the member is referring to. What I do know is that the Crown maintains that the owners are legally required to remove the wreck and they of course—just as anybody is entitled to seek compensation from them for damage they might have incurred—are free to seek resource consent to leave the wreck there.Brendan Horan: I seek leave to table paragraphs 13.4 and 13.5 from the Crown response regarding Wai 2391 and 2393 disclosing the sordid agreement to leave the wreck of theRena on the Astrolabe Reef.Mr SPEAKER: Leave is sought to table that. Is there any objection? There appears to be none. It can be tabled.Document by leave laid on the Table of the House.Brendan Horan: How long has it been National Government policy that if one pays $10.4 million for a public interest fund—the cost of 10 houses in Parnell or St Heliers—one can pollute New Zealand seas and foreshore for years thereby saving polluters potentially hundreds of millions of dollars?Hon GERRY BROWNLEE: That is not Government policy. In fact the New Zealand Government like many other Governments is a signatory to international limitation arrangements around shipping. We are heavily reliant on shipping as an exporting nation. The member should really read all of the report so that he can ask questions that show he does actually know a little bit about what he is talking of.Rt Hon Winston Peters: Is he saying in principle that no entity be it a company or an individual should be allowed to abuse and misuse assets that do not belong to them and escape the consequences of such actions?Hon GERRY BROWNLEE: What I am saying is that I think the owners of theRena  given their obligations under New Zealand law have acted most responsibly.Te Ururoa Flavell: Āe rānei kua rongo ia i te kōrero a Buddy Mikaere mō te tū o te iwi i tērā takiwā te tikanga ia me nuku te Karauna i ngā waihotanga mai o tērā o ngā kaipuke; mēnā āe he aha ngā kōrero i waenganui i te Kāwanatanga me te iwi mō te take e kore ai ia e pīrangi ki te tuku ki te whakawātea i tērā wāhi o ngā parapara ka tukuna mai ai ka ngahoro mai ki tērā o ngā kāinga?[Has he indeed heard Buddy Mikaere’s statement about the stance taken by the tribe of that area where essentially they are demanding that the Crown remove the remaining refuse of that wreck; if so what negotiations have taken place between the Government and the tribe as to the reason why he will not allow the area to be cleared of the refuse that continues to slip away from the remaining part of that wreck upon the home area? ]Hon GERRY BROWNLEE: Can I say at the outset that notwithstanding the view that Mr Mikaere has expressed the relationship between the company and the iwi is one where there has been mutually a degree of trying to keep communications constructive. However the Crown maintains that the owner does remain legally required to remove the wreck as a consequence of the notice that was issued under the Maritime Transport Act. No arrangements that we have made with the owner or anyone else have compromised the ability of the iwi or anyone else to seek compensation for damage that they can legally prove to have occurred to them as a result of the wreck. There is of course also no restriction on the owners of the wreck seeking a resource consent through proper channels to leave the wreck in place.Te Ururoa Flavell: He moni kua tukuna ki ngā iwi nei kua pātai rānei ngā iwi mō ētahi moni hai āwhina i ā rātou hei whaiwhai haere i wā rātou mahi nui nei ki te whakapaipai ake i te takutai moana pēnei i ngā iwi e noho mai rā ki runga o Mōtītī; mēnā āe he aha tā te Kāwanatanga whakautu i taua pātai mō te moni utu nama?[Have these tribes been allocated any funding or have they requested any that will assist them to follow up key tasks they have identified that will clean up the foreshore like the ones living over there on Mōtītī; if so what is the Government’s response to that question about funding to pay expenses? ]Hon GERRY BROWNLEE: The owner has established a limitation fund through the High Court of some $11 million. This is available to meet claims for all private entities affected by theRena wreck provided they are able to prove that the damage they suffered or the costs they incurred related to the wreck.KiwiSaver—Disclosure Rules5.Dr JIAN YANG (National)to theMinister of Commerce: What progress is the Government making on its commitment to introduce new KiwiSaver periodic disclosure rules?Hon CRAIG FOSS (Minister of Commerce):New disclosure rules that will give New Zealanders better information to compare KiwiSaver funds came into effect on 1 July. The KiwiSaver disclosure regulations will benefit savers by requiring KiwiSaverschemes to regularly report on fund performance fees asset allocation and other matters in a simple and standardised form. These changes allow KiwiSaver members to directly and easily compare funds to make an informed investment choice. The new KiwiSaver disclosure rules are part of the Government’s Business Growth Agenda to promote confidence of investors and businesses in the regulatory settings that support New Zealand’s capital markets.Dr Jian Yang: What other requirements are there in the new disclosure rules?Hon CRAIG FOSS: Under the regulations KiwiSaver providers will have to publish quarterly and annual disclosure statements online. KiwiSaver providers will also need to publish the information in a consistent data set that can be easily assessed and viewed on websites such as the Sorted website. The first disclosure statements are due to be published in mid-October 2013.Mining Industry—Development and Employment6.CATHERINE DELAHUNTY (Green)to theMinister of Energy and Resources: Does the Government still think that increased mining should be a priority for creating jobs given the recent spate of mine closures and layoffs including the announcement this week that the Reefton Oceania Mine will be mothballed?Hon SIMON BRIDGES (Minister of Energy and Resources):Yes. We have seen clear evidence in New Zealand over the last year that companies have been able to raise money and that the local mining industry is expanding. To give the member a sense of that in 2012 total exploration expenditure was estimated at a record high for New Zealand of $50 million showing continuing confidence to invest in mining in New Zealand. It is probably right to say that internationally mining like so many other sectors is in a contractionary phase but New Zealand is bucking that trend and the Government does not want to be a slave to cycles. We think long term Ms Delahunty.Catherine Delahunty: So is the Government still pinning its economic hopes on the mining boom despite plunging prices for coal and gold and despite the hundreds of job losses in recent months?Hon SIMON BRIDGES: Well no. What is true is we have been raising the profile of the sector but it is only a part—some would say a small part—of the much wider Business Growth Agenda and the jobs agenda which include intensive farming aquaculture and the like. But I would make it very clear to the member who in her questions implies a dislike of coal that it is opportunities like what Bathurst Resources is wanting to do in the South Island that actually lead to the steel that makes the wind turbines that she pins her hopes on.Catherine Delahunty: Given that the gold price has plunged 25 percent this year has he read reports by mining experts that warn that the gold price could collapse further and that now is not the time to invest in goldmining and why is he gambling the country’s economic future by betting that these experts have it wrong?Hon SIMON BRIDGES: Yes I have read many reports on these things but we do not take a boom-and-bust approach to things Ms Delahunty. Actually as I said in my primary answer we take a long-term view. If the member wants to bet against the fact that people will be wanting consuming and using gold for many many many years to come I would say she is foolhardy.Catherine Delahunty: Does he agree with Buller mayor Pat McManus who said in response to the Reefton cutbacks that the district has to diversify its economy and does that not mean it should not be reliant on his boom-and-bust gold industry?Hon SIMON BRIDGES: Well I would like to see the comments in their proper context but the fact of the matter is that goldmining at Reefton has been contributing $45 million each year to that community for some time. Actually as we have seen inrecent regional GDP figures the West Coast is one of the strongest performers. Yes that is on the back of agriculture but it is certainly also on the back of mining. We have been doing it well for a very long time and I think it is right that this Government seeks to lift that profile.Catherine Delahunty: Given the fact that companies like OceanaGold have started mothballing their mining projects and that towns like Waihī after 25 years of goldmining are still struggling economically is he prepared to revise his strategy and support more sustainable economic development?Hon SIMON BRIDGES: Well the member is simply wrong. The fact of the matter is that if one looks at OceanaGold although it is right to say it is putting on hold the Reefton mine it has also got other opportunities in New Zealand that it is continuing with. This Government does not back any particular business. We actually take as I have said a long-term view and although one business may not be doing so well there are a number of others that are increasingly doing more and that are raising capital like Chatham Rock Phosphate like Trans-Tasman Resources and like many others I could list. But I come back to it. If she talks about sustainable growth I would say to the member there will be a place for mining. Take for example that coal that she loves to hate so much. It is necessary in all the renewable projects that she likes to think of.Catherine Delahunty: Is it really worth destroying unique landscapes like the Denniston Plateau for the sake of an industry that employs few New Zealanders is laying off workers and sends most of its profits offshore?Hon SIMON BRIDGES: Well the bankruptcy of that member’s position is that she wants to just get coal that is done much dirtier from other parts of the world and bring it back here in the form of the steel and so on that we need in this country in a modern economy. But the fact of the matter is that my colleague the Hon Dr Nick Smith has been working very hard and sensitively on the kind of issue she raises. And the premise in her—Hon Members: Sensitive?Hon SIMON BRIDGES: Well he is a sensitive new-age guy. But the premise of her question is just plain wrong.Catherine Delahunty: Equally sensitively rather than betting all its chips on the environmentally destructive bust-and-boom mining industry which creates few jobs will National instead take on more green policy and invest in information and communications technology green manufacturing and ecotourism which already employ more people than mining does?Hon SIMON BRIDGES: Well kia ora Ms Delahunty. The fact of the matter is that actually we have been investing more in the areas she talks about in information and communications technology and in tourism. Maybe she should go back and read the Budget.Catherine Delahunty: I seek leave to table a metals report from Ernst and Young which states the 10 major reasons why you should not invest in—Mr SPEAKER: Leave is sort to table that document. Is there any objection? There is objection.Homelessness—Definition and Statistics7.JACINDA ARDERN (Labour)to theMinister of Housing: How many people if any are currently homeless in New Zealand?Hon Dr NICK SMITH (Minister of Housing):There is no precise current measure of homelessness although the Housing New Zealand waiting list is a measure. The total number in the A and B categories is currently 3811 which is actually 551 fewer than when the Government took office. I am advised that 20 percent of the people incategory A could be classed as homeless—or about 250. Housing New Zealand housed 200 people in June or about 40 high-need families per day.Jacinda Ardern: Why is the definition of homelessness used by Statistics New Zealand different from that used by Housing New Zealand which does not for instance consider someone living in a night shelter to be homeless?Hon Dr NICK SMITH: No change has been made. Inevitably there is some degree of arbitrariness. In terms of Housing New Zealand’s definition if a person is living in a car we could treat them as being homeless. If a person is living in a tent or something that is quite clearly not a physical safe roof over their head they are certainly considered as homeless. I would also remind the member that this Government is spending over $2 billion on the accommodation supplement and on the income-related rent to support people with housing challenges—Hon Tony Ryall: How much?Hon Dr NICK SMITH: —over $2 billion—as well as $2.9 billion of capital over the next 3 years with Housing New Zealand which is the biggest investment ever in the corporation.Jacinda Ardern: Will he ensure that his department includes in its definition of homelessness someone who uses a night shelter which includes up to 850 people a night or for instance someone who is forced to couch surf because of a lack of shelter?Hon Dr NICK SMITH: We could get into some esoteric arguments—Grant Robertson: It’s not esoteric if—Hon Dr NICK SMITH: Well but—[Interruption ]Mr SPEAKER: Order! Order!Hon Dr NICK SMITH: Housing New Zealand provides funding for a number of organisations to provide—Hon Clayton Cosgrove: Answer the question.Hon Dr NICK SMITH: Well for the member Mr Cosgrove actually there is less homelessness now than when you were a Minister mate.Mr SPEAKER: Order! [Interruption ] It would be helpful—[Interruption ] Order! It would be helpful if the Labour front bench ceased from interjecting while the Minister attempts to answer the question.Hon Dr NICK SMITH: There is not—Hon Trevor Mallard: I raise a point of order Mr Speaker. In fact there are two points of order. One is that there used to be a rule in the House that when you got to your feet the person who otherwise had the call sat down. That did not occur. The reason I thought you were getting to your feet was that the Minister indicated that things had changed since you were in Government. They may have but only a little.Mr SPEAKER: With regard to the first point of order because I was looking at the Labour front bench I did not actually notice but I accept that the Minister may not have sat down which is not helpful. The reference to the Speaker occurs on occasions and it is well-known to all members of the House to not bring the Speaker into the debate. But I am trying to attempt to get an answer for Jacinda Ardern who has asked a reasonable question. But it is very difficult for the Minister to answer when he is continually responding to interjections that are coming from the Labour front benches which are interrupting the answer the Minister is giving. Would the Minister now please answer the question.Hon Dr NICK SMITH: A common-sense definition that I take of homelessness is a person who does not have a roof over their head. We can put a whole lot of energy into arguing the definition or we can do what this Government is doing and get on and build the homes that New Zealanders need.Jacinda Ardern: Is he concerned that his department or indeed himself as Minister is grossly underestimating the scale of this issue when based on an Official Information Act reply we received from his department Housing New Zealand has housed on average just 250 homeless people per year when in the last year alone just one service provider in one city had more than 200 brand new homeless clients walk through their doors and another had a further 130?Hon Dr NICK SMITH: In the last month—June—Housing New Zealand housed 200 people. The current waiting list of people waiting for a house is smaller now than when members opposite were in Government. We are investing record amounts in new housing. We have actually got the economy growing. I would also remind the member to have a look at the record of her member’s Government in terms of the increase in housing costs because it was an awful shame.Peseta Sam Lotu-Iiga: Tēnā koe Mr Speaker. How much have housing costs risen over the past 5 years and how does that compare with previous years?Hon Dr NICK SMITH: Since 2008 house prices have increased by 16 percent or 3 percent per annum. Between 2000 and 2008 house prices increased by 105 percent—Hon Tony Ryall: How much?Hon Dr NICK SMITH: —105 percent or 10.5 percent per year: i.e. housing costs are going up by a third of what they did under the previous Government.Jacinda Ardern: Does he have a strategy for this issue given his own Government has two different definitions for homelessness—his own now is a third and could include for instance someone living under a bridge as being housed—and he does not know the scale of the issue no one Minister or department has responsibility for it and the NGO sector is essentially being left to deal with growing demand?Hon Dr NICK SMITH: I take issue with the member claiming that when you say someone is homeless when they do not have a roof over their head somehow a bridge is a roof. That is a somewhat unique definition coming from the members opposite. In terms of whether this Government has a strategy let me tell you about it. We are spending $2.9 billion over the next 3 years on building thousands of extra bedrooms on to existing State houses. We are building 500 infill houses. In fact over this financial year the Government will be directly building more houses than any Government has in the history of New Zealand.Eating Disorders—Treatment Services8.Dr PAUL HUTCHISON (National—Hunua)to theAssociate Minister of Health: What investment has this Government made to improve eating disorders services?Hon TODD McCLAY (Associate Minister of Health):Tēnā koe Mr Speaker. I am pleased to report that in 2012 920 people were seen by specialist—[Interruption ]Mr SPEAKER: Order! Would the Minister please start his answer again.Hon TODD McCLAY: I am pleased to report that in 2012 920 people were seen by specialist eating disorders teams in New Zealand compared with only 483 in 2008 1 year before this Government’s extra funding began. The improved services began in 2009 after this Government invested an extra $26 million for treating eating disorders which is paying for crucial earlier detection and family-based therapy for sufferers of eating disorders. The situation this Government inherited meant that many anorexics in New Zealand would quite likely have ended up having to be sent to Sydney for treatment because services were inadequate here.Dr Paul Hutchison: What progress has been made as a result of this extra funding?Hon TODD McCLAY: Oh important progress. The extra funding has more than doubled the number of dedicated beds and doubled the number of patients accessingspecialist care. There are now 27 dedicated national beds around New Zealand. We are also ensuring community teams around the country are working better together and have stronger links to resources training and support from their specialist services in Auckland Wellington and Christchurch. Anorexia is a terrifying illness. It has the highest mortality rate of any mental illness but I am advised that this improved treatment is making a significant difference to the many young sufferers and their families.Christchurch City Council—Building Consent Accreditation9.Hon LIANNE DALZIEL (Labour—Christchurch East)to theMinister for Building and Construction: When was the Ministry of Business Innovation and Employment first made aware of the September IANZ report which warned the Christchurch City Council that “Continued accreditation beyond May 2013 will depend on a satisfactory outcome of that assessment” and when was he advised of the content of the report?Hon Dr NICK SMITH (Minister of Conservation)on behalf of theMinister for Building and Construction: The ministry received the report in mid-October 2012. It was a regular accreditation assessment done biannually on all 69 building consent authorities. Nearly all these reports recommend some corrective actions. A follow-up assessment was done in May this year to check that the corrective actions had been taken. They had not and a final 1-month warning was given then. Minister Williamson was advised of this on 6 June Minister Brownlee was advised on 7 June and the matter was raised as an oral item at Cabinet on 10 June.Hon Lianne Dalziel: So is the Minister saying that his officials did not provide him with any briefing on a report that contains 17 corrective action requests and warned that continued accreditation beyond May 2013 will depend on a satisfactory outcome of the assessment and that the 17 corrective action requests had to be completed by February this year?Hon Dr NICK SMITH: I note that the accreditation system that is run by International Accreditation New Zealand has been running since 2007. The Christchurch City Council received unsatisfactory reports in its biannual reports for that period—Hon Annette King: Always trying to blame someone else.Hon Dr NICK SMITH: No the point I want to make Annette King is this—Hon Annette King: It’s 5 long years—5 long years.Hon Dr NICK SMITH: Just listen for a moment; you will learn something. When those reports were done all of the councils—all 69 of them—had corrective actions recommended. What the member is suggesting is that every time any corrective action is required Ministers would have to be advised. That has never been the practice under the previous Government or this one.Hon Lianne Dalziel: Did he receive reports from the Ministry of Business Innovation and Employment in relation to the extensive work it was undertaking to assist the council to meet its requirements to maintain accreditation prior to 30 May; if so did he pass these on to the Minister in charge of the recovery or did he not actually read them?Hon Dr NICK SMITH: The Christchurch City Council building consent department has I am advised by the ministry had difficulties in terms of its accreditation since 2007. The Ministry of Business Innovation and Employment and its predecessor the Department of Building and Housing have been meeting weekly with that council for more than a year on these issues. Both Minister Brownlee and Minister Williamsonwere aware of the support that the ministry was providing to the city council as those issues became more acute with the extra workload flowing from the earthquake.Hon Lianne Dalziel: Has he read the report of May and September—because it is quite clear in both of those reports that in fact the Christchurch City Council did not go through its regular assessment in 2010 because we had an earthquake and in 2011 it was put off for a year because the Government passed an Order in Council to enable the accreditation to stay in place for another year. The first assessment by International Accreditation New Zealand that it had was in September 2012. Has the Minister read the report?Hon Dr NICK SMITH: I am not Minister Williamson to be able to answer to what degree all those reports have been read. But I would note again that of the 30 councils or building consent authorities that are reviewed each year all of them have reports and all of them have recommended corrective actions. The part I find so ironic about the member’s question is that all last year she was criticising the Government for daring to interfere in the council and is now on her feet saying that my colleague Mr Brownlee did not interfere nearly enough.Hon Lianne Dalziel: Can he confirm that the report on the review of the Christchurch City Council building consenting system which will be released by the Christchurch City Council today identifies that one of the reasons that crisis point was reached was information to senior management about the need for corrective actions and/or the seriousness of the Christchurch City Council situation was not accurate or was not read or was not followed up on; and is that why everything has gone wrong in terms of the relationship between the council and the Government—nobody is reading any of the reports?Hon Dr NICK SMITH: The ministry has been working with the Christchurch City Council trying to provide support to improve their building consent system. What it had noted in its reports to Ministers is that there has been a lack of buy-in by the leadership within the Christchurch City Council to the sorts of changes that were needed in its building consents system. That is why the Government has been providing support. Again I find it ironic and I welcome today the fact that the council has agreed to the appointment of a Crown manager although I note that members opposite opposed the legislation that would enable the appointment of a Crown manager.Hon Lianne Dalziel: I seek leave to table the report on the review of the Christchurch City Council building consenting system by the Ministry of Business Innovation and Employment.Mr SPEAKER: Leave is sought to table that document. Is there any objection? It can be tabled. There was no objection.Document by leave laid on the Table of the House.Women—Representation and Recognition10.JAN LOGIE (Green)to theMinister of Women’s Affairs: What has she done to address the Human Rights Commission’s criticism of the prevailing “pale ambition for women’s progress in New Zealand”?Hon JO GOODHEW (Minister of Women’s Affairs):Tēnā koe e te Mana Whakawā. I disagree with the statement from the previous Equal Employment Opportunities Commissioner. The Government’s targets for women’s progress are very ambitious. We are focusing on achieving greater economic independence for women more women in leadership and women’s increased safety from violence.Jan Logie: Did the Minister consider when she used her only opportunity to appoint to a statutory board that to appoint a man to the National Advisory Council on theEmployment of Women undermined her commitment to advancing the representation of women at board level?Hon JO GOODHEW: The way that I will answer that for the member is to talk about what this Government believes and that is that when around the table there is diversity of thought diversity of representation—be that age gender ethnicity—then there are better decision makers. The person that the member is referring to Michael Barnett with his work in the Equal Employment Opportunities Trust is ideally suited to bring a particular view skills and knowledge to the table to advance progress for women. This particular Government believes in diversity.Jan Logie: I seek leave of the House to table the Human Rights Commission report from 2012 that shows a decline in the number of women on statutory boards.Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Jan Logie: Did the Minister meet with the Prime Minister regarding the Queen’s Birthday Honours List to discuss why only 15 percent of the top 40 honours went to women?Hon JO GOODHEW: I am trying to be really sure about whether I have ministerial responsibility for this but when I have met with the Prime Minister to discuss the advancement of women we have certainly discussed bringing in more nominations. And I certainly put to my colleagues that I am very keen to see as many nominations as possible not only for appointments and honours but also for appointments to boards. In fact we rely on all members of this House and the public as well to nominate women for honours. Yes I was disappointed that there were not more women but we have to deal with what is actually put forward in the way of nominations.Jan Logie: Is the Minister comfortable that although her ministry monitors the gender pay gap there is no ministry responsible for the delivery of initiatives to close it?Hon JO GOODHEW: Could I ask the member to repeat—Mr SPEAKER: Order! Could the member repeat the question for the benefit of the Minister.Jan Logie: Is the Minister comfortable that although her ministry monitors the gender pay gap there is no ministry responsible for the delivery of initiatives to close it?Hon JO GOODHEW: The member is simply incorrect. The Ministry of Women’s Affairs is a policy ministry that does a lot of work to assist New Zealanders to actually close the gender pay gap. I might remind that member that it is now at its lowest level ever. Although not responsible for the legislation the ministry in fact is working very very hard to assist in closing the gender pay gap.Tracey Martin: Kia ora. As the Minister of Women’s Affairs has she requested any reports on the effects of her Government’s previous cuts to adult and community education funding for Māori Pacific and migrant women in light of these women being identified by the Human Rights Commissioner’s report as the most vulnerable; if not why not?Hon JO GOODHEW: No.Rt Hon Winston Peters: I seek leave to table two reports. The first is of the National Party in 1975 appointing a man as Minister of Women’s Affairs. The second one is a report where at the first world indigenous conference the Australians sent a white man.Mr SPEAKER: On the basis that they could assist members leave is sought to table those documents. Is there any objection? There appears to be none. They will be so tabled.Documents by leave laid on the Table of the House.Jan Logie: Does the Minister understand how her actions and her inactions add to the current perception—Metiria Turei: I raise a point of order Mr Speaker. My apologies to my colleague behind me but it has been and continues to be during this point of order impossible to hear my colleague’s question because of the constant and persistent barraging from the National Party side of the House. I would ask that they be asked to be quiet while she delivers her question.Mr SPEAKER: The member is making a reasonable point. The level of noise from many parts of the House has been quite excessive today. Jan Logie supplementary question without interjection from the back right-hand corner of the House.Hon Gerry Brownlee: What about down here?Mr SPEAKER: And that also includes where Mr Brownlee happens to be sitting.Jan Logie: Does the Minister understand how her actions and inactions add to the current perception that she is failing to take leadership on anything positive for women in New Zealand?Hon JO GOODHEW: The member started her first question by quoting fromSex and Power: A Report Card  and I will do similarly. I quote from page 3: “The Prime Minister John Key and successive Ministers of Women’s Affairs Hekia Parata and Jo Goodhew have helped mainstream the debate about women on boards.” That is just one example.Jan Logie: Point of order—Mr SPEAKER: Order! On a point of order Jan Logie and this point of order will be heard in silence.Jan Logie: I seek leave to table the 2012 survey that shows only 5 percent of New Zealand women consider women have equality—Mr SPEAKER: The member needs to identify the source of the survey.Jan Logie: It is from theNextmagazine investigation.Mr SPEAKER: Order! That is available to members if they so want to subscribe.Jan Logie: No it’s really hard to find Mr Speaker.Mr SPEAKER: Order! [Interruption ] Order! That is available to members if they want to subscribe to theNext magazine.Conservation Legislation—Minister’s Priorities11.Hon PETER DUNNE (Independent—Ōhariu)to theMinister of Conservation: What are his legislative priorities for the balance of this year?Hon Dr NICK SMITH (Minister of Conservation):My first priority is progress on marine protection and particularly the Subantarctic Islands Marine Reserves Bill. I am also keen to progress the Game Animal Council legislation for which the member has been the architect and the issues around the confidence and supply agreement with the member over game hunting. I am also working on a conservation law reform bill to improve management of conservation lands which make up about a third of New Zealand.Hon Peter Dunne: When does the Minister expect the Game Animal Council Bill to be passed and the council formally established?Hon Dr NICK SMITH: I am working on a Supplementary Order Paper with the member amending the bill to address the interests of the professional hunting guidesand game estates. My ambition is to have the legislation through the House this year and the Game Animal Council formed on that timetable as well.Hon Peter Dunne: What steps is he taking to outlaw heli-hunting as per the National - United Future confidence and supply agreement and will those steps be in place before the current heli-hunting permits expire in February 2014?Hon Dr NICK SMITH: The Government is committed to the changes around heli-hunting. It is my intention to include those changes in a conservation law reform bill. There is the issue of the concessions for heli-hunting which is coming up and I am working with the department on finding a solution so that it is consistent with the Government’s direction of reform.Police Resourcing—2013 Police Association Survey12.KRIS FAAFOI (Labour—Mana)to theMinister of Police: Does she agree with the issues raised by the 2013 Police Association survey referred to in the July edition ofPolice News;if not why not?Hon ANNE TOLLEY (Minister of Police):This was a survey of union members and I agree that unions will always say they need more resources. However I was very pleased to see that the survey showed that under the previous Labour Government police were more concerned about front-line resourcing. To aid the House I have provided the graph. In 2008 69 percent of those surveyed felt that additional resources were required—Rt Hon Winston Peters: I raise a point of order Mr Speaker. The Minister has been going for some time to the extent that she is now referring to a chart. The question talks about issues raised by the 2013 Police Association survey and she went straight back to 6 or 7 years ago and that cannot be relevant.Mr SPEAKER: No—[Interruption ] Order!Hon ANNE TOLLEY: If the member looked at the survey that the question is about it actually has the chart in there. I have just reproduced it for the House. Can I continue?Mr SPEAKER: Yes the Minister can continue with her answer using the chart if it is being used.Rt Hon Winston Peters: I raise a point of order Mr Speaker. The Minister might have difficulty grasping this but the question begins “Does she agree with the issues raised …”. The issues raised are the issues raised in the 2013 survey. They may well have a chart but she—Mr SPEAKER: Order! The Minister is saying that this issue was raised within that survey. The Minister can continue her answer.Hon ANNE TOLLEY: If I can continue this chart shows that in 2008 69 percent of front-line police felt that additional resources were required. That has fallen under National to 61 percent. This Government—Mr SPEAKER: Order! That is a sufficient answer from the Minister.Kris Faafoi: What will she do—[Interruption ]Mr SPEAKER: Order! The member can start the question again.Kris Faafoi: What will she do and what is her message to police and New Zealanders about the fact that 44 percent of the close to 4000 Police Association members who were surveyed say that restructuring within the police has lead to worse efficiency and effectiveness and has had a negative effect on the police’s ability to serve the public?Hon ANNE TOLLEY: Actually what this survey says is that 60 percent of the union members say either that the 4 years of restructuring which has only just finishedbeing rolled out this month has created more efficiencies that it has remained the same or that it is too soon to tell—60 percent of them.Richard Prosser: How—[Interruption ]Mr SPEAKER: Order! I have called Mr Prosser for a supplementary question. [Interruption ] Order! I think that just goes to show the difficulties being created by the level of noise.Richard Prosser: How can rural New Zealanders have confidence that when they are in need the police will have enough staff to respond in a timely manner given the 2013 Police Association members’ survey has the drop in staffing as its No. 1 issue?Hon ANNE TOLLEY: As I say the police have been through 4 years of unprecedented change. Particularly in the last 12 months there have been backroom police jobs that through restructuring through HR and finance and case management have gone. I think it is perfectly explainable that people will be concerned about staff but the reality is that crime is at a 30-year low including in rural areas. My own area of Gisborne has seen an unprecedented drop in recorded crime of over 10 percent. Whatever is happening in the police is certainly working and New Zealanders are certainly feeling safer in their homes and out in their communities.Kris Faafoi: What will she do and what is her message to police staff and to New Zealanders given that 61 percent of the 4000 Police Association members surveyed believe that shortages of front-line staff and non-sworn support staff are “the areas of police being most at risk of service failure because of recent cuts and deficiencies”?Hon ANNE TOLLEY: I refer the member back to the chart that I started with. The reality is that it may well be 61 percent now but under the Labour Government it was at 69 percent so actually they are much happier under a National-led Government.Richard Prosser: Does the Minister concede that the drop in staff numbers has put public safety in rural areas at risk and does she agree with one Police Association member who said that staffing numbers need to continue increasing especially in the smaller areas?Hon ANNE TOLLEY: No I do not agree because front-line policing numbers have not dropped. In fact this Government has added an extra 600 front-line police. In addition to that there has been a 70 percent increase in foot patrols so our police are far more visible out in the communities. I think that under this Government we have seen crime at a 30-year low and that has made our communities much much safer.Kris Faafoi: Can the Minister assure the New Zealand public that their safety and the service that they receive will not suffer given that just 6 percent of Police Association members believe the restructuring has been effective while 62 percent believe that the restructuring has made things worse or made no improvement at all?Hon ANNE TOLLEY: The figures that I think tell the real tale are in the independent survey of public satisfaction and confidence in our police—Kris Faafoi: I raise a point of order Mr Speaker. I am asking the Minister specifically about this survey and she is bringing in another survey so—Mr SPEAKER: No if the member reflects on the question asked it was “Can the Minister assure the New Zealand public ...” and it then went on. The Minister is very adequately using another survey which reflects in her opinion public confidence in the police. So the Minister can certainly continue that answer.Hon ANNE TOLLEY: Thank you for the question because public confidence and satisfaction is at an all-time high of 87 percent.Kris Faafoi: Does she take responsibility for these major concerns in this survey and in the police ranks given that the Minister has closed 15 police stations and cut the opening hours of a further 12 one station is no longer open to the public the policeTen One magazine shows monthly sworn resignations are skyrocketing there are 155 fewersworn police than at this time last year there are 191 fewer police support staff than at this time last year and her own estimates figures show a real cut in funding of $113 million over the next 4 years?Hon ANNE TOLLEY: I really refute all of those assertions that that member has made. But I do not understand why Labour continues to run down our police. I can understand why police are much happier under a National-led Government when crime is at an all-time low than when they had a Labour Government and crime actually went up.Kris Faafoi: I seek leave to table a document obtained under the Official Information Act showing that 15 police station closures have happened since January 2009.Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Kris Faafoi: I seek leave to table my graph—[Interruption ]Mr SPEAKER: Order! [Interruption ] Order! This is a point of order.Kris Faafoi: Can you see it all right? I seek leave to table this graph prepared by the Parliamentary Library showing the monthly average of police staff resignations since January 2009.Mr SPEAKER: Leave is sought to table that graph.Hon Steven Joyce: I raise a point of order Mr Speaker. The explanation—Mr SPEAKER: Order! That is not a point of order. Leave is sought to table it. I am asking whether the House wishes that document to be tabled. Is there any objection? There is objection.Hon ANNE TOLLEY: I seek leave to table this graph from the Police Association showing that the police are happy.Mr SPEAKER: Leave is sought to table that. Is there any objection? Yes there is.Kris Faafoi: Does she agree with theNew Zealand Herald editorial on Saturday 29 June which read “Mr Faafoi says claims that the police are more accessible than ever before seem a little far-fetched in communities that lose their stations.” and then went on to say “It is hard to disagree.”?Hon ANNE TOLLEY: I do not agree with any of Kris Faafoi’s press releases. They are works of fiction.Question No. 1 to Minister—Amended AnswerHon BILL ENGLISH (Minister of Finance):I need to correct an answer I gave to an earlier question.Mr SPEAKER: So you are seeking leave to correct an answer. Is there any objection to that course of action? There is none.Hon BILL ENGLISH: In response to a question from David Bennett regarding public assets I implied that Albania does not have any partially privatised companies. I am advised that in fact it does have mixed-ownership companies. We cannot find a single country where the Labour policy is in place.Hon Trevor Mallard: Point of order Mr Speaker. [Interruption ]Mr SPEAKER: Order! Order! I am trying to hear a point of order from the Hon Trevor Mallard.Hon TREVOR MALLARD (Labour—Hutt South):I raise a point of order Mr Speaker. I think that I am making the same point of order that my colleague was making before he stood up. Ministers get permission to correct answers when they are factually inaccurate and not to make cheap political points. If—[Interruption ]Mr SPEAKER: Order! This is a point of order.Hon TREVOR MALLARD: If the process of giving leave is to continue we will need some assurances from the Leader of the House that that does not happen again.Mr SPEAKER: From the point of view of raising the matter it was raised and the leave was put to the House. The House then accepted that the Minister would correct an answer. As I understood it he was correcting something that was factually incorrect in the substantive answer earlier. It is certainly unhelpful then to add the political connotations. It may lead to difficulties where leave is sought to correct an answer and it in fact may not be given.Questions to MembersManukau City Council (Regulation of Prostitution in Specified Places) Bill—Submissions Received1.Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First)to theChairperson of the Local Government and Environment Committee: How many submissions have been received on the Manukau City Council (Regulation of Prostitution in Specified Places) Bill?NICKY WAGNER (Chairperson of the Local Government and Environment Committee):The committee received 229 submissions.Le’aufa’amulia Asenati Lole-Taylor: What was the percentage of submitters granted the opportunity to present at the select committee oral hearings and how many submitters were declined to be heard in person?NICKY WAGNER: The committee travelled to Auckland to hear submissions. We heard 18 submissions and as far as I know none were declined.Plumbers Gasfitters and Drainlayers Amendment BillIn CommitteeDebate resumed.The CHAIRPERSON (Lindsay Tisch): Members the House in Committee on the Plumbers Gasfitters and Drainlayers Amendment Bill is resumed.Hon Trevor Mallard: I raise a point of order Mr Chairperson. It is a tradition that some Minister is proud enough of the bill to sit in the chair.The CHAIRPERSON (Lindsay Tisch): Sorry yes—I cannot proceed. Thank you. Members we will start again. The House in Committee on the Plumbers Gasfitters and Drainlayers Amendment Bill is resumed. Before the lunch break we were debating Part 1. The Hon Ruth Dyson had the call and she has 2 minutes 50 seconds remaining should she wish. Before I call the member I ask those who are leaving the Chamber to do so expeditiously please so that we can actually hear the speeches.Part 1 Extension of purposes for which Board may impose levy(continued )Hon RUTH DYSON (Labour—Port Hills):Thank you very much for the opportunity to conclude this speech that I began before the luncheon suspension. In that earlier contribution I reminded the Committee of the whole House that when this bill was introduced the Hon Maurice Williamson the Minister in charge of the bill said on 14 March 2013 that it was critical for the continued solvency of the board that the bill was sent to a select committee that submissions were called for and heard that advice from the officials was asked for and received that the bill was deliberated on—all in one week—that the report-back date was 22 March 2013 and that it all had to be done and dusted in this House by 1 April. Even according to our rather wonky calendar it is now 2 July. I do not know why the Minister could not have taken the advice of justabout everyone in the House and certainly every member of the select committee taken a deep breath and a step back and looked at what the actual problems are and what a fair resolution of the problems would be.There is not one person in this Chamber who does not respect the trades that we are discussing in this bill and the need for safety in those trades. And I am sure there is not a single tradesperson throughout the country who would disagree with that either. The people who are impacted by this retrospective legislation took their complaint to the Regulations Review Committee not once not twice but I understand now for a third time. They have taken this issue to the Ombudsman. They have taken the issue to the Auditor-General. Where else could they go? Every single body that they legitimately raised their complaint with said their complaint was justified. And instead of looking at the real problem instead of looking at the real issues and asking as a Parliament how we address that—because we all agree on what we want the outcome to be—Maurice Williamson said: “I have seen the disallowance motion from the Regulations Review Committee. I know they’ve got further consideration here again. I will introduce and ram through the House in a 1-week session retrospective legislation to validate the actions of the board.”We agree with a solution to this. We pledged to work across all parties to find a fair solution to this issue. I am pleased that the Hon Gerry Brownlee is in the chair at the moment because he might redeem the situation. He knows what it is like to have a big issue and to work across all political parties to try to get solutions. This is not the answer.CHRIS HIPKINS (Labour—Rimutaka):I am very pleased to have this opportunity to take a call on the Plumbers Gasfitters and Drainlayers Amendment Bill. It would be fair to say that this bill has had a very long history and is a result of a number of serious issues over quite a long period of time. A few years ago I had the opportunity to sit on the Regulations Review Committee when we were considering issues to do with the Plumbers Gasfitters and Drainlayers Board and it would be fair to say that members of the community the professionals who do this work have legitimate concerns about the way the board is operating legitimate concerns around the legislation that governs it and legitimate concerns around the actions of a number of people involved in the industry.What we are seeing here today is that the Government is simply going to override by way of legislation by narrow majority what have been clear breaches of the Act by the Plumbers Gasfitters and Drainlayers Board and that is wrong. One of the reasons it is wrong—well there are many many reasons it is wrong; it is manifestly unjust. One of the reasons that Parliament sets up an organisation like the Plumbers Gasfitters and Drainlayers Board is to provide leadership to the industry. And how can the board provide that leadership that the industry needs when so many in the industry have no confidence in it? They have no confidence in it because it has breached its own Act on several occasions. Every time they have gone through some kind of process to have their grievances addressed and acknowledged they have been proven to be correct. Yet this Government is simply turning a blind eye to that and is just saying to the board: “Just go on doing what you’ve always done.” That is not right. It is simply wrong. Actually this board to operate effectively must have the confidence of the people who are required to pay the levies to it and at the moment it does not. So how can it do the job if no one has confidence in it or if the majority of people practising in the profession do not have confidence in it?So this legislation far from fixing the problem actually makes the problem worse because it simply rides roughshod over the whole process and simply discounts all of the legitimate concerns that have been raised. It says that those concerns do not matterand that that whole process—after the huge amount of time and energy that people have put into having their concerns addressed—is going to be simply overlooked.I will turn specifically to what happens in Part 1. There are two parts to this legislation. Part 1 which we are dealing with now is the part that effectively enacts the legislation as the board thought it should be. The board had been acting in a way that was inconsistent with the legislation as it was. Part 1 of this legislation simply says: “We’ll just change the law in order to allow you to continue doing what you have always done.” That is what this Government has said to the board.Part 2 which we will talk about shortly then retrospectively validates decisions that have been made. I am looking forward to that part of the debate because there are a number of National Ministers who have been on record in this House when they were in Opposition lambasting the then Labour Government for anything that had even the slightest hint of retrospectivity to it. And now suddenly here they are retrospectively legislating to approve a whole lot of decisions that the board made that were against the law.So turning to Part 1 of the legislation specifically and looking at the clauses that are in the legislation we see that clause 4 amends the Act to allow the Plumbers Gasfitters and Drainlayers Board to impose on registered plumbers gasfitters and drainlayers a disciplinary levy to fund the costs arising out of investigations into allegations or complaints against registered persons and proceedings covering dispute under Part 3 of the Act. It is that last part that is actually really important because the Act previously allowed the disciplinary levy to be collected to cover complaints against only registered persons and not against other people who might be practising. This is where the board got itself into difficulty because it was collecting a disciplinary levy that it could then use outside disciplinary matters concerning just registered practitioners under this Act.So what it effectively does is say that those who are registered those who go to the trouble of being registered are now being asked to fund potential investigations and disciplinary action against the people who do not make that step of becoming registered. There may well be good arguments for that but simply imposing this by way of a legislative override effectively of a whole lot of organisations—the Regulations Review Committee the Ombudsman and various others that have all said that the practitioners who have raised the concerns have legitimate concerns—and to ride roughshod over those organisations through a legislative process is not the right way to do it. It is manifestly unjust. It is simply not right. Retrospective legislation is not right.We know that there have been major problems with this board as I mentioned. There have been some very good people involved with the Plumbers Gasfitters and Drainlayers Board and there are still some good people involved in the board. It is not in any way a reflection on them and I do not want to cast aspersions on their characters or anything like that but the board itself has had major systemic problems. In order to deal with those issues one of the things that must be done as a matter of priority is to restore confidence in the board. This legislation sadly is not going to allow that to happen because if anything it is going to add to the sense of grievance that people who have concerns with the board already have expressed. The bill raises natural justice issues; retrospective legislation often does. We are certainly not convinced it is justified in this case. Sometimes there are rare occasions where retrospective legislation can be justified and in this case I am certainly not convinced that there is quality justification for that.A number of complainants concerned about the illegal collection of the disciplinary levy and offences fee have had their claims vindicated through a number of the mechanisms including as I mentioned the Auditor-General the Ombudsman and the Regulations Review Committee. All of that vindication of their concerns is now beingoverturned. We in the Labour Party acknowledge the major problems that have existed within this industry and the way this board has operated. We are committed to finding a solution to those problems but that must start from the point that we have got to have a board an organisation that the whole industry can have confidence in. Unfortunately this legislation that Maurice Williamson is bringing before the Committee today does the opposite. It simply reinforces a legitimate sense of grievance that many people feel. That is the reason why we cannot support this.BRENDAN HORAN (Independent):Before I start I would like to thank the Chair for the opportunity to speak. As one of now two independent MPs in Parliament I get the opportunity to truly partake in the democratic process only during the Committee stage of each bill along with seven other MPs who have to beg steal or borrow speaking slots from the major parties. For me this rarely occurs so I really do appreciate being able to take this call. I also look forward to taking calls later this evening and certainly after dinner whereby I can partake in the democratic process because as we know sometimes deals are made between major parties but they do not consider those other MPs who are in the House.This Plumbers Gasfitters and Drainlayers Amendment Bill is somewhat akin to the Government Communications Security Bureau debacle and Kim Dotcom. The Government has this Plumbers Gasfitters and Drainlayers Board which was investigated by the Ombudsman who found dubious illegal and unlawful activity. Rather than pay back the $600000—Ministers pay themselves a Wellington accommodation allowance of over $600000 annually so it would have been quite easy for the board to repay that money—to the plumbers gasfitters and drainlayers whom the board illegally took that money from the board went to the Minister and here we have now a retrospective change in legislation. It is not fair. It is not the Kiwi way. I wonder what is happening to our country and the message that we are sending out to the children of New Zealand when something so wrong can just be turned round and we change legislation.When we look at legislation I think it is very very important that we ask whether this is good legislation. As we have heard from everybody on this side of the Chamber this is clearly not good legislation. This is a board that has adopted a heavy-handed approach. It is turning this great industry itself—the 17100 tradesmen in the industry—against the Government. We need to look only to some of the other price increases that this board has wrought upon the plumbers gasfitters and drainlayers. If we look at the cost to plumbers for instance to get an apprentice through the system what used to be $6000 thanks to levies imposed by the board is now $12000 or $14000 an apprentice. I spoke to a plumber earlier this week who normally has three apprentices but because of the costs imposed by this board he now has only one apprentice. He told me himself that once that apprentice is finished he is not going to get another one. So we have a board that is really turning the industry against itself.I cannot support this bill. Thank you very much.Hon ANNETTE KING (Labour—Rongotai):I want to continue on from where Chris Hipkins was in his contribution to this Plumbers Gasfitter and Drainlayers Amendment Bill.Hon Members: Oh!Hon ANNETTE KING: Oh I am so pleased members opposite are welcoming my contribution. It is going to be a serious one. In fact I am going to quote from probably one of the member’s own constituents whom I met with recently. Chris Hipkins said we know that problems exist in this area and we are very keen to find solutions. I think where we ought to start is to take seriously complaints that have been made about what is going on in this industry. I am aware that there are three complaints currently beforethe Regulations Review Committee—three complaints that those who have made the complaints want heard before this bill passes. They have asked for them to be heard before this bill passes.I have spoken to the chair of the Regulations Review Committee Maryan Street. She is keen to put these complaints on the agenda and have them heard. I will predict however that the members of the National Party who now have the majority on that committee—it is unheard of in this Parliament that you have the Regulations Review Committee without it being a committee that has even numbers on it—will not allow those complaints to be heard. I will predict that. If the members opposite can tell me that they will support the hearing of these complaints when the chair calls for them to be heard say it today. What I suspect is that this bill is going to be rushed through and the complaints are going to be denied to be heard by that committee before the bill is passed. That is what I believe is going to happen and so do those who have made the complaints.You see this is what has happened because of uncertainty this last year in particular around this bill and around what is going to happen. The bill was introduced in March and the House was told that the Government needed to pass it very quickly in a short time and then it truncated the number of submissions that could be heard. In fact not all the submissions were heard. It needed to be passed by 1 April I think it was said at the time and here we are really on 4 July although it says 2 July on the Chamber calendar and it is still only now being debated. In that year I have received as other members have from the Plumbers Gasfitters and Drainlayers Board the figures on the number of certified and licensed plumbers gasfitters and drainlayers for the year 2012-13. So what has happened while we have had this uncertainty—the lack of resolution around the problems in this area? We have seen in the last year an overall loss of certified plumbers of 558. We have seen the loss of certified gasfitters of 88. We have seen 761 certified drainlayers lost. In fact the total loss of licensed and certified drainlayers over this last year is 2173. Can we afford to have that sort of loss particularly of licensed drainlayers? They are the ones who actually go out and do the job. Can we afford it at this time—Mike Sabin: The board’s there to make sure the unlicensed ones don’t get away with the rubbish they do.Hon ANNETTE KING: —when we need to have such—what is the member over there crowing about?Mike Sabin: The unlicensed ones are the ones whom the board is there to protect the licensed ones from.Hon ANNETTE KING: Well the licensed ones are leaving the industry because of the lack of certainty—Mike Sabin: And I think you’ll find they’re being replaced.Hon ANNETTE KING: I am not talking about unlicensed plumbers gasfitters and drainlayers Mr Sabin. Get the figures. These are the licensed ones so stop yelling and listen for a change. We have seen a loss of 2173 gasfitters drainlayers—[Interruption ] Mr Chairman.The CHAIRPERSON (Lindsay Tisch): Order! Interjections should be rare and reasonable and barracking across the Chamber is unacceptable. I ask the member to calm it down and I come back to the Hon Annette King.Hon ANNETTE KING: Thank you Mr Chairman. Maybe Mr Sabin would like to take a call rather than just scream from his seat. What I am saying to this Committee is that that is a huge loss of licensed plumbers and certified plumbers drainlayers and gasfitters over the last year.There does need to be resolution around this bill. I have had something to do with it in the past. This Plumbers Gasfitters and Drainlayers Act used to be under the Minister of Health so I did have some contact with this Act in the past. But now we have so much uncertainty and we have those who will not pay a licence fee because they believe—Hon MARYAN STREET (Labour):I rise to take a call on this bill the Plumbers Gasfitters and Drainlayers Amendment Bill yet again. It is a shame that this situation has been allowed to get to the point of needing validating legislation. When it was first introduced to the House it was clear that nobody was particularly happy about it but the Minister for Building and Construction had decided that this was the way to correct the inappropriate purpose for which the Plumbers Gasfitters and Drainlayers Board extracted a levy from its members.This does go back a long way and it is entirely true that the Plumbers Gasfitters and Drainlayers Board has been problematic for a long time. I would suggest that in fact instead of passing this legislation it would be good for the Government to go back as we did when we were in Government and look at the whole membership and performance of that board again. We did that once because the board was behaving in ways that were particularly disreputable and it was denying perfectly competent young tradespeople the chance to get a ticket. In a sense it was gaming the labour market by making certified tradespeople rare. That was inappropriate and besides that there was all kinds of behaviour from the board at that time which I have never seen in an industry association before or since.The Plumbers Gasfitters and Drainlayers Board is not out of the woods yet. There is another alternative. I am talking about Part 1 of the bill “Extension of purposes for which Board may impose levy” because this is one possibility. It imposed a levy that it was not entitled to impose for reasons that are defensible—it wanted to clean the industry out of cowboys. Unfortunately it has now had the reverse effect. We have plumbers drainlayers and gasfitters who now have their licences and are able to practise but who will not pay the registration because this board has increased it substantially and has treated them with disdain.In legalising the purpose for extracting this disciplinary levy which the law did not give the board the right to do funds have been amassed that in my view ought to be repaid. So another possibility other than Part 1 is to arrive at an accommodation with the disgruntled plumbers gasfitters and drainlayers and say: “All right we’ll come to some arrangement where some of the levy that you have paid which we extracted from you illegally will be refunded.”That is why we have submitted Supplementary Order Paper 204 which seeks to enact the recommendation of the Office of the Ombudsmen that a proportion—not even the whole lot—of those levies and fees but the levies in particular that were extracted unlawfully should be repaid to the members of the Plumbers Gasfitters and Drainlayers Federation. Our Supplementary Order Paper provides that the retrospective validation component of the bill which is this Part 1 will be effective only after a percentage of those levies and fees is repaid in accordance with terms specified in an Order in Council made under section 172 of the Plumbers Gasfitters and Drainlayers Act.That would address some of the concerns that plumbers gasfitters and drainlayers have over this issue. But the effect on the industry because of the board’s behaviour is really profound and we are now seeing perfectly well-qualified tradespeople relegating themselves to the category of cowboy—by virtue of being unregistered—because they do not wish to pay fees to a board that misappropriates them or that extracts those fees unlawfully.The only remedy the board has ever entertained has been retrospective validating legislation and that is what is in front of us in Part 1. That is not the only alternative and I would ask the Minister to consider Labour’s Supplementary Order Paper and consider supporting that in order for this industry to be mended somewhat. I personally think that there probably needs to be another clean-out entirely of the Plumbers Gasfitters and Drainlayers Board. I would rather that the Minister acted in that way and had a close look at the actions of the Plumbers Gasfitters and Drainlayers Board instead of simply going with its request to make legal what it did illegally.I understand the disgruntlement of these men. George Clarkson comes up to me on a regular basis at the Nelson market on Saturdays. He is so wound up about this—and he is not alone—that I find it difficult to say anything to him other than: “I agree George. It needs to be started over. It needs to be done again.” but this legislation is not going to be the answer.The legislation as it stood was I think perfectly OK. I do not think there was anything wrong with the legislation. The Plumbers Gasfitters and Drainlayers Board has in fact stepped out of line with the legislation and done something that everybody who has been asked to pass judgment on its action has found to be illegal from the Ombudsman to the Regulations Review Committee and onwards and this piece of legislation is not going to appease the plumbers gasfitters and drainlayers who feel not only hard-done-by but led inappropriately in their industries.The numbers the Hon Annette King was quoting a moment ago are seriously scary. In the space of 10 years where there used to be one drainlayer per 939 people we have now one drainlayer per 2471 people and the population has not increased that much. I use the example of drainlayers in particular in this instance because they were under the administration of the Ministry of Health because of their impact on the health of communities. They lay the sewers. They put down the waste-water pipes. These are the people who connect up all the services that are required for us to not all be dying of E. coli the plague and anything else that might be carried by waste water and through sewers. So they were always under health previously. They are important and we will need them—Christchurch will need them. Christchurch needs them now and yet somehow overall we now have 761 fewer certified drainlayers than we did in 2012.This behaviour of the Plumbers Gasfitters and Drainlayers Board is causing the industry to diminish for two reasons. One is that it behaved badly towards those in the industry and will not apologise for doing things that are illegal and secondly it whacks up the charges on them so that it costs far more to register as a qualified and licensed tradesperson in New Zealand than it does in Australia. So is it any wonder that our young tradespeople are being driven offshore being driven to Australia where the prospects—IAN McKELVIE (National—Rangitīkei):Given what we have listened to in the last half-hour I think it necessary to refute a number of issues that I think have been raised slightly erroneously. We should remember that this issue arose from legislation put in place in 2006 so it goes back quite some time. That is the first point I want to raise. I want to briefly talk about Supplementary Order Paper 204 introduced by Raymond Huo. In my view it is clearly impractical. It does not achieve anything other than to give some money back to an organisation or a group of people in an organisation who will then have to pay it back to the organisation in order for the organisation to continue to function. We heard the Greens earlier thinking that it would be a great idea for the Government to just pay the difference. Well we could just pay the difference in a whole lot of issues in this country but we would run out of money. That clearly is not going to work. The Plumbers—Andrew Williams: You could sell more assets.IAN McKELVIE: We will use the asset money productively. The Plumbers Gasfitters and Drainlayers Amendment Bill is being put in place to allow plumbers gasfitters and drainlayers to act in the same manner as any other good industry-good body would act. It is being put in place to protect those members from the activities I guess of what we might call cowboys. I think it is logical that any industry-based organisation should be able to operate in that manner and operate with the protection of legislation put in place by this House. That is what this bill does. It cleans up a messy situation created in 2006. Sure there have been complaints to the Regulations Review Committee. Those complaints have been dealt with one way or another.There has surely been a complaint to the Ombudsman. The Ombudsman made a call on this and in the process of making that call he suggested there was a fine line between what was right and wrong and what was the best way to deal with this. He thought that the Plumbers Gasfitters and Drainlayers Board was doing the best it could with a slightly I guess poor piece of legislation. It is not an opportunity for us to attack an industry body. The course of this bill certainly should not provide that opportunity. I think that the Plumbers Gasfitters and Drainlayers Board is doing the best it can as the Ombudsman indeed said with a piece of legislation that certainly is not perfect. We have got to understand that this board collects about $600000 a year so for it to be putting in place levies of the magnitude that were mentioned earlier in this Chamber—$11000 to $14000 a year per member—is quite ridiculous.The next issue I think we need to refute is the claim that the numbers of these people are dropping as a result of the poor management of this board. That clearly is not the case. We have to look only at the record of our building industry over the past 7 or 8 years and we will see why the numbers are dropping. Quite clearly the numbers of all sorts of professionals in this area have dropped in that time. They have dropped for a very good reason—they have dropped because there is no work. The other thing that happens in an industry like this which happens frequently in all sorts of industries is that a significant amount of efficiency comes in. New methods arise and obviously that has played a large part in the changes in this industry.So the opportunity that this bill puts in place is firstly to give the plumbers gasfitters and drainlayers legislation that supports their industry-good body which allows them to contest and I guess investigate unlicensed people practising in the industry. As one of the Opposition members mentioned earlier this organisation used to come under the Ministry of Health for very good reason. That is why we need to have legislation and strict management of the opportunity for registered people to be operating in this industry. [Interruption ] As my compatriot Mr Sabin says gas is not the safest thing to be operating within our houses and it certainly needs to be regulated very well there.I do not want to dwell on this much longer but I think there is a very good reason for this piece of legislation to be put in place. I do not think there was a suitable alternative to it and I think that the Minister for Building and Construction has done a good job of bringing this to the fore.I just want to say one last thing. All organisations are going to have internal disputes. All organisations are going to have disagreements as to how they should be run. This legislation will give this organisation the opportunity to put its house in order and to manage the process that it needs to manage around the licensing and the control of those licences in a proper manner. So I think that aside from not supporting the Supplementary Order Paper which I think clearly will not work I am all in favour of this bill proceeding. Thanks.ANDREW WILLIAMS (NZ First):I take a call on behalf of New Zealand First on the Plumbers Gasfitters and Drainlayers Amendment Bill. New Zealand First will notbe supporting this bill as we have said in this Chamber before. We do not favour bringing in retrospective legislation to sort out what was basically something of the past. It should have been picked up a long time ago. The Government should have sorted out the Plumbers Gasfitters and Drainlayers Board back in 2006 2007 and 2008 at the beginning of the National Government and it should not have taken 5 years for the Government and for Minister Maurice Williamson to bring it to this House. It is wrong we believe to impose effectively a retrospective tax in a sense. It is a tax on small business—this levy these charges these fees. It is wrong to go back and attack these small businesses and try to penalise them and charge them for errors of the past.We have received a lot of correspondence from a lot of concerned plumbers gasfitters and drainlayers around the country who simply say that in this current environment and in the way they have been conducting business in recent years they cannot afford to start paying these retrospective moneys for a number of years going back. These small businesses are not able to suddenly start coughing up retrospective fees so it is not fair for them to be attacked in this manner—for the board to go after some of these organisations in this manner.It is also driving a wedge right into the middle of this industry. You are now seeing one side versus the other. It is not healthy in a small economy like ours to have such an important area as the provision of plumbing gasfitting and drainlaying ending up with the two sides at loggerheads. In this instance the Minister has very much been on the side of the board which has ended up alienating such a large percentage of people in this particular industry. As a result we are seeing more and more disappearing off to Australia and further afield and as we have heard already in this Chamber today there have been 761 fewer certified drainlayers since 2012. That is an alarming sort of figure.At a time when our country needs to be developing our capacity and increasing our capacity it is most alarming to be seeing so many trained people disappearing out of the system. They are not just disappearing overseas; we are hearing that they are just disappearing—giving up and getting out of the business because they have had it up to their back neck with it.So in this respect we feel this is wrong. We feel that the Minister should have worked through a far more conciliatory process to find a way to get buy-in from the whole industry instead of just taking one side of the argument. He has not worked through all the other alternatives that were available to him in order to find a better solution to this. He has tried to ram this through in very quick succession despite it being a 5 or 6-year-old problem instead of sitting down and working with the industry to come up with a solution that although it might not meet every single need would at least have some compromises in there to appease those who are aggrieved by this. Instead of doing that as is the usual Maurice Williamson way he has just rammed it through with a sledgehammer the same as in the days when he rammed through changes to legislation that ended up with us having the leaky building situation in this country.It is the same way that he has been ramming through changes to the building code through the building amendment legislation to reduce the requirements on building in this country. Again this legislation is being pushed through with little regard for the final effects in terms of the situation in our building industry. This is what we would call a litany of continuous errors on the part of the Minister Maurice Williamson who just seems to think that you can sort it all out in retrospective situations like this with legislation you can turn a blind eye to leaky buildings and you can turn a blind eye to errors within the building code. Quite frankly we do not think this is the right way to go so New Zealand First will not be supporting this. We really do feel that it is wrong.Once again when this Government keeps talking about supporting small business in this country supporting and developing the economy growing the jobs helping smallto medium enterprises get ahead reducing compliance costs and making this a more competitive economy it sends all the wrong signals to then go after just the plumbers gasfitters and drainlayers in this manner. Basically it is not warranted.BRENDAN HORAN (Independent):I would like to put forward an amendment to clause 4(2) in the Plumbers Gasfitters and Drainlayers Amendment Bill a clause that amends section 143 of the Act to replace the words “of any amount it thinks fit for the purpose of funding the costs arising out of—” with “of a reasonable and justified amount for the purpose of funding costs directly attributable to the functions of”. I believe that any amendment should define what “a cost arising out of” is. It is far too broad as it stands and it is being applied to items that the Regulations Review Committee has already stated do not appear to be costs arising from investigations.So the bill as it is is validating expenditure by the Plumbers Gasfitters and Drainlayers Board on items that may not be costs arising out of investigations. The validation at this stage simply gives the board a clean slate another start point to cover its total incompetence and that of the Minister for Building and Construction and the Building and Housing Group. We ask where the accountability is. For instance was the legal firm that gave wrong advice to the board held accountable and did that legal firm repay the money the fee that it was paid? I would suggest certainly not.I would ask too where the accountability is in the bill as it stands. Is anybody on the board going to lose their job because of the debacle that occurred? Saying that they are going to be held accountable through the Minister’s accountability agreement is certainly a long bow to stretch.The industry started as a victim. The industry had followed the correct procedures to get accountability which the Government has taken away with this bill. The industry is once again the victim. This bill will create more problems than it will resolve. Bully-boy tactics will no longer be accepted and those in the industry who disagree with the board have clearly indicated that they will stand their ground. What happens from here on is the responsibility of the Government and the board. If the industry declines and fails it is this Government’s failure and the board’s failure. So to that end I would like to put forward this amendment.The CHAIRPERSON (Lindsay Tisch): Members we come to the votes on Part 1. We have an amendment in the name of Brendan Horan to clause 4(2). The question is that the amendment be agreed to. Those of that opinion will say Aye to the contrary No. The Noes have it? [Interruption ] The Noes have it? Can I just remind members that if you want a party vote you must challenge my vote at the time not many seconds later because I was ready to move on. But this is probably the first amendment the member has put and with the goodwill of the Committee I am allowing a party vote.The question was put that the following amendment in the name of Brendan Horan to clause 4 be agreed to:in subclause (2) replace the words “of any amount it thinks fit for the purpose of funding the costs arising out of—” with the words “of a reasonable and justified amount for the purpose of funding costs directly attributable to the functions of—”A party vote was called for on the questionThat the amendment be agreed to.Ayes14Green Party 12; Mana 1; Independent: Horan.Noes103New Zealand National 59; New Zealand Labour 33; New Zealand First 7; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Amendment not agreed to.The result corrected after originally being announced as Ayes 14 Noes 105.Part 1 agreed to.Part 2 Validation of disciplinary levy and offences feeThe question was put that the amendments set out on Supplementary Order Paper 204 in the name of Raymond Huo to Part 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes54New Zealand Labour 33; Green Party 12; New Zealand First 7; Mana 1; Independent: Horan.Noes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Amendments not agreed to.The CHAIRPERSON (Lindsay Tisch): We have a correction to the previous vote and this was Brendan Horan’s amendment. The correct vote should be the Ayes 14 and the Noes 103. The record will be changed accordingly.A party vote was called for on the questionThat Part 2 be agreed to.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes54New Zealand Labour 33; Green Party 12; New Zealand First 7; 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.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes54New Zealand Labour 33; Green Party 12; New Zealand First 7; Mana 1; Independent: Horan.Clause 1 agreed to.A party vote was called for on the questionThat clause 2 be agreed to.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes54New Zealand Labour 33; Green Party 12; New Zealand First 7; Mana 1; Independent: Horan.Clause 2 agreed to.A party vote was called for on the questionThat clause 3 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Clause 3 agreed to.Bill to be reported without amendment presently.Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) BillIn CommitteePart 1 Amendments to Income Tax Act 2007The CHAIRPERSON (H V Ross Robertson): I am looking for someone to take the call.Hon David Cunliffe: Mr Chairman.The CHAIRPERSON (H V Ross Robertson): Wonderful! I call the Hon David Cunliffe.Hon DAVID CUNLIFFE (Labour—New Lynn):Kia ora Mr Chair.Hon Trevor Mallard: You’re meant to be listening for someone to seek the call not looking.Hon DAVID CUNLIFFE: Mr Chair can look and listen Mr Mallard which is a wonderful thing that we have such a—well yes it is too late in the week to think of long “p” words. But anyway congratulations Mr Chairman. Thank you very much.Here we are in the Committee stage of the very famous Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. I see that the Minister in the chair the Minister of Immigration is smiling. That could be because he is about to be advised by the Hon Trevor Mallard which will be of great assistance to his career no doubt or it may be that it has dawned on him that he is not the Minister of Revenue. That as you will see is very lucky for him because what is so important about Part 1 is not exactly what is in it but what is not in it—what is not in it. What is not in it is the famous car-park tax. It was not long ago Mr Chairman ladies and gentlemen and colleagues that National introduced what has now got to be one of the most infamous tax ideas that this House has ever seen: the idea that you would place fringe benefit tax on the personal use of a company car-park but only if you are in the central businessdistricts not a street away and only if it was in Wellington or Auckland not Hamilton Rotorua Taupō Tauranga or anywhere else around the country.Hon Lianne Dalziel: There aren’t any parking buildings in Christchurch.Hon DAVID CUNLIFFE: And there are no parking buildings left in Christchurch the “Minister for Earthquake Removal” tells me.Hon Lianne Dalziel: Removal?Hon DAVID CUNLIFFE: Well I am just saying that in honour of the Christchurch City Council having knocked down all the buildings that it has attempted to consent over the last year. Well done Bob Parker. That reminds me that we are talking about car-parker tax and this has been withdrawn. It has been withdrawn because it was going to cost according to some independent accounting estimates $2 to collect for every $1 it raised.Dr David Clark: How much?Hon DAVID CUNLIFFE: How did that one—$2 to collect for every $1 it raised—get past the goalie at the Inland Revenue Department quality control centre? That is what I want to know. But even if it got past the goal line in the boffin building what happened in the Minister’s office? What happened in—it was then the Hon Peter Dunne Minister of Revenue; we have had musical chairs in the hot seat since then—his office? Where was the political advice? Minister this is a dog and it barketh. Actually that is a bit tactless. I apologise. We should not be talking about dogs because Todd McClay the Minister of Revenue is also trying to poison them all for psychoactive substances—Hon Trevor Mallard: The drug dealers.Hon DAVID CUNLIFFE: —and to make drug dealers rich but we are not going to go there. That is not a tax matter Mr Mallard. It may be an animal rights outrage but it is not a tax matter. So finally common sense prevailed and the car-park tax was withdrawn under the steely hoofs of an unlikely combination of Matthew Hooton and the Council of Trade Unions. Matthew Hooton and the Council of Trade Unions joined forces to stampede the Minister of Revenue—aided and abetted by the loyal Labour Party trying to stand up for truth justice and the Kiwi way—and bang there goes the car-park tax.What is also not in Part 1 of this bill are three now four other stupid tax proposals of a similar ilk. Last week when we were doing the first reading of the bill I was able to report to the House on three equally idiotic taxes and since then the Government has taken notice of our advice. I am pleased to report that a new one has emerged. In fact the fourth extra-stupid tax other than the car-park tax came out in the public domain in the same week. Fringe benefit tax is now to be applied to—wait for it—the clothing allowance of plain-clothes policemen. Not only that as if it is not bad enough to penalise the hard-working cops risking life and limb it gives new meaning to “the emperor’s got no clothes”—the emperor’s new clothes; the bobby’s new clothes. As if it was not bad enough to impose a punitive tax on the poor near-naked bobby—I mean the phrase “bobby on the street” now has extra meaning does it not—this was done retrospectively. [Bell rung ] Mr Chairman I have to complete this story. This was done—Hon Trevor Mallard: Sounds like the naked truth to me.Hon DAVID CUNLIFFE: The naked truth is that not only has the Government imposed yet another stupid tax on the public but it has done so retrospectively. Why? Was it that if it did it prospectively people would stop it before this outrage got across the line? Why would the Government commit the double sin of stupidity retrospectively? Let us hope that good sense will prevail and that our poor near-naked undercover police will once again be clothed so that if they are not shot to death theywill not freeze to death. I do not want to make light of what is often a high-risk situation and their clothing allowance is there for good reason.Let us recall the three other stupid taxes currently at issue none of which appear in Part 1 of the bill we are discussing today but which are relevant because they are akin to the one that was in Part 1 of this bill. They are the iPad tax where the Government was going to charge everybody fringe benefit tax on the private use of their iPhones iPads and other electronic communications. You are going to have to go through your phone bill and apportion your data charges and work out which calls were work calls and which were private calls and pay tax on the private ones. Does not that sound like a really good idea? Imagine the time spent on that. Imagine the red tape. How did that one get past the goalie?But if it was not bad enough that that got in the Inland Revenue Department’s discussion document the Government at the self-same time gave up on taxing Apple the people who make the iPads that the Government was going to charge you the public extra fringe benefit tax to use. Apple pays only about 1 percent tax on its profits in New Zealand. Why is that? Because apparently it does not make any money because that is part of a bigger problem called—technical term—base erosion and profit-shifting which is a matter that the OECD is looking at but which the Government has done sweet nothing about. Why not? Because it is too busy retrospectively applying a clothing tax on cops and poisoning poodles. It is ridiculous.The Minister is obviously overworked. All right? Hopefully if he does not do too well in this life there may be redemption in the next but it is unlikely because he is also imposing a punitive tax on clergy—grossing up the value of church housing and then imposing fringe benefit tax on an income that is not even earned by clergymen so that the Government can charge fringe benefit tax on clergy housing. This is ridiculous. What is systemically wrong at the Inland Revenue Department that it keeps coming up with these stupid stupid crazy ideas? I am hopeful that the Minister will stop that one.But in honour of the Hon Lianne Dalziel the Opposition spokesperson on earthquake recovery and we hope soon to be the Mayor of Christchurch—I just want to say that again; soon to be the Mayor of Christchurch because poor old Bob Parker is not having a good week down there—I say that she has brought to my attention the problem of the accommodation tax. This is the fringe benefit tax being applied on temporary accommodation used for over a year. Christchurch is full of temporary accommodation and it is expensive enough to live there now or stay there if you are part of the rebuild but the Inland Revenue Department wants to impose personal fringe benefit tax on anyone lucky enough to live in a shipping container in Bexley. This is madness. What is going on at the Inland Revenue Department? What is going on in the Minister’s offices? Where do these crazy ideas come from and how did they get into Part 1 of this bill?The only good thing one can say about this bill is that David Bennett has had a road to Damascus experience. David Bennett the member for Waikato-something thinks Damascus is between Tīrau and Pūtāruru but it is not.Tim Macindoe: No it’s between Parnell and Herne Bay.Hon DAVID CUNLIFFE: Touché. He has had a road to Damascus experience. After 55 years of helping farmers rort their taxes he has now recanted and decided that he is going to find absolution by ratting on his former clients and he has dobbed them in by putting some livestock valuation rules in this bill. Thank you.Dr DAVID CLARK (Labour—Dunedin North):It is a pleasure to rise to speak to this bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. I think the honourable member David Cunliffe raised a very good point at the beginning of his speech. This bill is not so noteworthy for what is in it but for what is not in it. He raised immediately the issue of the car-park tax which has been ditchedsince the first reading as this Government fled for cover recognising the foolishness of imposing these petty taxes. It is a shame that the Government did not see this earlier that it did not look to avoid the paper girl and paper boy tax that it imposed in the previous Budget that it looked to not impose additional burdens on businesses that now have to collect child support and that it did not look to not impose further red tape on businesses to deal with those child support changes. This bill is full of these mild tinkering measures. It is typical of a tax bill put through under this Government. Some of them cannot be disputed as kind of sensible step-by-step little measures patching up tiny holes here and there rearranging the deckchairs on theTitanic perhaps and who can say that you would not get a little bit of sun if you put the deckchairs over here rather than here on theTitanic and make the most of the time you have available. But that is not a long-term strategy—that is not a long-term strategy.This is a Government with no plan. That is what it comes back to. This Government has been muddling along making tinkering little tax changes here and there taking the time of the House in order to rearrange the chairs on the “Tax-Titanic ”. What it ought to do—Hon Member: Worst economic performance in 50 years.Dr DAVID CLARK: The member over there quite rightly points out that this is the Government with the worst economic record of any Government in this country in the last 50 years.Andrew Williams: How long?Dr DAVID CLARK: In the last 50 years Mr Williams—quite right. It is shocking. But in some ways it is no surprise. If you do not have a plan to change things things will carry on as they are. Things will continue to get worse. The gap between rich and poor will continue to grow and the studies coming out say that it is. The gap between the rich and the poor in New Zealand has never been as great as it is now. This Government is shrinking median wages—they have gone down since it took over—and the people in the street know that. Ordinary Kiwis know when they go out to make their extraordinary contributions that they are less well off than they used to be because this Government is acting in the interests of the wealthiest.We as citizens know that something is not right when people in this country who have over $50 million are not on the top tax rate—when people earning over $50 million are not declaring income of $70000 or more. What we also know is that 75 percent of New Zealanders who fall into that category are not paying the top tax rate. That cannot be right. Are there any members opposite who think that is right?Hon Member: No not one.Dr DAVID CLARK: Not one. Not one member opposite thinks that those top tax earners should not be on the top tax rate and I am not surprised. But will they do anything about it? Will they do anything about it? They will not. Is there anything in this bill to do anything about it? No there is not. This is a bill that is all about the status quo that is all about ensuring that those wealthiest New Zealanders are protected and that those who cannot avoid paying tax are clamped down upon more and more and more.If this bill was accompanied by pro-growth tax reform we would be able to support it more enthusiastically. We will be supporting this bill because the measures in it are the little stitches that need to be made here and there to make things mildly better but making sure that the deckchair is placed in the sunny spot on theTitanic is not enough—it is not enough. We think that theTitanic should also be repaired. We think it should be done up and we think it should be sailing a course for a brighter future. There used to be another party that said that but it does not say that any more. It has given up that slogan because it knows it is not delivering on it. It has just shifted away from itsgoal of closing the wage gap with Australia. It has given it away. We know that 200000 Kiwis have moved permanently to Australia under this Government’s watch. This is a Government that is not improving the lot of New Zealanders.In this bill we also see nothing that reverses the tax changes made in 2010 that saw the wealthiest 10 percent of earners in New Zealand get 40 percent of the value and the bottom 20 percent of earners in New Zealand saw just 2 percent of the value of those tax cuts. That is why the gap between rich and poor is growing in this country. This bill does seek to make amendments to several Acts including the Income Tax Act 2007 the Tax Administration Act 1994 the Goods and Services Tax Act 1985 and the Income Tax Act 2004 in order to improve fairness. That stuff we cannot disagree with. What we see there is an attempt to tighten up the rules for deducting expenditure on assets such as holiday homes boats and aircraft that the user uses both privately and to earn income. I would be interested to hear the Minister in the chair take a call to explain why the approach taken in this bill has been adopted rather than one similar to that used for company cars where a fringe benefit tax applies. It seems logical that the same could be done here. If it could be enforced properly—it works perfectly well for company cars—why was that approach not taken here? I see the Minister in the chair looking confused. He looks very confused and I am wondering whether he will take a call to explain—Hon Trevor Mallard: No no that’s not confused. That’s a normal state.Dr DAVID CLARK: The member in front of me Trevor Mallard assures me that that is what he normally looks like. I give the member more credit than that and I am sure he will take a call to explain why this present policy has been adopted this present approach rather than the one that is similar to that used for company cars which would be more straightforward. That would be less burdensome to administer and it would be potentially a better use of taxpayer resource—unless the Minister does not care. But I suspect he does so I will look forward to his contribution.This bill also changes the time periods for claiming refunds. It changes the GST rules for business-to-business cross-border transactions and there are several other GST-related amendments. Let us not forget that this is a party that likes to tinker with GST. It might not tell you that. It might go into an election saying “We won’t put up GST.” I think John Key said that did he not?Hon Damien O’Connor: It was a lie.Dr DAVID CLARK: Oh my colleague says it was a lie.The CHAIRPERSON (H V Ross Robertson): Order!Dr DAVID CLARK: I could not say that—The CHAIRPERSON (H V Ross Robertson): Order! And the member will not say that.Dr DAVID CLARK: I did not say that Mr Chairperson. Other members may have a view. But Mr Key in my view did say he would not put GST up and then he did—and then he did. We can call that what we will. He said one thing and then he did another thing. He said “We will not put up GST.” and then he put up GST. The members opposite might want to tell me what that is called over the other side of the Chamber. It might just be what happens. It might be that we live in a dynamic environment that things change with time and that we can change our principles when it suits. That might be the approach that Government takes but we on this side of the Chamber believe in higher principles. We believe everyone should pay their fair share when it comes to tax not just those who cannot get through the loopholes.Facebook in 2010 paid just $5000 in tax in New Zealand—$5000. It has 2.2 million users but it paid just $5000 of tax. The next year that went up to $15000 worth of tax with 2.2 million users. It says that it is doing nothing illegal and that is true but just because it is not doing anything illegal does not make it right. But this Governmentcontinues to allow multinationals to avoid paying their fair share. It is doing nothing to sort out that problem just as it is doing nothing to stop those wealthiest New Zealanders avoiding paying the top tax rates. This is a Government that is protecting the big interests those at the big end of town. This Government will bring in this kind of tax bill that will tinker that will try to “base broaden” and that will try to make sure that it tapes up little loopholes here and there that cannot be avoided by people from lower backgrounds and some middle-income earners. As long as it is fair we will support that aspect of it.But what we really want to see on this side of the Chamber is an overall fair tax policy that makes sure every New Zealander pays their fair share and that makes sure we can afford the schools and hospitals that our future generations will rely on in order to enjoy the prosperity that we are enjoying now. Those who are wealthy have benefited from those institutions in our society and they like everyone else ought to pay their fair share. Most New Zealanders do. Most New Zealanders do not quibble with that. But it is those who are the very wealthiest who are avoiding this and this Government is on their side and not on the side of ordinary New Zealanders who go about their day-to-day business working hard trying to save but experiencing a New Zealand where the Kiwi dream of owning your own house is getting further and further and further away.Labour policies will change that. We will bring in 10000 affordable homes every year for 10 years to make sure that there are affordable homes. We will introduce a power policy that will ensure that power prices drop for ordinary New Zealanders. We care about those ordinary New Zealanders who are struggling. Mr Key says that ordinary New Zealanders are paying about the right amount for electricity. We disagree. But I will come back to the tax issue and that is that this bill is a tinkering bill. We will support the tinkering for the meantime but we think rearranging the deckchairs on theTitanic is not enough.ANDREW WILLIAMS (NZ First):Thank you Mr Chairperson—a wise choice. The Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill—I was just very interested in the comments from the previous speaker Dr David Clark because I actually thought at one stage that he had read some of the notes I had for my speech because he made some excellent points.The first point which I think we all have to be reminded of and which most New Zealanders do remember is the fact that 2 years ago this Government gave something like close to $2 billion in tax cuts to the wealthiest of New Zealanders at the expense of the rest of New Zealand. As a result of giving those tax deductions to the likes of the Prime Minister who got another $1000 a week in his pay packet; to the likes of Paul Reynolds the Chief Executive of Telecom who got another $5000 a week rebate on his tax—$5000 a week can you believe it—and to the likes of many other National Party - supporting high rollers who got a lot of money back we end up with the Hon Peter Dunne the Minister of Revenue at the time who is now very much the “done Minister” rather than Minister Dunne who brought forward this bill 167 pages long to tinker around with the tax to basically find the rats and mice to find the little nickel and dimes to do what he could to try to claw back some money to help offset the couple of billion dollars that the Government gave to the likes of John Key and Paul Reynolds.We were very sceptical about this legislation in the first place because we could see that it was very much just tinkering around the edges. However we have come round to the viewpoint that we will support it in that it does state that it is “in order to improve the fairness of existing tax law and regulations protect the tax base and minimise the burden on businesses.” These are very much in line with principles that New Zealand First has to support streamlining the tax system to support the reduction in cost tobusiness to help the New Zealand economy to help grow the New Zealand economy and to help make our people basically a more prosperous people and nation as a result.We do note that there are some areas in this bill that are worthy of note and they are that there have been some changes to the GST laws which remove the inequitable situation of non-resident versus resident businesses. That is fair enough.There have also been some changes to the livestock valuation rules around the whole livestock valuation area. It also provides—and we think this is an important aspect in this bill—Hon Clayton Cosgrove: Speaking of livestock.ANDREW WILLIAMS: Speaking of livestock? Oh speaking of livestock—really? It also provides tax deductibility for expenditure on trees and plantings for erosion shelter and water protection purposes and we think that is a good thing. With the increasingly erratic climate that we are suffering and with what we saw as recently as last week with storm damage in different parts of New Zealand it is increasingly important that we do have increased planting of trees and other such planting to reduce erosion to provide more shelter and to help with protection of our important waterways around New Zealand.Similarly this bill has a part in it that provides donee status to three charity organisations that operate internationally. Again we feel that that is fair and it recognises those particular three organisations in order to treat them in a fairer manner. It also eliminates tax treatment mismatches to certain foreign currency hedges. Again it helps our currency markets to perhaps operate in a fairer manner. It does in the end withdraw what was going to be a silly tax the car-park tax on Auckland’s central business district and Wellington’s central business district. Again we are pleased that that was withdrawn from this bill because that would have been a complete nonsense. We have heard from so many people who said that you could literally be across the street from your biggest major competitor and on one side of the street you would be paying for your staff to be parking and on the other side of the street your major competitor could be getting off scot-free. What a total nonsense. How the Minister and how this Government allowed that sort of thing to get into this legislation is beyond us. [Bell rung ] Mr Chair—The CHAIRPERSON (H V Ross Robertson): The honourable member Andrew Williams.ANDREW WILLIAMS: Thank you. Another wise decision Mr Chair—another wise decision.We also remind New Zealand that in terms of the tinkering around the edges this Government does have to face up to the fact that all New Zealanders need a fair go when it comes to tax. What we are seeing increasingly is that the Government is getting behind and doing backroom deals with those who can take advantage of situations and who can do very well out of the system while others—the general everyday good solid Kiwi hard workers—are not being treated in the same manner. It is not right. We certainly hope in this House that every politician would be aiming to get a fair tax system for everyone. Aspects of this bill go some way to address that but there is still a long way to go and there is still a lot to be done to streamline our tax system in order to make it simpler to make it fairer to reduce taxes in this country to make this economy more affordable and more competitive and to put us on a stronger level pegging with many other economies that are moving forward at a much greater rate with lower company taxes and lower taxes for the likes of the export sector. Again New Zealand First is very strong on the fact that we are not doing enough to support our export sector. If we do not make more money offshore and if we do not bring more overseas funds into this country we as a nation will suffer. The Inland Revenue Department isalso going after some silly areas in taxation instead of looking at the much bigger picture of how to reform the taxation system for the benefit of all.Just in closing we hear that the Inland Revenue Department is about to spend $1.5 billion on a new computer system to oversee its revenue and tax collection. That is a vast amount of money by anyone’s standards—by any country’s standards—to spend $1.5 billion on a new computer system. One would hope that if New Zealand is spending that sort of money we would get hand in hand with that new computer system a lot more of a streamlined system that would make this country really tick over a lot faster. We would hope we are not going to get another Novopay another INCIS and another debacle and that we will not look back in years to come on the Inland Revenue Department in terms of having some disastrousTitanic of a computer system strung around our necks. New Zealand First will be supporting this bill but we do so with some reservations.The CHAIRPERSON (H V Ross Robertson): I call the Hon Damien O’Connor.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):Thank you Mr Chairman. Your wisdom shone through if a little slowly.The CHAIRPERSON (H V Ross Robertson): Oh I might take that call back actually.Hon DAMIEN O’CONNOR: Mr Chairman—[Interruption ] That is right. That is right; I apologise. If there was any offence taken I am prepared to withdraw.I know that some people may think that my colleagues have strayed off track but I am going to stay in the part of the bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill that we are discussing here. I refer to a part of it that I am unclear of. The “Minister for Prison Riots”—Minister Anne Tolley—is the Minister in the chair. Maybe she could explain clause 5 which is around “Premiums from issue of rights to subscribe for shares”. It seems reasonably—Hon Trevor Mallard: No no it wouldn’t have “premium”. It’d have to be “premia”.Hon DAMIEN O’CONNOR: Well premiums premia premiums—no no well I am not quite sure. But do you know what sprang to mind—and maybe the Finance and Expenditure Committee chair or members could answer the question—was has this been changed to give more benefit to those people who can afford to buy Mighty River Power shares?What we have had of course with the sell-off of State-owned enterprise shares are premiums and incentives for so-called New Zealand investors. I am sure some of my colleagues here who are a little more knowledgable in this area of taxation may be able to answer it but I would appreciate the Minister getting up and answering my question about the premiums from issue of rights to subscribe for shares. If I go here in the bill it says: “A distribution by a company to a shareholder is not a dividend if—(a) the company issues to the shareholder a right (the ‘shareholder right’) to subscribe for or dispose of to the company a share in the company at a given price (the ‘shareholder price’);”.The point is that we have a loyalty bonus share scheme. That is the way that John Key promoted the retention of ownership in New Zealand hands of the sell-off of half of our State-owned enterprises starting with the electricity sector. What was effectively a lie—and I will say “a lie” because it has been an untruth—was that these companies will be sold off to New Zealand investors. It is an untruth because they have not been—Hon Tau Henare: Call it a lie.Hon DAMIEN O’CONNOR: I will call it a lie if you would like. In fact of all the hype around the sell-off of Mighty River Power shares I go back to the reality that there were 113000 investors who took up the share offer and I am guessing that all of thosepeople were then entitled to a loyalty bonus share scheme. That might on the face of it seem like a good deal for Kiwi mum and dad investors because that was what we heard from the Prime Minister and all the idiots over there on the other side. We heard that this was an opportunity for mums and dads to go and buy shares in a company that they already owned. Well let us look at what actually happened. Those 113000 so-called Kiwi investors included trusts companies and investment institutions—hardly mum and dad investors I would say to you. In fact half of those shares went to a mere 13000 investors—Hon Anne Tolley: I raise a point of order Mr Chairperson. I am sorry. I have been listening to the member—sort of—for quite some time. I fail to see what the sale of State assets has to do with the bill in front of us.The CHAIRPERSON (H V Ross Robertson): We are actually speaking to Part 1 but—Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. Like the Minister I was also listening intently to a large number of these speeches. They have been wide-ranging covering all sorts of issues and you quite rightly have used your discretion not to pull people up. So it may be that the truth hurts but she cannot have it both ways.The CHAIRPERSON (H V Ross Robertson): Order! The member was doing very well—Hon Clayton Cosgrove: Thank you.The CHAIRPERSON (H V Ross Robertson): —was—but can I just say that I ask the member to continue in the vein of his speech. Relevancy is my discretion.Hon DAMIEN O’CONNOR: I appreciate that Mr Chairman and I do appreciate your wisdom as I said at the start. Can I say that if the Minister of Police is not on top of her game if she does not know what we are debating here she should go to clause 5 of the bill and then get up and explain to me whether the bonus offer loyalty scheme for the sale of the State-owned enterprises will apply to new section CD 29B(3) in clause 5 which states: “A distribution by a company to a shareholder is not a dividend if—(a) the company issues to the shareholder a right (the ‘shareholder right’) to subscribe for or dispose of to the company a share in the company at a given price …”. What are the rights attributed to the loyalty bonus share scheme shares offered to the so-called Kiwis—[Bell rung ]The CHAIRPERSON (H V Ross Robertson): I call the honourable member but focus on Part 1.Hon DAMIEN O’CONNOR: Absolutely. Well I read it out Mr Chairman. I can read it out again if you like.The questions I ask about the loyalty bonus share scheme in relation to the sell-off and the sell-down of our State-owned enterprises apply to this taxation bill. I would like some answers. The lie that we are referring to was that this company would be sold to Kiwis. They would be offered a bonus scheme a loyalty share offer and I wondered whether this legislation in any way undermines the benefit that will come with that loyalty bonus share scheme. It is a relevant question and I think there are a whole lot of Kiwis who currently own this State-owned enterprise who have been conned. They thought that the 49 percent might actually go to Kiwis. The reality is quite different. The question will be: do these institutional investors have the right to the loyalty bonus share scheme and do they have the right to the provisions or are they affected by the provisions in this piece of legislation? Meridian Energy we are told is going to be next off the block so it is only fair that we clarify for mum and dad investors—that is to quote the Prime Minister and Mr Bennett who is up there trying to sell it to all the people in Hamilton—what they might get.We have seen a slide in the share price. In fact many of those mum and dad investors have lost money at this point in time. I do not know what the share price is today. Maybe someone could let me know.Hon Clayton Cosgrove: Oh they’re pretty low.Andrew Little: Not good.Hon DAMIEN O’CONNOR: Are they still on the negative side? [Interruption ] Less than $2.50. So indeed the promise by all the share traders by the Minister and in fact by the trader who is the Prime Minister—you cannot believe most of what a trader will tell you because they are basically a glorified salesperson who clips the ticket on the share price or the derivative price going up and down. That is exactly what John Key is doing. He is clipping the ticket. I have to say that it is a really sad thing to admit that it is a popularity ticket. He is clipping it and meanwhile the dividends are going down for most New Zealanders across the board. It is harder for them to live they are working longer hours and the share trader clips the ticket on the way up and down.I come back to the bill; I have not strayed too far from it. The other danger in relation to the sell-off of our State-owned enterprises and the need for us to clarify in this legislation how the distributions and how the loyalty bonus share scheme will work for people so that the Kiwis who might who can afford to—and I would have to say that 10 percent of the shares of Mighty River Power went to 400 people which is an average investment of $250000. Was that your average mum and dad? I doubt it—I doubt it.To come back to the reality and the hype around the next sale—that is of Meridian—we need to know what might happen to any bonus scheme that will be offered there. I would suggest that the Prime Minister is going to have to offer a sweeter deal another deal or some other kind of twisted arrangement that looks good on the face of it. But as many of the investors the mums and dads who have invested in Mighty River Power will be finding it is not all beer and skittles. In fact that share price has gone down. I am not sure whether they will get their dividend. It has not been terribly positive for anyone really other than the Minister of Finance who has got a bit more money to play with and he is spending it about 10 times over.I will come back to the bill and ask: can the Minister of Energy and Resources who is now the Minister in the chair hop up and answer the questions as to whether the distribution through a loyalty bonus share scheme will be affected by this piece of legislation. I have many things to comment on in the livestock part of this legislation but I will just start in this first part of the legislation. I know the Minister of Energy and Resources he is a smart Minister—he says so all the time. Can he get up and answer these questions? That is the least that an up-and-coming knowledgable Minister could do in the Chamber this afternoon.BRENDAN HORAN (Independent):I greatly appreciate the opportunity to participate in the democratic process. Being an Independent member of this Parliament I note an anomaly in that seven MPs of the Parliament do not get the opportunity to fully participate in democracy in that we are denied the opportunity to speak in the first second and third readings of a bill. I look forward to these opportunities these rare opportunities that I get to participate in the Committee stage and I thank you very much for this opportunity to rise to take a call on Part 1 of the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill.I would say that much courtesy matters. A little bit of courtesy at the beginning of the week would therefore see a lot of courtesy at the end of the week. I started off this week flying in from that beautiful place called Tauranga where there is plenty of livestock. I arrived in Wellington and drove straight away to Foxton. As I was doing that I was having my caucus meeting. I was able to get to Foxton and sort out some problems that some of the local people there had with a couple of dairies. I came backbut whilst I was doing all of this I had no idea that the Parliament would be going into urgency. I had no idea of some of the bills that were being rushed through and placed in front of the Parliament. The Hon Gerry Brownlee did not feel it necessary to inform me at all. I would stress that courtesy at the beginning of the week means a lot at the end of the week. To that end I would say that it is very important that at the Committee of the whole House stage we do thoroughly examine the legislation that is before us. I look forward to hearing after the dinner break contributions from members like David Bennett.Taxation bills appear regularly from the policy advice division of the Inland Revenue Department as regularly as the passing seasons. They are some of the most complex that we consider and they are thoroughly deserving of debate.The CHAIRPERSON (H V Ross Robertson): Order! Could I ask the member to talk to Part 1 of the bill because the member has had half of his time. Otherwise there will be an issue of relevancy.BRENDAN HORAN: Thank you very much. I am going to miss you. Part 1 of the bill in clauses 3 to 61 comprises amendments to the Income Tax Act 2007. I would like to address several aspects of some of the provisions in these clauses. We are told for instance that in the category of remedial adjustments there are provisions affecting us—that is affecting all members of Parliament—and that is why I brought up the issue of members of Parliament earlier. One provision is “Correcting an unintended minor change to the tax treatment of allowances for members of Parliament.” Another provision at clause 12 and elsewhere is to “correct an anomaly arising from changes to fringe benefit tax provisions to ensure that the tax applied only to the private element of any payment or service provided to members of Parliament under the Civil List Act 1979. This would accord with the original policy intent.” I am sure that is a relief. We are all heartened to know that the original policy intent will apply. I can see the Hon Tau Henare is breathing a sigh of relief.I am equally sure equally certain that this will be the talk in the cowsheds throughout the Waikato where the honourable member David Bennett resides and also in Southland and in every dairying region throughout New Zealand. The talk in the cosmopolitan clubs and the RSAs throughout town and country will be of nothing else but the original policy intent that will apply to members of Parliament.Equally I am sure that the press gallery will be riveted by this news. Patrick Gower and Corin Dann will no doubt be ready in their reports for the first stories in their 6 p.m. bulletins and then later on with all the other content they will be able to fill up their late news bulletins from all the contributions after dinner. They will no doubt be including the changes also included in this part changing the rules for livestock valuation. That will be important to the men and women in the cowsheds. I would note that rules for livestock valuation were introduced just 12 months ago in that riveting Budget 2012. If you think this speech is boring check out that Budget. So this Government—Hon CLAYTON COSGROVE (Labour):All I can say about that previous contribution by Brendan Horan is that I was chloroformed by that speech absolutely. The Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill does a number of things—Brendan Horan: I raise a point of order Mr Chair. I do not mean to interrupt that member’s speech because I love his speeches but I was just wondering whether my microphone was working because earlier today I noticed that the Chair found it difficult to hear me and I was wondering whether we had that same problem.The CHAIRPERSON (H V Ross Robertson): You can rest assured Mr Horan that I heard you.Hon CLAYTON COSGROVE: This bill makes a number of adjustments but I have got to say this is not the big tax bill. This is not a major set of reforms that we were promised by this Government. The major set of reforms that it embarked upon of course was what it called in its sort of spin-like way a tax switch which saw the top 10 percent of New Zealanders get 40 percent of the tax cuts—40 percent of the tax cuts.Hon Anne Tolley: Don’t tell lies.Hon CLAYTON COSGROVE: Pardon? What was that? What was that? Somebody said: “Don’t tell lies.” Well that is really interesting because we have made a couple of speeches on this and I have challenged members opposite at every stage through this debate to get up take a call and tell us whether they think the so-called tax switch where the top 10 percent got 40 percent of the tax cuts is equitable. So I ask them again—in fact I will yield to one if they would like if they are prepared to get up and say that that is an equitable tax switch.Hon Anne Tolley: Don’t tell untruths.Hon CLAYTON COSGROVE: Hang on there is a noise. There is a squeak from the middle row. Was that an admission of guilt? Oh no. Of course they will not. What New Zealanders want—[Interruption ] Pardon?Andrew Little: Her head’s gone down again.Hon CLAYTON COSGROVE: Oh yes—Hon Anne Tolley: Talk to the bill.Hon CLAYTON COSGROVE: Talk to the bill? Well part of any bill I say to that Minister over there when we are talking about tax is that people want equitable and fair tax. They want confidence in their tax system and they want a simple and transparent tax system. There is no equity in this.There are a couple of issues. For instance in Part 1 there is an item that deals with Learjets or private jets whereby the scheme of arrangement is tightened as I understand it. If you buy a Learjet say as Sir Peter Jackson has done for about $80 million and you use it a couple of days a year and you try to claim that it is a major commercial expense for say 50 percent as I understand it those rules are tightened. Well I have got to say that is a good thing because otherwise that is a swindle. But I have got to say compared with substantial reform in the tax area that does nothing for Joe or Joanne Public in the street in terms of the other 90 percent of New Zealanders who got very little if anything and get very little if anything out of the so-called tax switch.Hon Anne Tolley: That’s not true.Hon CLAYTON COSGROVE: Well if it is not true Ms Tolley get on your feet and take a call in the debate. Get on your feet and actually justify it.Paul Goldsmith: I am happy to take one. We will.Hon CLAYTON COSGROVE: Oh “Goldfinger” at the back. He is going to justify it. Good stuff! Well I wait for that speech and I wait for that member to tell us whether the top 10 percent getting 40 percent of the cuts is equitable. Just like of course what the Prime Minister said about power prices which is that nobody is paying too much for power as did—Hon Simon Bridges: That’s right.Hon CLAYTON COSGROVE: That is right says the Minister in the chair the Minister of Energy and Resources—old “Jed Clampett”. “That’s right.” he says. “That’s right.” Let us get it on the record again: no one is paying too much for power according to the National Government. But I asked that Minister in the Finance and Expenditure Committee. I said: “Can you tell us at what point you believe if power prices go up they would be paying too much for power?” Oh absolute silence. To quote him out of the transcript: “I can’t give you a dollar figure.” That is what he said. So theGovernment cannot justify its position now. No one believes the Government as people get their first set of power bills in the cold and dreary weather not to mention the tax reductions and the tax breaks that they are not getting because of the inequity of the so-called tax switch.So OK it has done a couple of things for the owners of private jets. That would be Kim Dotcom I presume. That would be Sir Peter Jackson and a couple of other people. I do not know how many people in the gallery or listening to this own their own private jet and will be shaking in their boots tonight as they feel they may have to pay a little more tax if they go out and purchase a Learjet. But I will tell you that the other great tax reforms that this crew embarked upon of course are being mean to paper boys and girls and the car-park tax which it stuffed up completely—absolutely stuffed up. The old worker in his or her car-park the old paper boy or paper girl trying to get a few bob a bit of pocket money—oh there is “Uncle Scrooge” the National Government round the back pocket grabs the wallet and pilfers it. But if they own a Learjet and this legislation goes through then as we said today they might have to pay a bit more tax—a great groundbreaking reform from this mob.Of course the problem that this crew have when they are looking at the revenue side is what we found out today. Referring to clause 5(3) in Part 1 that is the point that Damien O’Connor raises. If you look at the State-owned assets sale what we know about the revenue side of this Government’s Budget is that it says it is going to get $5 billion to $7 billion from State-owned enterprise sales. It stuffed up the first one Mighty River Power and now Meridian Energy. As proof of that the Government now says it is going to have to do Meridian Energy in blocks or slices or whatever. It said it was going to get two or three away earlier this year. It cannot even get that right. But it says even though it has got an under-investment in Mighty River Power that it is going to still get $5 billion to $7 billion of revenue out of those sales. What is it going to spend it on? Well the list is long: KiwiRail schools irrigation hospitals—all these things that actually by the way do not generate any revenue. Last time I checked a school or a hospital does not. A hospital is there to make patients healthy. So the Government sells a revenue-generating asset which brings in ongoing dividends to the taxpayer to spend on those things. It purchases non - revenue-generating assets and it can do that only once because the money runs out.But it gets better colleagues because $5 billion to $7 billion apparently is going to pay for the Christchurch rebuild and a whole set of other things and that total bill adds up to $84 billion—billion with a B—worth of expenditure out of $5 billion to $7 billion revenue of sale proceeds if the Government gets all those assets away. So to quote the Prime Minister’s favourite phrase I say to those opposite show us the money because there is a big gap and a big hole in the fiscals that this Government puts forward. That is why you would think it would actually make some substantive reform not just the odd Learjet or private jet as it is doing here—not just clause 5(3) of the bill of course in here in respect of the dividends from the sale. I ask the Minister the same question that Damien O’Connor asked.I see Gerry Brownlee is here. He is the third most powerful man in New Zealand according to the ChristchurchPress . He will know the answer to this: is clause 5(3) of the bill going to affect the bonus shares the loyalty bonus from the Mighty River Power sale? Any takers? Gerry have a crack—all of your fingers and toes? No. No of course. No the Government will not answer that. It does not know.Hon Gerry Brownlee: I’ve got all of my fingers and toes.Hon CLAYTON COSGROVE: All your fingers and toes Gerry. Try that. Count up. You know I am sure he bought some shares. He may get part of the loyalty scheme. He may be able to tell us whether clause 5(3) of the bill actually impacts on that.Then of course finally we have the tinkering with GST and some adjustments. What we do not have here is the Prime Minister or Gerry Brownlee or the Minister in the chair getting up and apologising to the people of New Zealand for National lying to them—and it did—when it went back on its word in respect of the increase in GST. This is not the brave new world that we were promised by National or the brighter future. This is fiscal piffle.PAUL GOLDSMITH (National):I was very interested to hear from the previous speaker Clayton Cosgrove about his concerns about equity in the tax system. He was terribly worried that Joe Public in the street is having a hard time and that all the tax cuts are going to the wealthy. So I thought I would just remind him of a couple of statistics. At the moment 6 percent of income tax payers pay 37 percent of the income tax. So the higher-income earners pay a lot. But that does not anywhere near explain the actual extent of massive redistribution that we have in the system. When you take into account Working for Families at the same time—and I am trying to focus here on the first part that we are talking about—take for example Joe Average on the street whom Mr Cosgrove referred to. If you were on the minimum wage and effectively earning $30000 a year and you happened to have three children it would be interesting to know how much tax you would expect that person to pay under this iniquitous arrangement which the Labour Party thinks is a terrible one. Do they pay any tax—someone on the minimum wage with three children? No they actually get given $10000 extra so that their after-tax income is $40000. Rather than paying any tax under this massively redistributive system they are actually paid $10000 extra so that their after-tax income goes from $30000 to $40000.I am responding to the issue that Part 1 it has been suggested is not doing enough to reform the tax system. Actually that person having been given an extra $10000 would pay maybe $2000 or $3000 in GST but for that of course you get free health-care free superannuation free education at the point of delivery and all the sorts of things that the Government provides.I will just use one final example before I step up. What happens if there are two income earners in the family and the household income is $50000? What tax would you expect them to be paying if they had two children—two income earners with $50000 in household income. If they had two children well they would not be paying any income tax at all; they would actually be given $1600 on top of that. So their actual after-tax income is higher than their pre-tax income. Again it is hardly the most inequitable system unless of course you are suggesting that maybe there is too much redistribution and I think that is an issue that we need to resolve.If there are three children in that household with $50000 of income in fact the tax is not zero; they are given an extra $5000. So their after-tax income goes from $50000 to $55000. I just thought I would put those figures down on the table so that the people in the Parliament can realise that when we hear all this nonsense about the Government letting off the wealthier people from paying tax and making Joe Public struggle we—Hon Trevor Mallard: Do you want to speak again this year?PAUL GOLDSMITH: Sorry? I think I have probably said enough on this issue so thank you very much.BRENDAN HORAN (Independent):I look forward to being able to participate in democracy. I note that the rules for livestock valuation were introduced just 12 months ago in Budget 2012 so this Government is having to make changes almost before the ink is dry on the original legislation. We saw a parallel of this around about 6 weeks ago in this Chamber. Simon Bridges rushed through the Crown Minerals Amendment Act in April and it had so many flaws that this House under Budget urgency was asked to debate the “Crown Minerals Amendment to the Amendment to the Amendment Bill”.When the House is put into urgency as I said earlier a little bit of courtesy at the beginning of the week would go a long way. Members such as me have to cancel or rearrange constituent appointments so it has a great effect.But anyway this taxation bill with “Livestock” in its name the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill is another fixer-upper bill. But to return to members of Parliament and the way the taxation law applies to us in clause 12 the final wording after many changes and revisions provides that in respect of services for members of Parliament: “An amount is exempt income of a person to the extent to which it is income of the person and is not exempt income under another provision of subpart CW if the amount is travel accommodation attendance and communication services as defined in section 20A(7) of the Civil List Act 1979 and—(a) the amount is—(i) referred to in section 20A of that Act: (ii) paid under section 25 of that Act; and (b) the amount is—(i) provided to a person to whom any of section 25 (1)(b) to (e) of that Act applies:”. Honestly it is a relief to know that the original policy intent applies and I suspect that none of us would have been able to divine that from reading clause 12 as it was written.I welcome the opportunity to thoroughly examine to scrutinise and to debate the important business the Government puts before us today. There are another 17 parts and provisions of several bills to debate and I look forward to the debate and contributions of members after the dinner break. Thank you.The question was put that the amendments set out on Supplementary Order Paper 266 in the name of the Hon Todd McClay to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes118New Zealand National 59; New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; ACT New Zealand 1; Independents: Dunne Horan.Noes1Mana 1.Amendments agreed to.Part 1 as amended agreed to.Part 2 Amendments to other ActsThe question was put that the amendments set out on Supplementary Order Paper 266 in the name of the Hon Todd McClay and the amendments set out on Supplementary Order Paper 272 in his name to Part 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes103New Zealand National 59; New Zealand Labour 33; New Zealand First 7; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes 16Green Party 14; Mana 1; Independent: Horan.Amendments agreed to.Part 2 as amended agreed to.ScheduleThe question was put that the amendments set out on Supplementary Order Paper 266 in the name of the Hon Todd McClay to the schedule be agreed to.Amendments agreed to.Schedule as amended agreed to.Clauses 1 and 2Clause 1agreed to.The question was put that the amendments set out on Supplementary Order Paper 266 in the name of the Hon Todd McClay to clause 2 be agreed to.Amendments agreed to.Clause 2 as amended agreed to.Bill to be reported with amendment presently.Hon GERRY BROWNLEE (Leader of the House):I moveThat the Chairperson report progress.Progress to be reported presently.House resumed.The Chairperson reported the Legal Assistance Amendment Bill with amendment and that the Committee had divided it into six bills; the State Sector and Public Finance Reform Bill with amendment and that the Committee had divided it into three bills; the Plumbers Gasfitters and Drainlayers Amendment Bill without amendment; the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill with amendment; no progress on the Airports (Cost Recovery for Processing of International Travellers) Bill; no progress on the Administration of Community Sentences and Orders Bill; no progress on the Reserve Bank of New Zealand (Covered Bonds) Amendment Bill; and no progress on the Medicines Amendment Bill.Report adopted.The ASSISTANT SPEAKER (Lindsay Tisch): Members the Government has indicated to me that it no longer wishes to progress the business for which urgency was accorded. Therefore the House stands adjourned until 2 p.m. on Tuesday 9 July 2013. Good evening members.The House adjourned at 5.13 p.m. (Thursday)