Volume 650 Week 86 - Tuesday 23 September 2008(continued on Wednesday 24 September 2008) 
Text is incorporated into the Bound Volume 
Volume 650 Week 86 - Tuesday 23 September 2008(continued on Wednesday 24 September 2008) 
[Sitting date: 23 September 2008. Volume:650;Page:18943. Text is incorporated into the Bound Volume.] 
Tuesday 23 September 2008 
( 
continued on Wednesday 24 September 2008 
) 
Central North Island Forests Land Collective  Settlement Bill 
Second Reading 
Debate resumed. 
CHRISTOPHER FINLAYSON (National) 
: 
 Madam Assistant Speaker informs me that I have 1 minute and 30 seconds remaining to speak on the Central North Island Forests Land Collective Settlement Bill. I note that I started speaking last night at 9.52 p.m. so strictly speaking I should have 2 minutes but I will not quibble with the Chair because that would be inappropriate. 
All I want to do in closing is address the question of public access. It has been comprehensively dealt with in the bill. It is not an issue between the parties. The deed of settlement requires the Crown to grant public access easements over the forests prior to the settlement date and we can deal with that issue in the Committee stage. Clauses 10 and 11 deal with the issue and they are substantially the same as the clauses that the Committee of the whole House debated last night in the context of the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill; I refer to Supplementary Order Paper 250 which brought into that bill clauses 130A and 130B. The intent is the same even if there are minor differences in wording. 
With those closing comments I believe that all the issues have been considered and that there is no impediment to the bill proceeding through all its stages as quickly as possible. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I naturally stand in support of the Central North Island Forests Land Collective Settlement Bill. I intend to take only a very short call. I listened very carefully to the Hon Dr Michael Cullen’s second reading speech in the House last night and I am pretty confident that he covered all the technical aspects of the bill and also highlighted some of the important issues around the process that was undertaken by the Central North Island Iwi Collective. 
If I have any comment at all to contribute to this discussion it is about the process. It is important to acknowledge the leadership of the iwi collective leadership by Te Ariki Dr Tumu te Heuheu and also the efforts of his executive team and all those tribal leaders who made a contribution to the process and also to the manner in which the allocation of interests to all iwi concerned will be undertaken. 
It is also important to comment about the effect that this particular process has had nationwide where there are collective interests involving a number of iwi over a number of areas and relating to specific claims. It seems that a forum for the representation of common interests is very very popular. I have met with a number of iwi around the country since the central North Island agreement was signed who wish to look at a similar process so that they themselves can resolve issues that they all share as iwi. For example the Muriwhenua forum will look at a number of areas including Te Oneroa-a-Tohe Landcorp farms forests rivers and mountains. They themselves will decide how individual iwi interests will be represented and also how those interests will be distributed. Interestingly enough I met with iwi from Wharekauri—Moriori and Ngati Mutunga—who are also looking at a similar process. I am sure that over the next few months we will see similar arrangements being implemented around the country. 
The way in which the central North Island settlement was reached has gathered a lot of momentum and a lot of support. It is important to congratulate all those who have been involved in the central North Island settlement to date and to thank them for the contributions they have made. I thank my colleagues Dr Cullen and the Minister of Maori Affairs for the great work they did and I acknowledge the independent facilitator Wira Gardiner who conducted the whole operation like a military exercise. I do not mean he shot prisoners; I mean he made everyone stand to attention—but I was getting worried sometimes! [ 
Interruption 
] And Matt Te Pou; there are so many whom I could mention but if I go through them individually I am bound to offend by leaving somebody out. 
I also acknowledge the contribution to this debate by Chris Finlayson. I was not sure whether he was talking about the bill or auditioning for a job as Crown prosecutor but I thank him for his contribution. Kia ora tatou. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am pleased to rise to take a call on the second reading of the Central North Island Forests Land Collective Settlement Bill. This bill came to the Maori Affairs Committee at the same time as the bill we dealt with last night the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill and the select committee travelled to the central North Island to hear submissions on the bills at the same time. I think it is a tribute to the significance of this bill and its ground-breaking approach that there was a very very good attendance of the interests represented by this bill as for there was for the Te Arawa bill as well and that there was generally widespread support for it. So it is very good to be here this morning to see the return of the bill to the House and to anticipate its passing into law later this week.  
This is an important bill as has already been referred to. It is important to remind ourselves that it addresses only claims as far as licensed Crown forest land is concerned and that there will be future negotiations over various packages for each of the iwi in the collective. I was interested to hear the honourable member who spoke previously the Hon Mita Ririnui talking about how this bill and the approach in it appear to have acted as a springboard for other settlements across the motu in terms of the way it is possible for various iwi and various interests to come together in a settlement when there are interests in common. That obviously makes sense if having to wait to deal with them individually would not result in a better settlement and would also result in a further time delay. I look forward to the Hon Mita Ririnui outlining several other areas where the Government has been engaging with iwi over the last wee while since the central North Island settlement and to seeing some of those settlements come down the line as well. I am very interested also to see that progress appears to be being made in terms of settlements in Tai Tokerau.  
I would just flag a slight anxiety of the Opposition members that there appears to have been a rush to settle these claims. That is not to take away from the importance of doing so or to take away from the fact that the iwi involved have been willing to engage in the process in this last 12 months. After all they are not witless either. They know when they are ready to settle and if they see a readiness on the other side which they obviously did then they have been willing to move to the table. It bodes well for the future and that is good considering that there had seemed to be a bit of going to sleep on the job in the previous 8 years of this Labour Government.  
In any event we had very good gatherings at the select committee. I will refer briefly to one or two issues. The mandate issues that arise in all settlements certainly were not absent from the select committee hearings on this bill. Several submitters opposed the bill on the basis that the collective had no mandate to represent them and that the inclusion of their claims in the bill was of prejudice to them because it removed their ability to pursue their claims through other avenues such as the Waitangi Tribunal or the courts. Issues of mandate were raised in relation to Ngati Manawa Ngati Hikairo Ngati Whaoa Ngati Tahu and Ngati Rangitihi. The submissions from all of them were well put to the committee. They were certainly aired and given a good hearing.  
But in the end what is unique here—and we have acknowledged this already—is that the Government has basically seen fit to let the iwi sort through issues that are internal to them. This has been unlike previous matters where the Government has tended to go where it should not tread. It appears that in the end one has to accept certain mandates because there seems to be a majority there and because various interests have been mandated for other purposes. That does not mean to say that those who feel aggrieved ought to be ignored. Hopefully the collective in time will find a way to bring those parties into this settlement as well. I understand that in the case of Ngati Hikairo since the select committee went to Taupo there may have been some progress on their issues in relation to the Taurewa Forest. If so that is good.  
I would again urge the tribes within the collective to take that issue seriously—I am not suggesting that they have not—and I hope that when this bill passes into law they will take all possible steps to bring those interests into the settlement. This is a big settlement; it is a settlement that will provide a very potent springboard for the tribes of the central North Island. It is a very sensible one in the commercial sense because it keeps the forest estate under one entity. That makes sense undoubtedly. It also makes sense that everyone who is entitled to benefit from this settlement does so in the future.  
The other matter that I would like to refer to is the allocation model and the tikanga-based mana whenua resolution process. I raised this issue in my first reading speech. We were interested as a select committee to explore the issues involved with submitters. The proposed allocation for the commercial benefits in schedule 3 of the bill appears to be problematic for some iwi but again the collective itself proposed that to the Government. The tikanga-based allocation model or resolution process for the allocation of land interests of course is still to come. It is still before us. There are some anxieties about that as well. It interests me again that the iwi have proposed that to the Crown. It is good that the Crown accepted that given the experience we had over the fisheries model—although it has been laid to rest some time ago and we have seen the allocation of fisheries to iwi over the last 2 or 3 years.  
This model tries a new approach which leads us to the iwi themselves. After all they are the ones who know best or who ought to know best who has mana whenua in the various areas covering the Kaingaroa Forest. So that does seem to be a sensible place to start. The Opposition will be watching with interest and should we make it into Government we will certainly be monitoring and supporting the process. As I say it makes sense to leave those internal matters to the collective itself but it does require great leadership. Maybe it requires the various individual entities to put to one side their own interests in an attempt to make sure that the collective remains strong and united and to realise that everything is possible if one continues with dialogue and korero. Anything is possible if one does that. So we look forward to seeing how that model works and obviously if it is being followed elsewhere then maybe that is the way that other tribes will be able to see their way forward too. Thank you. 
PITA PARAONE (NZ First) 
: 
 Tena koe Madam Assistant Speaker. I am pleased to take a call in the second reading of the Central North Island Forests Land Collective Settlement Bill. The Maori Affairs Committee heard submissions on this bill and I was a member of the committee. This will be one of the few times I give some self-praise because I think the way in which the committee handled the various views on this bill would have given all the submitters a sense of satisfaction that they had received a fair hearing. 
One of the observations I made during that whole process however was that I was mindful of the oft-stated phrase used to advertise State of Origin rugby league matches in Australia: “state against state mate against mate”. Well in the case of this bill—and I am not wanting to be derisive about the whole process—the sad part for me during the hearing process was to see whanau against whanau elder brother or elder sister against younger brother or younger sister. Although I sympathise with the views of both parties I think when we have settlements affecting land and in particular mana whenua then certainly we will see more of that kind of division. That is the challenge that awaits the leadership involved in this settlement. 
Having said that I acknowledge the real leadership that was exercised by those who represented their respective iwi at the negotiating table. I think some of the decisions they made showed true leadership. One of those decisions was a preparedness to give up a percentage of what was already agreed to to allow another iwi to have a bigger slice of the cake so to speak. I want to acknowledge that sort of leadership. 
There are a number of issues that are worth making mention of and in particular the issue of mana whenua. Although this bill is essentially in the first instance about the allocation of rental funds held by the Crown Forestry Rental Forestry Trust the fear of many of those who had some resistance to the bill was that it might set a benchmark in terms of the exercise of mana whenua. As I say that will be a real challenge for those involved. I will give members an example. Part of this settlement is known as the Taurewa Forest. One hapu made private submissions to me to say that in their view and not only in their view but also by virtue of their tikanga they felt that that part of the settlement should be allocated to them. That is an issue that will have to be dealt with by the leadership. 
The other point I will make with regard to the issue of mana whenua is that we received several submissions both written and in person from a particular submitter all emphasising the fact that in terms of history and his tribe’s tikanga his particular tribe owned a majority of the land that this settlement is about. His real fear was that if this bill was to go through in its present form then the percentages that were used for the allocation of Crown Forestry Rental Trust funds and future rentals would determine how the land would eventually be distributed amongst the claimants. His concern was such that he has an application with the Maori Land Court and I understand that he wanted an urgent hearing with the Waitangi Tribunal. But at the end of the day we have to take into consideration the fact that the negotiators who may not have had a 100 percent mandate but certainly had a majority mandate have made the decision. They have made the decision on behalf of their iwi. Who are we to amend that decision? Any amendment would take the whole process back to square one and we all know that for this particular settlement the negotiators have had to travel a very long and rocky path to get to the point where we are at the moment. 
I will also make reference to Ngati Rangitihi who were at the table very early in the piece but as part of the mandate process quite clearly did not have the support of their people to accept the settlement. Whatever the argument might be as to why they did not get their support I think it is to the credit of those who have negotiated this settlement that they have allowed an opportunity for Ngati Rangitihi to get the required mandate. I understand that postal voting closes on 6 October—I am not quite sure about the date but it is very soon. Those people have until Christmas Eve 2008 to indicate whether they have the required support and I think it is to the credit of the negotiators of this settlement that they have allowed that to happen. 
Suffice it to say New Zealand First supports the second reading of this bill. Kia ora. 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting the Central North Island Forests Land Collective Settlement Bill. It has been interesting to hear the contributions so far about the complexities of the process about the submissions to the Maori Affairs Committee and about how to resolve the unresolved issues. The Green Party will be supporting this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Madam Assistant Speaker. Kia ora tatou e hoa ma i tenei ata. The date 25 June 2008 was a unique moment in parliamentary history. The downside for me was that I was not here. I was in fact away at a tangi. I arrived back in the House to take a call in ACT’s slot following on from my co-leader Dr Pita Sharples. But one could not help but feel though that something significant had happened on that day. I am of course referring to the first reading of the Central North Island Forests Land Collective Settlement Bill. 
As the member of Parliament for Waiariki I was very disappointed that I was not here to witness a piece of history. Engari e kore e taea te karo i te karanga a-mate. One cannot escape the call of those who have passed on. The taxi driver commented on the migration of Maori here as we headed from the airport back to Parliament. He talked about and the people talked about kuia and koroua whanau children babies in arms all having been drawn to this place to be a part of history in the making and about seeing that everywhere one turned there were Maori. When I finally got into the House the public galleries that were crowded earlier in the day had thinned out as people had moved off for kai and to celebrate the event.  
The Maori Party acknowledges that day. We acknowledge those who made it happen te ariki Dr Tumu te Heuheu the iwi negotiators Matiu Te Pou the Ministers and Dr Cullen in particular and Wira Gardiner on the pursuit of kotahitanga as the underlying principle the focus of unity. As I did during the first reading debate I give credit where credit is due and I acknowledge as I say Dr Michael Cullen for leading a new approach that sees us considering a heap of settlements prior to the closing-off of Parliament.  
The Maori Affairs Committee report describes the complexity that is associated with the mandate issues of iwi within the collective but clearly the approach taken to achieve kotahitanga within ourselves has been achieved for the most part. We certainly heard in the select committee as other speakers have spoken about from those who had issues but considering the task Matiu Te Pou and Wira Gardiner must take a great deal of credit for the result. This would never have been a straightforward procedure.  
The iwi making up the collective as we have heard are Ngai Tuhoe Ngati Manawa Ngati Tuwharetoa Ngati Whakaue Ngati Whare Raukawa and the affiliate Te Arawa iwi and hapu that are all detailed in the bill. There is space there for Ngati Rangitihi and I am hopeful of hearing in the Committee stage about the progress of the meeting that was held over the weekend. I have not been able to catch up on the detail of that. I am sure that the Minister will help us out on this occasion. The collective is a significant grouping of iwi.  
Having followed this process from the start it was pleasing to me to see the move away from caution like that shown at the hui held at Waitetoko last year through to kotahitanga to unity. I am clear in myself that getting to consensus views would not have been reached without fierce and robust debate in that sort of forum—and so it should be. There is much at stake here so all of the lead-in should be given the utmost scrutiny.  
Amongst all of this is Ngati Whaoa who for all intents and purposes may be classed as a small player. I spoke about this matter in relation to the Te Arawa affiliates bill. The desire on the part of Te Runanga o Ngati Whaoa to uncouple itself from Ngati Tahu is clear and I have statements from Te Runanga o Ngati Whaoa to confirm that. I will raise that issue again in the Committee stage but it is a major issue. Why? Because Ngati Whaoa has not insignificant interests in the central North Island forests under mana whenua. It is a small iwi with significant interests but its place in the scheme of things will be gone lost in fact by way of its being firstly coupled with Ngati Tahu then secondly wrapped into the Te Arawa affiliates. I will continue to do the best I can to represent the interests of Te Runanga o Ngati Whaoa which has asked me to take up its concerns.  
We know that this settlement like every settlement carries with it the legacy of generations that have gone before. The central North Island settlement is no different from others; people have passed on but have left behind matters that can be addressed only within and between the hapu and iwi who form this collective. I remain hopeful that matters of concern will be sorted out internally for it is clear that damage done between and among whanau hapu and iwi will be long lasting and talked about on our marae for years to come. Mr Pita Paraone spoke about that in his speech.  
As we now know mandate concerns were raised to do with Ngati Manawa Ngati Hikairo and Ngati Rangitihi and as I say Ngati Whaoa and Ngati Tahu. There were accusations of people feeling they were not receiving basic information suggestions that there were inconsistencies around all of those who could say they spoke for the tribe and reports of people being shut down at hui. Although I and other members at the select committee may have concerns about some of the accusations it is significant that the Crown believes that those interests are best dealt with by those iwi and hapu themselves. I have to say I concur with that view. Iwi must hold their own to account and deal with issues internally. I must add to be clear that I mean this should apply when the disagreement is intra-iwi. Where there is inter-iwi disagreement and a settlement is at stake I say the new model of rangatira ki te rangatira with experienced facilitators can work and would save a heap of stress at the business end. It is important that resolution is achieved if it results in long-term gains for the people.  
Today we acknowledge the significance of the $400 million - plus settlement as providing a foundation for the future of the people of Te Waiariki. Much has been made of the return of 176000 hectares of land which will make Maori the largest forestry operator in the country. Much has been made also of the collective ownership the large natural grouping that brings together the seven iwi representing over 100000 Maori. We know too that the settlement will make those iwi amongst the largest investors in Aotearoa. Those are all significant features of the settlement but we cannot lose sight of the injustice that is part and parcel of every settlement process which is that at its core compensation is only ever a fraction of the losses experienced.  
The Maori Party will not be quiet about the ongoing anomalies that must be responded to in the broader context of settlement policy. We will continue to raise the issues around cross-claims and time frames and around decisions being made in haste. But today is a day to recognise the precedent established by this bill. This settlement is innovative in the way in which it is iwi driven and tikanga based. The tikanga-based mana whenua resolution process set out in schedule 2 of the bill is a really interesting concept which we welcome as the initiative of the iwi involved. The concept involved three different criteria in the consideration of mana whenua ahi ka roa ahi tahutahu and ahi mataotao in three different tiers: negotiation mediation and adjudication. This provides an innovative model for other iwi to examine.  
The matter of the splits of rental moneys to iwi versus mana whenua is at the heart of concerns by submitters but I will talk about that at the Committee stage. Ngati Manawa for example has significant mana whenua interests over the land yet it gets only 6 percent of the rentals. An explanation of that would be appreciated. It is of note too that the Waitangi Tribunal in its report on the Native Land Court’s investigation of Kaingaroa No. 1 suggested a fluid overlapping and complex layering of interests. It may well be that the process that the central North Island negotiators and iwi have come up with satisfactorily addresses that point although the proof will be in the pudding.  
Perhaps a mark of how people have viewed this settlement has been the lack of strong and coordinated public opposition to it. Although issues have been raised it would be fair to say that the unique process the collective has followed has received a positive response. In fact only a week after the signing three northern leaders drew out comparisons for arrangements that might work say for Ngapuhi Ngati Hine and Ngati Whatua. Raniera Tau Erima Henare and the Maori Party list member Naida Glavish have sent a call to their respective iwi organisations to explore the potential of the central North Island process for advancing their own collective plans.  
At the other end of the country Te Wai Pounamu Ngai Tahu has also been watching on in terms of how this settlement will impact on its potential relativity top-up as it relates to the billion-dollar cap. In June my co-leader Dr Pita Sharples asked the Minister of Finance about the implications of this bill for the ratchet clause relativity mechanism. His response was that the point at which such a mechanism would apply could be expected to occur probably within the next 2 to 3 years in terms of reaching the point expressed in 1994 dollar terms. But as Otakou runanga chairman Tahu Potiki pointed out “there is definitely some subjectivity with the whole thing.” There are so many eyes on the central North Island watching the progression of this settlement and contemplating what it will mean. There is every opportunity for the economic development of the iwi involved in the settlement to prosper and every opportunity to increase the original investment and to generate greater value and higher returns.  
And so we come to the culmination of over two decades of energetic and inspired negotiation to bring this claim to a conclusion—or at least tomorrow it will be concluded. This bill represents a great deal of work since the passage of the Crown Forest Assets Act in 1989. The central North Island forest estate is an area not just of economic value but of huge cultural significance as well. The generosity of iwi in agreeing to preserve and enhance existing public access is an incredible statement from the iwi to the nation. We in this House must always remember that gift. The Maori Party will support this bill at its second reading. 
Hon TAU HENARE (National) 
: 
 I start by congratulating first the claimants themselves then the Government and then our little Maori Affairs Committee on a job reasonably well done. I will take a couple of minutes to talk specifically about what I think comes out of the Central North Island Forests Land Collective Settlement Bill. I will not talk specifically about what is in it because I think although much is made of the allocation model the tikanga-based resolution process and although it sounds really good in a fantasy world there are still people outside of that even though we have a tikanga-based resolution process who think the deal is not up to scratch. I suppose it tells us that no matter what system we have there will always be somebody outside the process who might think the deal is not right.  
One of the more interesting facts I found out about this bill during the select process was the result of a question I asked one of the submitters. It was about mana whenua it was about property rights—it went down that avenue. I asked that person who will remain anonymous about the land shares that that person and that person’s family had had for years and years. The answer to the question was that they had gone back even further to communal ownership. I thought OK I can cop that. I accept that that is a line of thinking that goes pretty well with the settlement. But I got to thinking about who compensates the person who had the individual shares. At the establishment of the Native Land Court communally owned land was individualised but now that we are going back to a point in time before the individualisation of land who compensates those people who have just been left out vis-à-vis the individual shareholders in the land? So whatever we do out of this we will create I think another set of grievances more than with any other settlement I have seen.  
I am not saying this is a bad settlement and a bad bill. I am saying that out of this we have created most probably if people are clued up—and I am sure they are—a situation where in 5 or 10 years’ time they will trot back in and say they have been hard-done-by and can we please sort it out because we were the ones who made the grievance and gave them the ammunition to have a go at us. National will support this bill going through and I just wanted to raise that issue because I do think it is a huge issue. 
I will read out a little paragraph on the select committee’s report on the bill: “Ten submitters implicitly or explicitly disputed the mandate of Te Runanga o Ngati Manawa to agree to the inclusion of their claims in the settlement bill. The key concern underpinning all these submissions was that Ngati Manawa should have done better out of the settlement given their strong mana whenua interests in the Kaingaroa. Some of the submitters also asserted that Ngati Moewhare … had been excluded from the settlement negotiations or that Ngati Manawa representatives had not had a significant role in” the central North Island negotiations. 
I want to bring something up at this stage and you can rule me out of order if you want to Madam Assistant Speaker. This process raises the issue when we are dealing with Treaty negotiations and Treaty settlements in the House that it does not matter how many submitters the select committee gets and it does not matter how many are opposed and in favour of the settlement the select committee has no jurisdiction to change the settlement. In fact the House itself does not have any jurisdiction whatsoever to change the settlement. So with all due respect to the mana of the House this process is a bit of a farce. It is a bit of a farce in terms of when we expect the community to come to us and say: “Excuse me these are my feelings on this legislation.” But we cannot change it so what is the point? Is the point itself just giving the community the opportunity to say hello and air its grievances and to then go away and nothing happens? I think that is a Clayton’s way of dealing with issues.  
It might make them feel nice that they fronted up to the select committee and had their say but nothing comes of it. I was not astounded but gobsmacked that there was a Speaker’s ruling on this matter that pertained even to an amendment to Treaty legislation. I can certainly understand why. I am not quibbling and arguing against it; I am just pointing out the fact that when we are dealing with these issues it seems a bit on the nose that we call for submissions that we spend money going up the line and hiring out a hall at the hotel and that we call hundreds of people together so that parliamentarians can listen to their submissions only to find out that we cannot do anything about it. 
I just wanted to raise that issue. Maybe in the future a select committee or even the House can look at this issue in a bipartisan manner. How do we deal with the issue of submitters coming to the House and asking us to change something because of the way they feel about it? Instead of saying no maybe in the future there will be some way of saying that we will look at it and see whether we can change it. That is one of the main points I want to make in respect of the Central North Island Forests Land Collective Settlement Bill.  
The last point is that I think the people who have worked on this bill have come up with a way of dealing with issues that is particular and peculiar to them. So I commend those who have been involved; there are too many to name. I think this is a watershed time in terms of Treaty settlements and hopefully some other people can look at how the process has been achieved and at the road we have gone down so they can follow the lead of those involved in the bill. But we will not hold up the show too much longer. Thank you Madam Assistant Speaker. 
Bill read a second time. 
In Committee 
Preamble  
CHRISTOPHER FINLAYSON (National) 
: 
 There is a certain air of unreality in going straight from a second reading to debating the preamble and there is a danger that in this air of unreality there will be unnecessary repetition. Of course the Committee does not want to hear unnecessary repetition from me. I must confess that my primary interest in the bill and the area I want to speak on is schedule 2 which is the tikanga-based resolution process for the allocation of land so I will be reasonably brief in speaking about the preamble. 
I simply say that I am particularly interested in recital (4) which talks about the way in which the allocation is to occur. It refers to the terms of the deed of trust. As we heard last night from the Minister in charge of Treaty of Waitangi Negotiations almost 86.5 percent of the beneficial interest in the forests is to be held for the collective “and the individual beneficial entitlement of each member of that Collective is to be determined by reference to the allocation process that has been agreed amongst those members and is set out in this Act.” That is a reference first to schedule 3 which sets out the percentages for allocation of rental proceeds. I must say that I think those percentages have been prepared to an admirable level. For example Tuhoe are entitled to 27.2987 percent of the total and how that was worked out I do not know. 
More particularly I will focus on schedule 2 which deals with the way in which the allocation process is to occur. As we can see from that schedule which I will look at in far greater detail when we get to it there are essentially three stages. I am particularly interested in stage 3 and the effect of that type of adjudication process on the ability of courts to interfere in any decision that may be reached. 
The preamble is a quite straightforward part of the bill. It sets out the background and it sets out that the Crown and the collective agreed to negotiate in good faith have established a framework and have established the percentages and a means by which each individual member of the collective is to be allocated a particular portion. I think that is all I need to say about the preamble; we must move on and get to the real heart of the bill. 
Hon GEORGINA TE HEUHEU (National) 
: 
 My colleague Chris Finlayson is right of course: the preamble is reasonably straightforward. It is important for the fact that it lays the groundwork for the rest of the bill and sets out that “(1) The historical CNI forests land claims … are based on historical breaches of the Treaty of Waitangi by the Crown and the desire of [the iwi involved] to secure the return of that land”—basically the land lying beneath the Kaingaroa Forest—“and to achieve an enduring settlement of those claims:”. 
The iwi of the Central North Island Iwi Collective comprise over 100000 individuals and they have interests that span a major proportion of the central North Island. This settlement relates to 175000 hectares of central North Island forest land and has its genesis in that land and in the contention that has surrounded it for the last 20-odd years. Interestingly the Crown Forest Assets Act was passed in 1989 so that is a long time for something to be done about this matter. I remember that Richard Prebble sat on the Maori Affairs Committee during his last term in Parliament. He was one of the main movers behind the Crown Forest Assets Act and he shared with Maori Affairs Committee members at the time that the issues surrounding the sale of Crown forests in terms of Maori interests—that is the land—were meant to be settled within about 3 or 4 years. Here we are now in 2008 and next year it will be 20 years exactly since that Act was passed. 
It is important to remind ourselves of the Act that was passed then because it sits behind the bill and its opening statements. Basically Maori took an action to the courts and as a result of hard-fought and successful litigation on their part that Act was brought in. A big part of it protected Maori interests in the land that is now part of this settlement—but not substantially because the land interests still have to be dealt with and some of us have referred to that in our second reading speeches. This bill deals with the commercial side of the settlement; as for the land issues in terms of allocation to the various iwi interests that exercise is still to occur. The rentals from the licences were set aside upon the passing of the 1989 legislation until the claims over the forests could be resolved. As I have already said that has taken longer than anyone had ever dreamt possible. I guess we have to wonder about the development costs to Maori in terms of lost opportunities over the years but I am very pleased that we are here today discussing the bill and the settlement. 
Recital (2) of the preamble sets out that the two parties the Crown and the Central North Island Iwi Collective agreed to negotiate in good faith. That has been referred to in previous speeches as well. When a settlement of this type comes together in the way that this one has with a long gestation we may ask whether that says something about the slowness of the Crown or about the various iwi interests not seeing a way to work together. Fortunately those things have been worked through. 
I think the preamble is fairly clear. It sets out what comes later and we will refer to some of the issues that are raised behind the preamble as the Committee debate progresses.  
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena no tatou. I have a few questions for the Minister in the chair the Hon Mita Ririnui even though we are just starting to hook into the debate and they are really just for clarification. 
I note that the preamble refers to 86.4 percent of the beneficial interest which I suppose implies that Ngati Rangitihi who were a part of the collective come under the 13.6 percent of the beneficial interest that has been tagged for remaining beneficiaries. I want to check with the Minister whether that is the case even though Ngati Rangitihi are not named. I know that this issue crosses over into Part 1 and into the schedules as well in terms of named iwi but I want to check on the issues around Ngati Rangitihi and where their part might be in terms of that matter. 
Could the Minister also give us some information about whether any progress was made at the mandate hui held over the weekend? Although I have not had submissions from Ngati Rangitihi or any of the factions I want to ensure that we can say that Ngati Rangitihi’s interests have been protected and I want to know whether there are any implications—I think I know what those implications are anyway—if they do not meet the 24 December deadline. Perhaps the Minister could give us some outlines around that matter. 
My main interest in the preamble is recital (4)—namely the 86.4 percent of the beneficial interest etc. I seek clarification specifically about the Ngati Rangitihi issue. I ask the Minister to take a call and give us some feedback. Thank you. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 For the benefit of the member Te Ururoa Flavell I will be very specific in terms of his queries about the preamble to the bill. If the member looks at recital (4) very carefully he will see that it is quite specific about the interests of Ngati Rangitihi. He asked a question about the progress being made in resolving the issue of a mandate within Ngati Rangitihi. I think it is too early to make any comment about that particular issue. It is an internal matter. There is a closing date for resolving the matter but it is quite some time away yet. I think we should allow Ngati Rangitihi the opportunity to resolve their internal matters and then come back to us and declare their position. Prior to that I certainly do not intend to speculate. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I am sorry to labour the point but the key issue in the discussions at the Maori Affairs Committee and indeed in the submissions made to the Minister in charge of Treaty of Waitangi Negotiations was that Ngati Rangitihi was originally included in the bill. We know that there are mandate issues—that is not argued. I thank the Minister in the chair Mita Ririnui for at least saying that they are ongoing. All that I want to know is whether it is clear that Ngati Rangitihi’s interests which are not now specifically covered in this bill have therefore moved to the other slot. That is all I need to know. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 The preamble of the bill does not specifically mention the interests of Ngati Rangitihi in terms of the period for which the remaining beneficial interest will be held but the member can take it as read that it is referring to Ngati Rangitihi. 
The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to the preamble be agreed to. 
Amendments agreed to. 
Preamble as amended agreed to. 
Part 1Preliminary provisions  
The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to Part 1 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2Provisions relating to transfers of assets allocation principles Crown agreed proportion and DSP properties  
The CHAIRPERSON (Hon Marian Hobbs) 
: The debate on this part includes clauses 6 to 29 and schedules 1 2 and 3. 
CHRISTOPHER FINLAYSON (National) 
: 
 I am pleased that we will be debating schedule 2 because it would make no sense to debate Subpart 2 of Part 2 without looking at schedule 2. 
Part 2 deals with provisions relating to the transfer of assets and to the all-important allocation principles. In my second reading speech I dealt with issues relating to public access. They are contained in clauses 10 and 11. They are in substantially the same form as the clauses contained in the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill which we debated yesterday. I have no problem with any of that. 
I come to Subpart 2 and particularly to clause 14 which is a very important clause. It sets out that “The iwi of the CNI Iwi Collective may in accordance with the resolution process set out in Schedule 2 agree among themselves as to which specific area or areas of the CNI forests land is or are to be transferred to the iwi of the Collective.” When one looks at schedule 2 one sees that a very comprehensive resolution process is set out. The first stage is for the parties to identify their mana whenua interests and this aspect is to be concluded by 1 October 2009. If there is a need for negotiation one moves to the second stage which will continue through to 30 June 2010—a very tight timetable and I will say something about that a little later. The third stage will be to finalise the allocation agreement which hopefully will be concluded by 30 June 2011. 
There are two parts to the third stage. The first part is to go down the mediation route. The provisions relating to mediation are very sensible as to both whom the mediators are to be and the way in which they are to decide the matter. But if the matter has to go to adjudication then the company has to appoint an adjudication panel. National members have no problem with the qualifications of the adjudication panel but the way in which the panel is to reach its conclusions perhaps needs a little discussion. 
Let me say at once as one who was involved in the fisheries allocation issue for many years that this provision is an admirable attempt to speed up resolution of any issues relating to allocation. Mr Shane Jones of course is the master of these things because he was on the Treaty of Waitangi Fisheries Commission for many years—in the latter stages as chair. 
Hon Tau Henare 
: It doesn’t make him a master. 
CHRISTOPHER FINLAYSON 
: It probably does not make him a master; I apologise to my colleagues for that unnecessary and undue praise. Members will recall that the 1992 Act was passed consequent upon the parties signing a deed of settlement and the idea was that the commission was going to determine the allocation of quota. Almost immediately litigation started. It started first in relation to the lease round. Of course the final allocation work had not been done so the quota had to be leased. It seemed that every decision of the commission was subjected to judicial review. Then in 1996 the people of Muriwhenua commenced a claim against the commission and that raised a huge number of issues. As I said last night the claim went to the Privy Council on at least three occasions that I can recall. Finally a couple of years ago the Government passed legislation to give effect to an allocation model that had been finally worked out by the commission but it was long it was tortuous it involved a huge number of proceedings the legal expenses incurred were horrific and the delay that occurred was most unacceptable. 
That is why I think this model is an excellent attempt to speed up allocation issues. I have just a couple questions about the effectiveness of it. I agree that as clause 6(13) of schedule 2 states the adjudication panel appointed must have “complete discretion to determine the process and the timetable”. I also agree that it is desirable that lawyers not appear before the adjudication panel unless all the parties agree. That may seem to be a startling statement but one must bear in mind that we are dealing with allocation on the basis of mana whenua and one would hope that lawyers would not get in on the act and because of legalism unnecessarily complicate things. 
Another issue which is extremely important and which we need to make sure we are very clear about it arises from clause 6(15) of schedule 2 which states: “The decision of the adjudication panel will be final and binding on all the parties.” I want the Minister in the chair Mita Ririnui to comment on whether the Government intends that that will have the effect of ousting judicial review proceedings because time and time again those sorts of clauses give rise to issues before the court. Let me give members an example from a judgment of Justice Temm in September 1993. A challenge was made in relation to payments made under the New Zealand Steel pension fund. Clause 18 of the trust deed set out as follows: “If any question shall arise as to the interpretation of these presents or the rights or obligations of any member or other person hereunder or as to any other matter touching or concerning these presents such questions shall be decided by the trustees whose decision shall be final and conclusive.” Members will note that those terms are similar to those contained in clause 6(15). The High Court said that that form of clause is commonly found in such deeds but it has to be interpreted on the footing that the decision of the trustees has been lawfully made and it must not be thought that a private transaction of this kind can prevent the courts from supervising the acts of trustees and persons of a similar status. So it did not oust the ability of the court to look at the issue. 
Of course the issue arose some years ago in relation to Mr Zaoui and his case against the Attorney-General and the Inspector-General of Intelligence and Security. There was a discussion about the ability of Mr Zaoui to seek judicial review. I will not trouble the Committee with the detail of the case but I will refer simply to a reference to a decision of Justice Tipping in a 1995 case called  
O’Regan v Lousich 
 where he said among other things that it is “possible for Parliament to provide if it chooses that the decision of a particular decision maker shall not be impugned on certain bases or indeed on any basis. With most types of tribunal and decision maker there is a presumption that Parliament does not intend the decision to be conclusive irrespective of errors of law unfairness or unreasonableness …”. 
My position—and I do not know what the Government’s position is—is that the jurisdiction of the courts should probably be ousted but I do not think that that occurs here and I do not think that clause 6(15) would prevent judicial review. We need to be clear on it. It is in the public interest and it is in the interests of these iwi that this allocation process result in a resolution by June 2011 and that the iwi not be troubled by judicial review proceedings or other types of proceedings. I simply say to the Minister that this clause will not have the effect of ousting the ability of parties to seek judicial review. If it is intended that the clause will have that effect then I think some stronger language is required. I will be very interested in his views on that. It is a very important issue because unless we get some clarity on it now the parties will embark down this path and there will be at least—I am prepared to bet on it—one or two challenges to the process. Maybe it is the intention of the Crown that judicial review of an error of law for example will be permitted. We need clarity and it would be helpful to hear the Minister’s view.  
Hon GEORGINA TE HEUHEU (National) 
: 
 Part 2 is the meat of the Central North Island Forests Land Collective Settlement Bill. I hope that the Minister will take a call to answer my colleague Chris Finlayson’s query about the ouster of judicial review. 
The Minister may recall that National members flagged in our opening speeches our interest in the tikanga-based resolution process for the central North Island forests land which is to be found in schedule 2. Although I applaud and support the fact that the Government has seen fit on the motion of the collective itself to bring forward or to promulgate an allocation process based on tikanga and matters that are of interest to them as iwi and are known only by themselves my colleague and I have a reservation about what happens if the various interests in the collective cannot agree on the allocation of the land interests. That is not to raise any doubt that they are not up to the job but when the Maori Affairs Committee travelled to hear them it was very clear to me that they well appreciate that this area is a real test of the leadership of each of the iwi participating in the collective. It is a real test of their ability to recognise mana whenua interests of each of them in the collective and a real test to lead and be generous in their thinking. That is what I took from many of the submitters. 
But I come back to the point that despite the best will in the world there may come a time when agreement may not be possible. At that point I too am interested to know whether there remains the ability for aggrieved parties to go on judicial review. There is certainly nothing in the bill here before us that ousts it. If there were a disagreement at some future point—and we certainly hope there will not be—is there recourse to an independent outside authority? It would be an authority that is at arms-length to this process and to the iwi involved and if called upon can address issues that may arise. Some people came to see me before the introduction of the bill and asked whether there might be room for instance for the Waitangi Tribunal to be that body should there be a disagreement during the allocation process. I said that I would raise the issue. I am looking forward to the Minister taking a call to tell us whether there is in the event that it is required recourse to an independent outside authority. I am sure that if he does not have the answer immediately we might get that answer before the Committee stage ends. 
In the end the allocation process is not a matter for the Crown. The issues of mana whenua are for the various iwi themselves to deal with. They know the principles that underlie the issues of mana whenua and they ought to and should—and I am sure they will in this case—be able to resolve the allocation process without going off the rails. That is certainly what we hope. 
A responsible Government acting on behalf of the Crown and the people of New Zealand has a responsibility to promulgate and pass legislation that gives maximum opportunity for the process that the iwi have devised to succeed. That process must be open transparent and on the record. Is it envisaged that there will be a record of the discussions that proceed when the allocation process for the land gets under way? That is important too. These things are important for future generations. It is only fair to future generations that they are able to see how the tikanga-based resolution process for their land interests was resolved. Again I come back to the point that it is important to know that there is an organisation at arm’s length should it be required. I am trusting in the leadership of each of the iwi in this collective. They have shown great leadership up to this point to bring to the Crown a model and a proposal that they largely devised. I am sure that that leadership will go on. 
In fact the bigger part of this exercise is still to come. The iwi may think they can breathe a sigh of relief because they have got over this significant first stage but the bigger part is still to come because they will have to manage that commercial asset. Part 2 sets out the basis on which the commercial interests—the rental proceeds and the commercial process—will proceed. 
The bigger challenge is the division of the land interests and that was certainly flagged by the submitters who came to the select committee—those iwi who feel aggrieved who feel that the collective does not properly represent them. So there will be huge interest from all quarters in how this proceeds not least of which I guess is the interest from the regions yet to settle. We heard from Minister Ririnui earlier about the ongoing work he has been involved in in bringing other iwi into the settlement process. It looks hopeful though. I have to say that the process that has been proposed to divide the forests land is ground-breaking. Of interest to me is that the division will not necessarily follow the percentages that have been reached for the allocation of rental proceeds because as I understand it that was done on the basis of population numbers. Perhaps the Minister in the chair the Hon Mita Ririnui could just remind us of that. Even though Ngai Tuhoe and Ngati Tuwharetoa receive quite substantial rental proceeds that is no indication of how the land interests will be divided. So that is good something to look forward to and hopefully something that is resolved with minimum fuss. 
I must pick up on what my colleague Chris Finlayson said about leaving the lawyers out of the process. Of course he is a lawyer and law is my profession as well so that could be a surprise to people. We have all seen how the involvement of the legal profession to date has been huge in these matters. It may be that the leaders in their wisdom devised this process partly so that the lawyers would not be there! As I say it makes sense because on the issues of mana whenua iwi know best. That belongs to them. It is their tikanga.  
Hon TAU HENARE (National) 
: 
 I want to make a brief comment on schedule 2 “Tikanga based resolution process for CNI forests land”. It will keep the lawyers at bay and I think that is a great thing. Over the years unfortunately the legal profession has made a hell of a lot of money off the backs of both the Crown and the iwi at the heart of Treaty settlements. I do not want to be too disparaging of the legal profession and of my colleagues in that respect but in the past they have played rather too large a part in the process. So the resolution process in the way it sets out what is to happen is a very good one. It is to be hoped that the allocation methods of settlements that follow can take a leaf out of this bill. 
I note that schedule 2 says nothing about the principles of the Treaty of Waitangi. The Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill which the House has just dealt with specifically mentioned the principles of the Treaty and I am staggered and gobsmacked that they are not mentioned in the bill that the Committee is debating now. I am waiting for the member from New Zealand First to stand up and say something about it. I think there should be a statement about the principles of the Treaty of Waitangi. If it is good enough for Te Arawa then it should be good enough for everybody else for goodness’ sake! 
Pita Paraone 
: Similarly if it’s good enough for this collective it’s good enough for the rest of the country. 
Hon TAU HENARE 
: Well there you go! That is a good point. I had never thought of it that way but now that you bring it up! 
Colleagues on this side have commented about the tribunal and judicial review. There has to be some sort of mechanism whereby if something goes wrong right at the end if the parties have followed through the process but have hit a brick wall there is some sort of final adjudicator. [ 
Interruption 
] I heard you on the radio mate—Phil Heatley the new member for Whangarei. Whether it is the tribunal or the judicial review process there must be a process whereby somebody adjudicates legally. I think we can work on that. The Crown the Government and the collective have a responsibility to ensure that the process entered into is transparent. It does not matter what system one has or what resolution process one has; there will always be people who disagree so for them one has to have a transparent process. I am with my colleagues on that point. 
I will turn briefly to schedule 3 “Percentages for allocation of rental proceeds”. Ngai Tuhoe will have 27.2987 percent. That is down to the last piece of timber! I am not so interested in the amount of allocation to each tribal district—Ngati Manawa Ngati Tuwharetoa and so on and so forth—but I am interested in the way that the percentages were arrived at and maybe the Minister in the chair the Hon Mita Ririnui can shed some light on that aspect. It is interesting to note that if one were to read the percentages for the allocation of rental proceeds then one would think that they were right down to the last little growth on the tree or the last little piece of grass in Murupara. 
That is all. I think that all in all the process is a fantastic attempt at taking out the argy-bargy the legalese that we have seen before and I hope that the process grows into something that we may be able to use later on down the track. 
CHRISTOPHER FINLAYSON (National) 
: 
 I would really be grateful to receive the comments of the Minister in the chair the Hon Mita Ririnui on an issue. In my earlier contribution I dealt in detail with schedule 2 and particularly with the adjudication part which is to be completed by 25 June 2011. I focused on clause 6(15) in schedule 2 which provides that a “decision of the adjudication panel will be final and binding on all the parties.” I said the authorities have suggested that the effect of that clause would not be to oust the jurisdiction of the court in judicial review. My personal view is that maybe it should do so.  
But I come to clause 7 in Part 2 of the bill which may provide us with some guidance. Clause 7(1) is the standard privative clause and it is not dissimilar to section 6 of the Treaty of Waitangi Act 1975 as amended by section 40 of the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992. In fact it is very similar because section 40 provides: “… the Tribunal will not have jurisdiction to inquire or further inquire into or make any finding or recommendation in respect of— … Commercial fishing … The Deed of Settlement … or … Any enactment …”. In a 1996 case the Court of Appeal stated that the effect of that clause—the so-called privative clause—in section 6(7) of the Treaty of Waitangi Act was to oust the jurisdiction of the tribunal.  
Then we come to clause 7(2) of this bill which is an interesting clause. It states that “Subsection (1) does not exclude the jurisdiction of a court tribunal or other judicial body in respect of the interpretation or implementation of the deed of settlement or this Act.” So any question of the interpretation of the legislation which would include the schedules obviously would be available in jurisdictional terms for a court or a tribunal to consider as would any question of implementation.  
It would seem on the face of it that the jurisdiction of the court is not ousted and that clause 6(15) of schedule 2 may not be the end of the road. I really think that we ought to be crystal clear about this because I believe based on my experience of the fisheries allocation saga that there could well be litigation although I agree with what my colleagues have said—that given the parties involved and the desire to reach a settlement one would certainly hope that there would be a conclusion of the allocation debate if there is to be a debate by 25 June 2011. But the Minister’s contribution on the allocation model and on whether it is intended to be final and oust the jurisdiction of the courts is very important because on the face of it I do not think it does that. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 Kia ora Mr Chairman. I will just respond to the questions that Chris Finlayson asked earlier in relation to the resolution process. I took my time in rising to respond to them because I thought that other speakers might also ask similar questions. I did note that after Chris Finlayson sat down the contribution from the Hon Georgina te Heuheu was along similar lines and she may have provided him with some answers to those particular concerns. 
I think it is important that we understand that this resolution process was developed by the collective and that clause 7(4) contemplates the possibility of litigation. I cannot give the member a guarantee that lawyers will not become involved but it was certainly the view of the collective that due to their experience of lawyers the role of lawyers should be minimised. Members should also understand that the decisions cannot be appealed but a review of the process can be sought to ensure that the process itself is consistent with the tikanga-based process in schedule 2. 
There were also queries about the proposed tikanga-based mana whenua resolution process that I just spoke about and also about the allocation model that was developed solely by the central North Island collective. As we heard from the submitters by and large a large percentage of them had the opportunity to participate in the process of determining the model for allocation and what we did find interesting when we came to the mana whenua concepts in terms of allocation or in terms of rights was that those concepts were defined as ahi ka roa which translates as continuous undisturbed; in other words permanent occupation. I would think that every iwi involved in the central North Island collective would qualify on that particular principle. 
But the collective also went to the extent of looking at other areas of mana whenua and other concepts. One that is new to me is ahi tahutahu which basically means provisional shared looked after by somebody else. It also can mean temporary occupation. In other words it suggests that a particular iwi may be transient and may move around considerably. I do not know that any of those iwi that are mentioned in schedule of the bill are in that position. The last concept of ahi mataotao which I often hear about is one of abandonment or lack of representation or underutilisation of land or no utilisation of land at all. I could not imagine anywhere in the country where that particular concept may apply although from time to time we do discover new iwi developing amongst the more known iwi and these particular iwi become the centre of debate whether or not they actually exist. 
Those are issues that iwi themselves will deal with and it is certainly not over to the Crown to determine whether a particular concept applies to particular iwi in a particular circumstance. I know I have just skimmed over many of the queries but I found that although many of the speakers asked questions by the time they resumed their seats they had actually answered the questions themselves. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I raise a point of order Mr Chairperson. My point of order is along the lines of what the Hon Tau Henare was discussing this morning. It has come out of the discussion about the provision for debate of amendments to do with Treaty settlements. By way of providing some background—I am not sure whether you were in the Chair at the time Mr Chairperson—let me take you through the issue. 
My amendments last night sought to amend clause 11 of the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill. They were ruled out of order in accordance with Speakers’ ruling 110/2 which states: “An amendment that purports to amend an agreement reached between the Crown and other parties is out of order in a bill to give effect to that agreement.” I ask that you as the Chair or the Speaker’s office or whoever deliberates on these issues look at this particular issue on the ground that the agreement that the Te Arawa bill gives effect to is not an agreement between the Crown and another party. The deed of settlement has been signed by the Government and another party but the Government is not the Crown. Shall I carry on Mr Chair? OK I will carry on. The deed of settlement has been signed by the Government and another party but the Government is not the Crown. The agreement becomes one between the Crown and another party only after Parliament has passed the legislation and the Order in Council has been signed by the Governor-General on behalf of the Sovereign. The point is one of I think fundamental constitutional importance: who and what is the Crown? 
I emphasise that the Maori Party supports the legislation—this bill and the Te Arawa legislation—but we uphold the Treaty of Waitangi as the founding constitutional document of this nation and we assert the value of the principles of the Treaty to regulate behaviour. It is incumbent on this Parliament to deal with matters involving tangata whenua in particular on the basis of Treaty principles—mutual respect reasonable cooperation and the utmost good faith. We are not advocating what are often termed in Parliament as frivolous vexatious or unreasonable amendments to legislation giving effect to agreements that have been reached between the Government and the Treaty partners. No that is not it. Our question is one of a constitutional nature: what is the purpose of bringing this bill before Parliament if it is true that the agreement has already been signed by the Crown? What is the purpose of seeking Royal assent to the Act once the bill has been passed by Parliament? Where does sovereignty lie if an agreement signed by a Minister of the Crown supersedes the authority of Parliament and the Executive Council? 
As the Hon Tau Henare has talked about we have called for submissions on Treaty settlement bills such as this one and the Te Arawa bill. The Maori Affairs Committee has listened to the submitters presenting reasoned and rational points of view. What is the point if Parliament simply ignores what the people have to say because the deal is already basically done? It is a fundamental principle of Westminster democracy that Parliament is sovereign and regulates its own procedures through Speakers’ rulings among other ways and it has been that way since way back when—the Magna Carta of 1215. Established conventions separate the powers of the legislature—Parliament that is—from the Government and the judiciary. Each guards its roles jealously. Parliament should not allow its powers to be constrained or allow itself to be seen to be in effect just a rubber stamp for the executive. 
Mr Chairperson all that I ask as a representative of the Maori Party is that you give consideration to looking at this issue to possibly giving a new ruling that might clarify it and more important perhaps to having a debate in respect of what is fundamentally from our perspective a constitutional matter. I am sorry that I have taken quite a bit of time but it was important to try to give you some background. I place the issue before Parliament at this point because we are in the Committee stage there are a number of other speakers and provisions to come and I want to take a call in respect of Part 2. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Flavell. I would like first of all to refer to the Speakers’ ruling you mentioned—110/2. It is quite specific. It states: “An amendment that purports to amend an agreement reached between the Crown and other parties is out of order in a bill to give effect to that agreement.” That ruling was made both in 2003 and in 2005. I understand that you were seeking to amend the names of the signatories or the parties to the deed and to take one group out. This Supplementary Order Paper contains amendments to the settlement agreement that have the agreement of the parties. Bills such as this are to give effect to the settlements; they are not to amend the agreements unless both parties—the Crown and the signatories—agree. That is where the matter lies. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I raise a point of order Mr Chairperson. I accept that that on the face of it is very much the case and that was an explanation given by Dr Cullen. What we are talking about however is a bigger issue. Sure the agreement has been done but if you listened to the first part of the debate you would have heard that it was very much about the notion of those agreements being between iwi and under that particular wording “the Crown”. The point I was trying to make was that the definition of “the Crown” within that is open to interpretation and is not clear. 
The CHAIRPERSON (H V Ross Robertson) 
: Can I suggest Mr Flavell—it cannot be done now—that there is always the opportunity to make amendments to the Standing Orders. The Speaker on a number of occasions has invited parties to do that. Maybe that is something the member needs to look at in the future but we cannot go back and do that now because we already have Standing Orders and Speakers’ rulings that govern the proceedings of this House and that is how it works. 
CHRISTOPHER FINLAYSON (National) 
: 
 I have only one other question that I want to raise about schedule 2 and I would be grateful for the guidance of the Minister in the chair Mita Ririnui. My question concerns clause 13(e). 
Clause 13 provides—I think sensibly—that the adjudication panel will have complete discretion to determine the process and the timetable for the hearing. That complete discretion is subject to certain requirements and they are more particularly set out in paragraphs (a) to (g). For example paragraph (g) provides that a decision is to be reached by 25 June 2011. But I am interested in paragraph (e) which states: “there is a right to question witnesses;”. What I would like to know and maybe we need clarification is whether that right to question witnesses relates only to the adjudication panel or whether an iwi claimant can also ask questions of another iwi claimant. If I were to proffer an opinion I would say it means both: that the panel could ask questions but that iwi claimants should also have the right to test evidence by way of cross-examination—by asking questions of witnesses for other iwi. 
What we do not want in the course of the adjudication panel hearing this matter is to have some kind of eleventh hour application for judicial review. I know that these sorts of questions have been subject to judicial review in the context of commissions of inquiry. I seem to recall a case concerning someone called Badger where the person presiding over the commission of inquiry was a former Attorney-General Dr Martyn Finlay and the case was held up for some time while the parties went to the courts. 
That is my interpretation but I would be very grateful if the Minister could give some guidance. Does the right relate to the panel alone asking questions or is there also the right of iwi claimants to ask questions and to test the written evidence that will have been filed by another iwi claimant? 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I say to the member Chris Finlayson yes iwi claimants can ask questions as well. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Chairman. There are just two issues that I want to raise. I agree very much with a number of the sentiments that have already been raised by other members that it is appropriate that iwi deal with internal issues themselves and I touched on that point in the second reading. I am pleased about the approach of internal conflict resolution; I think it is a good idea. 
The two points that I want to raise in particular are in respect of the notion of mana whenua and they have been highlighted by way of two groupings in particular. One is to do with Ngati Whaoa under the mantle of the Te Arawa affiliates and the other one is best exemplified by the Ngati Manawa example. 
The first issue in respect of Te Runanga o Ngati Whaoa is in two parts. One is the point that Ngati Whaoa’s claim has been included and we have touched on that in debate on previous bills. How is it that a person in a sense puts forward a claim on behalf of others then finds that in the process of settlements the claim has been put to be settled yet there has been no formal notification there has been no consultation and basically the claim is taken out of that person’s hands and put smack dead in the middle of this particular bill? I refer in particular to the claim led by Mr Peter Staite. That is the first issue. 
The second issue is in respect of this whole question of mandate. I know we did broach some of it in the debate on the Te Arawa affiliates bill but it is an important issue in this case in particular. According to what I have heard at least Ngati Whaoa might be relatively small in numbers but from their perspective they believe that they have not insignificant interests. We know firstly that their interests have been included in the settlement under the Te Arawa affiliate bill and that they have tried to get out of it in one form or another. I attempted to basically pull them out of the settlement last night but my attempt was ruled out of order. They have tried to get out of it in a number of venues. There have been three Waitangi Tribunal reports. The Waitangi Tribunal through Judge Carrie Wainwright pulled the parties together and attempted to facilitate a process. It did not happen. I am told that the group they have a grievance with did not want to continue the facilitation process so that was basically the end of the story. On top of that they have been to the Office of the Ombudsmen. 
In terms of this particular bill the question is to raise issues about Ngati Whaoa’s interest in all of this. The Minister in the chair Mita Ririnui talked about mana whenua and I suppose the question is that their mana whenua interests have basically now been pulled into the big Te Arawa affiliate collective. My role as an MP is to represent their interests and all I can do is put on the record that from their perspective at least their tamariki may well be back here at some point in time to reflect on this whole matter. Although we might say that those are internal issues when the two parties do not want to come together or do not come together then of course the matter will not move forward. As I said in the second reading I would like the approach to be rangatira ki te rangatira with facilitators to move the discussion along. 
The second issue which other speakers have taken up concerns the divvy-up of the resources. I accept that the divvy-up of the resources is an internal issue and from what I understand of the collective one representative from each of the iwi is sitting at the table and they make the decisions. It is a great approach for iwi to be empowered to make decisions about their own futures; that is fine. All we can conclude is that in particular around the rentals and the divvy-up of the land later on on the face of it iwi have driven it but the key thing is that some of the submitters told us that they had certain concerns about the divvy-up. It is not for me to say yay or nay or which is the best way. As I say I support the notion of iwi doing their own thing. But we have to wonder. 
I will choose Ngati Manawa as an example because of their large number of submitters at the Maori Affairs Committee hearing. They say that they have far and away more than 6 percent of mana whenua interests. Some might say that in comparison with the other iwi they are a small player in numbers but nevertheless in terms of their land interests they are very significant in the bigger picture. The concerns that were expressed by some of Ngati Manawa—certainly not all—were about the weighting and the allocation of the rentals. That was a key issue and I would not mind if the Minister could elaborate on it. I know that that question was put by the Hon Tau Henare. The second issue was the weighting of ahi mataotao ahi tahutahu and so on and how they might play out. It might be said that that is an iwi issue. Sure but again some of the submitters at the select committee suggested that they might lose their interest because the bigger blocks might gang up on them. And we can understand that because this settlement is probably the most significant settlement that they will ever see in their lives. 
It is about simply trying to get to grips with understanding the issues if the Minister is able to provide an explanation. The decisions might have been made behind closed doors. If it is all about those iwi making decisions for themselves then in the end I suppose their representatives have to stand and fall on those decisions made at the table. All I am doing is representing the interests of those who have made representations to me to seek some clarification. I suppose in the end they are simply protecting their interests—making sure their interests are looked after. I am talking for some of Ngati Manawa—certainly not the runanga because it is in there. Some of the submitters presented the case that they are quite significant in mana whenua issues yet they get a very small piece of the cake in terms of the rentals. They do not even know what their percentage of the bigger picture is and they have some time ahead of them to debate whether they will get their fair share of mana whenua. They ask “What is the story? How do we protect our interests?”. 
All I am doing is raising those issues and perhaps the Minister might be able to respond so that it will be on the record and I can tell some people back home. Kia ora. 
The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to Part 2 be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Part 3Miscellaneous provisions  
The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to Part 3 be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Schedule 1  agreed to.  
Schedule 2  
The CHAIRPERSON (H V Ross Robertson) 
: The question now is that schedule 2 stand part. All those in favour please say “Aye”— 
Hon Members 
: Aye. 
The CHAIRPERSON (H V Ross Robertson) 
: —of the contrary say “No”— 
Sue Moroney 
: No. 
The CHAIRPERSON (H V Ross Robertson) 
: The “Noes” have it? 
Te Ururoa Flavell 
: The “Noes” have it. 
Pita Paraone 
: The “Ayes” have it. 
The CHAIRPERSON (H V Ross Robertson) 
: The “Noes have it? The “Ayes” have it? Party vote called for? This is the vote on schedule 2. I will put the question again. Are we clear? The question is that schedule 2 stand part. All those in favour please say “Aye”. 
Hon Members 
: Aye. 
The CHAIRPERSON (H V Ross Robertson) 
: And those against? 
Hon Members 
: No. 
The CHAIRPERSON (H V Ross Robertson) 
: The “Noes” have it? The “Noes” have it. 
SIMON POWER (National—Rangitikei) 
: 
 I raise a point of order Mr Chairperson. It is not for me to give an indication as to what the Government is doing and I see that we have a senior Minister in the Chamber who might be able to help us but we have the Labour whip calling one vote and the Minister in the chair the Hon Mita Ririnui calling for a party vote on the opposite position. That just cannot be right. We need some clarification about what is happening here. 
The CHAIRPERSON (H V Ross Robertson) 
: All right. Let us get some clarification from the Minister please. OK. I want to get this right; this is the question that schedule 2 stand part. I understand that schedule 2 has to be lost because there is a new schedule 2 which will be put after this one. Are we clear now? This one as I understand it should be lost but there is an additional vote for a new schedule 2 as set out on Supplementary Order Paper 230 and that is the one to be agreed to. So this one will be lost. Let me put it now so that we are all clear. All those in favour of schedule 2 standing part say “Aye”— 
SIMON POWER (National—Rangitikei) 
: 
 I raise a point of order Mr Chairperson. I am sorry. I do not mean to be difficult but it is an extraordinary situation when the Chairperson of the Committee of the whole House is saying before we have a vote that the vote is meant to be lost. 
The CHAIRPERSON (H V Ross Robertson) 
: I understand. 
SIMON POWER 
: I think that in fairness to the Committee we should have the vote and then if indeed there is an issue someone can seek leave to amend it. It is most odd for you as Chair to be saying how a vote should go before you put the question. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Power and I concur with what you were saying. I was trying to provide some leadership in the situation.  
Schedule 2 not agreed to. 
New schedule 2  
The question was put that the amendment set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to insert new schedule 2 be agreed to. 
New schedule 2 agreed to. 
Schedule 3  agreed to.  
New schedule 4  
The question was put that the amendment set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to add new schedule 4 be agreed to. 
New schedule 4 agreed to. 
Clauses 1 and 2  
The CHAIRPERSON (H V Ross Robertson) 
: I call the Hon Georgina te Heuheu. I might add for the member’s benefit that clauses 1 and 2 are taken together but there will be separate votes. So the member can debate clause 1 and 2 but there are separate votes. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I will take a very short call. We do not want to be seen to be dragging out something that we are all in support of and that is obvious but the title the Central North Island Forests Land Collective Settlement Bill is very important. It is a very proper title obviously. But if one reads the title only without knowing the substance of the bill then one may not necessarily get the significance of what is being achieved here. It certainly is a collective which is one that I do not think we have seen before; a number of iwi have come together in terms of the commercial side of interests that have their genesis some 20-odd years ago in the Crown Forests Assets Act 1989. 
The bill makes provision for the allocation of land under the Crown forests but the individual claims of the iwi involved are still to be completed. It is a unique initiative and one that hopefully will be repeated if in fact it all appears that it is able to work the way it is obviously intended to work here. So it may be that we will see more region-wide settlements where we have collectives involved as well. This is the first one. It is unique. We support it. We would like to see it happen again. 
My colleague Pita Paraone might suggest—[ 
Interruption 
]—oh OK. I will not say anything about the north then. But I was just hoping we might see that where there are similar iwi interests in a particular region there may be room for similar legislation so we might see this term in use again as we go forward. So it is pretty simple. I want to support clauses 1 and 2. Thank you Mr Chair. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Chair. I want to take a short call on clause 1 which is the title. First of all I say that I support a lot of the sentiments of the previous speaker the Hon Georgina te Heuheu. You know we talk about the use of te reo Maori and I wonder whether any consideration was given by the principals of each of the iwi groupings that came to the negotiating table to the opportunity of giving this particular bill a Maori name. I see that my colleague from the Maori Party is grinning—I do not know whether it is a grin of derision or a grin of support. In terms of promoting the use of te reo I would have thought that this might be an opportunity to give the bill a Maori title. 
I am very mindful of the fact that the spokesperson for Ngati Manawa was very emphatic about what Ngati Manawa meant in relation to his tribe. Of course I can appreciate what he said. But I think that we will see similar titles in terms of collectives and affiliates and I suppose this title does provide a blueprint for titles of similar settlement bills. There is an opportunity for both the Crown and negotiators to consider Maori titles for our legislation. During my first term in this House I can recall making references to the opportunity of giving bills Maori titles. If it is OK for the House to provide committee reports back to the House in te reo Maori then I think that at some time in the near future we should be seeing bills that pass into law being written in te reo Maori. 
New Zealand First does not have any concerns about the title of this bill or its commencement date. Kia ora. 
Clause 1 agreed to. 
Clause 2 not agreed to. 
New clause 2Commencement  
The question was put that the amendment set out on Supplementary Order Paper 230 in the name of the Hon Dr Michael Cullen to insert new clause 2 be agreed to. 
New clause 2 agreed to. 
Bill reported with amendment. 
Report adopted. 
Financial Advisers Bill 
Second Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Financial Advisers Bill be now read a second time 
. I would like to begin by thanking the Finance and Expenditure Committee in particular Charles Chauvel the chairperson of that committee and Simon Power the lead member for the National Party. I also thank all of the officials for the work they have done. We now have a bill in this House that will accomplish its objective of encouraging the sound and efficient delivery of financial advice which should boost confidence in the use of such advice. 
A number of comments have been made in the last few weeks—and indeed seconds—suggesting that the Government should slow the passage of this bill primarily because of the extent of the changes the committee has made. However I have personally made the effort to speak to or meet with as many of those people as I possibly could and I am confident that we now have a way forward with this bill. I thank the industry for sharing its expertise with me in order to help us get this right. As I said to the industry I did not want to lose the 6 months that a delay beyond the election would entail because those 6 months can be put to very good use. 
That being said I have taken on board the concerns expressed by those who fear that we may not have picked up everything. Given that a lot of the detail of the new structure will be included in regulations I have decided to establish a working group that will encompass representatives of the industry the Ministry of Economic Development and the Securities Commission to provide a feedback loop as we go forward. 
The committee has recommended changes to the bill that first focus on financial products in contrast to financial decisions as was originally proposed in the bill; second adopt a tiered approach to the authorisation of financial advisers that will provide two tiers of advisers category 1 and category 2 based on the complexity of the products they advise on and enable the adoption of a qualifying financial entity model which will ensure there is appropriate regulatory coverage of advisers within these institutions while minimising the compliance costs that would otherwise be associated without that model in place; and third ensure that the bill provides clear and appropriate exemptions from the definition of a financial adviser. 
The most fundamental of these changes is the adoption of what the committee has termed a tiered approach to regulation. The risk-based approach will see more complex advice such as advice on derivatives portfolio investment entity products and other complex securities or financial planning services subject to greater regulatory control than advice on simple products. These category 1 advisers will need to be individually authorised by the Securities Commission to provide financial advice. They will be known in the future as authorised financial advisers. 
This does not mean that advisers who advise on simple products will be totally unregulated. Rather the bill provides that advisers namely those who are providing advice on products such as consumer credit contracts and insurance products must comply with basic conduct and disclosure requirements. They will also be required to be registered and be members of a dispute resolution scheme and that is dealt with in another bill that we will be dealing with before the House rises. 
The third category of adviser will be employees or agents of a qualifying financial entity and I envisage that they will be banks and insurance companies credit unions potentially and other organisations such as building societies—that sort of thing. The qualifying financial entity status will be granted to those institutions that have appropriate processes in place to ensure that any employees or agents covered by that status operate appropriately. These entities will be able to meet all of the registration and disclosure obligations on behalf of their employees and agents and indeed the membership of the dispute resolution body as well. However employees who are category 1 advisers or agents working for those institutions or working to them will still need to be individually authorised. That means they will have to be authorised financial advisers individually authorised by the Securities Commission. This will ensure that there is a level playing field between advisers who work for such organisations or to such organisations as agents and those who operate independently. 
The most fundamental change proposed by the committee was one signalled early on in the process and that is the proposal to shift away from the approved professional bodies co-regulatory model which I announced nearly 2 years ago. The committee has recommended that the Securities Commission undertake all regulatory oversight of financial advisers. I agree with that and as I have said on more than one occasion now the co-regulatory model could not have survived the level of mistrust and anger that exists amongst an investing public who feel they have been betrayed. I wish that was not the case but it is the case and that is why we cannot go forward with anything that signals any form of self-regulation in this environment. In my view such a proposal at this time would not be sustainable. My regret is that I was not alert to this issue before the Financial Advisers Bill was introduced. 
Some industry organisations raised concerns about their ability to undertaken the disciplinary functions that were contemplated for approved professional bodies in the bill as it was introduced. If it had ensued that industry organisations did not have the capacity to undertake the necessary disciplinary functions the Securities Commission would have been required to act in the place of approved professional bodies anyway. This would have required the commission to adopt an approach that catered to the diversity of standards that may have emerged across the industry. This in itself would likely lead to increased transaction costs for both the industry and the regulator. The approach we have adopted in the end aligns with the approach taken in respect of other occupational regulatory regimes in New Zealand including the regulatory framework for accountants lawyers real estate agents electrical workers and architects which means it is better placed for trans-Tasman mutual recognition as well. Although some commentators have claimed that this would result in the loss of industry expertise and the development of rules I believe that the committee has come up with a sensible and workable solution to alleviate this concern as well. The committee has recommended that a commissioner of financial advisers be appointed to the Securities Commission with the front-line focus of the commissioner’s work being on financial advisers. 
A code committee and a disciplinary committee will be established under this bill as well. Both committees will obviously need to include advisers with industry experience. This will allow industry representatives to be involved in the promulgation of the professional code of conduct to govern authorised financial advisers and the discipline of the profession. I think the select committee has done a good job of ensuring that we get the best of both worlds. Further the code committee will obviously be obliged to consult with advisers more broadly and with other stakeholders when developing the code. 
In conclusion I reiterate my gratitude to the industry especially to those who came to talk to me about their concerns; and to the Finance and Expenditure Committee. Again I single out Charles Chauvel as an excellent chair of that committee and Simon Power. They were both excellent to work with. The other thing I place on record is that I have really appreciated the fact that where there were concerns people came and talked to me about them and we were able to address them in a sensible way. I also congratulate the officials who worked long hours well beyond the call of duty and the parliamentary counsel officer assigned to work on the bill. This bill represents an extraordinary effort and a very good outcome. I commend the bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 Thank you Mr Assistant Speaker— 
Hon Darren Hughes 
: Oh Sarah Palin! 
SIMON POWER 
: What does that member’s billboard look like! I take this opportunity to thank the Minister for her opening remarks. It seems that the Hon Lianne Dalziel and I ended up with two of the most complicated and difficult pieces of legislation to work on—this bill and what is now the Commerce Amendment Act—over the course of the last 12 months. As I said also in the debates relating to that Act the Minister has always been forthcoming has made advice available and has been pretty open-minded on the whole when I have made suggestions during the course of the development of this legislation and I am grateful for that.  
One or two things do need to be said in respect of the opening stages of this bill. First of all the Minister has been generous in her praise of the officials and I certainly share that view when it comes to the enormous amount of work those people on the committee did in the initial phases. But in fairness and in no way reflecting on the Minister who I think did her best in the initial stages I say that the first draft of the legislation that was put before myself and others—and to be fair probably before the House—was poor. It was not up to scratch. 
Hon Lianne Dalziel 
: Fundamentally flawed. 
SIMON POWER 
: The Minister is prepared to say that it was fundamentally flawed and good on her for saying that! Quite frankly the legislation showed so many different drafting styles within the one bill that to the outside eye it was obvious that personnel and staff had changed during the course of the development of that first draft. It was hopeless legislation. It would have meant that the way financial advice was defined and the way that financial advice was captured was so random—for want of a modern term for the sake of the Hon Darren Hughes—that big holes would have emerged instantly in different areas of financial advice. I think—and this is a personal view—that the first draft of the legislation that we looked at did not bear that good a resemblance to the original recommendations under the review of financial products and providers done by the ministry. To be fair to the Minister when those issues were raised with her she took them on board and asked those officials for some changes.  
It became clear early on that trying to define advice by occupation was simply not going to work. That meant for example—and I know the Minister tires of me using these examples but it is my 10 minutes—that if a bank teller standing behind a counter told a customer who had $10000 in a savings account that the money should be put on term deposit the bank teller would have been caught for giving financial advice. If a real estate agent put an advertisement in the paper to say that a rental property was currently returning a 5.7 percent yield on investment in rent and that that was what it would continue to return should the property be purchased at the current price in my opinion that would also be financial advice. If a travel agent told a customer what insurance product the customer should purchase for his or her trip that would be financial advice. We may not think about it in those terms and frankly for nine out of 10 people purchasing travel insurance it probably would not have made the slightest bit of difference. But for the one out of 10 instances where someone in the family ends up ill—and I myself have been in this position—what is given in the advice and what is contained in the insurance policy does matter. But again that is financial advice because it will have an immediate financial implication on what a traveller can or cannot do based on the wording of the policy.  
So then the Minister decided that we would try to look at it from a product perspective which I thought was a more sensible approach. It became clear though that even within that approach trying to create a layered level of differentiation and differing regulatory environments depending on the level of advice or product—whether it was simple or complex—provided its own difficulties. In that case it would have been difficult to provide an overall framework that then allowed those more distinguished categories to fall underneath it. This was where the beauty of the select committee process was so helpful. On the first day of the select committee hearing the chairperson of the committee Charles Chauvel decided that he would allow everybody 10 minutes speaking time—he had negotiated with me; there was nothing wrong with that. But it became clear after we had heard a 35-minute submission from the first submitter I think from memory—it was certainly well over 20 minutes—that we would have to use the submission process to try to rewrite the bill. So at that point as submitters were coming forward I and others on the committee—the Hon Paul Swain was there; I remember that clearly because he had his disc with his CV on it on the table—started negotiating in a way that put ideas on the table at the time for submitters to comment on. That was a bit unfair to the submitters because they had not come prepared for that type of approach. But I think in the time I have been here it was one of the most constructive discussions we were able to have. Then we decided that an interim report was appropriate in the first instance and then extraordinarily—in my time here I cannot remember this happening before—a second interim report would be made to the House consequently driving further consultation with the industry which was absolutely essential because of the massive changes being made.  
I remember sitting in the committee one day and the poor chap from the Parliamentary Counsel Office was sitting opposite. We said at that time: “OK if we were to make these changes how much of the existing legislation would remain in place and how much would you have to redraft?”. He said we could keep the first three clauses. At that point we knew we had a big job on our hands—a big job on our hands. But to be fair to parliamentary counsel and to the officials on that committee who were just stunning in the way they approached it we managed to get the job done.  
I do not think that the job is finished. I still think there will be a much more subtle refining of the categorisation of financial product as time goes on and I think that the flexibility around the regulatory regime at that level is important. That will develop and mature as time passes. I hate to say it but I do not think we have seen the last of a discussion about financial advisers legislation. I still think we will have to refine it as we go along. Having said that I say that National certainly supports this bill in its second reading and believes it is an extremely good step in the right direction.  
When we come to the detail of the bill in the Committee of the whole House—the financial accreditation—the Securities Commission as the sole regulator is a model that is absolutely correct. The Securities Commission should be the sole regulator. I believe that that is absolutely the right move but I will talk about it in more detail during the Committee stage. 
Before we move to the Committee of the whole House—and I know there will be other members in the House who will want to make a contribution—I say that I was very interested to hear the Minister of Commerce talk about a working-group being set up for further discussion. I think that is a good move. I believe she said that industry representatives representatives from the Securities Commission and officials from the Ministry of Economic Development would be involved. When we get to the Committee stage I will be interested to know whether we will have any investor representation on that working-group—in other words whether we will hear what the users of those people who are providing the product would be looking for. I would be interested in any comment the Minister might want to make in that regard.  
We are dealing with an industry that we can talk about having losses or funds at risk in the billions. This is an extremely serious matter. It is a matter that the National Party will not delay during this urgency motion because we are keen to give a signal very early on as John Key did when he wrote to the Prime Minister many many months ago to say we would work with the Government in a bipartisan way on this issue. I was then dispatched to deal with the Minister of Commerce and this matter has been dealt with in a bipartisan way. Sometimes in politics issues are too big for political discourse and this is one of those issues. We have an obligation as a Parliament to ensure the security of our financial markets. This is a step in the right direction. We will deal with the detail in the Committee stage. National will support this legislation.  
R DOUG WOOLERTON (NZ First) 
: 
 I will take just a short call to say New Zealand First supports the passage of the Financial Advisers Bill. As the Minister of Commerce and Mr Power have said this bill is long overdue. A few financial advisers and people who came before us in the Finance and Expenditure Committee thought there should be no more regulation around their activities. They believed that their business was a fast-moving one and that the people they were talking to could judge in their own best interests whether the advice they were given was good or bad. Obviously we disagreed with that and so did the majority of the people involved in the industry. It was heartening to see that with a few exceptions people had a responsible attitude to the proposed legislation and were keen to help.  
We have also heard from the two speakers earlier that a lot of changes have been made to the bill. In fact when we look at the bill we see there are many pages of ruled-out text with new text following that. That is the way it should be. It is not until we come face to face with the participants in the industry not just the ones chosen to help officials through the process of preparing the legislation—although that is a good process as well—but the ones who are actively involved day to day with their customers and until we hear about their problems the distinctions they have to make and the care with which they have to approach these issues that we can actually get a full handle on the situation. I also agree that refinements will be made to the legislation in years to come. It was admitted during the hearing of submissions that every time new regulation comes into force somebody out there will find a way around it that is not in the clients’ interests and that will need to be blocked off in the future.  
There were days years ago when the Government of the day believed that there was no need for any of this regulation and that both those who were seeking help with investments and those who were giving advice on investments could go about their business without any need for the Government to be involved in those transactions in any way whatsoever. We have come to rue the day when those thought processes were the rule rather than the exception and we are now seeing something rather nasty start to happen in this country of a similar nature to what has occurred elsewhere. In America we are seeing the Government has had to hop in and prop up institutions where the people involved were not in fact qualified to know what was going on and did not know what was going on but proceeded without any caution nevertheless.  
Just as with any other industry the public have a right to know whom they are talking to when they seek financial advice. They have a right to know the qualifications of that person the experience of that person and whether that person has been involved in any shonky dealings hitherto.  
Hon Darren Hughes 
: Like John Key. 
R DOUG WOOLERTON 
: I could not possibly comment. This legislation provides some of those assurances. I have to say just before I sit down on this part that it will not take away the risk to the public. It cannot do that and it is not professing to do that. But it will give the public an indication of whom they are dealing with and in another bill an avenue to redress the situation as well because this is part of a suite of bills.  
I say New Zealand First supports the Financial Advisers Bill and we will be supporting the other bills that surround this issue.  
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker tena tatou katoa. The Maori Party is pleased to support the Financial Advisers Bill to enable a clear distinction to be made between financial advice that carries significant risk for consumers and advice that carries minimal risks. The intention of the bill is honourable but the bill is well overdue.  
An analysis of 25 financial advisory firms by Stephenson Thorner and fi360 Australasia released earlier this year concluded that many financial advisers may look trustworthy but are potentially risky. The risk factor is all around the concept of trust. The study showed that most New Zealand advisers ran their businesses with an inadequate duty of care. In fact the study went as far as to say their reports verged on becoming dysfunctional. Just how dysfunctional some of the sharks in the industry have been is old news now given the fact that more than a dozen New Zealand finance firms have gone under in the past 18 months. That is nearly $2 billion of investors’ money gone down the tubes. It is not in dispute that something had to be done. There have been frequent and increasingly urgent calls for tighter Government controls to tidy up the sector and make it more accountable to investors.  
It is not as though we have not been down this road before. Many of us remember the mortgage scandals of the mid-1980s when an unregulated sector of the finance industry extracted millions of dollars from what could only be called unsophisticated investors. That is a flash name for what the industry calls mum and dad investors: a segment of the population including Maori who have been investing their savings without necessarily realising the risk— 
R Doug Woolerton 
: Most of the population. 
Dr PITA SHARPLES 
: —yes—that they were exposing themselves to. In the 1980s the contributory mortgage companies screwed millions of dollars from New Zealanders lured by the promise of a quick buck and high interest rates. The classic was Registered Securities Ltd (RSL) which when it collapsed in July 1988 had ratcheted up loans to the sum of $97.8 million. Overnight more than half of that was deemed to be irrecoverable.  
But there is a startling difference between the contributory mortgage companies and the risk of the non-regulated financial companies and financial advisers. Back in mid-1988 when RSL hit the bottom of the market the then Minister of Justice Sir Geoffrey Palmer immediately took decisive action by amending the Securities Act. His amendments covered contributory mortgages and introduced sector-specific regulations yet here we are 20 years later finally getting around to introducing regulations to increase prudential standards—a move we support but action that should have taken place a lot earlier than it has.  
The point is we are not talking about people getting sucked into the Nigerian multimillion-dollar banking scams. Members know the type: “A tragedy has befallen us. Your long-lost Uncle Nigel has drowned leaving you as the sole benefactor of his estate. All we need is your bank account.” Everyday New Zealanders—the mythical middle New Zealanders—are being stung here. We are not talking about businesses or corporates; everyday citizens have been placed at risk. We are talking about the people whom successive Governments have ignored: humble trusting investors many of whom have entrusted their life savings to finance companies. Their lives have been turned inside out by the callous squandering of their funds. Worse not only do they have to endure the shame and guilt of having their funds squandered but also they are literally powerless and unable to afford the cost of legal advice.  
The Maori Party has always stood up for people who too often are voiceless in the corridors of power and our support for this bill is no exception to that. Sure the bill is a good thing. The regulatory framework should promote confidence and participation in the financial markets by investors and institutions. That is all positive. But what about those who have been burned by financial advisers and who are teetering on the brink of collapse? What measures have been put in place to look after their interests? Will the Securities Commission launch an inquiry into how those large-scale losses were able to occur? What support will be available for clients who have lost money to enable them to launch court proceedings against financial advisers who have been negligent?  
The issue all comes down to the basic truths around justice and the nature of power. One of the tikanga of the Maori Party around kaitiakitanga encourages us to promote the active exercise of responsibility in a manner that is beneficial to resources and the welfare of the people. In everyday language that means we promote the goals of living in a society where crooks and shonky advisers are not welcome. In other words there should be sanctions in place to ensure that those types of people—people who are negligent in their responsibility to care for the resources and collective good of their community—are not able to prosper.  
One could say as the  
National Business Review 
 has said recently that there have been sanctions against murderers and robbers for centuries but society still has not been able to eradicate such crimes. But for my money I want to live in a society where careful analysis and prudent assessment of risk are routinely part of the package for any financial deal where credibility and experience matter and where an individual can make an informed judgment about the qualifications and professional standing of a financial adviser before leaping in. In reality Maori businesses do not usually use finance companies to finance their business developments. The interest rates are too high and often security is required over land so it is a no-go area. Banks are more likely to secure loans over cash flow stock equipment and machinery without having to rely on putting our whenua at risk.  
The Maori Party will support this bill. We think it provides changes that are necessary to allow deposit takers to be better monitored and evaluated and at the end of the day that has to be better for the nation and for all our people in moving forward. But notwithstanding all the regulations approvals enforcement and remedies included in the scope of the legislation the key to success will rest in the conduct obligations outlined in the bill. The bill specifically obliges financial advisers to act with integrity and competence. Integrity cannot be regulated for but it nevertheless must be a foundation in order for the changes to actually work. We need to have protection for consumers and we need to have the changes provided in this bill in order to ensure an effective environment operates.  
Finally although we support this bill at these final readings we wonder why it was separated out from a bill that is on the Order Paper to come up later the Financial Service Providers (Registration and Dispute Resolution) Bill. Surely logic would demand that the two bills be read together to ensure due focus on the health of the sector. Thank you. 
CHRIS TREMAIN (National—Napier) 
: 
 Thank you for the opportunity to speak on the second reading of the Financial Advisers Bill. I pick up where my lead speaker Simon Power left off. He said that we are dealing with an industry where the losses are in the millions of dollars. I add to that by saying that the focus is not just on the industry where the losses are in the millions but more rightly so I think on the consumers who have invested in those businesses and who have lost multiple millions of dollars in the process. That is really where the focus of this legislation should be. At the end of the day this House stands to protect the rights of individuals in the community and to understand that there will always be risk in any investment across the range but that ultimately we should be there to try to protect consumers as much as possible in their decisions around investments. 
I want to pick up on the losses just to make it clear to people who may be listening to this debate on this Wednesday morning what we are actually dealing with. 
R Doug Woolerton 
: Not that many! 
CHRIS TREMAIN 
: Not that many! We are talking about $1.925 billion of losses which is significant. That was highlighted in the May  
Financial Stability Report 
. That is huge money. We are talking about $300 million out of Provincial Finance $459 million out of Bridgecorp $149 million out of Nathans Finance $187 million out of Capital + Merchant $127 million out of Lombard Group $141 million out of Geneva Finance and $319 million out of MFS Boston. This is huge money—$1.925 billion. These companies have gone into receivership or into moratorium over that period. There have been a few more since that financial stability report came out. By no means have all these companies fallen over because of shonky dealings—not by any stretch. It was due mainly to the credit crunch and not due to fraudulent activity. It is important that people understand that. 
Hon Lianne Dalziel 
: How do you know that? There are still investigations going on. 
CHRIS TREMAIN 
: I am saying that by no means did all of those companies fall over because of fraudulent activities. I think the Minister would have to acknowledge that. Certainly some of them did. The credit crunch has caused a run on funds. Many of those companies under the market as it was before had quite sound— 
Hon Lianne Dalziel 
: The failure of Bridgecorp caused the run in New Zealand. 
CHRIS TREMAIN 
: —just listen—balance sheets. Some of them have fallen over because of the credit crunch not because of fraudulent activities. A number of high-profile companies outside the finance sector have also recently gone into liquidation and I will talk about Blue Chip properties which have gone under in very dubious circumstances and are still under investigation. 
Hon Lianne Dalziel 
: What’s that got to do with the Financial Advisers Bill? 
CHRIS TREMAIN 
: A heck of a lot. The member will understand that many financial advisers actually recommended their clients to go into that company and that is whom we are trying to regulate. 
Hon Lianne Dalziel 
: Not any I know. 
CHRIS TREMAIN 
: No financial advisers that the member knows? A heap of them out there recommended Blue Chip properties. I ask the Minister what world she is living in. 
Hon Lianne Dalziel 
: No they were specific Blue Chip advisers. 
CHRIS TREMAIN 
: No there were not. Third party advisers were recommending Blue Chip. That is for sure. 
Hon Lianne Dalziel 
: Name one. 
CHRIS TREMAIN 
: I could do that but I think I would be breaching parliamentary privilege. I will not go there. I will not enter into that argument. Most of the investors were referred by way of a strong commission incentive and were referred by financial advisers around the country. 
A number of constituents have come to see me in my office about this particular issue. One woman whose husband died in the middle of the process had been encouraged to gear up her house to buy not one but two apartments. Recent valuations on two properties she owns show that if she sold on today’s market she would stand to lose the majority if not all of the equity in the property that she owns. She is faced with the liquidation of Blue Chip and no rent guarantee. She cannot afford the monthly commitments to mortgage costs and has therefore been forced to sell her apartments at a significant loss. 
Financial advice like that puts some people into very difficult situations. With all this contagion around the global financial market place the Government has seen fit to introduce a suite of legislation not to remove the risk from financial investments as there will always be risk but to raise the bar on those who enter the financial markets either to provide investment products or to proffer advice and to benefit from that advice by way of a fee or a commission. The Reserve Bank of New Zealand Amendment Bill (No 3) was the first in this suite of legislation. That bill addressed prudential requirements of the non-bank deposit takers and it was passed during the previous sitting period. National supported that legislation. 
The Financial Advisers Bill together with the Financial Service Providers (Registration and Dispute Resolution) Bill aims to address the regulation of financial advisers and to lift the benchmark and rigour around those who can be financial advisers their qualifications and the means by which consumers can seek to resolve disputes with financial advisers and those who provide financial products. The Financial Advisers Bill is being debated in its second reading today and quite clearly National supports it. 
The purpose of the bill which we will cover in the Committee stage is quite detailed in Part 1. The first purpose is to require disclosure by financial advisers and the second purpose is to require increased competency in the financial advisers who are proffering a range of products. Some advisers out there—and the Minister begs to differ with me on this—were proffering advice not only on financial products but also on some real estate investments in Blue Chip. The third purpose of the bill is to ensure that financial advisers are held accountable for the financial advice they give. 
The first round of submissions on the bill received much debate and we have covered that in the debate today in the House. The draft legislation hit the Finance and Expenditure Committee which my colleague Craig Foss and I are on and was ultimately thrown out. In fact as the Minister agreed it was totally amended. 
There are four key areas of change that I would like to address today in my remaining time. Firstly the bill now amends the coverage of the bill—whom it applies to and what is covered. Secondly the new legislation amends the Securities Commission which will now have the sole responsibility to undertake the regulatory oversight of financial advisers. As such it is proposed that the commission will be responsible for approving monitoring and having oversight of all financial advisers. The third area of change is to amend the bill in relation to statutory offences obligations and a penalty framework. I propose to spend the rest of my speech focusing on the coverage of the bill where there have been five significant changes to the bill as first mooted. 
Firstly the focus now shifts to financial products whereas the original focus of the bill was on financial decisions. We now have a definition which we will cover in the Committee stage for two categories of financial product: category 1 and category 2. There are effectively seven products that have been divided into two tiers of financial product. The seven products are complex securities investment broking savings or investment planning simple securities insurance credit and real estate. These are very important distinctions now because the complexity and level of risk that accompany these products are significantly different between each product. Some products at the higher end certainly involve a lot more risk and we believe more regulation needs to be provided for the level of advice given in the higher categories. We heard in the select committee process from many different submitters from the high end to the low end but it was in respect of those who provide financial advice at the lower end—the salesperson at the Noel Leeming store who is providing pretty basic advice under the Credit Contracts Act—that the level of financial regulation that we were initially looking to impose was really out of control. 
The second area of change is the adoption of a tiered approach to the authorisation of financial advisers which I have spoken on briefly. Effectively the products I have just described are broken into two tiers and there will be two levels of regulation that deal with those two tiers. 
Thirdly we are going to ensure that those providing financial advice on securities or investments savings and planning now become authorised financial agents. Members will see references to “authorised financial advisers throughout the legislation. An authorised financial adviser will be required to have certification to deal with tier 1 advice on tier 1 products. 
Fourthly in terms of changes to the bill we will be adopting certified financial institutions. Large institutions dealing with significant franchise networks will be able to apply to be a certified financial institution and effectively take responsibility for their advisers and make sure that they are imparting not only the knowledge but the responsibility and accountability for their advisers going forward. 
Lastly the amendments that relate to the scope of the bill will ensure that the bill provides clear and appropriate exemptions from the definition of financial adviser. I will use my time in the Committee stage to focus particularly on the exemption of budget advisers who originally were in the legislation but have now been taken out of it. Thank you Mr Deputy Speaker. 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to continue the National speeches in support of the second reading of the Financial Advisers Bill. Colleagues have talked about the suite of bills—and I am sure that the Minister of Commerce covered it; I missed her speech—that hold hands with this particular bill: the Reserve Bank of New Zealand Amendment Bill (No 3) and the Financial Services Providers (Registration and Dispute Resolution) Bill. It is all good stuff and quite timely—even more timely now I guess given the condition of and events in the financial markets since this bill was referred to the Finance and Expenditure Committee on 19 February 2008. 
There is one thing. My colleague Mr Tremain gave the example of someone caught up in the current crisis and I heard someone from the Government side of the House—I do not know whose voice it was—say that real estate agents are exempt from this bill. Yes real estate agents are exempt from this bill but that comment showed the incredible naivety and the lack of financial literacy of whoever it was who shouted it out. The commentary on the bill talks about “category 1 products (complex products such as a security other than …”. The bill excludes property quite explicitly—that is right. But if members look at the cause of the current subprime mortgage crisis around the world they have to ask what a subprime mortgage is. It is not the initial transaction of purchasing a property for sale; it is the ongoing leverage or de-leverage of the financing of property. That is what a subprime mortgage in the United States is. Investors around the world including some in New Zealand have been caught out by lending on property with a somewhat dubious valuation and perhaps associated transactions and fees. So yes those investments in property are affected by the intent of this bill; they will be caught up by it. 
At the end of the day it is all about asset classes be it hard assets such as property the derivatives of property or financial instruments down the chain. They will all be picked up. Property is explicitly excluded here in the first instance but if we go down one or two generations of any transaction of any of the current crises we see that the core asset devaluation the core deflation of those balance sheets is about property. Yes those investors might not be the initial owners of the property but if we look down the titles we see that they are guarantors and there is cross-party lending on the titles. Yes this bill and the other two bills pick up some of those issues but let us try to talk sensibly about the financial markets. 
I have here the first version of the bill which was referred to the select committee. I notice only one Government member of the committee here and I am looking forward to her speech on this bill. The bill that was referred to us on 19 February 2008 and the bill that we have before us are a credit to the process but goodness gracious me the first 70 pages of the original version are struck out—the first five parts are totally gutted struck out rewritten. That is a good reflection of the process which Simon Power alluded to—well done. Yes we acknowledge the Minister and her ambitions to have good robust and long-lasting legislation—we fully appreciate that—but we went through a fair few hoops on the way to get there. Who is to blame? I do not know. Perhaps those who were involved in the first draft needed a bit more input from the real world. What we see before us now is a better reflection of the real world because it is a reflection of the risk of investments and advice and that is entirely what financial markets are about. They are about the pricing applications and return—reward—of risk rather than individual occupations individual products etc. As Mr Power said earlier there is still some work to do but this bill is a good start. I am pleased to have been able with my colleagues on the select committee to contribute to the bill before us now. 
My colleague Mr Power also made the point about travel agents. I remember during the submissions process asking about travel agents and we seemed to park that issue saying that it was just travel agents and insurance. But we made the point that many people ask their travel agent when they should buy some foreign exchange. They say they are going to the United States and they ask whether they should buy US dollars now or in 6 months’ time when they go there—and we have all seen the volatility of the foreign exchange markets. The travel agent’s response qualified as financial advice; the travel agent is doing his or her best and maybe is just reading something off a computer screen but under the original bill that information would have constituted financial advice. There are myriad different examples like that from the hire purchase example in the commentary to the car salesman who offers advice on which loan to take or even which deposit to make—a 3-month a 6-month or a 12-month one—if the rates for each one are the same because as those with some financial literacy will know they are not actually all the same. 
My colleagues have spoken about the current conditions in financial markets around the world which are under major stress. I think about $5 billion is either frozen or very very stressed within New Zealand. But I acknowledge that New Zealand has many robust institutions—banking and non-banking—that are performing very well and their depositors’ funds are very very safe indeed. I acknowledge those institutions and I appreciate the tough times they are having as they search for funding and capital. 
I would like to make the point that the original bill was referred to the select committee on 19 February 2008 and the closing date for submissions was 4 April 2008. As submission after submission came in goodness gracious me it was pretty obvious by that stage that the bill would need amending. So there was the first interim report and the closing date for submissions on it was 16 May 2008. Then the second interim report came out and that is pretty much what we have before us today and the closing date for submissions was 22 August 2008. I sat in on many of those submissions and there were common themes. As I said before I acknowledge the path that this bill has taken to get to the more realistic and real-world form that it is in now but again I question why it needed to take such a tortuous and long path in the first place. It was almost an example of real-time submissions and bill-making as Mr Power alluded to earlier. Engaging with the submitters was a very healthy process. They knew their stuff and for a lot of it they knew it better than many of the members sitting round the committee table did. 
It is interesting to have this example because at least better legislation come out of the select committee process. Imagine if that process had been extended to the Electoral Finance Act which was raced through under urgency prior to Christmas last year. That legislation is creating all sorts of problems. Imagine if the same process had been extended to the emissions trading scheme bill. A thousand amendments to that bill were not submitted on and another 785 amendments were made to the bill that arrived back in the House. A total of 1785 amendments that had not been submitted on were raced through the House under urgency. Even KiwiSaver was in the same bucket. Good legislation does take good select committee time but most members would acknowledge that they are on a select committee to at least make legislation as good robust and long-lasting as possible. 
During the Committee stage I will be picking up a few points. My colleague Chris Tremain picked up that about $5 billion is under stress at the moment within New Zealand. Some of that is because of allegedly fraudulent and dodgy activities but much of it is from the market going against the investors—whatever they were. We have to distinguish between the two because the Serious Fraud Office the Securities Commission and the police are investigating many of those instances right now. 
I again make the point in this House that in the current environment—and I am sure the Minister said the same thing—with the stress in the financial sector now is a terrible time to be getting rid of the Serious Fraud Office. This bill is forward-looking—it is not retrospective—but at least we have the Serious Fraud Office to look at alleged misdemeanours that this bill cannot address yet the current administration is trying to wipe that office off the face of the earth. What an absolutely absurd time to do that with the stresses and the strains that the financial markets are under! 
I look forward to the Committee stage. I look forward to robust speeches from the other side; as we are sitting under urgency they must urgently want to speak. I will speak again in the Committee stage.  
Bill read a second time. 
In Committee 
Part 1Preliminary provisions  
SIMON POWER (National—Rangitikei) 
: 
 I have to confess that I may have misled the House during the second reading of the Financial Advisers Bill. I made the statement that advisers had told the House that only three clauses of the original bill would remain in the event that matters were completely redrafted from start to finish. Now that I have had a closer look at the bill it seems there are only two: clauses 1 and 2. In the bill as reported back to the House it now seems that pages 9 to 70 have been struck out with a fresh start being made on page 70 with clause 3 relating to the purpose of the bill which is of course what we are here to discuss in the Committee stage today.  
If we work our way through Part 1 and I know we are anxious to take a few calls—not several calls but a few calls—on each part as we work our way through the bill we find that the stated purpose “to promote sound and efficient delivery of financial advice and to encourage public confidence in the professionalism and integrity of public advisers” is a pretty good summary of where we are at today. As I said in the second reading it is impossible for any legislature to attempt to pass legislation to eliminate risk and nor should a legislature attempt to do such a thing because risk goes hand in hand with return. But this legislation seeks to require disclosure by financial advisers in order to ensure that decisions about whether to use a financial adviser are informed. It requires competency on the part of financial advisers to ensure that this advice is available to investors and consumers requires that they have the necessary experience expertise and integrity—I am not quite sure how one legislates for integrity—to effectively match a person to a financial product and requires that financial advisers are held accountable for financial advice that they give.  
Those are three broad and meritorious statements. The point of the three of them is that where an investor approaches a financial adviser and seeks advice on a financial product whether it be a simple or complex product or where an investor seeks advice on a more complex financial transaction that is to do with for example reverse mortgages different superannuation schemes and property investment companies the idea is that a certain level of disclosure and a certain level of competency should be available to the investor at the time that that advice is sought. The purpose clause attempts to capture the essence of the following: it is not the intention to legislate to prevent the loss of money in investments because that would have the outcome of putting the Government into the position of being a guarantor effectively of investments and that is not the way that markets work nor is it appropriate for Governments to find themselves in that position. But investors are entitled to a degree of advice and competency from those from whom they seek advice so that they are put in a position where they are best able to make decisions.  
What we heard at the Finance and Expenditure Committee was quite interesting on some days. On one particular day I recall the committee receiving a submission that went something like this: there were some financial advisers who were not disclosing the commissions that they were receiving when a particular product was sold but worse than that where they were conceding that a commission or a benefit was accruing to them if a particular product was sold not all of the benefit from or the discount on that product selection was being passed on to the investor. In fact on some occasions we were told a portion of that benefit was being retained by advisers themselves. We found at that point that the legislation needed to be broad enough to make sure that disclosure did cover off those sorts of situations.  
I think the other important thing about the disclosure regime is that even investors who consider themselves to be quite skilled and thorough—investors who may have a legal background or may have been in Parliament for some time—and who go along to their financial adviser out of a sense of nervousness to make sure that their investments are all in the right place and have sufficient protection would find themselves in an unenviable situation if they were confronted with a 5 or 6-page document to sign on the spot. What we need to avoid with this legislation is the situation where investors are put in that situation and told: “This covers that stuff. Just sign here and everything will be fine.” Even the most careful and confident of investors would not want to be confronted with that type of paperwork at that time prior to receiving the advice and feel as though they must execute those documents.  
This legislation has to avoid that situation occurring and I am sure the Minister in the chair the Hon Lianne Dalziel will give us an assurance in that regard. The legislation has to avoid the situation where an investor is simply presented with a wad of documents told to sign them on the spot before financial advice is given or received and then that in effect releases the financial adviser from any of the obligations contained in this legislation. The short question to the Minister is can a financial adviser contract out of the provisions of the legislation by presenting the investor with a disclosure document that the investor executes at the point the advice is received and are we making sure that pushing on the investor at the time that financial advice is offered will not create any problems for the investor at that point? I think we are all keen to know exactly how in practice the Minister sees that particular set of circumstances working because the last thing we want to do is to put in place a necessary and comprehensive piece of legislation to deal with financial advice and then find from day one that the financial adviser can simply contract out of it or assume that those obligations are discharged on the spot because a particular document has been executed. We will be interested to receive the Minister’s advice on that point.  
Let us move then to clause 5 “Interpretation”. We see that “document” is well defined there as is “Commissioner for Financial Advisers”. I say that is an exceptionally good idea and one that National is supportive of. Although “financial adviser” is defined in Part 1 the definition refers to “section 8” or clause 8 of the bill which is slightly further on. That definition warrants some attention at this point but before I come to it I just point out that Part 2 deals with financial advisers and their disclosure and conduct obligations but the definition of “financial adviser” is contained in Part 1 just in case members are concerned about that.  
Clause 8 states: A financial adviser is an individual who performs a financial adviser service …”—yeah right! That does not really clear very much up. Clause 10 defines a “financial adviser service” as one performed by a person who gives financial advice makes an investment transaction or provides a financial planning service. So I have one more question for the Minister and it relates to the definition of “financial adviser service”. When we were on the select committee we heard about the distinction between financial advice and opinion. I note that the reference to opinion is not contained in the definition of “financial adviser service” and I would be interested in hearing from the Minister on the issue of an opinion that is given by a financial adviser. Clause 11 defines when a person gives financial advice. I presume that financial advice is—oh here we go. Clause 11 states that a person who gives financial advice “makes a recommendation or gives an opinion or guidance”—I take it all back Minister; it is crystal clear there—“in relation to acquiring or disposing of … a financial product.” So that issue is covered; I give my apology to the Minister.  
But we look forward to hearing from the Minister about the signing of documents at the point of investment advice being sought and what that means for any downstream effects or for the protection that the legislation may offer.  
CRAIG FOSS (National—Tukituki) 
: 
 It is with great anticipation that I rise to speak in the Committee stage of this bill. I would like to touch on clause 6 “Act binds the Crown”. Obviously the Crown is exempt from the regulations around this bill. But firstly I shall turn to clause 3 the purpose clause. 
Clause 3 states: “The purpose of this Act is to promote the sound and efficient delivery of financial advice and to encourage public confidence in the professionalism and integrity of financial advisers by”. I was thinking somewhat laterally as I do about a situation in which the Crown were to give financial advice then to renege on that financial advice—and I know that the Crown is exempt from this legislation. I give the example of the “chewing gum tax cut” where people were given advice in a Budget they made financial decisions and plans based on that advice then the Minister of Finance reneged and took the “chewing gum tax cut” off the table. I would be interested to hear the Minister in the chair the Hon Lianne Dalziel make any comment at all on that matter. I know that it is a lateral thought but if the public are to have confidence in the financial services industry as is outlined in the purpose clause then surely they need first of all to have confidence that the regulator the Government of the country will be true and hold to its word. 
I turn to the interpretation clause and the definition of “advertisement”. It is plainly obvious that it is some form of communication. We recently had an example in Wellington that is not addressed by this bill or the disputes bill but may fall under the Commerce Act I guess. An organisation had a billboard outside its retail outlet offering funds at 8 percent interest and at the bottom of the advertisement was the statement “8 percent p.w.”—per week. Most people who went in there to borrow money had no idea what “p.w.” meant. In fact 8 percent interest per week compounded amounts to thousands of percent per annum. Under the Commerce Act that organisation was being quite open because the billboard stated “p.w.” but the people using that service did not have the financial literacy to know what it meant. Perhaps we need some more financial education in the public domain in our schools—and probably in Parliament. 
I go back to a point I made before. Someone was interjecting on one of our previous speakers who was speaking about real estate. I note the definition of “category 1 product”. Whoever interjected said that real estate is excluded but the definition states that “category 1 product” means “any estate or interest in land for which a separate certificate of title can be issued …”. There you go! That is a derivative because someone can own the land can use it as a guarantee can use it as collateral can use it as security and way down the chain someone can borrow against it to buy a car—someone whom the landowner has never ever met. There may be three people in the chain. That is why real estate is a category 1 product. I would be interested to hear the Minister clarify that. I do not whether she was the interjector. I give her the benefit of the doubt—perhaps she was not.  
Complex derivatives etc. are also category 1 products. The definition refers to futures contracts or any other contracts that may be specified along the way. The crisis we currently have in the financial markets is in and around those complex products. Events that occurred initially in New York and Cleveland are affecting people right down here in New Zealand. Unfortunately or fortunately that has been part of the global financial system we are in. 
In looking at clause 5 “Interpretation” I point out the obligations of financial advisers and who they are. As earlier speakers have noted they are not liable for the return on any investment as long as everything is declared upfront and disclosed be it a category 1 product or a category 2 product. That is all well and good but we must distinguish what they are because in these current times when New Zealand is in a recession many people are looking at the advice they were given. They need to determine whether they were given the full information and if they were not given it whether that impacted on the return on their investment. Someone may advise someone else to invest in say Australian equities and that adviser may forget to give that person the relevant foreign exchange advice. As I said earlier it is all about risk. 
I would be interested to hear other members speak about trust accounts. I refer to the definition of “trust account records”. Under this bill we interpret “trust account records” to mean “records relating to a trust account; and (b) includes any information that relates to a trust account and that is recorded or stored by means of any tape recorder computer … and any material subsequently derived from information so recorded …”. As we all know and without going into the detail interpretations of trust accounts and what goes through them—the interpretation of them—and the impact on not only the trustees but the beneficiaries of those trusts declared or otherwise is a very pertinent issue before this House and before the public right now. On issues like that the public has to have full confidence that the legislators in this House abide by the same rules that we ask the public and the financial advisers for whom we are regulating to abide by. We should put ourselves under the same microscope and regulation that this bill will put the financial sector under. Thank you Mr Chairman. 
The CHAIRPERSON (Hon Clem Simich) 
: The question was that Part 1 stand part and we have— 
Simon Power 
: I raise a point of order Mr Chairman. I am sorry for interrupting when you are just about to take the vote but there were a couple of questions and one in particular that I had asked the Minister in the chair the Hon Lianne Dalziel during my contribution on Part 1. They related to circumstances where financial advisers were asking clients to sign documentation relating to disclosure. I just wondered whether before you put the vote in order to keep the Minister’s contribution in order she would be prepared to offer me some advice on that matter. 
Hon Lianne Dalziel 
: Part 2. 
Simon Power 
: Part 2? 
Hon Lianne Dalziel 
: All the disclosure is in Part 2. 
Simon Power 
: OK well I am happy to wait until Part 2. 
The question was put that the amendments set out on Supplementary Order Paper 253 in the name of the Hon Lianne Dalziel to Part 1 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2Financial advisers and their disclosure and conduct obligations  
SIMON POWER (National—Rangitikei) 
: 
 This is a slightly more complex area than Part 1 and one of the most interesting measures in this part is clause 12. Clause 12 relates to when a certain person is not performing a financial adviser service when giving advice or doing a transaction. Of course my colleague Craig Foss would have noted that real estate agents are mentioned in clause 12(g). I am not sure whether that is a desirable policy outcome but I would certainly be interested in what other members think on that issue. Likewise although we are fully supportive of the legislation as members know I am not 100 percent sure that also excluding lawyers and chartered accountants is a particularly good policy initiative in the sense that in much of the work that I recall doing as a lawyer during the short time that I had in that job there was certainly a financial component to the advice that was given on a reasonably regular basis. I am sure that is equally so or more so in the case of chartered accountants although I have never been in that profession.  
One thing that is particularly interesting about clause 12 is the very important inclusion of a person providing free budgetary advice as part of a budgetary advice service offered by a non-profit organisation. As is so often the case at select committees some of the most powerful submissions that came before the Finance and Expenditure Committee were not from the big business organisations or the big unions but from the individuals who come before the committee. One particular individual whose name I am afraid escapes me came before the committee to express her concern that budgetary advice offered by citizens advice bureaus or similar sorts of budgetary services would on a reading of the bill be caught by its provisions. I think that the inclusion of clause 12(k) is an extremely important one given that we certainly do not want to put people who are giving voluntary budget advice into a difficult position when they are undertaking what is essentially an unpaid voluntary community service.  
Other people are included of course in the category of non-performance of financial advice services such as teachers lecturers journalists or State services employees who give advice in the course of working in those occupations as are a Minister of the Crown and a member of Parliament—both in the course of performing their duties in those respective roles. As I have said the list includes a lawyer a chartered accountant a tax agent a real estate agent a member of the board of a Crown entity a Crown organisation the Reserve Bank a person providing free budgetary advice and an employee giving advice to or making an investment transaction on behalf of his or her employer.  
There are some references to KiwiSaver investment transactions and the offerer or target company in the course of a takeover. That is quite an interesting little inclusion there. In particular the choice of words in clause 12(p) is I think quite odd because we are saying that a person does not perform a financial adviser service if the person is “an independent adviser giving advice in the exercise of that person’s functions under the Takeovers Code”. The use of the language in the first part of that sub-definition would make one think on first reading it that that is exactly the type of person who is supposed to be captured by this legislation. The Minister is shaking her head so no doubt we will hear from her on the issues relating to the Takeovers Code that need the provision of a special exemption.  
Then there is the case of a person giving general commentary relating to a financial market. Again that is quite an interesting little definition because we could have regular columns from financial advisers where one would write in and ask say: “Dear Mr Foss I have $10000 sitting in a bank account. What is your recommendation? Should I put it into KiwiSaver or should I use it to pay my increased ACC levies?”. In that case with regard to the response that Mr Foss gives in the media—hypothetically of course—I would need to be convinced that the definition of general commentary is enough to exclude the appropriate general comments made about the nature of some of these investment schemes. But of course if one of these commentators makes the remark in passing that today the ASB is offering 9 percent over 30 days. as opposed to the BNZ offering 8.75 percent over the same period of time and offers no specific advice in respect of those two current products on the market I ask whether that steers an investor in a particular direction by its nature or inference or whether it is general commentary thereby excluding itself from that definition. 
I suspect—and others in the National Party have said this during the second reading debate—that some areas of refinement will still be needed in this area after the election regardless of who sits next to you Mr Chairman during the Committee stage of that refinement. I wonder whether we have made that provision certain enough. I see that the officials are busy chatting about these matters and I would be interested to know exactly where we are heading with that particular point.  
It is also interesting to note— 
Mark Blumsky 
: That’s a good point. 
SIMON POWER 
: I thank Mr Blumsky. We will miss that sort of input when the member leaves! The other thing I am interested in is clause 13 “Meaning of financial advice clarified”. Interestingly in financial advice we do not include a prospectus an investment statement an authorised statement a bank disclosure statement a document or documents issued in lieu of a prospectus or investment statement or a disclosure statement. One of the things I am interested in is the role of the corporate trustee when it comes to the process for having discussions about financial advice. The Minister knows because we have shared the platform on one occasion recently at a financial advisers’ conference that I am a bit keen to look at the front-line regulator the corporate trustee and make sure that its obligations and its role as a front-line regulator are being exercised in an appropriate way to ensure that investors get the full picture. So we want to make sure that clause 13 does not let the front-line regulator off the hook and I would be interested in receiving some guidance on that.  
I will leave it there in terms of Part 2 of the bill but I am keen to make a short contribution on the remaining parts. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I thank the member. I think that this is an appropriate time for me to do the mea culpa. People have asked who is to blame for the quality of the original bill as introduced and I accept full responsibility for that. But there is one thing that I will say in defence of the line I took in terms of the occupational approach. 
Simon Power 
: I wasn’t blaming you. 
Hon LIANNE DALZIEL 
: Other members made certain comments so I thought I should accept responsibility. The point I want to make is simply this: if I had introduced a bill with a very narrow focus nobody who ought to have been covered by this bill would have put their hands up and said: “Excuse me you’ve left me out. Please include me.” By including everyone by having a really broad definition those who were not appropriately covered by this legislation were very quick to put their hands up and say: “Please take me out.” I still think that that was a good process in terms of getting everyone’s attention focused on who should be covered by the legislation. I do agree that shifting from the individual occupation to the type of advice they are giving based on the product and the financial services planning or the financial planning approach is absolutely the right way to go.  
I just draw the member’s attention to the Supplementary Order Paper because there are some changes here that have picked up on some of the omissions. One is in respect of registered valuation where obviously there could be potentially the giving of financial advice as a necessary incident of that work so we have included that as well. We have picked up on the issuers and trustees. 
Simon Power 
: Excluded that one as a financial adviser. 
Hon LIANNE DALZIEL 
: Excluded—excluded. We have also picked up on the question of issuers and trustees although I think that the point the member raises about the trustees the front-line supervisors is a very real one and it is part of the next stage of the Review of Financial Products and Providers which we have already announced is being held back a little while we do some further work arising very specifically out of the finance company failures of the last 2 years. There is further work to be done with regard to the front-line supervisors. We have already announced some of the original decisions that were taken but I have made the statement publicly that there is further work to be done in that area.  
In respect of the budget advisers I was very very concerned to make sure that budget advisers who help people who are struggling to cope on minimal levels of income would not be caught by the Financial Advisers Bill which is about protecting people from the risk of losing their life-savings when they have money left over to invest. I wanted that dividing line to be even clearer than as reported back from the select committee so we have actually picked up some concerns that have been raised by the citizens advice bureaus. So now the clause will exclude people giving advice or making an investment transaction in relation to a category 2 product or providing a financial planning service taking that in the broader sense if the advice is given the transaction is made or the planning service is provided without charge in the course of a service offered by a non-profit organisation. So that really should clear the decks for those people to feel comfortable that they can just get on with the job of providing that support.  
The third area I should highlight is the question of an employer providing assistance to an employee with the implementation of a decision to acquire or dispose of a financial product made available through the employee’s workplace. Not all workplace superannuation schemes will be KiwiSaver for example so I think it was important to focus more broadly on employers giving supportive information in order to assist the implementation of decisions that their employees make.  
In respect of the comment made by the member in relation to the Takeovers Code I should make the point that yes I know the language does sound difficult and we do speak of financial advisers not including independent advisers giving advice but the people who are appointed to enable people to make decisions as to whether to accept offers in a takeover situation are appointed under the Takeovers Act. Their independence is assured by that process and the question around disclosure is covered by the independence that operates under the Takeovers Act. It is all monitored by the Takeovers Panel and I think that is why it is excluded here. They do not have to go through having to disclose all of their situation under this particular legislation.  
Simon Power 
: So it’s not designed to exclude investment bankers. 
Hon LIANNE DALZIEL 
: It is not designed to exclude investment bankers but this is a particular function that they have under another Act.  
The last thing I want to comment on is the question of disclosure. I draw the member’s attention to the provisions of the bill which talk about disclosure having to be in the form required by regulation. I think that that is one area about which I want to give the member some comfort. I remember going to a meeting of financial advisers which included some of the representatives from the Australian industry. They talked about the number of pages that had been increased by the particular regulatory framework they had adopted over there. I have asked my officials to make sure that when they do this work on these regulations—and subsequently on the changes they will be making in the Securities Act area which will cover investment statements—they make them short and simple in plain English and make them very accessible to those who are seeking to rely on them. The last thing we need is to have complex difficult documents. We want people to be able to access the level of information they need.  
I think it is very important in this environment where we have advisers being paid by way of commission from the people who are selling the products that people have not only the information about the nature of that commission but also a comparator with those other commissions that might be available. Unless people know that their adviser is being paid a lot more to offer them a particular product over and above something else and all the other issues that the member raises then I think it does not address the fundamental flaw that exists in the current arrangement. This bill is designed to address that and I know that members of professional organisations now—and this is why I always recommend that people use financial advisers who are covered by professional organisations—require their members to disclose this information up front already. At this stage people do not have to wait for the legislation if they use people who are members of professional bodies. 
CHRIS TREMAIN (National—Napier) 
: 
 I want to pick up on what the Minister was speaking about during the commencement of her speech. She felt that the process she had undertaken had been a good one in terms of spreading quite a large net in a catch-all situation and then expecting people to put their hands up to say: “No leave us out of this process.” I want to discuss it in terms of the danger of bureaucracy which is something National bangs on about in terms of bureaucracy creep and getting down to people who should not be involved in unnecessary regulation. I guess no more can it be said for the budget advisory community which is referred to quite well in clause 12(k) whereby budget advisers are exempt under the auspices of this legislation. I think it is important to understand that initially budget advisers clearly came within the catch-all of the Act. As the Minister has quite rightly said these are the people in our communities who deal with people who do not have a lot of money such as beneficiaries who might have only a couple of hundred dollars week in week out to work with. I am talking about citizens advice bureaus and in my own electorate of Napier the Napier budget advisory service that is run by two or three volunteers who sit up there in Community House. I am talking about the Napier Family Centre budgeting service which has a number of volunteer budgetary advisory people.  
They deal with members of our community who do not have a lot of money to rub together. We are not talking about the investment of life-savings of $20000 $300000 or $400000 into different investment categories. We are talking about people who have had a pretty tough life and are struggling to make the best of $200 or $300. This bill initially looked to encapsulate the budget advisers within the legislation and to put regulation around them. Funnily enough one of the first submissions that came to the table was from the budget advisory association. This association supported the legislation and said that its members should be a part of the additional regulation. I could not believe it but that is what it said. But back in our electorate offices we were getting visits from budget adviser volunteers saying: “Crikey we don’t need this sort of regulation. If we have to be accredited it’s going to mean that we will need continuing professional development and there will be costs involved.” Quite frankly a whole lot of volunteers will leave this service and it will not be available to some of these hard-working Kiwis.  
Then the Minister said she was keen to get rid of it. But actually I say to the Minister one of the first amendments to the clause that came back from the officials was that budget advisory services would be exempt but only those funded by the Ministry of Social Development. I do not know whether the Minister remembers that particular clause but that is what came back from the officials in the first instance. It was the National members of the committee I have to say who put up their hands and said: “Look this will get rid of all the people who are involved in the voluntary sector.” As long as it is not for profit that clause has to change. We felt it was important that the voluntary sector was exempted totally and I am pleased to see that happen.  
People often bang on about National going on about bureaucracy but this is the type of bureaucratic creep that we get through this type of legislation and that is just crazy. Certainly it is not necessary for volunteers in the voluntary sector.  
I will give another good example. I was up in Mahia the other day with the volunteer firefighters. Volunteer firefighters are now required to have New Zealand Qualifications Authority qualifications for goodness’ sake! We are almost getting rid of the good Samaritan opportunities in our community and that is just crazy. We have to make sure that we allow volunteers whether they be budget advisers or firefighters to continue to do their work without massive bureaucratic creep and without additional costs. It is important that the officials consider those volunteers out there and the work they are doing and that they do not unduly bring a whole lot of additional bureaucracy into it. I saw that happening firstly with the budget advisers. We are not axing them. We will take out only the budget advisers who are funded by the Ministry of Social Development and then finally all budget advisers will be totally exempt. Thank you Mr Chair. 
The question was put that the amendments set out on Supplementary Order Paper 253 in the name of the Hon Lianne Dalziel to Part 2 be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Part 3Authorised financial advisers and qualifying financial entities  
SIMON POWER (National—Rangitikei) 
: 
 This is the part that attempts to deal with how to define authorised financial advisers and qualifying financial entities. I think that it is the most elegant part of the legislation but it is an extremely tricky thing to legislate for and the officials are to be congratulated on coming up with such a neat way of categorising advice in such a short period of time. This is essentially the part of the bill that creates the tiered approach if you like and National is supportive of that approach as we modestly suggested throughout the process that such an approach would be appropriate. 
One thing about institutional accreditation still sits in the back of my mind. I am pretty sure although I stand to be corrected by Charles Chauvel or any other member of the committee who was there at the time—in fact the officials might be able to correct me directly through the Minister—but I think it was Sam Stubbs from Tower who came before the committee and made a comment that went something like this. When it comes to dealing with a professional after something has gone wrong and what I think he termed the eye-to-eye conversation across the kitchen table has been had with that individual about the particular advice or product—in fact I think he drew a parallel with a dentist if I recall correctly—the responsibility should lie with that individual in the event that the financial advice has proved to be inadequate or inappropriate. That issue has sat for the last 2 or 3 months at the back of my mind—a reasonably crowded and cluttered place for it to sit over the last 7 or 8 weeks— 
Hon Mark Burton 
: It’s such a small receptacle. 
SIMON POWER 
: I say thank you to Mr Burton. I will miss those sorts of comments after the election although I am sure it was meant in good humour as all of the member’s comments have been over the last 9 years. 
In the situation where that individual who sat across the kitchen table gave financial advice to the person concerned—after a level of trust was built between them and discussions occurred; it was that personal connection that saw the investment decision triggered—we do not want to create a regulatory framework that sees that individual escape responsibility or escape accountability because he or she happens to belong to a large organisation that is institutionally accredited for the range of advisers who come under its umbrella. I think the submitter who raised that issue raises a fair issue. We cannot afford to have a group of financial advisers structure themselves in a way that sees that grouping being given an accreditation at an institutional level and thereby inoculating its individual salespeople financial advisers representatives and financial planners from any direct accountability or responsibility for the very nature of the trusting relationship that that one-on-one discussion built. 
That is the only question the only comment and the only thing on which I seek feedback from the Minister in Part 3. Thank you. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I am happy to respond to Simon Power’s comment on accountability and say that that is the reason why the qualifying financial entity approach that has been adopted in the Financial Advisers Bill is as the member himself described such an elegant solution. It says that the qualifying financial entity which is required to meet a standard in order to have that status acquired through the Securities Commission takes responsibility for defining who falls on either side of the line. On one side of the line we have the ones who are to be individually authorised and therefore individually accountable like any other authorised financial adviser. On the other side of the line we have the category 2 advisers who are dealing with the lower-level products based on that risk assessment. I think that is a neat way of allowing the institutions to take responsibility for employees and agents who are operating to sell essentially products that are in that lower-level risk category; the higher-level advisers will be required to be authorised financial advisers.  
To go back to a comment another member made about the sequence of events around budget advisers I say that is a very good example to use to explain how we have got to this particular position. When we started off by defining people by their particular occupations we ended up in a situation where budget advisers necessarily were included in the definition because it was so broad. We are trying to bring that back but at the same time we are very mindful of the fact that if we exclude an occupation then all of a sudden people will redefine themselves as budget advisers instead of financial advisers in order to avoid coverage which is why we tried to link it to the funding from the Ministry of Social Development. That was not the best mechanism. The select committee came up with a better one and I am grateful to it for that. Then the officials and I have come up with an even better one which is the one in the Supplementary Order Paper.  
But that is the exact point I am making: that the qualifying financial entity actually taking responsibility for dividing the two groups—one requiring the individual authorisation of the Securities Commission and the other coming within the responsibility of the qualifying financial entity—is I believe the best of both worlds. We get really good coverage and we get that eye-to-eye contact for those who have made bad professional judgment. 
CRAIG FOSS (National—Tukituki) 
: 
 I thank the Minister of Commerce and acknowledge those points. I agree with the qualified financial entity part of this bill—Part 3. It is another part that was totally rewritten and for the better as we have all acknowledged. I have some questions though—and perhaps I need to read somewhere else—about the qualified financial entities. 
Many of the submitters particularly the larger players are already doing something along those lines anyway so the burden is not huge. They operate across many jurisdictions and therefore need to keep control and account of who is doing what everywhere. In this mobile world where one can call a local bank and end up talking to someone overseas keeping control does become tricky and the bill acknowledges that we can go only so far here in New Zealand. 
Among the three obligations and responsibilities of qualified financial entities that are mentioned in the bill—and I agree that the Securities Commission having that call is exactly right; it is the gateway of all things regulatory around financial markets along with the Reserve Bank; I think it is a good fit—is to ensure that staff are authorised. Most of them took that on board particularly the larger ones. They do not really have a problem with it because all their staff are authorised in some way shape or form in order to get into the building to use their websites or to do whatever it might be. 
They are also obliged to provide a list of names to the Securities Commission and to keep that list up to date. I would be interested to know what “up to date” means. I had a quick look at the definitions and I did not see it there. Common sense would say it meant quarterly reports or something like that but it could cross a financial year or it could be an entire cycle. What is up to date for one qualified financial entity operating here in New Zealand on its own may be different from what is up to date for a qualified financial entity that is incorporated here but is essentially overseas owned. Is there consistency of timeliness? I am sure the Securities Commission would give encouragement and guidance but perhaps it is one of those areas that the select committee could have defined a bit further. I am open to be advised that the definition is somewhere in the bill. 
My colleague Simon Power pointed out earlier that all of us here agree that the single regulator model of the Securities Commission—leaving the expertise in that place—is very good. The bill acknowledges that a Commissioner for Financial Advisers will be appointed. The commissioner will be a member of the Securities Commission and that is all very well and good. I presume that more funding will be required to enhance whatever operations it does. 
Also in this part—and I acknowledge the foresight of this provision—is alignment of the fines outlined in the Securities Act those in this bill and those in the Financial Service Providers (Registration and Dispute Resolution) Bill which I assume we will be talking about this week. There will be consistency across the sector and that takes away the ability for someone to do regulatory arbitrage to exploit one piece of legislation over another—to do fine arbitrage if one likes. In this bill as it was first drafted there was the possibility of five industry bodies and one person could have moved around the other bodies. 
National members are voting for this bill and this part. We endorse where it has got to now. We endorse the consistency of it and the recognition of where the expertise lies in this particular sector. I think it is very good. I acknowledge the qualified financial entity model and the authorisation of two tiers category 1 products and category 2 products—complex and run-of-the-mill if you like. I think it is a very good fit. Yes there may be further work to do. 
I shall talk a little about the types of institutional accreditation. There are those registered under this bill as category 1 products and category 2 products and authorised by the Securities Commission. That is nice and clean. There are bound to be some organisations that fall outside or very close to it but I am sure we will find them on the way through. Having category 2 will totally do away with all the fears of the various insurers agents and people who operate call centres for banks. Basically they are transacting run-of-the-mill business. I acknowledge the Minister in regard to where we have got to on that. On a cost and compliance issue it was a great leap forward because everyone had looked on it in horror. 
The question was put that the amendments set out on Supplementary Order Paper 253 in the name of the Hon Lianne Dalziel to Part 3 be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Part 4How financial advisers are regulated  
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to Part 4 of the Financial Advisers Bill which deals largely with how financial advisers are to be regulated. Essentially as the legislation is now to be enacted it will be under the guide of the Securities Commission which was established in Part 1 of the Securities Act. It was going to be product regulation based under the Securities Act and the Securities Markets Act on the one side and then as we have discussed in previous parts of the bill financial adviser regulation with supervision of both qualified financial entities as Mr Foss just spoke about and of the accredited financial advisers as Simon Power spoke about earlier. Clearly under the Securities Commission there will be enforcement of the statutory obligations of each of those organisations. 
But what is now being proposed in Part 4 is how we are going to regulate financial advisers through the establishment of a Commissioner for Financial Advisers. That is dealt with in subpart 1 of Part 4. The commissioner will be a member of the Securities Commission. If we look back to the legislation as originally proposed if I recall correctly we see that the idea was that we would set up a number of bodies under each industry organisation that would then be responsible for the accreditation of the financial advisers within their own industry. 
Hon Lianne Dalziel 
: They would apply to be— 
CHRIS TREMAIN 
: Yes that is correct. Then there would be a default provider if there was nowhere to go. It all got a bit complicated at the end of the day and everyone in the House agreed that going to one body with the default provider being the Securities Commission and therefore the Commissioner of Financial Advisers was by far the best alternative in terms of stopping duplication. Everyone knew where to go and we have come up with the best solution.  
Essentially the functions of the commissioner are dealt with in clause 77 and they are as follows: “(a) to appoint members of the code committee:”. As I understand it the code committee will be responsible for establishing the code writing it and updating it as time goes by. The other functions of the commissioner are “(b) to review the code and propose changes to the code as required: (c) to act as a chairperson of the disciplinary committee:”—because a disciplinary committee will be established under the commissioner for dealing with complaints and disciplinary actions—“(d) to oversee and expedite the work of the Commission in relation to financial advisers:”. Lastly it is the function of the commissioner to exercise and perform such other functions powers and duties as are required of the commissioner.  
Clause 82 deals with the content of the code that the commissioner will be required to put in place. What we have done in the legislation is outline some of the key criteria that must be part of the code. It must provide for minimum standards of professional conduct. As one would expect this includes things like the standard of competence that must be required from financial advisers or from qualifying financial entities the level of knowledge and skills that these individuals or qualifying organisations must have and the level of ethical behaviour and client care that one would expect from a quality financial adviser.  
The code must also provide for continuing professional training for authorised financial advisers which is something we have seen come across a number of professions whether for plumbers electricians or financial advisers. We have seen that ongoing requirement for continuing professional development and more recently we have seen this come into the Real Estate Agents Act where both licensees and real estate salespeople who remain independent contractors will be required to undertake ongoing continuing professional development. Lastly in terms of establishing the code under clause 82 subclause (3) states: “The code must specify different standards for different classes of authorised financial adviser.” That deals largely with the fact that there will be a two-tiered system where financial advisers will need to attain a higher level of qualification to advise on category 1 products versus category 2 products. I think that is good.  
Subpart 2 of Part 4 deals with complaints about financial advisers and how that will be dealt with. It is pretty straightforward. Any person now may complain to this one body and it will be far clearer than it was under the original legislation that was proposed. Thank you. 
The question was put that the amendments set out on Supplementary Order Paper 253 in the name of the Hon Lianne Dalziel to Part 4 be agreed to. 
Amendments agreed to. 
Part 4 as amended agreed to. 
Part 5General provisions  
SIMON POWER (National—Rangitikei) 
: 
 If I had not received such a pleading look from the Minister Lianne Dalziel not to stand I would have sat down. I just make the point that Part 5 relates to general provisions and appeal of decisions the right of appeal of the commission—interestingly on the issue of authorisation—and the potential decline of qualifying financial entity status. The District Court apparently will make those decisions. I suppose on an issue like that there does need to be a procedure for appeal and I guess on balance that the District Court is the appropriate place for that. 
The question was put that the amendments set out on Supplementary Order Paper 253 in the name of the Hon Lianne Dalziel to Part 5 be agreed to. 
Amendments agreed to. 
Part 5 as amended agreed to. 
Clauses 1 and 2  
SIMON POWER (National—Rangitikei) 
: 
 We come to the only two surviving original clauses of the Financial Advisers Bill which as we said earlier in the debate has been completely rewritten with 61 pages being deleted from the bill. 
Hon Lianne Dalziel 
: A hard-working committee. 
SIMON POWER 
: It is pretty hard-working all right! Sixty-one pages have been deleted but what stays? Since this bill was referred to the Finance and Expenditure Committee in February of this year or thereabouts what has remained from the years of work and reviews stakeholder meetings workshops and the like that occurred? What is left is the title—the Financial Advisers Act 2007—and the Government is to be commended for retaining that during this process.  
Secondly what has also remained during the last 8 or 9 months is the commencement date. That is clause 2(1) and it will come into force on a date to be appointed by the Governor-General by Order in Council. Secondly clause 2(2) states: “One or more Orders in Council may be made appointing different dates for the commencement of different provisions.” That is it. They are the only two clauses that survived the original bill. 
Hon Dr Michael Cullen 
: We listened! 
SIMON POWER 
: That is right—it is a listening Government. So we wiped out 69 pages of ineffective legislation and replaced it. But as we said earlier that was the right thing to do and we now have what we view to be a crucial first step in workable regulation around this industry. I think it is worth noting that the Minister has always been careful in her public statements and particularly in her press releases and speeches—which we have followed pretty carefully—to make the following two statements in either this form or in a form similar to it. The first statement is that she is not inclined she tells us to regulate for regulation’s sake which is something that we support. We believe that regulation in this case is necessary. Secondly the Minister has made the statement many times that we cannot legislate to prevent risk and that is also a position that the National Party endorses.  
I have to say that I think this is the only time in my short time here that I have seen legislation so thoroughly amended by the select committee process. It was not comprehensively amended of course because we still have clauses 1 and 2 but it was thoroughly amended during that process. That tells the Committee that the select committee process adds value to the final product and it also tells the Committee that where a Minister is prepared to allow the legislation to form up following further input and advice from officials other political parties and the select committee the Parliament can find itself with workable legislation. I will make some comments on the future of this legislation in the third reading debate but I will leave my comments on what are now really known as the enduring clauses of this legislation. 
CHRIS TREMAIN (National—Napier) 
: 
 I would like to speak to the enduring clauses of the Financial Advisers Bill and to beg to differ just slightly with my colleague Simon Power who claimed there are only two enduring clauses. When we look at the amended legislation in the mark-up version we see that in fact only one clause remains in the legislation. If we look at page 9 of the new bill we see that only the title has remained the same from day one. Clause 1 states: “This Act is the Financial Advisers Act 2007.” and everything apart from that clause has changed. The commencement clause has quite clearly been changed. In the first draft there was an original provision there but that has actually been changed. 
Sitting suspended from 1 p.m. to 2 p.m. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Financial Advisers Bill be now read a third time 
. The progress of the Financial Advisers Bill has not been as easy as I first thought it would be. The failure of a string of finance companies last year brought me to the conclusion just before Christmas last year that the bill as introduced was not the best way forward. After advice from industry I concluded that the co-regulatory model would struggle with the disciplinary workload that could arise and would not survive the loss of confidence in the sector which is the inevitable fall-out of finance company failures. It was necessary to make significant changes during the select committee process. At this point I again express my thanks to members of the Finance and Expenditure Committee and officials who have engaged with the industry the wider sector and the public. I also acknowledge the Opposition’s commitment to working with the Government on finding a solution to these issues. In particular I acknowledge Simon Power who has been open about concerns and we have worked together to resolve them. I commend the whole committee’s engagement with the industry and its willingness to listen and make such changes at a late stage. I am confident that the committee has produced a bill that is far more practical and suitable for its purpose.  
Specifically I support the bill’s new focus on financial products in contrast to financial decisions and the development of the two-tier approach to authorised financial advisers and other financial advisers advising on category 1 and category 2 products. The bill enables the adoption of a qualifying financial entity model to reduce compliance costs for institutions with a large number of advisers as well. Finally the bill provides clear and appropriate exemptions from the definition of a financial adviser so that people offering budget advice for example are not captured by this legislation.  
I will just place on record here that in the legislation itself the definition of financial advice uses the words “recommendation” “opinion” or “guidance”. These are words that need to be read together; one follows from the other. “Guidance” does not simply mean setting out options for people then to take advice on or make a decision on. I want to make it absolutely clear that citizens advice bureau advisers will not be captured by the definitions in the legislation.  
I will not go over the details of the legislation again. Suffice it to say that the bill’s passage today will ensure that the election period can be put to good use by officials from the Ministry of Economic Development and the Securities Commission and by the industry as a whole to inject the detail into a regulatory framework that should reinvigorate a much-needed sector. I say that it is a much-needed sector because we all need to be able to rely on advice in order to be guided to make good investment decisions where we do not have that expertise ourselves.  
I will make two more statements that again cover issues that have not necessarily been raised in this debate. If people are taking advice from an adviser now I urge them to use one who is a member of a professional organisation that can hold that adviser to account. But I warn them not to use that advice as a proxy for their right to know the details of the investments being made and the level of risk they are exposed to. The Securities Commission has a good range of information available and I do ask people to use it. It provides good advice including the advice not to be afraid to say no if the level of risk is outside people’s risk appetite.  
The second issue is the question of financial literacy. We can build a strong regulatory framework as we have done with this bill but inexperienced investors must still understand basic financial principles such as risk and return. That is why the Government has committed to the National Strategy for Financial Literacy led by the Retirement Commissioner engaging as it does with the private sector and the non-governmental organisation sector as well. At the same time the companies that have taken the hard-earned money of people who have saved over a lifetime owe a duty of care not to abuse the trust that has been placed in them. New Zealanders who have lost money or whose funds are frozen are disgusted by the flaunting of wealth by those who have left behind them a trail of devastation. Corporation law was designed to protect entrepreneurs from personal liability so that they could take risks without facing financial ruin every time an idea did not pay off. But to see people driving around in Porsches and living in luxurious mansions when others are seeing their life-savings go up in smoke creates challenges for those of us who defend the underlying principle. It is a disgrace and they should be ashamed.  
Financial advisers stand in between those companies and clients and it is their duty to identify the risk profile of their clients and to do the homework their clients cannot be expected to do—work up a balanced portfolio read any prospectuses identify where the risks are ask whether the risk is appropriately priced and be alert to the potential motive behind higher than usual commissions. It is very easy in this climate to blame all financial advisers but I warn against imposing too high a standard on those who were faced with misleading prospectuses or who could not have foreseen the domino effect of the flight to quality that followed the initial failures.  
In conclusion I believe that the Financial Advisers Bill now meets the objectives I set for it when it was first introduced. It brings financial adviser regulation into the 21st century aligns us with international best practice and provides for an appropriate level of investor protection in New Zealand. I commend the bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 The Financial Advisers Bill has enjoyed support from the entire House from its first reading and through the select committee process in the Finance and Expenditure Committee its second reading and the Committee of the whole House and I suggest that that support will continue for its third reading. That tells us as a Parliament that the House regards this issue as being in many respects above the usual day-to-day political discourse that occurs on most of the legislation before it. Many many New Zealanders have lost money through finance company and mortgage trust collapses. Many billions of dollars have been lost because of those failures. It is critical to rebuild trust and confidence in our capital markets. The issue of the disclosure of fees and remuneration contained in this legislation is a key part of reforming the sector.  
I echo the Minister’s views when I say that many investors have received poor-quality financial advice. We in the National Party agree that there is a need to update the legislation that governs the activities of financial advisers and since the time when the Leader of the Opposition John Key wrote to the Prime Minister offering the assistance of the National Opposition with that process the issue largely became a depoliticised process. I was dispatched on behalf of the National Party to be briefed by the Minister’s advisers to discuss and negotiate with the Minister and to cajole her into accepting the differing views on the initial version of the bill. I will return to that matter shortly. 
One of the things that the Minister of Commerce and I and in fact that Labour and National agreed on very early was that it is impossible to eliminate risk from financial decision-making and indeed that it is impossible to legislate against such risk. So a balance had to be struck between minimising the risks for investors and minimising the costs of a new regulatory regime for investors. Of course legislation is not the only response to minimising the risks of financial investment. Improved financial education and literacy need to be part of improving New Zealand’s investment culture. Fundamentally the proposals in this legislation to require greater disclosure of financial advisers’ remuneration commissions royalties and other such payments greater disclosure of qualifications and conflicts of interest and a higher level of competency on the part of financial advisers are necessary. So too is the need to hold financial advisers accountable for the advice they give.  
This bill very appropriately in our view establishes the Securities Commission as the sole regulator of financial advisers and abandons the original co-regulatory model. It allows institutions to be accredited and responsible for their employees rather than in many instances requiring all individual employees to register. The two-tier regime which provides heavier obligations for more complex advice and lesser obligations for more simplistic products makes sense and is practical.  
On the issue of the financial adviser the definition of that term has been covered extensively during the Committee stage. There was no doubt that the attempt in the original bill to define advice given by referring to the occupation of the individual or the organisation giving that advice was based on a faulty premise not because that was not a good place to start the discussion about what a regime should look like but because it provided too many loopholes for people to avoid the regulatory framework. Indeed on the other hand it would have captured in our view—and in fairness to the Government in its view as well—a group of advisers who were never intended to be caught by a more complex regulatory regime rather than a more simplistic regime relating to more straightforward financial products.  
During the select committee hearings we saw the emergence of a model that virtually developed itself as submitters gave their views to the Finance and Expenditure Committee. It was actually quite a remarkable discussion with members of the committee putting alternative models to submitters as the submitters appeared and asking for their comment on the workability and practicability of those models. As those discussions went on it became clear that they were forming up in the minds of the committee and of the chair Charles Chauvel a useful model to explore beyond the model first offered at the bill’s introduction and first reading. To the credit of the officials who were advising the committee they swallowed hard and started effectively from scratch to draft the legislation that is now before the House in its third reading.  
During the second reading debate I said that parliamentary counsel made a remark in the drafting stages when I asked how much of the original bill would stay intact—my recollection was that the answer was three clauses. We later found out that it was two clauses and there was a suggestion during the Committee stage that it was only one clause. That meant there was a buy-in by the committee and by the Minister who corresponded with the committee on at least one occasion that I can recall offering to buy into that model and offering some suggestions about how it could work in a more practical way. I have to say the bulk of the work and if I can reuse the word I used in the Committee stage the elegance of the legislation that was put before us was largely a burden that had to be shouldered by the officials who advised the committee on that matter. They are to be commended for and congratulated on those efforts.  
I conclude by thanking the Minister of Commerce for making the officials available and for discussing this legislation in a positive and constructive way. I think in the end the House has delivered legislation that will begin this process in a comprehensive and thorough way.  
I will finish by saying one thing—and the Minister will be relieved to know that I am the only National Party member who is taking a call in the third reading—which is that this legislation in itself will not prevent people from losing money when they make investments. That is a very trite thing to say but it is an important statement to make because whatever happens after the election on 8 November and whoever occupies the Government benches will not change the situation that some people will lose money on various investment vehicles. All that the Government or for that matter Parliament can do is to provide a regulatory and legislative framework that is designed to put the best possible information before investors and to ensure that those people who are in the investment advisory business are competent and are required to disclose matters material to the investment decisions that are being made. The legislation cannot prevent loss and it cannot prevent risk but it does go some way towards requiring those who are giving financial advice to meet a far higher standard than that they have had to meet up until now. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First supports the Financial Advisers Bill as we do the suite of bills that surround it. We look forward to bringing to this House in the next Parliament other measures to help investors in this country. We need to encourage people to invest in our businesses and the sort of behaviour we have seen recently does exactly the opposite. Successive Governments have tried to steer people in this country away from property which New Zealanders have a preference for and one cannot do that if people see their money disappearing down the tubes. This bill goes some way towards making sure that the people who advise investors are at least registered which means they can have some faith in the advice that they get.  
I think it is great that the people who advise at the budgetary advice level like those from citizens advice bureaus have been left out of this bill thus ensuring that people who give advice to others like my friend Clayton Cosgrove are not caught up by this sort of thing. Where Mr John Key gets his advice from for his share trading we do not yet know—that has yet to be seen—but we suggest he would probably come into a category 1 or 2 situation whereby the level at which he operates is somewhat more sophisticated. We were pleased to see that those who advise people in good faith and without receiving any recompense need not feel that they could suffer a fine because of their good works. We think that is absolutely appropriate.  
As I said at the beginning and I will finish on this note New Zealanders need to have faith that the investments they make usually at the latter end of their working life do have some sort of surety around them and in particular that the people giving them advice are qualified to do so that they understand the situation people are in and that they give advice appropriate to people’s age their risk profile and those sorts of things. This bill goes some way towards ensuring that without taking away any of the entrepreneurial activity that we seek to encourage in this country.  
A party vote was called for on the question  
That the Financial Advisers Bill be now read a third time. 
Ayes 118 
New Zealand Labour 49; New Zealand National 47; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 2 
ACT New Zealand 2. 
Bill read a third time. 
Aquaculture Legislation Amendment Bill 
Second Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
 on behalf of the  
Minister for the Environment 
: I move  
That the Aquaculture Legislation Amendment Bill be now read a second time 
. Since the aquaculture reforms were enacted in December 2004 a number of issues have arisen with the legislation. This bill contains amendments to deal with those issues that have arisen from a May 2006 decision of the Environment Court in the case of  
SMW Consortium Ltd v Tasman District Council 
. The effect of this decision is that applications can be made for aquaculture outside of aquaculture management areas even though they cannot be granted. This could have the effect of blocking the allocation of space to iwi under the terms of the aquaculture settlement in the Maori Commercial Aquaculture Claims Settlement Act 2004. It could also create problems in processing other applications and in developing aquaculture management areas. We cannot allow a loophole to block aquaculture settlement obligations being met. 
The bill cancels any applications that were made after 9 May 2006—the date of the Environment Court decision—that do not relate to aquaculture management areas in operative regional coastal plans. As far as officials know there have been no such applications. The bill also freezes applications made outside of operative aquaculture management areas between 1 January 2005 and 9 May 2006. I thank the Primary Production Committee for clarifying that this amendment applies only to applications outside of operative aquaculture management areas. These applications can be processed only if the relevant area becomes an aquaculture management area in an operative regional coastal plan. In the event that the relevant area does not become an aquaculture management area in an operative regional coastal plan within 10 years of commencement of the amendment bill the applications will be cancelled. These applications are the ones that were the subject of the Environment Court case. 
The bill also clarifies in light of the Environment Court’s decision how aquaculture management areas are created. The bill makes it clear that from 1 January 2005 aquaculture management areas can be created only through the post - aquaculture reform provisions of the Resource Management Act by either developing a regional coastal plan that provides for aquaculture management areas and completing the interim aquaculture management area process set out in a regional coastal plan or deeming marine farms approved under old legislation to be aquaculture management areas. 
The bill also amends the Fisheries Act 1996 and the Aquaculture Reform (Repeals and Transitional Provisions) Act 2004 to ensure that the Ministry of Fisheries is not prevented from carrying out an assessment of any undue adverse effect on fishing. The select committee has assisted by adding clarification in clauses 9A and 9B as to whom aquaculture agreements should be made with when an area is covered by a reservation. Supplementary Order Paper 251 provides an additional technical fix to ensure that the fisheries register records a memorial against all quota stocks affected by a reservation. This keeps those trading quota supplied with the information that agreements could have been made that might affect the value of the quota. The Environment Court’s decision has highlighted a small number of consequential issues that provisions in the bill also address. 
The bill makes amendments to the Resource Management Act to ensure first that councils cannot grant coastal permits for non-aquaculture activities in an aquaculture management area except to the extent that the activity is compatible with aquaculture activities. Secondly an amendment to the Maori Commercial Aquaculture Claims Settlement Act 2004 ensures that applications that are not cancelled do not prevent allocation of space to the trustee. Thirdly there are amendments to the provisions relating to the assessment of undue adverse effects and the definition of “new space” in the Maori Commercial Aquaculture Claims Settlement Act 2004. 
The select committee has added a definition making it clear that unitary councils—and Tasman District Council is one of those—are regional councils for the purposes of the Maori Commercial Aquaculture Claims Settlement Act 2004. This is a very sensible clarification. I thank the select committee for its speedy and detailed consideration of the bill and commend the bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 I acknowledge my colleague and the chairman of the Primary Production Committee David Carter—a man who is quick to his feet with a sharp mind and who helped navigate the select committee through its consideration of the Aquaculture Legislation Amendment Bill. I look forward like most members of the House to— 
R Doug Woolerton 
: He’s got no idea what he’s talking about. 
PHIL HEATLEY 
: Oh well there is Doug Woolerton toeing the party lie. We see that he is over there contributing to this House and we look forward to his integrity perhaps shining through when he speaks about this bill. I imagine it is very difficult to present that type of face to the country at the moment.  
I will return to the legislation. As the Hon Lianne Dalziel said on behalf of the Minister for the Environment this bill amends four Acts: the Fisheries Act 1996 the Resource Management Act the Aquaculture Reform (Repeals and Traditional Provisions) Act and the Maori Commercial Aquaculture Claims Settlement Act. That is why this legislation will be divided into four bills.  
The bill addresses the Environment Court decision of 9 May 2006. There was a difficulty there where a whole bunch of investors had applied for aquaculture space—marine-farming space—that was not deemed an aquaculture management area through the processes of the new Act which came into effect on 1 January 2005. Two things fell out of that. Firstly there were difficulties over what effect on fishing the marine-farming area would have and secondly there was an issue around the settlement with Maori—the 20 percent provision of new aquaculture space that was to be passed over to Maori as aquaculture developed in this country. Of course that was the provision of 20 percent of existing aquaculture space that Maori were entitled to in the form of cash aquaculture area purchased by the Crown or new aquaculture space. Those applications at the top of the South Island threw a spanner in the works so to speak and a court case ensued. This legislation seeks to fix that.  
There is some irony particularly in the Minister’s speech where she talked about the need for this legislation that in the relatively small area applied for Maori will get 20 percent of the marine farm area to be developed down there in the future. I say that because it has been over 1300 days since the Labour Government’s aquaculture reforms came into effect. The total area of new aquaculture management areas which are the areas where marine farming that did not previously exist that has developed in those 1300 days of marine farming now amounts to—and members need to get their pens out because I need them to write down this number—zero. I want the House to know that none zero zilch zip nothing has been created in the way of aquaculture management areas in over 1300 days—over 3 years—since those reforms were put in place. No new aquaculture management areas new marine farms or new areas have been created in that time under Labour’s legislation. Is that not absolutely appalling?  
Maori were to get 20 percent of the new space that was to be created—that is one-fifth of the new space for those members who are struggling. I want members to get out their pens and paper again because we will do a little sum. Are members ready? Essentially Maori have one-fifth or 20 percent of however much has been created in 3 years. So 20 percent of zero or nothing zip or zilch means that Maori have not received a single square metre of new marine-farming space in over 3 years anywhere in the country. Is that not an absolute disgrace?  
But the Minister has brought into this House some legislation that will patch up a small area at the top of the South Island and I tell members that the National Party will support it. Why are we supporting it when it goes very little towards fixing a 3 or 4-year problem? We think that anything we can do to help marine farmers is at least something so we may as well support this legislation even if it is only incremental. Could the Labour Government have done much better? It certainly could have done better than zero. We will help it to do this small amount; we will be supporting this legislation particularly given the input of National members on the select committee.  
The irony of the Minister’s initial speech about passing this legislation for Maori is of course that Maori have received nothing in terms of aquaculture space—20 percent of new space created—because no new aquaculture space has been created anywhere in New Zealand. Marine farmers in a mainstream sense across New Zealand have not received any new space and Maori have certainly not received any percentage of that. Therefore they are no better off after the promises of over 3 years ago.  
Hone Harawira might remember that there was a bit of quid pro quo 3 or 4 years ago when Labour said to Maori: “We will do you a deal. Stop marching for the seabed and foreshore and we will give you some marine-farming space.” Maori now have neither so I will be very interested to hear Hone Harawira’s speech shortly.  
It is true that this bill is very very complex. It reflects some of the fundamental problems with the underlying legislation. We know that it will go only a small way to fix it up—it is a sticking plaster approach—but we are happy to support it.  
During the course of the Committee stage I will speak about particular areas and particular clauses of the bill because we had some issues to resolve when the legislation first came to the House. The first issue regarded the way that new marine-farming space affects those who fish. Members can appreciate that if there is a marine farm across the surface of the water it is very difficult for fishermen to run a trawl line to run nets or to fish in that same area. They are essentially locked out of a geographical area of the sea. What happens is that there is a fisheries test—an impact assessment if you like—to show how a marine farm put in that area would impact commercial recreational or customary fishers.  
Unfortunately previously the Act was not clear about the negotiations between marine farmers and fishers to make it fair for parties so that they could both be satisfied that a marine farm could be put in place. It states that the parties have 6 months to undertake those negotiations but it was not clear as to when the 6 month-period started. The 6-month period was a bit open-ended so we have closed that loophole and identified when it is to begin.  
We have also looked at the issue of the regional council definition because believe it or not when the original Act was passed the Government when it identified regional councils in the Act it did not put in a definition of what a regional council was. Unfortunately under the Local Government Act the councils of Marlborough Tasman Nelson and Gisborne which are all unitary authorities—they have regional and district council functions—are excluded from the Act. But in this legislation before us we say that those councils should be recognised as if they were regional councils. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 The people of this country have had the pleasure of hearing the National Party’s spokesperson on fishing. 
Hon Clayton Cosgrove 
: Who? 
Rt Hon WINSTON PETERS 
: That is a very good question so for the public’s information I will say his name is Mr Heatley from Whangarei. I recall at the fishing meeting we had at Onerahi in Whangarei some years ago he told people there that he was going to be the next Minister of Fisheries. I think they are probably still laughing but the fact is that he has come out today and pretended he is on the side of Maori. That would be the world’s best kept secret because hitherto until National members have most recently aligned with the Maori Party they have been anything but. On this bill we have had Mr Heatley speaking; and of course the chairman of the committee that looked at these four bills and this one in particular is one David Carter. 
Hon Clayton Cosgrove 
: Who? 
Rt Hon WINSTON PETERS 
: David Carter is a front-bench MP for the National Party but he is known— 
Hon Rick Barker 
: I thought he left at the last election. 
Rt Hon WINSTON PETERS 
: I thought he left at the last election because there has been no evidence he has been here since then. 
Hon Clayton Cosgrove 
: He carved his name on the desk. 
Rt Hon WINSTON PETERS 
: He has carved his name on the desk that is true but that would take a bit of work of course and doing any work on things to advance the economic and social interests of the people of this country is not what the National Party has done lately. No National has been engaged not in terms of aquaculture and the hopes and dreams and aspirations of people on the coastline of this country and investors and shareholders in what should be a burgeoning economic aquaculture future but has been obsessed with character assassination day in day out until of course its lead man Mr Key was caught out again. I am speaking because I am from the tribe called Ngati Wai and that means people of the sea.  
Hon Member 
: A great tribe. 
Rt Hon WINSTON PETERS 
: It is a great tribe and we have a serious interest in unlocking the aquacultural potential of this country in the interests not just of the Maori people but also of the region up north and of the nation so that people can make a full economic contribution hopefully as exporters to add to this country’s wealth. Every time Maori sell a product offshore they bring home money for the family New Zealand and that is the economic inspiration and vision that the party I am proud to be part of New Zealand First has always believed in. The areas designated in this legislation can be employed for only aquacultural purposes. I just want to put one thing on record here because I heard a Maori Party spokesperson say— 
Phil Heatley 
: Apparently you are Italian. Does that go on the record? 
Rt Hon WINSTON PETERS 
: I tell members why he said that. When I was young I did not sit on my backside sunning myself at Christmas time lying around surfing and leading the rich man’s life that Mr Heatley used to lead. No I used to work on the then new Panmure bridge for an Italian company called Codelfa-Cogefar. 
Hon Member 
: What’s this got to do with aquaculture? 
Rt Hon WINSTON PETERS 
: He raised it. They do not like it. They put up something smart and when they get the retort they do not like it. But just to finish off I used to be the union delegate on the bridge working every day in the rigging getting things ready doing something productive for New Zealand and getting paid. I was a poor humble student unlike Mr Heatley and Mr Carter who inherited all his wealth and he is not prepared to share it with anyone at all. He watches every cent. He criticises me for the magnificent causes I have run in my life—and they have cost a fortune—and he has not been prepared to spend a cent himself but has criticised and passed judgment on a member of Parliament who is engaged in worthy causes including suing him for saying defamatory things. Guess what Mr Carter said when he got to court? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
Rt Hon WINSTON PETERS 
: I will get there very quickly. The case was about fishing. He told the court through his lawyer that nothing he said ever meant to impugn the honour and integrity of Winston Peters. That was his defence. There is a word for that that starts with “h”. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No no. 
Rt Hon WINSTON PETERS 
: Oh yeah! He is a big man in Parliament he is a big man out there but he gets to court with all his millions and he is dead scared. 
Hon David Carter 
: I’m never scared. You lost. 
Rt Hon WINSTON PETERS 
: The member has not won yet. 
Hon David Carter 
: I have. 
Rt Hon WINSTON PETERS 
: The member and Bill Ralston and Television New Zealand and Radio New Zealand? No no. Tell the truth. Last December the judge said that there was a prima facie case to face here. In other words when Mr Ralston goes on TV spewing his bile it is because he is the one I sued and he is losing. He does not look too flash now. Mr Carter is a mere bagatelle so I thought I would let him go. Listen to him! Let me tell members something. He is not so happy about that because he thinks he might have won but when one is down the tubes $180000 to one’s law firm as he is do members think he has won? I do not. If I were the member I would keep my mouth shut. I would not try to criticise Winston Peters and try to defame him. I say to the member to get up and tell the House now— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can we get back to the debate. 
Rt Hon WINSTON PETERS 
: I would love to. Let me say that the Government is through this bill enabling Maori—because of the Waitangi settlement—to have 20 percent of this future resource. Why is that apposite now? Well the Maori Party actually said that New Zealand First does not support the Treaty of Waitangi. That of course is not true. What we do not support is the phrase the “principles of the Treaty of Waitangi” that not one Maori member can tell me they can describe not one historian can tell me what it is nobody at law school can tell me what it is and nobody in this House can tell me what it is but they would love to have it in the law. When one asks what the principles of the Treaty of Waitangi are one is told that it is a sort of catch-all phrase.  
Pita Paraone 
: A feel-good phrase. 
Rt Hon WINSTON PETERS 
: A feel-good phrase. It means whatever one wants to say it means. There is one party in this country that does understand Maori and once when we were better understood by Maori we won all the Maori seats which the Maori Party never will. One way to get offside Maoridom is to say one thing on the marae one thing over Maori radio and then do something privately that is different. That is what happened here. To put the record straight I came down to the House because it was chance to say to Maoridom—and I know that they are listening in their tens of thousands now that they know this debate has started—that what they are hearing over the airwaves from the Maori Party is not the truth.  
Hone Harawira 
: I raise a point of order Mr Speaker. 
Rt Hon WINSTON PETERS 
: I see I have struck a nerve. 
Hone Harawira 
: I ask you Mr Assistant Speaker to ask the member to come back to the bill. 
Rt Hon WINSTON PETERS 
: That is what is in the bill. The 20 percent is the Waitangi settlement that the Government has agreed to as to their fair proportion. That after all is the deal that was struck with Maoridom. The chairman of the select committee that sat on this bill Mr Carter can call it a load of rubbish. That is his speciality—a load of rubbish. But he obviously did not do anything when he was on the Primary Production Committee. 
Hon Clayton Cosgrove 
: He was sent here to be kept out of the family business wasn’t he? 
Rt Hon WINSTON PETERS 
: I cannot be certain of that but if it has any truth to it I can understand why. If there ever was a cowboy in this place it is David Carter from the South Island. In fact Federated Farmers said: “Who on earth appointed him to that role?”. They want to know what they did to deserve him as the National Party spokesman on agriculture. 
Hon Member 
: Invisible man. 
Rt Hon WINSTON PETERS 
: They called him the invisible man but unfortunately not the silent one. He is still interjecting in this House.  
The New Zealand First Party is pleased to support this legislation and to put a few things on the record that are factual—which are to do with the truth—rather than have ourselves so vilely unfairly demonstrably misrepresented. 
Hon DAVID CARTER (National) 
: 
 For a start I want to put on record my thanks to Winston Peters for the cheque of $9600 that we received last week as full and final settlement of a case that he lost. Thank you very much I say to him. It took a long time to get it. It was probably the threat of bankruptcy proceedings that did it. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. You cannot have a man get up and say that a transaction was done because of the threat of bankruptcy. That is humbug. The member has no right to make that sort of statement at all. We paid Mr Carter because we always have paid people when we have to—not for the kinds of vile selfish venal reasons he has but because it is called honour.  
Hon DAVID CARTER 
: Speaking to the point of order I want to say that payment was received only after the second letter was sent to Brian Henry saying that unless money was received bankruptcy proceedings would be initiated. 
Rt Hon Winston Peters 
: There he goes again. That cannot possibly be true. As he well knows any such letter had to be sent to the instructing solicitor who is Dennis Gates—not Brian Henry who is the barrister sole and does not get such correspondence. Whether the member’s lawyers are so stupid as to send it to the wrong man I do not know. But I know that the cheque that Mr Carter got came from Dennis Gates. I ask the member whether the cheque came from Dennis Gates—yes or no. [ 
Interruption 
] The answer is that yes he does not know what he is talking about. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I think that we have had our fun and I think that both members have made a contribution. 
Hon DAVID CARTER 
: I would certainly like to speak to the Aquaculture Legislation Amendment Bill which the Rt Hon Winston Peters has just spoken on—probably as the deemed Minister of Fisheries in the Labour - New Zealand First Government. Of course in recent weeks he has had more contact with the fishing industry— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. You cannot surely have a front-bench member of the National Party demonstrate his hopeless ignorance by referring to a Labour - New Zealand First Government. There is no such thing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: It is a debatable point Mr Peters and I will not tolerate frivolous points of order. 
Hon DAVID CARTER 
: The Labour-Progressive Government has been supported ably in recently months by the New Zealand First Party as it has maintained its position in Parliament. 
I was saying that Mr Peters has had more contact with the fishing industry than the actual Minister of Fisheries particularly over the last few weeks with regular contact with the likes of Mr Simunovich and Mr Vela— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can we just keep to the bill please. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. See he is at it again. He is making it up as he goes along. I have had no contact whatsoever recently with Mr Simunovich. I would not even know where he is living. That is the kind of deceit that member engages in all the time.  
The ASSISTANT SPEAKER (H V Ross Robertson) 
: What we are having may well lead to chaos and I am not going to have that in this House. We will have order. This is a place for full and vigorous debate but contributions will be made with respect for the traditions of the House as enshrined in the Standing Orders. That is why I am on my feet—because I represent those Standing Orders. I crave your respect for them and your understanding. Let us get back to the debate.  
Hon DAVID CARTER 
: The biggest contribution that the Labour Government supported by New Zealand First has made to aquaculture during the last 9 years is this pamphlet I have here produced in June 2007. It is a very fancy brochure and states: “Now is the time to get out on the water whatever the weather and join the journey.” Join the journey! The brochure is signed by six Ministers. The first is the Hon David Benson-Pope the Minister for the Environment but he is not that any more; he was fired. Then there is the Hon Chris Carter the Minister of Conservation but he is no longer the Minister of Conservation. Then there is the Hon Parekura Horomia the Minister of Maori affairs; he is the only one who has kept his job. Next is the Hon Trevor Mallard the Minister for Industry and Regional Development but I do not think he has that job any more. Then there is the Hon Jim Anderton the Minister of Fisheries. Last is the Hon Mark Burton the Minister of Local Government but he is another one who has been fired. 
I make the point to Clayton Cosgrove who is interjecting that despite producing a very expensive and fancy brochure the Labour Government has done nothing to promote the aquaculture industry. The industry both domestic and international is currently worth about $300 million and it has potential to do significantly better. All that the Government had to do was to pass legislation that would facilitate aquaculture development. The member Winston Peters was in this House supporting the Labour Government’s legislation in 2004 and as my colleague Phil Heatley has pointed out subsequent to that legislation the amount of new aquaculture space that has been created in this country is zero. I say to Mr Peters and the Labour Ministers: “Well done on producing a fancy brochure!”. 
We are today passing this little bill in an attempt to patch up what was completely unworkable. Doug Woolerton was not on the Primary Production Committee in 2004 but what the select committee told the Minister at the time— 
Hon Clayton Cosgrove 
: How did you mess up that selection? 
Hon DAVID CARTER 
: I think Mr Cosgrove might have been on the select committee in those days. The select committee told Mr Benson-Pope as the Minister that the legislation would not work. Mr Benson-Pope did not listen to the select committee but the proof of the pudding is in the eating because the legislation has not worked. Today we have a little bill that patches up but one court case.  
R Doug Woolerton 
: The actual fact of the matter is that the area has now been filled with product. 
Hon DAVID CARTER 
: Mr Woolerton sat on the select committee. He heard people saying that not one new aquaculture area has been created and he is now saying there is lots of product. Mr Woolerton should listen when he is sitting on the select committee. What we have today is this single piece of legislation and all that it does is attempt to sort out a mess that we knew was likely to occur. It concerns a particular area in Tasman Bay where some resourceful fishers under the name of SMW Consortium applied to occupy space before the Tasman District Council had actually deemed it to be an aquaculture management area. All that we are doing now is pass legislation in the dying days of this Parliament to patch that up. If we look further down the Order Paper we see another bill of a far more technical nature we are told which will try to further tidy up the mess.  
Hon Clayton Cosgrove 
: You will struggle. 
Hon DAVID CARTER 
: If Clayton Cosgrove had only listened when he sat on that select committee as a humble backbencher he could have worked with us in 2004 to pass legislation that would allow this industry to reach its potential. He could have been part of historic legislation being passed through this House. It would have had the label of the Labour Government on it and it would have been successful. But Mr Cosgrove would only do what David Benson-Pope would tell him to do. As a consequence no new aquaculture spaces have been created and we have a little bill today to patch up but one silly mistake made by David Benson-Pope and another bill sitting on the Order Paper to try to further patch up the mess. But they will not be enough. Mark my words the aquaculture industry will not get ahead until satisfactory legislation comes before the House that recognises the potential of the industry and allows our space to be utilised.  
Hon Rick Barker 
: Why is that member running a family business? 
Hon Clayton Cosgrove 
: He is running it into the ground.  
Hon DAVID CARTER 
: Minister Barker asks why I am not running a family business. Well for that Minister’s information—and what it has to do with aquaculture legislation I do not have a clue—I do run a family business and I do it with substantially more success than that Minister will ever do anything. That is the difference between this side of the Chamber and that side. Over here we have people who have run businesses and understand what makes businesses work. On the other side they have nobody. They had one guy called Jim Sutton. He knew how to fill out a GST return and they fired him. Helen Clark fired him. That is the difference between this side and the other side. We actually know how to run businesses. The select committee in 2004 heard from a substantial number of submitters who ran small family businesses in the Marlborough Sounds and they said to the committee in front of Mr Cosgrove: “You get this legislation right and we’ll stay in New Zealand but you get it wrong and we’ll take our expertise to Australia and Chile.” Does Mr Barker know what happened? Those people have gone to South Australia. Who is the loser? Well certainly the Labour Government is the loser and deservedly so but the real loser is the whole of the New Zealand economy.  
R Doug Woolerton 
: They have not gone at all. Rubbish! 
Hon DAVID CARTER 
: Doug Woolerton can chip in all he likes but he was part of the party that supported the Government to pass legislation that has not worked and will not work. This bill is a small band-aid to patch up the problem. It will not be enough to fix the underlying problem and to give the industry a real chance. The industry has huge potential billion-dollar potential and could be a goer if only we had a Government that knew a little bit about business knew a lot about fishing and would create the legislative framework to get the industry going. 
Hon SHANE JONES (Minister for Building and Construction) 
: 
 Tena tatou Mr Assistant Speaker. In inverse proportion to the speech given by the last speaker this speech will be short and will point out that in actual fact this simple legal modification closes a gap brought about by an unwise decision flowing from the Environment Court.  
Hon David Carter 
: No it didn’t make a mistake.  
Hon SHANE JONES 
: Yes and the Tasman District Council etc. will enjoy a higher level of clarity. I say the notion that investors are leaving in droves from the industry is absolute rot. I am glad to hear that all members of the Primary Production Committee supported this improvement. They realise that from time to time members of the judiciary do come up with decisions that are beyond the purview of the original legislators when they are passing legislation. It is not unusual for that to happen.  
I am looking forward to the fact that speaking in the House today from the Maori Party is Hone Harawira who I have no doubt will support this bill. Had he been here he would have supported Winston Peters. Had he stayed on the Privileges Committee he would have supported Winston Peters unlike the wittering we heard from Te Ururoa Flavell who fulfilled that great Maori proverb: “Kei runga te korero kei raro te rahurahu.”—there is wittering upstairs; noises of a different nature are being emitted downstairs. Those members will be punished for that type of rauhanga which is what we in the Ngapuhi call it. However it will be good to hear Hone Harawira speak shortly and support this bill which will drive aquaculture forward. That will make a small step towards atoning for the very unwise short-sighted decision made by Mr Flavell to cuddle up to John Key. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
Hon SHANE JONES 
: I will come back to the bill Mr Assistant Speaker. I am just pointing out that that Maori member will stand to support this bill because it is good for our Maori claims process. That other Maori member did not stand with another Maori who deserved to be given a fair go. Kia ora tatou katoa. 
METIRIA TUREI (Green) 
: 
 Tena koe Mr Assistant Speaker. The Green Party is supporting this Aquaculture Legislation Amendment Bill so I will take just a short call on it. 
In our view aquaculture can be a growth industry and it can be a very good supplier of an alternative source of seafood for New Zealand particularly while our wild fisheries recover from the incredible over-exploitation of those stocks that is going on as we speak. But really aquaculture is useful for this country only if it is done sustainably and excludes any kind of genetically engineered aquaculture. Aquaculture processes must protect conservation values and the public recreational and customary rights that our community has to the resources and places of the coast. It must avoid damaging fish-breeding grounds and valuable aspects of the coastal ecosystem. It must not pollute; there is always a serious risk of that with aquaculture. It must not pollute it must be sustainably managed and what is very important it must involve the public in decision making on aquaculture management areas. There is considerable uncertainty as to whether the current regime—with or without this amendment and with or without its more substantial brother bill which the House is yet to debate—can adequately do that. 
The National Party has described aquaculture as having stagnated under Labour. Although there are complications with the resource management of aquaculture it does not mean that all aquaculture development has been stalled at all. I am advised that the Northland Regional Council has approved many aquaculture management areas recently with only six applications out of 25 being contested. Most of them have gone through relatively easily. That said it is also suggested that the council railroaded the community and non-governmental organisations in some of those instances and there is considerable disquiet in the area about the loss of public coastal places to marine farming. It is our coast it is not the developers’ coast and the community has the right to have a say. The public must never be shut out. 
The Minister of Conservation must also have a say lest our marine ecosystems are sacrificed simply for profit. National’s intention to liberalise coastal management will be disastrous for the community for the habitat and for conservation values. 
I know that there is a particular Maori interest in aquaculture. It has been discussed here before and no doubt it will be discussed later this afternoon. I had the privilege of talking with the Wakatu Incorporation about its aquaculture proposal in Nelson. It is very exciting. The Greens are looking forward to that development. 
National’s policy is about certainty for investors. National’s policy is about having the freedom to change species about reducing bureaucracy and cost and about removing—entirely removing—conservation from the picture of aquaculture management. This means that National would shut out conservation and shut out the community; it would shut out those interests from decision making over commercial projects so that those projects can reduce costs and can have more freedom to make a profit at the community’s cost and expense. That is not what New Zealanders want to see happen with their coastal areas. They want to have a say. There is no doubt that there are opportunities for development and for local and regional economic development in this area but not at the cost of destroying the environment destroying the habitat and preventing people from being involved in those decisions. 
There is considerable concern about GE aquaculture. Members will remember the threat of GE king salmon back in the 1990s. The Greens fought GE aquaculture hard then and we will continue to do so if it rears its ugly head again. The world does not want GE and our New Zealand brand advantage including the brand for aquaculture is clean green and 100 percent pure. GE aquaculture would erode and indeed destroy our competitive advantage. It is not only that; the biosecurity risk of GE marine organisms is very high as the ocean is a very dynamic environment. They would put at risk our marine environment for no benefit whatsoever to the community or to our industry. 
This bill is very technical. The Greens look forward to its brother bill being debated in the House. We are pleased that the bill restricts applications to approve aquaculture management areas only and we support it. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Mr Assistant Speaker. Kia ora tatou e te Whare. I was really pleased when Rahui Katene the Maori Party candidate for Te Tai Tonga proudly told me about Nelson’s Wakatu Incorporation which has just released plans for a 78-hectare Horoirangi Centre of Seafood and Aquaculture Innovation. It will include fingerling fish hatcheries high-value extraction and aquaculture research facilities and complementary activities including seafood and marine education and Maori cultural tourism. I congratulate Wakatu on their vision their leadership and their enterprise in the face of adversity. 
I say that because although we know well the tremendous commercial opportunities that can come from aquaculture we know too that the iwi from Te Tau Ihu have not exactly had a lot of support from the Government. The crux of the matter for Te Tau Ihu is that although they were promised 20 percent of new aquaculture space there is nothing left so they were given nothing. They were forced to pursue a cash settlement because the Government refused to offer them anything at all. 
Putting all that aside this Aquaculture Legislation Amendment Bill will be important for iwi wanting to get into aquaculture in that it defines what aquaculture management areas or AMAs will be available although we also note that this bill will stop iwi from developing aquaculture projects outside of aquaculture management areas which Te Tau Ihu did in 2006. We understand the need to clarify the way in which aquaculture management areas can be established and we are glad that the bill confirms obligations to provide new space to iwi but we will not be holding our breath waiting for that to happen anytime soon given the fact that although the Maori Commercial Aquaculture Claims Settlement Act was passed in 2004 the agreement to provide iwi with 20 percent of aquaculture space simply has not happened. 
We are not surprised to hear though that all of a sudden the Government is running a consultation exercise with iwi just prior to the election about aquaculture space allocation. What it is not bragging about though is that what it is talking about with this consultation exercise is what it was supposed to do in 2004 and now will not be doing until 2014—if we are lucky. We are also mindful of the recent aquaculture consultations which the Government called a success but which cost the taxpayer $180000 and some hui attracted only five people. Given how poorly those consultation exercises have been to date and given that this is election campaign time it would not be unrealistic for people to think that this exercise was nothing but a publicity spend to profile the Government. The Maori Party co-leader Tariana Turia summed up the situation perfectly when she asked the Minister of Maori Affairs last September: “Since the legislation can the Minister tell the House how many new aquaculture farms have been established by and for Maori and where they are?”. The Minister’s response was “None.” 
The Maori Party will support the bill in the interests of trying to get the Government to honour the Maori commercial aquaculture settlement but we do so mindful of the bad faith and broken promises that have characterised this Government’s commitment to Maori aquaculture development. Sorry I apologise; this Government did keep one promise to Maori. It promised to steal our foreshore and seabed and it did exactly that. Kia ora tatou. 
Bill read a second time. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: This bill is set down for Committee stage forthwith. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. Mr Clarkson wants to make his valedictory speech early. Do you see Mr Assistant Speaker? Oh he has pulled the sign down. It will be a short speech. He has been totally incomprehensible since the day he arrived. He jumped before he got pushed. 
BOB CLARKSON (National—Tauranga) 
: 
 I raise a point of order Mr Speaker. I have just two words Mr Assistant Speaker: good bye. 
Rt Hon Winston Peters 
: That’s his valedictory. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: We must be in urgency I think. 
GERRY BROWNLEE (National—Ilam) 
: 
 I raise a point of order Mr Speaker. Thank you Mr Assistant Speaker. I appreciate the opportunity to make a contribution to the proceedings in the House this afternoon as we appear to have reached some form of impasse whereby the Government is not able to proceed with its business because the Minister has not turned up. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thought that was going to be a point of order Mr Brownlee. 
Hon Members 
: What’s going on? 
GERRY BROWNLEE 
: I sought the call. You gave me the call. I assumed that— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No I did not give you the call Mr Brownlee. Please be seated. I was under the impression that you had a point of order. I declare the House in Committee for consideration of the Aquaculture Legislation Amendment Bill.  
In Committee 
SUE MORONEY (Junior Whip—Labour) 
: 
 I seek leave for the bill to be considered as one question. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course to be followed. Is there any objection? There appears to be none. 
Clauses 1 to 22  
Hon DAVID CARTER (National) 
: 
 I simply want the Minister to clarify one point with regard to Part 3 “Amendments to Maori Commercial Aquaculture Claims Settlement Act 2004”. The reason I want clarification is that some quite differing information was given in the previous debate on the second reading. The principal question I want answered by the Minister is— 
Hon Lianne Dalziel 
: Say it slowly. 
Hon DAVID CARTER 
: I will say it very very slowly for the Minister and member for Christchurch East. How much new aquaculture space—new aquaculture management areas as they are called—has been created since the passing of the original legislation in 2004? In my contribution and the contribution from my colleague— 
Hon Lianne Dalziel 
: Do you know the answer? 
Hon DAVID CARTER 
: Yes I do know the answer. When the Minister does her homework she will have to stand and say that no new space has been created. The reason I think that should be clarified is that the Green member of course suggested in the debate that some new space—new aquaculture management areas—had been created particularly in Northland.  
The reason this does need to be satisfied with regard to Part 3 is that if new space has been created then effectively 40 percent of that space must now be made available to Maori. I suspect from the contribution of the Maori Party in the second reading debate that they are not aware of receiving any space and I suspect that in this case the Maori Party is absolutely right. They will not have received any space because no new space has been created. That is why this legislation is so critical. It is but a band-aid to fix a far bigger problem.  
In 2004 the Government passed legislation that the then Minister David Benson-Pope announced as being groundbreaking legislation that would lift this industry from at that stage about a $200 million industry to a billion-dollar export industry. That has not occurred and I think the Minister should take time to clarify with the officials immediately behind her to find out how much space has been created— 
Hon Lianne Dalziel 
: You have already answered the question. 
Hon DAVID CARTER 
: I think that the Minister needs to answer for the sake of the Maori Party members. They need to have accurate information and they can then be informed how much space has been created since 2004. I am sure they will find the answer is zero. Therefore the Minister might also like to rise and give me an explanation as to what else she is proposing to do to fix the legislation beyond this particular measure to ensure we do get enabling legislation to allow this industry to reach its potential.  
The Minister will be well aware of this very fancy document I am holding. I think she must be about the only Minister who actually did not get to sign it. Everyone else has put their name on the bottom of it but I do not see Lianne Dalziel’s name there. It is a particularly glossy brochure. It points out the potential of this industry. It is not a laughing matter I say to the Minister. 
Hon Lianne Dalziel 
: What year was it? 
Hon DAVID CARTER 
: This was June 2007 and the member was a Minister then? 
Hon Lianne Dalziel 
: Yes. 
Hon DAVID CARTER 
: Only just or just about to go out? I cannot remember the details. 
Hon Lianne Dalziel 
: Minister of Commerce. 
Hon DAVID CARTER 
: Minister of Commerce!  
Hon Lianne Dalziel 
: Women’s affairs and small business. 
Hon DAVID CARTER 
: This is important—Minister of Commerce. This Minister of Commerce should be enabling legislation to allow the aquaculture industry to reach its potential which is a billion dollars - plus. 
Phil Heatley 
: What did she know that the others didn’t? 
Hon DAVID CARTER 
: No—I suspect it is because perhaps there was a fall-out between this Minister and Benson-Pope because Benson-Pope did not ask for her signature; I am not sure. But every other Minister certainly managed to sign it. A lot of them are not Ministers any more but I guess that is not the point.  
The final question I think is one for the Minister to confirm for the sake of the debate today. How much new aquaculture space has been created since that wonderful piece of heralding legislation was advanced by the Hon David Benson-Pope in 2004—legislation that the National Party strongly said at the time would not work? If the answer is that no space has been created it is— 
Hon Maurice Williamson 
: Can’t be no space I’m sure. Must be some space. 
Hon DAVID CARTER 
: I am sure there will be but we are waiting for the Minister to take a call. I am sure that that is absolute proof that the National Party was right about this legislation and the Labour Government supported by New Zealand First was as expected absolutely wrong about it. 
PHIL HEATLEY (National—Whangarei) 
: 
 Perhaps I could describe the smoke and mirrors being used by the Labour Party up and down the country when it comes to aquaculture. Of course it is a fact that no new aquaculture management areas have been created anywhere in the country in the last 3 years. The Labour Party says that new marine farms have been created but of course although they might have been started only recently they were created under the old legislation before Labour supposedly fixed it. The new marine farms that are coming on stream today—the farms that came into play recently—were created under the old legislation. Since the new legislation came in 3 years ago the Labour Party legislation that apparently fixed the industry no new marine farms have come through. So when Metiria Turei talks about new areas up in Northland which of course is my home patch she is talking about either farms that have been in existence which automatically have become aquaculture management areas or new farms that have become aquaculture management areas passed under the old legislation. 
Hon David Carter 
: Did those few new places lose 20 percent of the market—who was the real Minister? 
PHIL HEATLEY 
: That is exactly right. I want to inform the Committee about an issue concerning clause 11(3) on the definition of regional councils. An intelligent person like Maurice Williamson will weep when he hears this. I have not explained it to him before but I would like to explain it to him now. When Labour passed the Aquaculture Reform (Repeals and Transitional Provisions) Act over 3 years ago in 2004 it said that regional councils would have a specific say. But members know I know and half the country knows that Tasman Marlborough Gisborne and Nelson are—are what I ask Mr Williamson? They are unitary authorities. They have the functions of both a regional council and a district council. There is no “Marlborough Regional Council” because the Marlborough District Council the Tasman District Council the Nelson City Council and the Gisborne District Council are all both a district council and a regional council. That is unlike the situation in Northland where we have the Northland Regional Council and also the Far North District Council the Whangarei District Council and the Kaipara District Council. But the Marlborough Tasman Nelson and Gisborne councils are unitary authorities. They have both regional council and district council functions. 
Believe it or not when the Minister passed that Act over 3 years ago he never put in the definition to say that where most of the aquaculture happens those district councils would have regional council functions. That means in effect that the most important district councils in the area are ignored in this legislation yet they are dealing with coastal activities aquaculture and marine farming all the time. My question to New Zealanders asks how they can trust the ability of a Government that does not even realise that four district councils across this country—or actually three district councils and one city council; I think Nelson has a city council—which have as much to do with aquaculture as does any other council in the country have only regional council functions and that by passing the 2004 Act we could have gone by the Local Government Act definition that does not recognise the regional council function in those councils. Today thankfully we are passing legislation that will secure in ink through this Parliament the recognition of the regional council functions of those four councils in this country. Thank goodness that has happened over 3 years on; we are pleased about that. 
I would like to ask the Minister of Commerce who did not sign the “glossy” that came out a few years ago why she did not sign it. Was it because she was suspicious that there would be no progress in aquaculture going forward? Was it because there was no room for her signature because everyone else had signed it? Was it because she knew that a number of Ministers would resign their portfolios or like David Benson-Pope be fired from their portfolios and she did not want to be one of a number of signatories to a document that was clearly cursed right from the beginning? That is my first question. My second question asks whether she was aware at the time of the legislation being passed over 3 years ago that her Labour Party Cabinet colleagues did not know that those unitary authorities had regional council functions. 
The question was put that the amendments set out on Supplementary Order Paper 251 in the name of the Hon Trevor Mallard be agreed to. 
Amendments agreed to. 
Clauses 1 to 22 as amended agreed to. 
The Committee divided the bill into the Aquaculture Reform (Repeals and Transitional Provisions) Amendment Bill the Fisheries Amendment Bill (No 2) the Maori Commercial Aquaculture Claims Settlement Amendment Bill (No 2) and the Resource Management Amendment Bill (No 2) pursuant to Supplementary Order Paper252. 
Bill reported with amendment. 
Report adopted. 
Third Readings 
Hon LIANNE DALZIEL (Minister of Commerce) 
 on behalf of the  
Minister for the Environment 
: I move  
That the Aquaculture Reform (Repeals and Transitional Provisions) Amendment Bill the Fisheries Amendment Bill (No 2) the Maori Commercial Aquaculture Claims Settlement Amendment Bill (No 2) and the Resource Management Amendment Bill (No 2) be now read a third time 
. I do not intend to traverse the very extensive coverage that I gave to the issues arising out of this legislation that I gave in my second reading address. I simply place on record my gratitude to members of the Primary Production Committee for their very hard work on this legislation. I know that they had a shortened period of time to look at it because it was technical legislation addressing as it does the outcome of an Environment Court decision that allowed applications for aquaculture activities to be made before aquaculture management areas were defined in regional coastal plans. Addressing that matter was the primary intent of the legislation. Yes we did tidy up other matters as identified by Mr Heatley during the Committee stage in respect of unitary authorities.  
It has been very good to have such good assistance from members of the select committee and the Opposition in facilitating the passage of this legislation. I place on record as well the thanks of the Minister for the Environment to the officials who supported the select committee in that work. I commend the legislation to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party will be supporting this legislation. It does address the findings of the Environment Court made on 9 May 2006 that clarified that the applications for aquaculture space can only be inside aquaculture management areas. The intent of the law was that marine farms be inside aquaculture management areas only.  
This legislation does freeze applications between 1 January 2005 and the court decision such that they can proceed only if the area becomes an aquaculture management area and it cancels applications made after the court decision. Of course the applications that are frozen are still able eventually to be involved in marine farming if the area becomes an aquaculture management area within the next decade. If not of course those applications will fall void.  
It is true that this legislation is very complex. It reflects the fundamental problems with the underlying legislation. The progress of creating new marine farming spaces has been very slow. No new significant aquaculture management areas have been created in the last 3½ years which quite frankly is a disgrace. It means that no 20 percent settlement has gone to Maori in that same time period of 3½ years. This legislation along with the Fisheries Act 1996 Amendment Bill (No. 2) which we will be debating probably today also will simply secure the current process—a process that clearly needs streamlining.  
The industry wishes us to support this legislation and we are happy to do so. On behalf of the National Party I do say that it is an interim measure. It is a sticking plaster to temporarily deal with some pressing matters affecting the industry and more fundamental changes need to be made particularly to the overarching Resource Management Act. National supports this legislation. It is making some progress but certainly not the progress that we want to see over the next decade. 
Hon DAVID CARTER (National) 
: 
 In rising to support the Aquaculture Legislation Amendment Bill I acknowledge that legislatively this is a difficult area. It is an industry that I think has huge potential but there are also difficulties around environmental issues and certainly the occupation of space which people with competing interests feel they have a right to be involved in. The solutions are not easy.  
In supporting this particular narrowly focused legislation which tidies up one quite specific issue in Tasman Bay I note that there is further legislation on the Order Paper that may or may not be referred to a select committee before the election. Even that legislation I suspect when passed through its full parliamentary process will not be enough to ensure that we harvest the potential of this industry. I look forward to the day when Parliament can have a realistic and unemotional debate on what we can do that is right for the New Zealand economy. We have huge potential because of our unique location in the world. We have a very large ocean area that is ours and the trend throughout the world now is to farm fish rather than harvest wild fish. Therefore I think that as that trend accelerates and the demand for fish products grows exponentially the potential for New Zealand is huge. We cannot harvest that potential unless we have the correct legislative framework. As I said earlier I think the passing of this legislation today and the subsequent legislation if it does receive a third reading before the election will in itself not be enough to unshackle this industry and let it go forth. 
PITA PARAONE (NZ First) 
: 
 Tena koe Madam Speaker. It is my pleasure to participate in the third reading of this legislation and to signal our support for it. I want to acknowledge the work of the Primary Production Committee; although I am not a member of it I did participate in the final areas of debate before the legislation was reported back to the House. Although I did not have any voting rights I want to accord my appreciation to the chairman for allowing me to contribute when I wanted to.  
Aquaculture is an industry that has great potential for this country. Unfortunately we are not seeing the full benefits of this particular industry for whatever reason be it political or otherwise. But this legislation will go a long way to see the acceleration of this industry as a major export source for the betterment of our country. I am particularly pleased to see that the issue of Maori fisheries has been addressed. I know that those in the industry particularly those interested in Maori interests are very supportive of this bill. I know that Te Ohu Kai Moana made representations on behalf of the Maori interests in fisheries and came out in support of it.  
I do not have too much more to say other than to say that this legislation is timely and I look forward to seeing this whole aquaculture industry grow not only for the benefit of those who will participate in it but for our country as a whole. Kia ora. 
Bills read a third time. 
Fisheries Act 1996 Amendment Bill (No 2) 
Second Reading 
Hon STEVE CHADWICK (Minister of Conservation) 
 on behalf of the  
Minister of Fisheries 
: I move  
That the Fisheries Act 1996 Amendment Bill (No 2) be now read a second time 
. This bill amends the Fisheries Act 1996 and it is particular to section 13 of that Act. The provisions of the bill address an issue pointed out by the High Court in February 2008 in a case reviewing decisions on total allowable catch for the area 1 stock of orange roughy. The court pointed out that the practice of the past two decades in the management of many of New Zealand’s fisheries has been inconsistent with the current wording of the Act. This effectively disabled the key management measure for the majority of our fisheries—that is the setting of total allowable catches under section 13 of the Act.  
This short bill addresses the problem identified by the court and restores the ability of the Minister of Fisheries to set catch limits for all quota management system fish stocks. It introduces new subsection 2A into section 13 of the Act. This new subsection will enable catch limit decisions to be made for quota management stocks where full quantitative estimates are not available for the current biomass of the stock and the biomass that would enable the maximum sustainable yield to be taken. It is intended to preserve the balance of consideration in setting total allowable catches under the Act that has prevailed in recent years providing for the utilisation of fisheries while ensuring sustainability. It replicates as much as possible the language and concepts of the existing provisions as they have been applied to date.  
The new provision will not only be used where quantitative estimates of biomass as required by the existing provision are not available at reasonable cost effort or time; it also requires that decisions must not be inconsistent with the objective of managing fish stocks at or above a level that can produce a maximum sustainable yield. In short the new provision restores the ability of the Minister of Fisheries to set sustainable catch limits for all fish stocks and allows the management of fishing to continue as it has in the past.  
The Primary Production Committee reported this bill back to the House with minor amendment only to cross-references under clause 4(2) that correct a drafting oversight. Essentially the committee agrees that this bill does what it sets out to do and that it is important to focus on this task alone. Submissions made to the committee asked for a variety of additions and alterations to be made to the bill. However anything that departs from the simple task of restoring the ability of the Minister to set total allowable catches for all stocks with the best available information will inevitably be controversial and delay this important bill and it is important that this bill is passed into law this week.  
The Minister of Fisheries has total allowable catch advice put before him at this very time every year and in March so that fisheries may be managed sustainably. The current decisions need to be finalised and gazetted by 1 October if they are to have effect in the coming fishing year. The need to expedite this bill is not to deny the work of many of the submissions made to the select committee. The Fisheries Act could of course be improved and a forthcoming review of the Act has already been signalled by the Ministry of Fisheries. The ideas for new approaches put forward in submissions will be taken forward into that wider view of legislation.  
This bill contains provisions that will correct the deficiencies in the Fisheries Act 1996 that were identified recently by the High Court and it will allow our most important fisheries management decisions to be made in a timely manner consistent with practice in recent years. This will restore the ability of the management system to fulfil the purpose of the Act which is to provide for utilisation of fisheries resources while ensuring sustainability. I commend the bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party supported the Fisheries Act 1996 Amendment Bill (No 2) going to the select committee because we believed the ministry Crown Law the Minister and the industry when they came to us and said that the law needed clarification. There was no will on the part of the National Party to change the law; what we wanted to do was clarify the intent of the law and we believe that the legislation does that.  
This bill amends section 13 of the Act to allow the continuation of what has always been done—that is to use a range of methods and management strategies in the setting of a total allowable catch. The ministry claimed that clarification was necessary following a recent court case decision where the total allowable catch and the total allowable commercial catch settings of orange roughy were successfully challenged. Although there was at that time dispute over whether it was the interpretation of the law that led to the judgment against the Ministry of Fisheries rather than poor advice from the ministry the fact is that since the judgment commercial fishers the ministry and Crown Law agree that the intent of the law needs to be clarified. We welcomed that into the select committee. We understand that the industry the ministry and others agreed on wording that does not extend the current law and does not curtail the current law. It does not extend current practice when measuring fish stocks and it does not curtail current practice in measuring fish stocks; it simply endorses both.  
Current law and current practice allows the Minister to set the total allowable catch and total allowable commercial catch based on a maximum sustainable yield that has been estimated using a range of methods not just a single method. The law as it currently stands could be interpreted to say that there is only one way to estimate the maximum sustainable yield. We would not like to see the Ministry of Fisheries restricted to using only one method to estimate the maximum sustainable yield simply because that would mean that the vast majority of fish stocks would not be able to be measured in this way and certainly the resources to do so are limited so it would just not be practically possible.  
This amendment has no relationship we should add to the section 10 fisheries amendment bill that was languishing on the Order Paper with no political or industry support. We saw that in the mid-year. The section 10 legislation was to clarify the law that the Minister must take a cautious approach where there was inadequate information on fish stock health. I have to say again that this legislation here has no relationship to that section 10 legislation; this legislation deals with section 13 only.  
National agrees that the current Act is not explicitly clear. We agreed to clarification not change. We can say particularly to recreational fishers who are concerned that this legislation makes a change that favours the commercial fishing industry that members of the select committee—members from Labour National and other parties across the debating Chamber—were very careful to ensure that this legislative change that we are debating today made no change at all to the intent of the Act or to how the Act currently works. There is no shift of the goalposts at all; we have been very careful to make sure of that. We agree that the current Act is not explicitly clear. We agree to clarification we do not agree to change and we believe that this is what this legislation does achieve. 
SUE BRADFORD (Green) 
: 
 The Green Party believes that the Fisheries Act 1996 Amendment Bill (No 2) is a necessary fix to one of the many flaws in the Fisheries Act 1996. Given that for many if not most fish stocks we have very limited actual biomass data let alone good enough data to accurately estimate what sustainable yields are it is an unacceptable situation for the Minister to not be able to set or change the total allowable catch for those fish stocks. A number of alternative methods for guesstimating maximum sustainable yields are required for fish stocks without good biomass data. As a result of a High Court decision those are unavailable to the Minister. The bill amends section 13 of the Act to use the best available information to estimate the maximum sustainable yield.  
The Green Party believes that fisheries management in New Zealand is fundamentally unsustainable with fish stocks continuously being depleted and that deep quota cuts are required. Orange roughy is the classic example of that having been fished almost to death by bottom-trawling. Since quotas were reduced in some areas in the 1990s the state of the fish stock has hardly even begun to recover. The hoki fishery despite recent recertification by the Marine Stewardship Council is heading in the same direction as are many of our other fish stocks. The Minister may describe the New Zealand quota management system as a world leader but the sad fact is that it is not. It could be a world leader if the Fisheries Act was based on a precautionary principle if the sustainability of fish stocks in the wider marine ecosystem was paramount if customary and recreational interests came before commercial interests if the Minister mandated best-practice fishing and by-catch avoidance methods and if foreign fishing vessels were restricted in New Zealand waters.  
The fish in New Zealand waters are a natural resource that belongs to all New Zealanders yet since 1992 the commercial fishing industry gets to catch them for free provided that it owns quota. The public of New Zealand get no return on the use of that resource. If commercial fishing was required to pay resource rentals for the fish it profits from our fisheries management would be better and fairer. When total allowable catches are based on treating biomass maximum sustainable yields as targets we regularly overfish the stocks. The biomass maximum sustainable yield should be treated as an absolute maximum in setting the total allowable catch not a target. I have learnt that only 24 of the 629 fish stocks managed under the quota management system have quantitative estimates of current biomass and maximum sustainable yield. By number that is just 3.5 percent of all fish stocks but due to many major fish species being in the 24 by volume it is actually 24 percent.  
In addition to general concern about the inadequate precautionary and sustainability principles in the current fisheries legislation this bill raises a more specific issue about research. We can estimate fish stocks in ways other than quantitative estimates but we must not rely on them. There are woefully insufficient incentives for the fishing industry to do the necessary research to obtain hard evidence of the sustainability of fish stock and catch levels. I am advised that we invest less today on stock assessment research than we did 15 years ago. Taking inflation into account it is under half what was spent in the early 1990s. The investment dropped drastically during the period when the National Government was in charge and the Hon John Luxton was the Minister. Those were dire days for fisheries management. The current Government has improved things somewhat but it is still a fact that we invest significantly less in research than we used to. That has to be addressed.  
The Green Party amendment to this bill would help. It says that if the Minister has to set a total allowable catch under new section 13(2A) inserted by clause 4 of the bill he cannot increase the total allowable catch. In order to increase the total allowable catch the Minister would need to be satisfied that there is sufficient information on the stock. Where there is uncertainty then the precautionary principle would apply and the total allowable catch would not be increased. It could be reset at current levels or reduced depending on what the limited information available suggested was prudent. The incentive should be that if one does more research one gets estimates of sustainable yield that comply with section 13(2) of the Act and then one can increase the total allowable catch if the reliable estimate can sustain that. The second part of the Green Party amendment simply ensures that the broader purpose and principles of the Act are taken into account when setting a total allowable catch using the new section 13(2A) and section 13(3). We commend this amendment to the House as a way of ensuring that the bill does not have the perverse outcome of allowing catches to be increased in the face of uncertainty.  
Finally I say the test of this legislation will come when the Minister sets the total allowable catch allocations for the major bluenose stocks which have one stock with a quantitative estimate that has not been updated since 1991 and no estimates for other areas. Limited evidence suggests that this fishery is actually unsustainable. This legislation should allow those total allowable catch allocations to be reduced. For that reason the Green Party will support this bill even if the House does not accept the Green Party amendment. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker. Well we know only 44 days are left until an election when suddenly everyone wants to consult “the Maori”. Curiously this bill the Fisheries Act 1996 Amendment Bill (No 2) is being debated at the same time the Ministry of Fisheries is consulting tangata whenua about ways of improving the processes for working together on fisheries management—interesting! Some 12 years after the Act was introduced the ministry now deems it appropriate to talk with Maori about ways to implement the requirements of the Act. The Ministry of Fisheries is going around the country between now and 31 October asking Maori what participation looks like. Twelve years later the ministry is asking the people what the Act means when it allows the Minister of Fisheries to approve measures “to better recognise the rangatiratanga of iwi and hapu over their non-commercial customary fisheries.” We are not criticising the fact that there is consultation; quite the contrary. Engaging with Maori before making sustainability decisions such as changes to catch limits and amendments to regulations is absolutely fundamental and consistent with the Fisheries Act. But we are concerned about why it has taken until now to willingly involve tangata whenua in fisheries management—and I take this time to commend the Minister of Fisheries the Hon Jim Anderton for taking particular care to ensure that tangata whenua are consulted.  
This bill was always inevitable. The problem identified by the High Court in relation to setting the total allowable catch had to be rectified and there is a particular reason why we have supported the section 13 amendment coming up under urgency. That is of course the fact that this time next week—1 October—signals the start of the new fishing year and so the amendment is needed to establish new catch limits. We acknowledge the pressure that a tight time frame has placed upon the sector with literally the whole process being tied up within the space of 8 weeks. The amendment will enable the Minister of Fisheries to determine the catch limit decisions for fisheries in the quota management system according to established practice and using the best available information. The emphasis on established practice and best available information is of particular interest to the Maori Party. The Fisheries Act requires that the Minister must provide for the input and participation of tangata whenua and additionally have regard for their kaitiakitanga in matters such as changes to catch limits.  
We are pleased that the Minister has initiated a more robust consultative process with Maori fisheries. We are aware however that not all parties are satisfied and that non-commercial fishing representatives both amateur and customary are concerned that the amendment was reached without sufficient input from them. Demands were also made at a recent hui of the Hokianga Accord the mid-north iwi fisheries forum for a more open and democratic process before making such a significant change to the Act. The concerns from the Hokianga Accord the New Zealand Big Game Fishing Council option4 and other non-commercial fishing representatives spoke of the vital need to work together to ensure sustainability and to avoid international condemnation of fisheries management in New Zealand.  
In thinking about an international context I want just to mention a recent announcement from the United Nations that has confirmed New Zealand’s rights over seabeds outside the country’s exclusive economic zone. It is a fascinating irony that a Government that was hell-bent on taking the foreshore and seabed off Maori has at the same time been negotiating for 10 years to extend the outer limits of the continental shelf. And it is with even more irony that we learn that the new continental shelf boundary will enable what the Prime Minister describes as “New Zealand” to exercise its rights to resources such as minerals and petroleum. I cannot help contrasting this new-found enthusiasm for rights to petroleum with statements back in 2000 in response to the claims by nga hapu o Nga Ruahine o Taranaki and by Ngati Kahungunu of Hawke’s Bay and Wairarapa in relation to their interests in the petroleum resource. In that significant finding the tribunal concluded that the claimants had a subsisting Treaty interest in the petroleum resource and that they were accordingly entitled to redress beyond that to which their historical land-loss grievances entitled them. But of course it is history now—that the Government briskly moved to reject the findings and to ignore the conclusion that this was a breach of the principles of the Treaty of Waitangi and to quickly rule that oil and gas were public assets.  
As I have found in this place political intelligence is all about connecting the dots pointing out the inconsistencies and addressing the anomalies. It would appear that the fisheries area has more than its fair share of loopholes and fishhooks trapped within the sector. This bill we believe is an honest attempt to untangle one of the more recent issues impacting on quota management stocks and we welcome that. We do not believe that it will create major change for the general approach of the Fisheries Act and we do as I said earlier have the concern that we do not want to delay decisions on catch limits before the start of the new season. We are very aware that the current status for the majority of the 629 fish stocks in the quota management system is such that the information threshold can simply not be met. So we hope that this amendment will enable due process to occur with best practice and robust information to set catch limits without incurring unreasonable cost effort or time across the sector. The warning is there however that effective progress in fisheries management will come only with full frank and informed consultation with all parties.  
I end with a concern that the Hauraki Maori Trust Board’s spokesperson John McEnteer has raised regarding the seabed decision I referred to earlier. His comment was that with the foreshore and seabed legislation the Government grabbed more than $100 million of assets from Maori and in excluding Maori from the new development—the additional 1.7 kilometres of seabeds—it continues to marginalise and ignore the rights of Maori even further. The Hauraki Maori Trust Board suggested back in 2004 that moves to claim the continental shelf should be done in partnership with Maori but the Government refused to do that. What is worse when Mr McEnteer has gone to officials for robust information they have refused to give it claiming the matter is confidential. All that such action does of course is to further erode the confidence of Maori in the Government and ultimately affect the perceptions around the integrity of the consultation process. The fisheries sector is very familiar with the notion of the precautionary principle—that we should not introduce a new initiative unless we are convinced that it is safe for us and for the environment. The Maori Party recommends that this same precautionary approach is considered of value when thinking about consultation on anything relating to fisheries management. We will support this bill at its final readings and we signal our support for the ministry and the Minister to continue to demonstrate their commitment to consultation. Thank you. 
PHIL HEATLEY (National—Whangarei) 
: 
 I raise a point of order Madam Speaker. I did not want to interrupt Dr Sharples in his speech but when he was talking about seabed exploration he mentioned an Andrew. Was it a place name or a person’s name? It was Andrew I think and I did not catch the surname. Or did I misinterpret? I am just interested in that. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I think you might have to settle that out of House time. Is that all right? It is perfectly legitimate. 
PHIL HEATLEY 
: OK. 
PITA PARAONE (NZ First) 
: 
 I say to the member that the name of the person I heard referred to is John McInteer who I understand is a member of the National Party.  
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Does the member wish to seek the call?  
PITA PARAONE 
: Tena koe Madam Assistant Speaker. I stand on behalf of New Zealand First to take a short call and to indicate that New Zealand First will certainly be supporting the Fisheries Act 1996 Amendment Bill (No 2). The bill imposes a technical change in regard to section 13 of the Fisheries Act 1996 where it provides for the continuance of established practice by the Minister of Fisheries when setting a total allowable catch for a stock covered by the quota management system. It would allow a total allowable catch to be set even where estimates of the current and target biomass of a fish stock were not available. The bill is a response to a recent High Court ruling which found that as the principal Act stands the Minister must be provided with estimates of the current biomass of a stock and of the biomass that can represent the maximum sustainable yield from that stock before setting a total allowable catch. 
Reference has been made by a previous speaker that two particular lobby groups within the industry expressed some concern about the short notice and possibly about the lack of opportunity to be consulted on this bill. I say that around about this time last year I and a number of members of this House attended the quarterly meeting of option4 and the Hokianga Accord. At that particular conference this whole fishing issue was discussed. I extended an invitation for the members of that conference to come and visit New Zealand First to clarify the concerns they might have but I can report that from that day to this day neither I nor any of my caucus colleagues have received a visit from either of those groups. We have heard today that they have been making approaches to some parties complaining about the process this House has adopted but they have not wanted to express their concerns to other parties. 
Suffice to say this bill will certainly give more clarity and dare I say it more authority to the Minister of Fisheries. If I had a personal concern it is that it may become the norm rather than the exception for the Minister to exercise his or her prerogative to issue or not to issue a particular quota for a particular species irrespective of there not being sufficient evidence or documentation to prove that that species is under threat. New Zealand First supports the second reading of this bill. Kia ora.  
Bill read a second time. 
Instruction to Committee 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave for it to be an instruction to the Committee of the whole House that it take the Committee stage of the Fisheries Act 1996 Amendment Bill (No 2) as a single debate with the relevant questions put at the end.  
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Leave is sought to do this. Is there any objection to that course of action? There being none that instruction shall be given. 
In Committee 
Clauses 1 to 5  
The question was put that the following amendments in the name of Metiria Turei to clause 4 be agreed to: 
to omit subsection (2A)(c)(ii) in subclause (1) and substitute: 
(ii) that is consistent with the purpose and environmental principles of the Act; and 
to add to subsection (2A) in subclause (1) the following paragraph: 
the Minister may not increase a total allowable catch under subsection (2A). 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 10 
Green Party 6; Maori Party 4. 
Noes 107 
New Zealand Labour 49; New Zealand National 47; New Zealand First 7; United Future 2; Progressive 1; Independent: Field. 
Amendments not agreed to. 
The question was put that the following amendment in the name of Metiria Turei to clause 4 be agreed to: 
to add the following subclause: 
(3A)Section 13(3) is amended by omitting “the Minister shall have regard to such social cultural and economic factors as he or she considers relevant” and substituting “the Minister shall consistently with the purpose and environmental principles of the Act have regard to such social cultural and economic factors as he or she considers relevant”. 
Amendment not agreed to. 
Clauses 1 to 5 agreed to. 
Bill reported without amendment. 
Report adopted. 
Business of the House 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Pursuant to discussion I have had and for technical reasons to enable the bill we are dealing with at the moment the Fisheries Act 1996 Amendment Bill (No 2) to be assented to by 1 October 2008 I seek leave for Government order of the day No. 16 the second reading of the Financial Service Providers (Registration and Dispute Resolution) Bill to be taken at the conclusion of the third reading of the Fisheries Act 1996 Amendment Bill (No 2). 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Dr Cullen has sought leave to change the order of business slightly. Is there any objection to that course of action? There being none it is agreed to. 
Fisheries Act 1996 Amendment Bill (No 2) 
Third Reading 
Hon DAMIEN O’CONNOR (Minister of Tourism) 
 on behalf of the  
Minister of Fisheries 
: I move  
That the Fisheries Act 1996 Amendment Bill (No 2) be now read a third time 
. The Fisheries Act 1996 Amendment Bill (No 2) amends the Fisheries Act 1996 and in particular section 13 of that Act. The provisions of the bill address an issue pointed out by the High Court in February 2008 in a case reviewing decisions on total allowable catch for area 1 stock of orange roughy. The court pointed out that the practice of the past two decades in the management of many of New Zealand’s fisheries has been inconsistent with the current wording of the Act. It has effectively disabled the key management measure for the majority of our fisheries—that is the setting of total allowable catches under section 13 of the Act. 
In short the bill addresses the problem identified by the court and restores the ability of the Minister of Fisheries to set catch limits for all quota management system fish stocks. It introduces a new subsection (2A) into section 13 of the Act. The new provision restores the ability of the Minister to set sustainable catch limits for all fish stocks and allows the management of fishing to continue as it has done in the past. 
The Primary Production Committee reported the bill back to the House. Essentially the committee agrees that the bill does what it set out to do and that it is important to focus on this task alone. I acknowledge the amendments put forward by the Greens but it was the view of the Committee and the House that the bill as reported back achieves what we set out to do—that is to take a precautionary approach but allow enough flexibility for the Minister to set total allowable catches. 
The bill contains provisions that will correct the deficiencies of the Fisheries Act 1996 identified by the High Court ruling and allows the most important fisheries management decisions to be made in a timely manner consistent with practice in recent years. That will restore the ability of the management system to fulfil the purpose of the Act which is to provide for utilisation of fisheries resources while ensuring sustainability. I commend this bill to the House. 
Hon DAVID CARTER (National) 
: 
 National will support the Fisheries Act 1996 Amendment Bill (No 2). We also were happy to grant leave to Dr Cullen 5 or 10 minutes ago to change the Order Paper specifically so that this legislation and others could be enacted by 1 October this year. It is critical that this legislation be dealt with by the Primary Production Committee passed through the House and enacted by 1 October so that we do not have any difficulties—or have fewer difficulties—with the setting of total allowable catches for the coming fishing season. 
The fishing industry is intensely litigious. This legislation is before us today because of a decision made by Justice Miller in February 2008 when Antons Trawling Co. Ltd took a case against the Minister of Fisheries regarding his establishment of a total allowable catch for area 1 orange roughy. Antons Trawling challenged the establishment by the Minister of Fisheries Jim Anderton of a total allowable catch and on the basis of a ruling from Justice Miller that it was necessary to establish the maximum sustainable yield the original quota decision of the Minister was overturned. 
We now have about 629 species in the quota management system and those total allowable catches are set annually—in many cases without the information necessary to establish the maximum sustainable yield. Although the ruling by Justice Miller is obviously the strict interpretation of the original legislation for a long period of time now the sustainable yield has been established on a variety of information. Clearly the cost and complexity of having to establish total allowable catches based on only full information about the maximum sustainable yield would make it be impractical. National acknowledges that and is happy to support the legislation. 
The Minister of Fisheries should have done a lot better for this industry. The original decision from Justice Miller came out in February of 2008. Mr Anderton sat on his hands aware of that decision and of the difficulty of establishing total allowable catches from October this year. He then rushed legislation into Parliament on 11 August and told the select committee that it had to report it back to the House by 22 August. The select committee did that; it reported it back by 22 August and the bill has sat on the Order Paper for the last month when we have had the ability to get it through Parliament. That is just typical of the Minister of Fisheries. He has been absolutely hopeless for this industry. He has never been interested in the portfolio and consequently it is of little surprise to me that his relationship with the fishing industry is similar to the relationships that he has established with the farming industry and the forestry industry. 
The Primary Production Committee received a number of submissions and many of those submitters made points that were outside the scope of the bill. I am comforted by the fact that the Ministry of Fisheries acknowledged to the select committee that it intends to conduct a wider review of the Fisheries Act 1996. It is very complex legislation; it provides a ground-breaking mechanism for managing fisheries and fishing stock that is well regarded around the world but it is not perfect. It is timely that a review be undertaken and I hope that that review will find ways of addressing some of the submissions that came before the select committee. 
It is with pleasure that National members support the legislation. It needs to be passed by 1 October. I certainly hope that in setting fishing limits for the coming season—which starts on 1 October 2008—we do not then see too much litigation with too many challenges from the industry to the Minister’s decision which after all is about ensuring that we have a sustainable fishery into the future. 
PITA PARAONE (NZ First) 
: 
 Tena koe Madam Assistant Speaker. New Zealand First of course supports the Fisheries Act 1996 Amendment Bill (No 2). We are indeed pleased about the fact that it is being passed at this stage because that will then allow the Minister of Fisheries to start the process of issuing the various quotas that are required for the beginning of the fishing season which starts on 1 October.  
One of the things I note about this bill is that it came about because of a court action. Like the previous speaker David Carter I hope that as a consequence of this bill we will not see any further litigation in this regard.  
The bill provides for a precautionary approach to be taken and it is great that it is being passed at this time. This country has a resource that many other nations would like to have—I am not quite sure whether they would like to share it. But certainly we as a nation because of the proximity of the various fish species and the importance they have to our economy should ensure that one we have processes in place to protect that resource and two we are able at the same time to get the maximum return and the maximum benefit from it not only for the people of New Zealand but for ourselves as a nation. With what seems to be the trend of entering into free-trade agreements I suspect that the fishing industry will have a major input into increasing the benefits that such agreements provide for our nation.  
In conclusion I reaffirm that New Zealand First supports this bill. 
Bill read a third time. 
Financial Service Providers (Registration and  Dispute Resolution) Bill 
Second Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Financial Service Providers (Registration and Dispute Resolution) Bill be now read a second time 
. This bill requires that all financial service providers must be registered with the New Zealand Companies Office from banks right the way through to moneylenders including the loan sharks that prey on vulnerable people. I know that in a previous debate we heard mention of a particular moneylender who was advertising rates at 8 percent but only in the small print did we notice that that was 8 percent per week not 8 percent per annum. These are the people who will now have the spotlight put upon them by the requirements to be registered. We will know who they are we will know where they operate and we will know what services they offer. The register will provide a very useful resource for consumers the industry and regulators by providing a searchable access point for information on all financial service providers in New Zealand. The register will also enable New Zealand to meet certain of its anti - money-laundering obligations under the Financial Action Task Force’s requirements. 
I am aware that the Opposition spokesperson on commerce may be somewhat surprised that we are dealing with this bill in the order that we are so I think it is probably worthy of a slight diversion from my speech to say that one thing that had not been appreciated—something that I had overlooked myself—was that there are cross-references to the Financial Advisers Bill. For that bill to take effect in the time frame we want we have to pass this bill pretty much at the same time so that the cross referencing can take effect at the point that both bills are brought into— 
Nathan Guy 
: It’s good you’ve got that organised. 
Hon LIANNE DALZIEL 
: Yes I apologise to the House if that has caused a problem. The bill also requires all financial service providers who provide a service to the public to belong to an approved dispute resolution scheme. Approved dispute resolution schemes will hopefully build on the existing industry-led dispute resolution schemes in the financial sector. I pay particular tribute both to the Banking Ombudsman and Insurance and Savings Ombudsman schemes and to the organisations that have established them because the banking sector and the insurance and savings sector have set up schemes well ahead of the Government’s requiring such schemes to be set up. I think the Banking Ombudsman scheme has been in place for something like 13 or 14 years. It is a tremendous resource and support for consumers of the banking industry and the level of work that is done is considerable given the complexity of some of the issues that have to be dealt with. The bill provides that the Minister of Consumer Affairs may approve industry-led schemes that meet the principles of accessibility independence fairness accountability efficiency and effectiveness as well as fulfil a number of operational and capability requirements. 
Simon Power 
: No—make the Minister of Commerce do it! 
Hon LIANNE DALZIEL 
: The very generous Opposition spokesperson on commerce suggests that it should be the Minister of Commerce who takes up that role but in fact the Banking Ombudsman and the Insurance and Savings Ombudsman and the codes of practice they operate under directly relate back to the Minister of Consumer Affairs and it is the Minister of Consumer Affairs who has oversight in that area. Therefore it makes sense for consumer dispute resolutions services to sit with the Minister of Consumer Affairs—it just makes very good sense—and it enables the very good Minister of Commerce to get on with the job of dealing with the more detailed elements of the Review of Financial Products and Providers that are yet to come because these bills are the first of several bills and maybe the member has forgotten that nine discussion documents resulted in the legislation we have now and in future legislation to come. 
The legislation will also establish a reserve scheme so that financial service providers who are not members of an approved industry-led scheme will be able to meet registration requirements. One of the issues that came very very clearly out of the Finance and Expenditure Committee was that there is very much a need for certainty for consumers so that when they make an initial approach it is almost like a single entry point for any dispute resolution. I think we are going to be working very closely on the development of the regulations around the various schemes that will operate in this space to make sure there are no wrong doors and that anyone who makes an inquiry in this area is able to get the assistance needed. 
I will not go through the detail of the changes that were made at the select committee. Again this select committee focused its attention very much on legislation that is detailed but the committee probably did not have some of the more difficult elements of the preceding legislation. There was good support on both sides of the House to see this legislation pass through the House. I am not going to hold it up any further; I simply commend the bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 I was minding my own business in my office when I got the call that the Financial Service Providers (Registration and Dispute Resolution) Bill would be proceeding a couple of days ahead of time. That means my evening has now been altered beyond recognition. Nevertheless that is a small price to pay for the continuation of this suite of legislation which is designed to deal effectively with what has happened. It was not the intention to do this when the review of financial products and providers was first undertaken but since that time a range of finance companies have collapsed tens of thousands—if not more—of New Zealanders have been affected by the collapse of those finance companies and mortgage trusts and literally billions of dollars have been put at risk as a result. 
I have to concede to the House and to the Minister of Commerce that my attention over the last 12 months has been very much on the Reserve Bank of New Zealand Amendment Bill (No 3) and the Financial Advisers Bill. It is really Craig Foss who is the expert on the Financial Service Providers (Registration and Dispute Resolution) Bill. I myself was involved with another committee for much of the time that this bill was before the Finance and Expenditure Committee. I was effectively drafted on to the committee to deal with other bills but I have to concede that this was not one of them. Having said that I can say that this bill falls within my area of responsibility and it is one of those bills that seeks to regulate the financial service providers in the same way that the Financial Advisers Bill does. I am sure that the Minister Lianne Dalziel is right when she says the two bills are joined at the hip as it were and that one cannot proceed effectively without the other. Therefore being the flexible party that we are here we stand ready to debate this legislation through all its stages—for the rest of the evening I imagine. 
This bill seeks to reinforce that suite of legislation that Doug Woolerton spoke about so eloquently during the day. It seeks to establish a registration system for those service providers. It requires—and that is an important word—them to join an approved industry-led dispute resolution scheme or what the legislation and the Minister describe as the reserve scheme. As the Minister alluded to we have already dealt with the Financial Advisers Bill and the Reserve Bank of New Zealand Amendment Bill (No 3) which dealt with the regulatory framework on— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: You have 2 minutes. 
SIMON POWER 
: How can that be possible? I have just started. Madam Assistant Speaker are you sure that you did not start me at the end of the Minister’s time? 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: That is exactly what has happened. I duly apologise. 
SIMON POWER 
: The Minister Lianne Dalziel and I have got on well in recent months but this is getting ridiculous; I am not sharing a call with her! 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I apologise to you profusely. 
SIMON POWER 
: There is an election coming up—we have to differentiate on some issues! There are some things that the Minister and I do not agree on and sharing calls in this House is probably one of them unless the Minister wants me to answer the questions—but there are no question times left so I cannot do that! 
Clauses 5 and 6 determine the application of the legislation that defines those activities considered to be financial services. I presume that that is consistent with the suite of definitions that were offered in the financial advisers legislation considered earlier today. Importantly clause 13 sets out the matters that disqualify a person from registering as a financial service provider and is amended to specify the types of offences that would count as fraudulent or dishonest. That is an important qualification because it sets the legislation up in a way that makes it clear that there are legislative parameters rather than codes of conduct or industry understandings that relate to the registration process. I think that that degree of statutory rigour is required in this industry given the recent events we have seen. 
We know that the bill covers things like the deregistration of financial service providers and indeed the reregistration of financial providers. The bill establishes the register itself and outlines access rights to that register. The dispute resolution regime and scheme is also outlined. Interestingly in the same way that the Commerce Amendment Bill did for decisions of the Commerce Commission on price setting any decision of the registrar that is subject to an appeal remains in force. That brings some clarity to the process and it provides some consistency with other legislation in this area that we have debated in recent days. The bill also sets out the number of schemes that are available for registration the public access to information and the rules of those schemes. It imposes duties to cooperate and to communicate in certain circumstances and of course it requires the appointment of a reserve scheme from an established recognised dispute resolution service. I imagine there are good reasons for that requirement. 
I believe that the House is unanimously supportive of the passage of this legislation—certainly I have not had any indication up to this point that any party present intends to vote against it. Any legislation that is put in place to add rigour to the financial advice industry should be welcomed but with the following rider—and it is the same qualification that I put forward in my third reading speech on the Financial Advisers Bill. 
People who choose to invest their money in New Zealand should not form the view from the passing of this legislation that no risk accrues to those investment decisions. Ultimately the Government has a role in providing a safer environment for investment by way of a sturdy transparent and accountable regulatory framework around those investment protocols. In the end Governments cannot be vicariously liable in many situations but they have a responsibility to provide mechanisms to people who wish to invest their moneys in order to ensure that those people are as safe as they possibly can be. 
I probably have 4 minutes left on my call— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: You have 2 minutes left. 
SIMON POWER 
: OK. I do not intend to labour this matter any further other than to say that Craig Foss will also be taking a call on this bill. He is as I said the expert from the Opposition side of the House on the technical aspects of this legislation. He will have some comprehensive views to share with the House on the matter of the registration and the reserve schemes as they relate to the provisions of the legislation dealing with the registration dispute resolution and appeal processes. I will certainly be hanging around to listen to that discussion. 
As we head into the Committee stage I suspect we will hear from a range of other members of Parliament on this side of the House. As I said during the debate on the Financial Advisers Bill we are in no way attempting to delay or slow up the passage of this legislation. In fact as I said endlessly during the debate on that bill the Opposition has worked cooperatively with the Government on this suite of legislation and will continue to do so—although in a slightly surprised way—throughout the remaining stages of this legislation which has come up a little earlier than we thought it would. 
On that basis I will resume my seat and say to the House that no doubt Doug Woolerton will have plenty to offer on this subject matter. As a permanent member of the Finance and Expenditure Committee—which I am not—he has taken some interest in this issue. I am sure that Lindsay Tisch although he is not on the select committee will make a contribution that is worth listening to. But it is really Craig Foss whom we are looking to on the more complex and technical matters contained in this bill. 
Hon Shane Jones 
: They want to hear from him in Flaxmere! 
SIMON POWER 
: That is the former chairperson of the Finance and Expenditure Committee yelling out from over there. Perhaps he would like to take a call and express a view on these matters. I am waiting with some interest for Mr Foss to cover the technical aspects of clause 10 particularly in respect of the provisions relating to the licensed service offence. National will support the Financial Service Providers (Registration and Dispute Resolution) Bill through its second reading. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First is supporting the Financial Service Providers (Registration and Dispute Resolutions) Bill which I guess is the disciplinary side of the Financial Advisers Bill. I will not be taking a long call. In fact it will be for only a couple of minutes because we have other business to get through before the House rises. Like all my New Zealand First colleagues I am looking forward to fighting an exceptionally good election campaign and to New Zealand First returning with increased numbers. We are keen to get on and not hold up the process.  
I think we cannot have a registration process as proposed in the Financial Advisers Bill without some disciplinary procedures to go with it. This bill provides that. There is a fairly decent amount of industry involvement so that these people will not be judged just by some cold harsh people. They will have an involvement in the disciplining themselves. This legislation was intended to be light-handed so that we do not stifle entrepreneurial activity altogether in this country and to give some surety to the public so they can have some confidence in the people who are giving them advice. For them to know that the advisers are subject to some disciplinary action just adds to that surety. That is all I want to say. We intend to sit here and support the bill to its conclusion and to listen to the contributions of my colleagues. Thank you. 
DAVE HEREORA (Labour) 
: 
 I take this opportunity to speak in the second reading debate of the Financial Service Providers (Registration and Dispute Resolution) Bill. In doing so I want to highlight some of the benefits for consumers that will occur following its enactment. The introduction of freely accessible dispute resolution for all consumers is not only something that is based on a moral principle; it is also a practical initiative that will increase confidence in the financial sector.  
Currently there are a large number of consumers who are using financial advisers and non-bank credit providers and who cannot access consumer dispute resolution. When consumers are in dispute with their financial provider be it a mainstream bank or a local service they can feel quite powerless and not sure where to turn. Under this bill consumers who have a grievance with their financial service provider will always have somewhere they can go to get a fair hearing. The framework established by the bill supports the formation of industry-based dispute resolution schemes. These will be approved if they meet the benchmarks of accessibility independence fairness accountability efficiency and effectiveness. Experience suggests that industry-led schemes are particularly flexible and responsive in addressing consumer complaints.  
This bill represents a win-win situation for consumers. It provides a free service to assist with the resolution of disputes against financial service providers and it incentivises providers to put in place good complaint resolution processes and to be more responsive to consumers. Consumers will be able to confront any unethical or sub-standard dealings from a provider through challenging behaviours that do not meet acceptable practice. Consumers will help to raise the quality of financial services in New Zealand and to that end I stand in support of the bill. 
CRAIG FOSS (National—Tukituki) 
: 
 Like earlier speakers and colleagues I say the debate on the Financial Service Providers (Registration and Dispute Resolution) Bill is like déjà vu all over again. We debated the Financial Advisers Bill this morning and for the record it was debated under urgency. It surprises me that we are under urgency on the Financial Service Providers (Registration and Dispute Resolution) Bill and that it is deemed to be more urgent than other bills. But I noted in the Minister’s speech the reason for moving this bill further up the Order Paper. She spoke about the cross-references between this bill and the Financial Advisers Bill which we passed a few hours ago. When I was looking through the Financial Advisers Bill it occurred to me that there are a lot of cross-references and in fact all the way through the process we have dealt with these bills in partnership. Anyway we are now debating the second reading of the Financial Service Providers (Registration and Dispute Resolution) Bill.  
An earlier speaker raised a concern that this legislation will come under the portfolio of the Minister of Consumer Affairs rather than that of the Minister of Commerce and I missed the bit about the Banking Ombudsman’s recommendation. I think it was that it be put under consumer affairs and not commerce.  
Hon Lianne Dalziel 
: It was preferred that it went under consumer affairs rather than commerce. 
CRAIG FOSS 
: I thank the Minister for clarifying that point. I realise this is not the Committee stage of the bill but it is all very friendly in here at the moment.  
On looking through the bill I see some issues that I started to raise in the debate on the Financial Advisers Bill are also pertinent to this bill. There was a part in that bill where we talked about information sharing and of course as the Minister earlier noted this bill forms a suite of measures—not only the Reserve Bank of New Zealand Amendment Bill (No 3) the Financial Advisers Bill and this Financial Service Providers (Registration and Dispute Resolution) Bill but also a raft of other bills. I think there were nine papers in total all around money-laundering etc. and a total review of all things financial in New Zealand. I think there are a few more discussion papers out there. That is good policy development and we are happy about that. We have enjoyed being part of the process around this bill and helping to make it better legislation.  
Earlier speakers have noted the events that have occurred subsequent to this bill appearing before the Finance and Expenditure Committee which I think was on 9 February this year. The financial crisis around the world has become much tougher. It has hit home here in New Zealand much deeper and quicker than many people thought it would but as we are part of the global financial system we will always be impacted on by what happens around the globe. The sad fact is that New Zealand as a debtor nation faces an increased interest premium that we have to pay and as we are No. 22 in the OECD we are at the back of the queue so any impacts and effects on economies around the world will be felt exponentially down here. Hopefully a change of direction—a change of Government—will start to address that position.  
I will look at just a few issues in the bill. There is a Supplementary Order Paper with this bill: Supplementary Order Paper 254 in the name of the Hon Lianne Dalziel. Again I give my apologies for missing this in my first speech but around the not-for-profit organisations in the Financial Advisers Bill there was a bit of sneaking in the door in that the only not-for-profit organisations that were originally to be covered were those that already had some contractual obligations or arrangements with the Ministry of Social Development. The Finance and Expenditure Committee in its wisdom did very well and turned that round talking about not-for-profit budgetary advice institutions etc. We had many many submissions from such groups and sometimes there were conflicting views which we found somewhat curious at the time. The core argument was about the cost of compliance for those organisations which may have annual budgets of only $25000 or so. The cost of initial set-up here would have been quite onerous for them.  
But I did note that the Minister had an amendment to the definition of a not-for-profit organisation in the Financial Advisers Bill. I have just glanced through Supplementary Order Paper 254 and although I may have missed something I do not see any new change there to the definition of a not-for-profit organisation. Perhaps I am missing something because like previous speakers I fully expected to debate this bill not tonight but perhaps tomorrow so I have not gone through that Supplementary Order Paper. I am quite happy to be corrected but I cannot see an amendment to that definition at the moment. Perhaps that issue may be addressed by officials or the Minister later on.  
There is good consistency between the two bills and again I say it would have been more consistent if we had debated this bill in conjunction with debating the Financial Advisers Bill earlier today. But much of the select committee’s work was about the consistency of definition and of process given what I have just said about not-for-profit organisations just to make sure the terminology we used was the same there was no arbitrage between the two bills and there was no opportunity for either bill to be exploited. Wherever possible across the select committee we did use the same definitions. We had the same discussions and in fact submitters spoke to both bills. As my colleague Simon Power noted earlier most of their energy was spent on the Financial Advisers Bill and this service providers bill was just sitting to one side important and pertinent though it is.  
There is a reserve scheme for disputes resolution which I find quite interesting. Basically that is the backdrop scheme if organisations have not found themselves the time or got themselves organised to do it but there is a very good point on page 11 of the commentary on the bill. It is again a credit to the select committee that the commentary notes that the disputes resolution body does not necessarily have to be a financial disputes resolution body because the issues are about resolving and mediating disputes rather than financial disputes. That is a small and subtle change and we took out just a couple of words along the way but none the less it is a good change because many people help to mediate or solve disputes in many fields. That is what they do and a dispute is a dispute is a dispute I would argue.  
There is a very good clause in this bill—and again there is a similar provision in the Financial Advisers Bill and in the Reserve Bank Amendment Bill (No 3)—which is the 5-yearly review clause. Again I highlight the consistency and tie-up between those bills and I presume any other bills that the next Government brings in will also be aligned to that time frame. I think that is very very healthy. Again that is because this bill and the Financial Advisers Bill are joined at the hip and then I guess holding hands with the Reserve Bank of New Zealand Amendment Bill (No 3). But also I say it is not a bad process to bring in for all bills that they have an ongoing review clause in them because particularly in the area of financial markets things change rapidly. What is being talked about in the headlines today was probably not even contemplated 4 or 5 years ago or even 3 years ago. So who knows what will be happening in 5 years’ time particularly with the globalisation of the financial markets etc.?  
I highlighted another point as to who must register. I spoke about the cost to the not-for-profit organisations so I will probably just end on that note. Again I say that we just found the amendment quite curious and I understood the Minister’s explanation earlier as to why it happened. But I would be intrigued to have it pointed out to me where the amendment or definition of a not-for-profit in Supplementary Order Paper 254 is the same as or aligns this bill with the amendment on the Supplementary Order Paper in respect of the Financial Advisers Bill that we saw earlier on this morning. Thank you very much. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Madam Assistant Speaker. Kia ora tatou i te Whare. On behalf of the Maori Party I am happy to take a short call today on this “Let Us Nail Those Filthy Bloody Loan Sharks and Try To Stop Them From Ripping Off All The Poor People by Making Them Go Through Registration and Dispute Resolution Protocols Bill” because I see the level of poverty being exacerbated by some of these vultures preying on poor Maori communities right throughout the country and in particular in my own area. I see that these companies are charging upwards of 450 percent for finance. I see families that are so pushed to the wall that they are taking out these quick loans just to pay for kai and already by the very next week they are behind the eight ball. I see the way that these companies come into my home town of Kaitaia at Christmas time because they know of the massive pressure put on people to try to buy things for their families and already those families do not have money. I see people coming out of pokie parlours busted for the week and trying to get some money so that they can go home and make out like they still have their benefit. I see these sorts of things happening and I am glad that somebody is at least trying to propose some kinds of protocols to keep these guys in line. I am glad because poor people do not have the money—if they did they would spend it on something else—to pay for lawyers to try to deal with some of these rip-off merchants that are preying on our communities.  
I would like to see other things like being able to ensure that any time a loan shark company tried to come swinging through a town it would have to ensure that there was sign-off from a budgeting service before a family was able to get access to that kind of money. I would like to see those people being banned from decile 1 communities because those are the places they prey on. I would like to see a whole range of things including some of these buggers being strung up. I would like to see them not getting on the front page of the 
 Times of Tonga  
in South Auckland. I would like to see them not taking up the centre spread in some of the community newspapers in some of the poorer South Auckland communities where they are ripping people off. I hope that some of them have gone to the wall over this financial crisis and that the people who have loans out to them can just move a few houses down the road and get out of having to repay those loans.  
If I speak with passion about this issue it is because if there is anything we can do in this country to help poor people get by particularly at this time when money is so short and prices are rising so much and at such a rate then the Maori Party as members know is a fan of it. That includes taking GST off food—we are just so surprised that the rest of the House does not go along with that great idea—raising the minimum wage to $15 an hour and ensuring that anyone on an income of less than $25000 does not need to be stung with tax. But if I bring it back to the bill mihi atu ki te Minita e whakatakoto nei i tenei kaupapa. I thank the Minister for laying down this first step in a long long process of reining in some of these loan sharks. We look forward to doing better in future to ensure that people in desperate need will not be preyed on by these vultures in the years to come. Kia ora Madam Assistant Speaker. Kia ora katoa. 
CHRIS TREMAIN (National—Napier) 
: 
 I just pick up where my colleague Hone Harawira left off and I say to him that one does not have to be in Kaitaia to experience loan sharks. Electorate offices around this country across the spectrum have constituents coming in to see MPs from both sides of the House with regard to the issues they face with various loan-related difficulties they get themselves into.  
It is interesting to note that it is probably not the loan sharks that Mr Harawira speaks about but more the actions of some of the high-profile companies that have brought about the legislative changes that are being proposed today. We were talking about a number of high-profile businesses that many people around this country have been on the tough end of. They are businesses like Provincial Finance which has gone to the wall with some $300 million outstanding; Bridgecorp at $459 million which I spoke about earlier today; Nathans Finance with $149 million; Capital + Merchant at $187 million; Lombard Finance at $127 million; Geneva at $141 million; and MFS Boston at $319 million.  
These are huge dollars that we are talking about here—some $1.925 billion. I believe that it is not just the poor people of New Zealand who are suffering because of these finance companies but that a lot of people in middle New Zealand have also been in the gun in this respect. I am the first to stand up and say that not all these companies have gone to the wall for fraudulent activities—though some of them have and are still under investigation for matters before the courts in that regard. A number of them have gone to the wall due to the credit crunch and the difficulties they have found as their balance sheets have not been able to handle the run on funds and they have had to close down the funds in the short term to protect other investors’ money.  
The point I make is that there will always be risk in this market place. Business is about taking some risks and investing money is about taking risks. We will not get rid of risk entirely from the business scene nor should we; that would be crazy. If we were to do that then we would put a lid on our economy and we would stop economic growth entirely and without economic growth none of us could stand on the rostrum and say that we will be able to put more money into certain areas. Economic growth is a driver and finance companies are a key part of doing that.  
Hon Darren Hughes 
: You’d borrow for tax cuts. 
CHRIS TREMAIN 
: In fact I have talked to a number of constituents and I was out at Upper Hutt the other day—close to the member’s electorate of Otaki; across the road there. I was speaking to some property developers who have been big developers in Upper Hutt and have been big drivers of the economic growth in the community there. They have borrowed money largely from the banks at about 65 percent and second-tier finance companies at about 30 percent to 35 percent and they have put in maybe 10 percent of their own equity. The second-tier finance company has gone out of the mix now so it is very difficult for these investors to get that second-tier finance. That is why we are seeing quite a slow down in investment in new property investments. That is a major issue for us.  
In talking about the wider finance industry and the suite of bills we have seen before the House I also mention the Reserve Bank of New Zealand Amendment Bill (No 3) which approves the prudential requirements around finance companies making sure that their balance sheets are stronger and not leveraged as high ensuring better control over second-tier non-bank deposit takers and giving the Reserve Bank the authority to get down to that second tier of finance companies as opposed to where it would normally regulate with the banks at the top tier.  
The second part of the suite of financial service bills is the Financial Advisers Bill which we have debated at some length this morning. That has now passed through the House bringing more regulation around those who seek to be financial advisers and lifting the benchmark there and I think that that is definitely a good thing. Thirdly today we stand here now to debate the Financial Service Providers (Registration and Dispute Resolution) Bill. It requires all providers of finance services to be registered and in order to be registered they have to be part of a dispute resolution service.  
The Maori Party asked earlier why the two bills were not merged together. The key thing to note is that this bill has a much wider scope in that it requires a wider section of finance companies and banks to be registered under the public register and to also be registered with a dispute resolution service in order for them to be registered.  
I think that this suite of bills is a good step in the right direction. Once again as my colleague Simon Power has said we know that we will not take the risk out of the equation of investment in New Zealand nor should we. That would be crazy. However we must provide regulation at a level where consumers understand what they are letting themselves in for. We will put a high bar there which is what we must do and I think it is good to provide better consumer protection.  
Bill read a second time. 
In Committee 
TIM BARNETT (Senior Whip—Labour) 
: 
 I seek leave for the bill to be taken as one question. 
SIMON POWER (National—Rangitikei) 
: 
 Although we will not have any difficulty with giving leave in that regard I just want to make it clear that that will not in any way limit the overall time that is available for members to make a contribution. It would be simply taken as one question is that right? 
The CHAIRPERSON (H V Ross Robertson) 
: I am sure that that will be given every consideration Mr Power. Leave has been sought. Is there any objection to that course of action being taken? There appears to be none. 
Clauses 1 to 75 and schedules 1 and 2  
SIMON POWER (National—Rangitikei) 
: 
 I find myself taking an urgent interest in the Financial Service Providers (Registration and Dispute Resolution) Bill. I will make a couple of more general comments to the Committee stage this afternoon and leave my colleagues Gerry Brownlee and the Hon Murray McCully to make the more detailed contributions in respect of this legislation which no doubt they will make with their usual high regard for detail on commercial legislation. I see that Mr McCully has come to the Chamber specifically for that purpose and we welcome him back.  
Could I start by saying that this bill is one of a suite of measures that implement the Review of Financial Products and Providers which yielded nine discussion documents in that area about 12 to 15 months ago. What became clear at that point was that the legislation relating to the Reserve Bank of New Zealand Amendment Bill (No 3) which imposed a regulatory framework on non-bank deposit takers was swiftly dispatched to the Finance and Expenditure Committee and has been dealt with by the committee and by the House in fact in a unanimous way as a regulatory framework is sought to be put in place for those particular institutions. Earlier today we also considered the Financial Advisers Bill which passed through all remaining stages—the second reading the Committee stage and the third reading—today.  
One of the more technical bills to form part of that suite of legislation is the bill currently before the Committee of the whole House called the Financial Service Providers (Registration and Dispute Resolution) Bill. The name could be misleading but it is not. This bill is decidedly useful in creating an approved industry-led dispute resolution system and in establishing a registration scheme and system for financial advisers. What we know about this particular area of course is that billions of dollars literally up to $5 billion have been put at serious risk with the collapse of finance companies in this country over recent months and years. Tens of thousands of New Zealanders have had their savings and investments put at risk. This legislation along with the other legislation I have described is not designed to take risk away from investment. What it is designed to do is provide a regulatory registration framework for financial advisers to ensure that when individuals are contemplating such an investment they know the quality of the advice and the competency of the people who are giving that advice that they are having disclosed to them the necessary fees commissions and royalties that are being paid by the various bodies concerned and that they are able to make an informed decision. Legislation alone of course will not necessarily make those decisions more informed. What is required is continuing education financial literacy and financial awareness of some of the more complex documentation that often comes alongside these sorts of investment opportunities.  
This particular bill as I have said adds to the suite of legislation in the financial advisers’ scheme that we have already seen today. I am reluctant to talk about any of the specific detail of this legislation with Lindsay Tisch in the Chamber. He of course has far more knowledge of these more technical aspects than I do and on that basis I look forward to his contribution on new clause 61A because it is one of those clauses that often strays under the radar in this House and it needs a bit more of an explanation to this Committee. We are very keen on this side of the House to see this matter progressed so keen in fact that at the commencement of what was a disastrous time for lower tier finance companies and their collapse the Leader of the Opposition John Key wrote to the Prime Minister to offer to assist in a bipartisan way in negotiations and discussions surrounding the suite of legislation. 
GERRY BROWNLEE (National—Ilam) 
: 
 Anyone who has been watching the proceedings of the Committee or indeed listening to this debate on the Financial Service Providers (Registration and Dispute Resolution) Bill this afternoon will be absolutely amazed that the Minister in the chair Lianne Dalziel could have listened to such a learned contribution from Simon Power and sit there dumbfounded and unwilling to take the floor of the Chamber and give the explanations that we now know we will have to wait for Mr Tisch to give this afternoon.  
These sorts of bills may in some circumstances be described as somewhat mundane. Indeed a lot of people would say that often people take the floor of the Chamber and speak for their 5 minutes and offer absolutely nothing of substance in the debate whatsoever and that sort of comment of course does not do Parliament itself a great deal of good. But generally there is a reasonably sound reason for people to ask the questions they do. It has nothing to do with the hope that more traffic may find its way down to this House. It does have to do with a desire on this side of the Chamber to be sure that the Minister who is imposing these regulations or conditions upon the financial industry service does in fact know what is going on.  
So we look forward to the Minister recognising that she has some considerable responsibility to the nation taking the floor as soon as possible and explaining the bill to the Committee particularly that clause that Mr Power seems so very worried about—clause 61A. Although we can assure the Committee that in Mr Tisch there is an expert on these matters it is very very important that his knowledge is not given to the Committee ahead of the Minister stating what it is all about. His speech may be a short one. Mr Tisch may in fact give a short speech saying simply that the Minister knows what she is talking about. That could happen and the Committee’s time would not need to be taken in this way were it not for the Minister’s reluctance to speak. I am getting no sign from the Minister that she is willing to answer these important questions. What I can say in all seriousness is that this legislation is a companion to the financial services bill— 
Hon Lianne Dalziel 
: The Financial Advisers Bill. 
GERRY BROWNLEE 
: —the Financial Advisers Bill which was passed earlier this afternoon and it does provide the basis for people who are aggrieved at the service they have received being able to have some redress. 
Hon Shane Jones 
: Talk about aquaculture Gerry. 
GERRY BROWNLEE 
: The honourable member Shane Jones suggests that I talk about aquaculture. I would like to talk about Labour’s record in aquaculture. However as those members have done nothing for 9 years there is really very little that can be said. [ 
Interruption 
] I notice now that I am being mercilessly heckled by the Hon Darren Hughes. He is a man who has elevated himself to the front row of the Labour Party just for the afternoon. We are sure that he will have a front-row seat someday and then he will not have to go about faking sunburn in order to be seen by those who are seeking him out.  
In the meantime I will return to the bill because I do not want to incur the wrath or ire of the Chairperson. I think I can simply say that in providing an opportunity for disputes to be resolved between clients who have expected that they were investing their money quite reasonably on the advice given to them and the adviser who in many cases will have believed that the advice they gave was quite legitimate this is good legislation in the current environment. It is most definitely needed and just subject to that little explanation about clause 61A I think the National Party will be able to continue its support for this measure. 
The CHAIRPERSON (H V Ross Robertson) 
: I wish to advise members that in accordance with a decision of the Business Committee for members to make valedictory statements I will report progress and ask to sit again presently. 
Progress reported. 
Report adopted. 
Valedictory Statements 
KATHERINE RICH (National) 
: 
 When I announced my retirement one of the first emails received said: “Good riddance you’ve said nothing done nothing and stood for nothing.” Harsh I thought but typical of many political letters to MPs. The funny thing was that a week later I received another email from the same man. It said: “Mrs Rich my heartfelt apologies. Comments from your colleagues the media and even your opponents seem to have been uniformly positive. I can only conclude that I got you mixed up with someone else. Sorry about that. Mistaken from Petone.” It was a strange exchange but somehow it sums up politics. Criticism is fulsome and sometimes unwarranted but every so often we get the right messages across and we can change minds.  
It has been an honour and a privilege to have taken my seat in this Chamber as a National member for 9 years. It is an experience that few New Zealanders ever have and I will remember it for the rest of my life. I would like to acknowledge Madam Speaker our first woman Speaker and say how proud I was as a woman in New Zealand to attend her swearing-in. The perfect rugby pass of a handbag to the surprised Darren Hughes as she strode up the aisle to meet the Prime Minister and Governor-General was also impressive.  
Mr Deputy Speaker you have been a good friend to me during my 9 years and I am honoured that you are in the Chair. I also acknowledge former Speaker Sir Robin Gray. His support over the years has been invaluable. When I was cleaning out my office I found a card from Sir Robin received when I first became an MP. He said: “The delivery of one’s maiden speech and valedictory are the only two times when a member is free to say exactly what they want to say.” That is very true.  
Leaving here is hard at such an exciting time and after the hard graft of Opposition but it is the right decision for me. Being an MP is not a job; it is a life. Political service is all-consuming and the New Zealand public deserves nothing less. In preparation for my valedictory I read my maiden speech. Nine years later my beliefs have not changed and I have done exactly what I said I would do. I will not pretend that I am unaffected by the experience—I have a thicker skin; I can deliver a better speech—but the things I believed in before I came to politics are the same. In some ways I am fortunate. I leave at a time of my own choosing positive about Parliament my party and our democracy.  
I do not agree with some who leave Parliament and say that little can be achieved through such public service. An MP can make a difference every day if he or she chooses to. I have taken a Ralph Waldo Emerson approach to politics and always thought that if even one life is breathed easier as a result of the work we have done then that is success. That is why I have found constituency work satisfying particularly its harder edges—cases like the inmate mother handcuffed during childbirth; the woman who could not get her teacher’s registration because she had the same name as a Christchurch criminal; the boy who absconded for 3 months before officials looked for him; and many others. These are not big cases to the public but I can say they were for those individuals involved.  
I would like to thank the journalists with whom I have worked closely. I would not have had such success in solving the tougher cases from Opposition without their stories. There is nothing like a front-page lead to galvanise the authorities into action after all other approaches have failed. Some of the Child Youth and Family cases still haunt me. I recall the shock of realising that a 9 kilogram 2-year-old left to eat toothpaste was the same weight as my son Jonathan at 6 months.  
There were the scandals—grants for hip-hop tours and other questionable spending. One day my erstwhile opponent Steve Maharey might tell me whether I was effective but it is a fact that many of the schemes I pilloried do not exist now. At this point I would like to acknowledge the impact that political life can have on family because my mother and sister both worked for the Community Employment Group—one of the organisations that I had criticised. In my defence I can say that my aim was to get better financial management. I never imagined that the whole department would get shut down.  
Many in my family are dedicated public servants. I say that the Public Service cannot be that politicised because at one point there were five of them working in Ministers’ offices or departments. Such is their professionalism I can proudly say they have been no help to my political career whatsoever. I could not even ask how their day was going during Budget time.  
I have added to my family since becoming an MP. I could not have received more support from my National colleagues. Parliament is not a great place for families but it is the worst place to be pregnant. Simple things like taking a call in the House prove difficult. Although it breached the Standing Orders I was thankful that Jonathan Hunt allowed me to perch on the arm of my chair so I could stand quickly enough to take a call. It was probably vanity as the cameras were certainly not there to see me but I did not enjoy the walk to caucus each Tuesday. Years later I had to ring TV3 to ask them to stop using the footage of Simon Power who was at that time slim and myself the size of the Goodyear blimp waddling along the corridor. I was starting to get mail asking why I had been pregnant for 5 years.  
I am proud that my son Jonathan is a Southlander but it was not my ambition to have him 5 weeks early at the 2001 National Party conference in Invercargill. When my daughter Georgia grows up I hope she will be proud that she was the first baby to sit in this Chamber. She sat with me quietly here one evening and no one called “stranger in the House”. She was born after the 2002 election. Members may recall that for nearly 3 weeks it looked as if I was not going to make it back to Parliament. Even my office had been reallocated. I returned on the equivalent of three party votes per electorate. Whether members think that is a good thing or a bad thing is up to them but it does demonstrate the importance of the party vote in MMP.  
One of my most satisfying political memories is playing a part in the section 59 debate although it was not an easy time. For months one would think the sky was falling in for all the bleating of some opposed to losing the right to hit children. Some said parenting would become illegal Child Youth and Family would steal our children and good parents would end up in jail. Well it has not happened. In the years to come I think most people will wonder what all the fuss was about. I believe the Bradford law will be another chapter in our gradual move to social enlightenment alongside other seminal pieces of legislation that brought women’s suffrage homosexual law reform and the recognition of civil unions.  
Initially I supported Sue’s bill because I wanted to close the legal loophole that allowed some parents to batter their children and escape conviction. By the end of the debate I supported the message that hitting children for any reason was not OK. A turning point was listening to another MP talking of the loving smack and the merits of using an instrument to beat children. With referenda pending any politician who thinks that electoral glory comes from the promotion of hitting kids needs to take a reality check.  
Much has been made of the solitude of my position within the National Party caucus on this issue. The day John Key brokered the deal I recall walking to Copperfields and passing the press gallery chairman Vernon Small who quipped that I was the last totara standing although given that I am short and pale a slightly smaller and less indigenous analogy might have been more appropriate. He looked at me with disbelief when I mumbled: “Might be a forest by the end of today.” In truth I was never the lone totara of the centre right. I had the support and friendship of Doug Woolerton and Brian Donnelly brave and inspiring men hardly the wet-sook liberals that Sue Bradford and I had been accused of being.  
National’s concern was making the law work in practice and ensuring that good parents were not punished. So once John Key had found a way through that deadlock National supported the legislation—the totara had become a forest after all. It is frequently said that Katherine Rich voted against the party. That is not correct. I leave Parliament having never crossed the floor and publicly supporting every caucus decision. What I have done is voted according to my conscience and thankfully National has a strong tradition of protecting the rights of its MPs to do so.  
Commentators who have questioned my place in the National Party I think fail to understand our party’s history. I know exactly where I stand in National’s history of a liberal tradition following names that include Ralph Hanan Tom Shand Katherine O’Regan Marilyn Waring Roger Sowry Clem Simich and I have added Simon Power to that list! The last five have very much inspired me as an MP.  
Liberal conservatives have always had a role not only in tempering the harder edges of conservative politics and encouraging change but also in acting as a cautionary voice in times of upheaval. One of my colleagues calls me the “um hang on a minute” person because of my propensity to bring up the possibility of less-charitable interpretations by the news media of some of our ideas.  
I am proud of my voting record. Some agonise over conscience votes but I have never struggled because essentially most are about human rights and whether one believes that all New Zealanders should have the same rights. I have never been lobbied by caucus to change my vote but there have been occasions when party members have taken issue. In each case I have reminded them of the National Party principles that I hold dear—equal citizenship and equal opportunity individual freedom and choice and personal responsibility.  
Every MP has their annus horribilis and mine would have to be 2005. Members might recall I had a slight difference of opinion over a welfare speech. Looking back I think I got into trouble more for what I did not say rather than what I did but it surprised me that few read that speech closely or understood it. Demotion clearly was not a career highlight but it was preferable to trying to explain why I a well-paid mother with all the supports in the world intended telling a DPB mum to leave her baby in childcare in order to net probably less than half the minimum wage. That time was not much fun but I was determined to leave here feeling positive because over the years I have realised that politics can deliver to our doorsteps hundreds of reasons to be bitter but it is up to us to decide how we react to those situations. I found that most things could be survived as long as there was family friends and Flying Nun—a good dose of Flying Nun I have to say.  
Politics can also deliver small kindnesses. When I announced my plan to step down I was really touched by the press releases issued by the Maori Party. I will miss regular Chamber chats with Pita about family and parliamentary life. The surprise farewell that our president Judy Kirk and the women in National held for me is a wonderful memory; I thank them for that. I will miss the regular parliamentary exchanges—hearing about Maurice’s latest cellphone or gadget inappropriate jokes from John Carter critiquing fashion with Paula Bennett that wonderful poetic marae-speak from Shane Jones Mr McCully’s hospitality and infinite wine supply and teasing Mahara Okeroa that we Nats indeed have a secret agenda and it is to make him our first ambassador to Namibia!  
But now I would like to make some comments about future policy. I know that under John’s leadership the economy and other major portfolios will be taken care of so I want to pick a couple of smaller issues for comment. I hope that support for Kiwi music is continued and boosted. Kiwi music brings us together. It is one of the glues of our society. The market will never support local music sufficiently given the size of our country. Reading-recovery programmes are particularly dear to my heart and I would appreciate improved support for them. Those programmes and others save many Kiwis from lives of illiteracy. I would like to see the Office of the Children’s Commissioner retain its independence as a strong voice and social conscience for our nearly 900000 children who do not vote.  
And now for some specific people I would like to thank. To John Key: I have enjoyed my time on National’s front bench and working for you. I respect you because of your beliefs and your way with people and I know that under your leadership National will not forget those less fortunate. To Bill English the man with a brain the size of a small planet: thank you for giving me the welfare portfolio. You could have walked away from politics years ago but I think New Zealand is fortunate that you decided to stay and fight. To Gerry: I fail to put this into words properly but thank you for your humour. In some of our darkest moments in Opposition I have seen you lift our combined spirits with a clever one-liner and positive attitude and that is quite a gift. To my best political friend Simon Power: the people of Rangitikei are very fortunate indeed. Stay staunch over the coming years. I know you will uphold National’s liberal tradition and play a strong “hang on a minute” role in Cabinet debates—PS please introduce some decent rehabilitation to the women’s prisons because next time I visit my constituent I want to know she has more to do than just play ping-pong.  
I would like to thank John Slater and Jenny Shipley. Had it not been for their faith I never would have taken my seat. To my colleagues from the “class of ‘99” that has met almost every Tuesday for 9 years: thank you for your support and your friendship. Likewise I am grateful to party officials Craig Myles Roger Bridge and Kate Hazlett and all my electorate chairs. I would like to thank my loyal secretaries Pat Humphries and Robyn Broughton and my driver Roy Bremner.  
To my husband children and parents who are here: thanks just does not cover it in particular Andrew. Campaigning in Dunedin is never easy but Andrew’s intimidating use of balloons and bodyguard approach to campaigning has kept most opponents at bay. I could not have lasted through 9 years in politics and two babies without his support.  
Regrets well I have had a few. Speaking with Don Brash last week we shared the regret that we did not make more progress with the Christchurch civic crèche case. As a circuit-breaker Rob Muldoon got an Australian judge to look at the Arthur Allan Thomas case. That might be an option for this one. I regret not being able to implement my strategy for welfare but I am confident National has good policy for the future. Compassionate and practical welfare provision will always get better results than condemnation. I regret that there are not more hours in the day to achieve the most illusive of conjuring tricks—the mythical work-life balance.  
But I do not wish to dwell on my regrets. They are more than outnumbered by positive memories I will take from this place; also the satisfaction of having done my job to the best of my ability. I leave positive about New Zealand and our parliamentary process. We live in a robust democracy in one of the least corrupt societies in the world and I think we should remember that when the daily small scandals threaten to distract us.  
I issue one final plea to my fellow parliamentarians and the gallery. We all belong to political parties but we are not clones. National and Labour are broad-based parties which means that each will have members who sit on different parts of the political spectrum. We back party policies but it is not a scandal to privately hold a different view. In the last year I have seen too many stories that run the line that this is somehow a crime. Regarding conscience issues we all have a conscience and we must remain free to exercise it on those issues that go to the heart of our belief systems. I urge all party whips to ensure that this most vital of parliamentary freedoms is never forgotten.  
Looking back on many valedictories delivered in this Chamber I find a popular choice for retiring MPs is to quote Frank Sinatra’s “My Way”. Well anybody who knows me knows that I cannot abide crooning; I have always preferred the Sid Vicious version. I have done things my way but I have done them within a National team and Parliament as a whole. I wish you all the best for the coming election and I say thank you and goodbye. 
MARK BLUMSKY (National) 
: 
 Mr Deputy Speaker honourable members Corinne and Kendra—gosh you know no matter how many times you speak in public you still get nervous don’t you; isn’t it a shocker? As recently as a week ago I had not intended to make a speech in this House today. As people may be aware I have been quoted in the media as saying I have not particularly enjoyed my 3 years in Parliament and I have been critical of some of the ways this complex operates. I had initially planned to leave it there.  
However I was recently approached by a very senior colleague who managed to find me all the way back up here and sit beside me—quite an achievement. This colleague rarely speaks but when he does he is well worth listening to. He told me that in my short time here he had never heard me speak in a negative manner in this debating chamber. That is something I have prided myself on—always trying to add a bit of value or to make an improvement. It was at that point that I realised I did not want to leave Parliament in a manner that could be perceived as being negative. I thank my wise colleague Clem for his words and I assure him that his message to Wellington got through to me.  
I wish to start my final speech by thanking Parliament for the opportunity it has given me to serve. I know I have been very lucky to have been a member of Parliament. It has been a wonderful learning opportunity. I do not regret my 3 years here. There are so many in our communities who strive to get here but never do. Even now as I speak there are people around the country working incredibly hard to become an MP. Some will most will not and my heart goes out to those who will fall short.  
It has been an honour to be here and for that I wish to thank the National Party for selecting me and all the people who have supported me in particular my wife Corinne and my princess daughter Kendra. I will tell members now: being a Wellington MP has had some huge advantages. I have been able to go home at night to my family and I have also been given the opportunity to take Kendra to school every day. Parliament can be particularly hard for those who cannot head home each night and do not get to see their kids in the morning. I applaud and we should all applaud the sacrifices that those MPs make. But I would tell those MPs to not ever lose their perspective on what is truly important in life.  
Of course history will show that I did not get into Parliament in quite the manner I had hoped. I freely acknowledge that I would have loved to win the Wellington Central electorate but I was beaten by the better candidate on the day. As a result I entered Parliament as a list MP which I can tell members now is very much second prize. So it is as an inner-city resident that I thank the Hon Marian Hobbs for having done a great job as my local MP. I have enjoyed working with you Marian on the Local Government and Environment Committee. You are sharp you are smart and you know your stuff. And by the way you are a damned good cook as well. We have become even better friends during our time here and it is handy having an accommodation option on my next visit to England if I can suggest that.  
Ironically this has actually been one of my problems here in Parliament: I quite like a few of the people I work with who happen to be in other parties. In the last few years I have come to realise that I am probably a bit too trusting and I just do not dislike enough to be a truly effective MP in the way that this place currently operates. Some people think I am absolutely mad for leaving now when a change of Government looks quite likely. However those who know me and understand why I have made my decision will know why I made it and why the election result will not affect my decision.  
In my maiden speech 3 years ago I said I came to Parliament because I wanted to make a difference; I wanted to add value. In my time as the Mayor of Wellington I did manage to help change that city hugely and I wanted to bring a taste of that to the national level. My intention was to be positive to build to improve and to make a difference. Frankly I have not been able to do that as much as I would have liked to and because of my personality type the way I work and the way I want to work I cannot see it happening in the future and that is why I made the decision to walk away. In my experience and observation sitting back here Parliament does suit a certain personality type and it does require people to behave in a certain way in order to succeed. National politics is not for everyone and that includes me. The trick was to recognise this fact and to act.  
As my father said to me recently the easiest thing I could have done would have been to stay. He said to me: “Don’t be too scared to make the true hard call.” His advice has always hit the mark. I say “Hi” to Blum. I know you are watching and I love you to bits Dad.  
However I believe my time in Parliament has been valuable because I have learnt a great deal. I have met some wonderful people and things have been clarified in my mind about how I work best and where I can make a true difference.  
I thank my excellent executive assistant—she typed this obviously—Susan Palmer for all her work over the last 3 years. She has been a great friend. I think we have been unique during our term in the sense that we are the only MP and executive assistant whose offices are not connected. They are literally right next door to each other with no connecting door. That means from time to time I have had to use the Parliament House intercom which involves me yelling at the wall: “Susan have you got that file in here?”. It generally works well and when it does not it is a case of knowing that Susan is not in her office and it is not the intercom that is broken—that is the trick.  
I say a special hello to Tom Chambers who is my at large out and about electorate agent. Tom you have been a very good friend and you have kept me honest.  
I thank the MPs and the staff in the leader’s office who have popped into my office to say hi—and to steal the lollies I say to Chris Finlayson. I fear that some of them will miss my lolly jar more than they will miss me. As for this back row of MPs I tell members there is a huge starvation issue ahead for these guys and there will be a dramatic loss of sugar levels—you will have to find a new sugar daddy guys!  
At this point I record my thanks to the guards and the messengers who have always smiled and said “Gidday”—neat people. Thank you also to the librarians who have dug up the work for me the cafe staff and others who make Parliament run ever so smoothly. I know I will never have another job with seven mail deliveries a day. 
I sincerely thank my inmates—the National MPs’ class of 2005 the MPs I came into Parliament with. Those guys really do rock! I have enjoyed working with them all and I am lucky to have made some friendships that I know will never ever fail. Those members will all go far and I for one will be cheering for them big time. For the sake of the country they had better do it on 8 November.  
Finally on the thankyous I pay a particular tribute to a very special MP and I know that he will be hugely embarrassed by this. I have been lucky enough to have worked and to have travelled around the country with John Carter. After more than 20 years in Parliament John still exudes passion commitment energy and excitement about his job and the National Party. John you are a true inspiration. Your mana and reputation in the local government sector is huge and you deserve recognition in the future.  
Like John Carter I have always wanted to add value to my work and there have been some successes from my time here that I will always be proud of. I believe that I made a positive contribution to National’s economic development policy but I particularly enjoyed helping to shape Parliament’s local government policy. Both of those areas were real passions of mine. They were not sexy for the House but they were passions of mine. By way of warning I tell members that I may well be on the other side when the local government policy is actually being delivered.  
Locally after a big struggle we did get Government funding for the Karori Wildlife Sanctuary which it totally deserved. When the Government turned down the initial funding request possibly the only person angrier with the Labour Government than me was Marian Hobbs the local MP. But between us we righted a major wrong for what is an iconic Wellington attraction.  
Another achievement I would mention is the successful trial of my voluntary retailers’ code of practice around the sale of volatile substances such as meths glue and paint. It was designed to curb abuse. We did the research found the funding developed the shop resources and ran a very successful trial here in Wellington. However when we approached the relevant Minister for support for what we thought was a non-partisan country-wide issue he basically dismissed us. More than a year later—surprise surprise—Jim Anderton launched a very similar scheme but basically cut out all of those people who had worked on the successful trial. I am assured by my colleagues that having a policy stolen is the highest compliment but I still feel there has been a lot of wasted effort a lot of wasted intellectual property that could have been better directed against a very real problem.  
I was proud to be the Mayor of Wellington. I have to say that I have struggled to have that same pride as an MP in the New Zealand Parliament. Partly that is because the public can have a very negative view of politicians and what we do. It is sad to hear how many people feel obliged to make a derogatory comment when they find out that one is an MP. Sometimes I fear we are our own worst enemy. It is hard to explain to members of the public the value of having long debates in the Chamber when the results of the vote are actually known long before we make the first speech. In local government there was always the chance that if a councillor made a passionate speech that was well researched and well reasoned that councillor could actually sway a few votes around the table but not here. As a House we spend an extraordinary amount of time speaking to no effect.  
I remember back as a brand new MP how excited I was going into question time. What a disappointment! It descends into a farce when Ministers have only to address rather than answer the question. It becomes a competition as to who can give the best smart-arsed answer. It is a tragedy for democracy in New Zealand that accountability can be dismissed so lightly. The public does deserve better. I sincerely hope that the next Government—of whatever composition—looks again at this precedent and makes the selfless call to require Ministers to answer; it is the right thing to do.  
This Parliament also passes law that I sense we all know could be better but sensible amendments are turned down for political and philosophical reasons. The them-and-us factor is stronger than I had expected. It is damaging the quality of legislation and I believe it damages the country. If they have their answer and we have our answer then the chances are that neither of us is exactly right. The emphasis should be to just work it out but that does not happen too much in here. It is often all or nothing but few solutions come entirely from philosophy or ideology and as a result I think we do miss out on some of the real solutions.  
Another reason there is a lack of respect is that we are a long way from the coalface. We are in a rarefied bubble. We have more security guards to get through here than at any airport in the country. And it does change people but rarely for the better.  
My challenge to those who will be in this Chamber next session is to rebuild the respect that people should have in this institution and in the basically good people—which they are—who serve here. I will not be here of course and my advice to anyone here is: “If you do not fit do not stay.” And that applies to me. But I am afraid I think that some MPs stay in Parliament because they just do not have too many other options. I do not think that is a good enough reason to stay around and not add value.  
My hope is that one day New Zealand has a Parliament that is more united more cooperative and more respectful and one that includes members across the spectrum all of them dedicated to improving their communities. It can happen.  
To finish I will share one of the most moving experiences I have had which was on one of those much maligned trips to Europe. It was an opportunity to look at the interaction between local and central governments in other countries. I learnt a lot and I thank Parliament for giving me that opportunity to go.  
Northern Ireland was an eye-opener. We were addressed by four MPs from four different parties—Sinn Fein the Ulster Unionist Party and two others. Their opening comments to us were remarkable. One of the MPs remarked that one of his parliamentary colleagues at the same table used to have him in his gunsights. That colleague responded that the reason he had him in his gunsights was that he knew he had a contract on his family. They were not joking. Ten years earlier they had been literally on the battlefield against each other; at the time of my visit they were sitting at the same table working as a team for the good of Northern Ireland.  
The question was asked: “How is it that you now get on so well when you were literally trying to kill each other not that long ago?”. Their answer was simple. They just said “We now respect each other’s right to be here and we respect that each one of us is working for the good of the country as we see it.” If they can do that after years of bloodshed then why cannot we show some of that same respect in this Parliament? I hope we can.  
I leave having learnt a tremendous amount in 3 years. I have met some great people and some great leaders I tell John Key. I have made a difference in a couple of areas and I have gained an understanding of how this place works. Those insights will be tremendously useful when I go back into local government—if my wife lets me.  
My maiden speech was criticised by some pundits as being too Wellington-centric. I would respond by saying that it is not my fault I cannot get Wellington out of my bones. Then again I really do not want to. Parliament is staying in Wellington and I am staying in Wellington so I am sure I will continue to see members of this House around the greatest city in the country. Thank you all for the opportunity. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave for the dinner adjournment to be taken at the conclusion of this speech should it proceed past 6 p.m. and for the House to then resume 1 hour after the start of the dinner adjournment.  
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is none.  
Hon CLEM SIMICH (National) 
: 
 Tena koe Mr Assistant Speaker and thank you. I want to first of all thank Katherine Rich and Mark Blumsky for their kind references to me. I do not know whether I deserve them but they are much appreciated. 
Mark Blumsky made some reference to something that many commentators have referred to in a jocular way over the 17 years that I have been here. I have accepted it as that but now and then it got annoying. It was about my taking a message to Wellington. Those commentators had it wrong of course because it was not my taking a message to Wellington; the question was that if they wanted a message taken to Wellington—that is the voters in my Tamaki electorate—then I asked them to give it to the Government not to the Opposition. But it developed from there and many have had a little fun over it. 
If members doubt that a message came to Wellington I invite them to read my maiden statement in  
Hansard 
 Volume 522 at page 6912 on 17 March 1992. From the middle of the page the next four paragraphs set out very clearly what the message was. After reading it members will accept that the message was taken on board and it still is today because we are a quite different party from what we were in 1991. The message is there I know that it has been taken on board and I am very pleased. 
Mr Assistant Speaker I have been delighted to work with you over the last 6 years. Ross Robertson you are a top MP. Along with the other Assistant Speakers whom I have had the pleasure of working with—a Deputy Speaker in Ann Hartley and an Assistant Speaker in Marian Hobbs—you have formed a team of Speakers and we have operated I believe very very well. A lot of that is due to your knowledge of the rules your calm personality and the fact that you do not take too much rubbish. I thank you Ross for being a colleague of mine for 6 years in the role that I have had to play. I also thank Marian Hobbs. It has been great fun working with you more latterly and I respect what you have done. 
I pay particular tribute to the Speaker. The Hon Margaret Wilson is in my book a very very fine person indeed. I first met Margaret when I was a student at Auckland University in 1985. She was a lecturer then and for the last 3½ years she has taken up that role again. She was a delight then although it was a student-tutor and student-lecturer relationship but down here away from this Chamber most of those who have been with Margaret will know that she has a sense of humour she has absolute integrity and she is just good to be with. She has taught me a lot and we have been able to work together over the last 3½ years and that is something I have really really appreciated. 
Before Margaret there was Jonathan Hunt. I was with him for 2½ years—another superb Speaker. I first met Jonathan in 1966 slightly before he came to the House. Time slips away; that is only what 42 years ago? When I met him he was at a dinner with Roger Douglas. We were out together and the acquaintanceship went from there. I was delighted to work with such an experienced person a top-class Speaker for 2½ years here. 
Colleagues I want to say thanks also to two special people. The first is Roland Todd the Speaker’s Assistant. Members would probably notice that we would go a fair way astray but for Roland Todd. He does a superb job and I thank you for that Roland. I thank the Serjeant-at-Arms Brent Smith who likewise plays a role up front but also in the background. To those two people my special thanks. 
To the Clerk Mary Harris to you and your people I am deeply grateful for the help that you have given me and the other Speakers in the work that we do. You and Debbie Angus are invaluable as are the other Clerk-Assistants. 
I make mention here of David McGee who was very special to all of us here in Parliament. He was with the establishment for 20-odd years and was an absolute authority on parliamentary procedure. He is recognised right around the Commonwealth and in fact the English-speaking world including the USA for his expertise on how a Chamber and the parliamentary system should work. I was lucky to be with David McGee for much of the time that I have been in Parliament and certainly when I have had a Speaker role. 
I now pay special thanks to—hey this could be a speech all of thanks! But that does not matter. In my view everything belongs to the future but I am actually going to talk about a lot of things in the past. You might gather that that is the stage of life I am at. It has been a long past and I will go on to that. 
I first came to this Chamber 51 years ago. In 1957 I sat in the Speaker’s gallery right where my wife is sitting with a small group of people. I was hosted here by the Prime Minister Sidney Holland. The reason he was hosting us was he was the patron of my wing at the police training school. I met him we formed a relationship and 18 months later I had the pleasure of hosting him at the training school where I was his guide and his host when our wing graduated. We have had something like 12 Prime Ministers since then. It is not big-noting it is just showing how long I have been around the establishment but I have known personally every one of them. I have not just met them but have been with them and spoken with them every one right up to the present Prime Minister. 
I have been delighted to know Helen Clark. That goes back a few years too. The thing that really stands out in my mind is that Helen Clark was one of the few who came to see me on my by-election night. She was the first there and it was a very warm greeting. I thank you Prime Minister for the courtesy you have shown me and my family through all of those years. It has been much much appreciated. 
So 51 years ago I was in the gallery. I was 17. Some years down the track—almost another 17 years—I started coming to this Parliament for 1 day a month and I did that for 15 years in a row. I did it because I was on the governing body of the National Party and we met for 2 days every month. I would spend the late afternoon and evening of one of those days here. 
By that time I had established a relationship with David Lange. He did not particularly like me when we started. We had a battle in another by-election which I knew I would never win but at a late stage even my family thought I might have a chance. I dreaded the thought because it was not my intention to start a parliamentary career at that point. But during that by-election Lange was making fun of me saying I had been born with a silver spoon in my mouth and he had not and so on. But I knew his history. He had a very upmarket upbringing if you like. One night after a television interview I reminded him about something. I said: “David you should really stop saying that. My mother was your father’s housekeeper.” He just laughed and said “Nah!”. I said: “Well you go and check with Phoebe.”—his mother who lived in Kohimarama. He did and she told him that mum was his housekeeper. Indeed she was his uncle’s housekeeper as well. Both of them were doctors. From that time on we were as close as we could be. 
So I used to come down to the House. I looked after Rob Muldoon for 18 years. There were ups and downs—mostly ups—but I looked after him both in his electorate as a councillor and here in Wellington against the hordes who were trying to get at him. I would come down here and Rob would sit there and he would just wave. David Lange would see me in the gallery and without fail he would come and get me and I would sit at the back of the Chamber. That went on year after year. It went on while he was Prime Minister too. So we had a very good relationship and I enjoyed it thoroughly. 
I will move a bit closer to where I come from. I came down to the police training school from Aranga. Aranga is a small swamp up north near the Maunganui Bluff. It was from there that I went down to the police training school as a 17-year-old. We had only recently come back from my old country which was then Yugoslavia and is now Croatia where I had spent 5 years. 
At the time that I came to Parliament in 1992 Aranga was topical. Aranga was part of the Te Roroa claim. The Maunganui Block was part of it. Te Kopuru was part of it—that is where I was born. Tokatoka was part of it. Waipoua was part of it. It was at that point that the claim was surfacing. Lots of things happen very quickly here in Parliament; within 5 minutes the whole scene can change. However the issue that was just starting to bubble then has taken a wee while longer. But it was something that I noticed when I was first here. On 3 April of that year just 1 month after I had been sworn in the Waitangi Tribunal reported to the Minister and to the claimants on the work that had been done with a recommendation—actually a recommendation that had been made by the Maori Land Court in the year I was born 1939—for lands to be returned to that tribe. Down the track I come into Parliament and it is right up there up front. Tomorrow the Te Roroa Claims Settlement Bill will receive its third reading. That is my second to last day in the House and it is just a coincidence that that has happened. 
The people who were involved in those claims—Lovey Te Rore Alex Nathan lots of them—were footballers with me up north. They were my coaches. My brother and I were playing senior rugby in Northern Wairoa when I was 14 but that was only because there were very few people in the neighbourhood in the area. But we were big guys. So I was playing with these people. They have gone now but they pushed those claims a lot of the way. So did Syd Morunga. 
At the same time that I came into the House Croatia was in turmoil. If I have a home country Croatia is it. As I said before I spent 5 years there. It was in turmoil. It was at war and the Balkan area which had been Yugoslavia was breaking up. Croatia wanted to be recognised as a nation State. At my first meeting as a candidate with the then Prime Minister Jim Bolger in January of 1992 he told me he had had a request from Croatia and he asked me what I thought of it—whether our Government should recognise Croatia. I said: “Do it straight away.” He spoke to the honorary consul here and gave him the message: “New Zealand will recognise you immediately.” I know he had done some work on it before but that was thrilling for me because of my relationship with the Croatian people. Today as I leave Croatia is on the verge of joining the European Union. It has a little way to go but it is right there. There is such a stark difference between Croatia today and what it was when I came into this House. 
It is a very similar position to that of the Te Roroa claim which was just gaining speed then and is going through the House tomorrow. For a lot of that thanks go to all of the Governments over that time but especially to the Hon Dr Michael Cullen for speeding it up and for working on it. 
It looks like my life has been in lots of 17. I was 17 years old when I first came here to this Chamber and another 17 years later I joined the National Party. In between were the most exciting 17 years because I got married to my wife Ann. I met her 47 years ago and we have been married for 43. I have three wonderful children. They were born in that second tranche of 17 years. My third lot of 17 years was spent doing my charity work for the party. They were absolutely wonderful times but one needs an understanding family for them to put up with it. I was at most times looking after four electorates in Auckland I was a councillor and on the governing body for almost all of that time and I was away from home 3 or 4 nights a week. Lots of members have done that; it is quite common for people in the party organisation to do it. 
Then my opportunity came up—the fourth period of 17 years—and I came in here. This has been the most delightful time of my life—to have been a member of Parliament to have been a representative. I have no regrets at all. I think it is an enormous privilege just to be here but also to be able to achieve things and to do the work. I have had so many opportunities come my way and I am deeply grateful to all of the people and the parties who have given me those opportunities. I was a backbencher for a while I was chairman of a select committee and I was fortunate enough to serve time in Cabinet. For that I am deeply grateful to Prime Minister Jenny Shipley just as I was grateful to Prime Minister Jim Bolger for what he did at the time of my by-election to come in here. 
I have special friends in this House. I could say that all of the other 120 members in this House are my friends and I am very proud of that. I have special friends like Katherine Rich and Simon Power which I found rather odd because I was the oldest one on this side of the House—almost the oldest one in the House—and they were the youngest. Yet we hit it off very well. 
I am a liberal conservative and I have thoroughly enjoyed the liberal issues that I have been able to take part in in this Parliament. In fact they are my proudest moments. I have been on the right side of I think every one and I have been very pleased to do it. It is all about making people feel better about themselves. It does not matter how small the group is; if you can make just one person feel better about what is you have done a good job and it is worthwhile doing it. With a whole host of these issues that is what we were able to do. 
I pay special acknowledgment to my good friend Georgina te Heuheu. She was my benchmate in Cabinet as was Tau Henare. We were at the same end of the table. We were in Cabinet together. I am very grateful to Tau for other reasons of course. He is partly responsible for my being in Cabinet because he stuck with us and stayed in Government in 1998. Those were thrilling times. For the last 4 or 5 years Georgina has been my benchmate here. 
I shall finish up because you all want to get away. I want to say thank you very very much to a whole range of people. My sincere thanks go to the Hansard people; the security people in this establishment; the messengers; the Crown transport drivers; the travel office; Bellamy’s; my House committee with Warren Biddington and Nicola Fenton on it; and the Standing Orders Committee with its chair Margaret Wilson its deputy chair the Hon Michael Cullen and David Bagnall the secretary. To my personal assistant in Parliament Noeline Thresh who has been with me since I arrived we have had the same journey with many office changes. I thank you Noeline and Derek for your great work and for your support for me and my family. I thank the library staff Bev Cathcart from the protocol office and Alison Allen from Inter-Parliamentary Relations. I thank all those people for their courtesy their goodwill and the help they have been to me and to others in my 17 years here. 
Colleagues I have people in Tamaki whom I am deeply grateful to. John Tremewan was the chairman when I began there. Some great people have led that electorate ever since and I thank all of them. In particular I thank John and Vicki Tremewan for being my agents and for being great workers and supporters. I am greatly indebted to David and Sue Morris and to people like Jim Mungall Tom Barton and Graham Malaghan. Graham Malaghan I met in 1974. I knocked on his door and met him and his wife Dale. They have been great friends ever since. Graham ran most of my campaigns up until last time in 2005 and I thank you for that Graham. I also thank Jonathan Kinsella who was my chief runabout in my by-election in Tamaki. He was later my press officer when I was Minister of Police as well as having other portfolios. He is now the public relations and press head honcho at the British High Commission but he is leaving there soon to go back to the UK. So I say thanks to him also. The most recent chairman of Tamaki is Andrew Hunt and he does a superb job. At the regional level I am deeply grateful to Stuart Masters who was my mentor when I first came in and to Ross Armstrong who was my chairman when I went out. I was deputy chairman of that region with Ross for 7 years. I thank all of those people sincerely. 
I want to say to you all that I go with no regrets at all. When I came in here in 1992 there were 67 members in the National team albeit two of them had become Independent. Of the 67 members there are eight left. There were 99 members in the House and there are 19 left. That tells me that change has to happen that I am part of that change and that I need to move on. I am happy to do so. 
I do it in the knowledge that this country is in great health. I have no doubt about that at all. It is better every day that we go on—some downs mostly ups. It is a bit like John Carter’s bloody phone message where he says: “Every day gets better.” That is my view of New Zealand. Every day does get better. We have some hiccups. 
I pay special tribute to my leader John Key; to my deputy leader Bill English; and to Gerry Brownlee Simon Power and all of my colleagues. Thank you for the encouragement for the support and for giving me all the opportunities that you have. 
My first opportunity in the National Party was given to me by George Chapman who is still around. I still see him. He had faith in me and I hope I have not let him down. Sir George Chapman was my first president and I thank him and Sue Wood. I have had about 10 presidents leading up to the most recent one who is Judy Kirk. I thank them all for the many opportunities they have given me 
Finally because we all need to get away I want to speak briefly about my family. Ann I love you. You have been a tower of strength to me and to our family. You are as fantastic now as you were when I met you 47 years ago and I am just about to embark on another life with you on leaving this House. Thank you Ann. Thank you to my children Karl and Jacki who are in Europe. To Simone and Paul and to my grandchildren Natalia Sofia Liam and Niko I thank you. 
And I thank my youngest son Ricardo who is in Los Angeles at the moment. He sent me a note because he could not be here: “To my darling father Clem. From the day I was born 36 years ago I have had a father that is the kindest man in the world. Growing up in a family with such love and morals is a blessing few children have. I grew up to the smell of politics happening around me jolly conversations with thumping tables and debates vintage cars in a by-election where you stood against David Lange the son of the man whose house your mother used to clean. Mum asked you to rest your Wellington ambitions until we were finished at school. My how cool it would have been if you had been an MP when I was at school.” I would have thought the opposite but that is the way he sees it. “Over these years you have juggled entrepreneurial business with National Party duties. Dominion councillor policy—you have done the lot. You stepped through the politics of the party with a gentle approach always making sure everyone was happy and being a loyal friend to all.  
After 17 years you entered Parliament. You went to Wellington for the right reasons. It was never about you it was about making things right and helping others—a feat I fear many MPs hope to do but the world in Wellington often changes the paths of even the noblest cause. Dad I know how much you love the House and I know how very sad it will be to say goodbye. The New Zealand House of Representatives gained more than a politician 17 years ago; it gained a true statesman of the House. You are this quite simply because you are above the fray and have no ego or personal agenda. Congratulations on being a legend to our entire family and I will be listening to your speech online from the States.” He says: “God bless you the Hon Clem Simich and many thanks to Mum who has stood by your side throughout.” 
Those are just some thoughts from my son and they are endorsed by his brother and sister. I appreciate them and reluctantly share them with you. Thank you for bearing with me. I do thank my family. I also thank my brothers Alex and Frank. Indeed my family have been my main helpers in my entire 34-year career in politics. God bless you all. 
I want to finish by saying that it is hard to leave this place but we all must. But I can take with me my love for this institution my absolute confidence in the future and my deepest gratitude for having had the opportunity to serve my country and our people. Tena koutou tena koutou tena koutou katoa. Haere ra. Dovijenja i zbogovan. Good bye and best wishes to you all and thank you. 
Waiata 
Sitting suspended from 6.18 p.m. to 7.20 p.m. 
Financial Service Providers (Registration and Dispute Resolution) Bill 
In Committee 
Debate resumed. 
Clauses 1 to 75 and schedules 1 and 2  ( 
continued 
)  
CHRIS TREMAIN (National—Napier) 
: 
 Before I speak to the Financial Service Providers (Registration and Dispute Resolution) Bill I acknowledge the valedictory speeches of Mark Blumsky Katherine Rich and Clem Simich who all set a very good tone in terms of their speeches and who were not afraid to acknowledge their political opponents. They were excellent contributions to the House. 
For the first part of my speech I will focus on clause 3 and then I will turn to clauses 5 and 6. Clause 3 “Overview” provides the reasons why we are enacting this legislation. Members of the community who are listening to this speech will remember that three bills form part of a portfolio of legislation that has been put in place to provide greater protection for consumers. The Financial Service Providers (Registration and Dispute Resolution) Bill is the third of those bills. Clause 3 provides us with an overview and states: “This Act requires financial service providers to be registered.” So the bill forces all financial service providers to be registered and it makes sure that they are all members of a disputes resolution service. 
The key area where the Maori Party got a little bit confused between this bill and the Financial Advisers Bill was in the fact that this bill has a wider scope and nowhere is that more confirmed than in clause 5 which defines the meaning of a financial service. It widens the scope of who will need to be part of the register and who will need to register with a dispute resolutions service. Clause 5 states that a financial service includes any service that has a financial adviser service that acts as a deposit taker that is a registered bank that keeps invests administers or manages money that operates a money or value transfer service and that issues and manages a means of payment—for example credit and debit cards. Thus one starts to get a feel for the fact that the scope of this Act is a lot wider than the scope of the Financial Advisers Bill. 
Although the scope of this legislation will include a number of financial organisations a number of them already have dispute resolution services that are set up and operating effectively. The officials thought that a couple of dispute resolution services were not operating effectively but this legislation forces organisations to be registered and to be involved with a dispute resolutions service. If these organisations do not have one set up within their industry grouping they will be forced under the legislation to join a reserve scheme. That is an important part of the bill. 
I also want to focus on clause 6 “Application of Act”. What we tried to do here was to replicate the clauses that were in the Financial Advisers Bill so that those organisations that were exempted from that bill would also be exempted from this bill. Clause 6(2)(a) provides that lawyers and chartered accountants who were always exempted from the Financial Advisers Bill pretty much from the word go will remain exempted in this legislation and will remain covered by their own legislation and their own disputes resolution services within their own professional bodies. In respect of clause 6(2)(ba) one group that lobbied quite hard to be excluded from the legislation was tax agents. They felt that they provided a similar service to that of chartered accountants who had their own body and code of conduct and who had their own disputes resolution service. Tax agents really felt they were being treated unfairly and separately from chartered accountants. I think that all of us on the Finance and Expenditure Committee—and certainly the Minister—thought it was wise to keep tax agents separate from the bill. 
Interestingly I have to declare a conflict of interest in respect of clause 6(2)(bb) as I have businesses in the real estate industry. Real estate agents have been exempted from this legislation largely because the advice they tend to give is secondary to the actual act of buying and selling a property and also because they are covered by their own legislation. Now that there is a separate Real Estate Agents Authority there is a disputes resolution service for members of the public in those instances. 
CRAIG FOSS (National—Tukituki) 
: 
 I continue in the Committee stage here but I would like to acknowledge the very good valedictories we enjoyed before from Mark Blumsky Katherine Rich and Clem Simich. We will miss those members not only in our caucus and in our party but also in the House. 
I will concentrate on a couple of clauses. Clause 42 was of interest to me at the Finance and Expenditure Committee and even as we have it now as new clause 42B. It is about the territorial scope of this bill. Again it is one of those particular clauses that at the select committee we made sure was totally aligned with and very much the same as those in the Financial Advisers Bill. But at the select committee we had some interesting discussions about this one and even towards the last minute I think it was being constantly improved. I just note that because there are many theoretical examples in which people could fall outside this bill. Under the title “Territorial scope” the clause states: “This Act applies to the provision in New Zealand of a financial service by a person who is in New Zealand regardless of where the financial service provider is resident is incorporated or carries on business.” We had a lot of discussions actually because we had the theoretical example of someone—as the bill was originally drafted—who could whip through Auckland airport and make a few phone calls and we were not sure whether that person would be covered. So the provision has been tightened but again in this new clause and in the same clause in the previous Financial Advisers Bill it is a very difficult part and almost a glaring hole in both bills. Although I am not offering a solution to it I am identifying the problem. 
This relates to the common theme of what I was speaking about earlier—the globalisation of everything. For example we could make up an example right now: someone living overseas could offer an interest-free loan to people in New Zealand. If New Zealanders went offshore to solicit that money or to get advice to get such funds etc. took ownership of those funds outside of New Zealand and then came back and in some way utilised those funds for themselves or others without getting advice and if various regulatory bodies had problems with those particular transactions then they would fall outside the gambit of this bill. The same applies for the Financial Advisers Bill.  
I am not offering a solution to that. I do not think there is one unless we tighten up our agreements with other jurisdictions. Some authorities are quite tight—Australia in places and other places in Europe—and of course any dodgy activities happen in places that are commonly known as tax havens or that have somewhat lower thresholds of regulatory integrity than we expect here in New Zealand. Sadly there have been examples in the past. A while ago people from Thailand were calling down to New Zealand offering to New Zealanders wonderful deals on equity trading and all sorts of commodity gains and unfortunately some New Zealanders were taken in by the scams and sent funds to Thailand. Those people had no recourse whatsoever; there was no civil or legal recourse. Even under this bill there is no recourse whatsoever if a New Zealander transacts funds and sends them overseas to some unusual pyramid scheme or to what is basically a simple rip-off. 
Again I am not offering a solution to that but just identifying this practice as a potential problem because those who are of a mind to exploit others and rip them off are also of a mind to look through regulations such as these look for the holes and find them. They could be New Zealanders deciding to transact from outside New Zealand or they could be people pushing something down into New Zealand from an offshore entity with which New Zealand does not have strong arrangements. Unfortunately we will probably see ongoing examples of that activity. Between now and earlier when I spoke on the second reading of the bill I note that I saw a headline going across the news wires that the FBI—a major regulatory body in the United States but not even a financial regulatory body—was reviewing the activities of Lehman Bros Freddie Mac and Fannie Mae for potential or alleged mortgage fraud. That was very interesting. 
I have a question to ask of the Minister concerning clause 62 which is under the heading “Annual reports and information requests by Minister”. 
The clause states: “The person responsible for an approved dispute resolution scheme must supply to the Minister within 3 months after the end of the financial year applying to the scheme an annual report containing prescribed information about the scheme …”. I ask about the time period which is kind of touched on there. We see by the words that were struck out by the committee that we originally said the report had to be supplied “by 1 July each year … in relation to the 12 months ending on 31 March in that year.” I ask the Minister whether the provision relates to the financial year of the particular scheme because of course there can be many end dates for financial years—31 December 31 March 30 June or even others. Because I see that the Minister has to report back to the House I ask whether there would be any interest by the Minister to have reports presented all in one go. From the time of the first annual report back to a Minister—let us say 3 months after 31 December—to the potential last one which is 3 months after 30 June and is therefore 30 September one can see there is quite a long time between drinks—a long time between annual reports to the Minister. I would be interested in that explanation because I see that that provision is sitting alongside the 5-year review of the scheme in relation to the robustness of the regulations we are putting in place tonight. 
Finally I tell the Committee that clause 59 relates to the obligation to publish rules about any approved dispute resolution scheme. I understand that the wording of this clause comes from other legislation but something does not read quite correctly to me in subclause (b) which states that the rules must be published “on an Internet site in an electronic form that is publicly available (at all reasonable times).” Well first of all “on an Internet site” means that it is electronic; it cannot be anything but electronic. And I would just like to question what is meant by “at all reasonable times”. Reasonable time for one entity for the Minister or for the public can mean many different things. I fully realise that the common-sense test there is about being available all the time. The net is wide open somewhere 24/7 and back-up sites are available so most sites particularly for these financial services are cached somewhere and are available 24/7. It is not the availability on the Internet site that would be the problem; it would be a power cut or something like that. But the rules would still be available on a site somewhere in the world. That is just a little bit of a quirk and I wonder whether the Minister had thought about that or whether there had been any advice on that. Otherwise I will just leave it on the Table as something to consider. Thank you.  
CHRIS TREMAIN (National—Napier) 
: 
 I rise to continue where I left off previously which is on clause 6 “Application of Act”. I made the point when debating the Financial Advisers Bill about non-profit organisations and their exclusion now from the Act. New Zealanders will be interested to know that initially non-profit organisations’ budget services were part of a dragnet inclusion in the Financial Advisers Bill and there was a debate about whether they would be included in this Financial Service Providers (Registration and Dispute Resolution) Bill as well. Now we have reached the point where we have excluded them specifically which is good.  
That is a point that New Zealanders need to be careful of and it comes very much to the fore in terms of where National is at with its wider economic policy. Our five principal policies cover ongoing reduction in personal taxation a real focus on education looking at the line-by-line item of Government expenditure making sure there is value for money in everything that is delivered through the Government and investment in infrastructure to try to promote growth in our economy so that we can actually deliver additional services to the people of New Zealand on an ongoing basis. But a real driver for us is that fifth point around that sort of creeping bureaucracy that we see and that we so often are questioned about by people in New Zealand who say we talk about bureaucracy and its impact on New Zealanders but ask what we are actually talking about. What we are talking about is reflected in new paragraph (cd) of clause 6(2) which excludes from the Act non-profit organisations that provide free financial services. Initially they were included in the Financial Advisers Bill and were potentially part of this financial service providers bill. That meant that voluntary organisations providing free financial services around the country were going to be potentially included and would certainly be included in the Financial Advisers Bill with the raft of additional regulation that was going to be wrapped around them. That meant their members would have to become accredited registered and have ongoing professional development. There were all sorts of varying costs around doing that.  
We are not talking about people who are advising mums and dads who have earned $300000 and are looking to invest their life-savings for their retirement. We are talking about volunteers in our communities who are looking after those who have fallen on tough times and who maybe are on a benefit and have only a couple of hundred dollars a week to go on. Some of those people whom Mr Harawira was talking about earlier struggle with their budgets big time. They need some help. They need to know that $50 is going on clothing that $120 is going towards their rent or whatever and they need budget advice. The problem with this creeping regulation in clause 6(2)(cd) is that it has the potential to exclude many of those people and for them to walk away from providing those voluntary services. Quite frankly that is just crazy. We need those people in our community.  
Those members of the community who put their hand up day after day and who put in their own time do not expect one cent from the help they give. Sure they might not be qualified accountants they might not be qualified budget advisers but by heck do they deliver a service to our community! Every day they go out there; they have people come to them and those people value the service they receive. We cannot afford to let the legislation that we draft down here in Wellington bog down and capture these people in a dragnet wrap bureaucracy around them and wrap compliance costs around them to keep them out. It is very good that we have reached this point now. So non-profit organisations will be exempt from this legislation; they will not be wrapped up in it and that is good.  
I move on to Part 2 in terms of registration and the purpose of Part 2. It is to “establish a compulsory public register of financial service providers …”. A compulsory register will be developed. It will be an online register which is documented in Subpart 4 where it talks specifically about the register of service providers. Clauses 23 and 24 in particular deal with that. It will be an online service similar to the service run by the Companies Office and it will be run by the Ministry of Economic Development I understand. I am hoping that this service will be as straightforward as the online service provided for the registration of companies around the country. That service is world leading; I stand here and acknowledge that. The Companies Office online service for the provision of registration for companies is world leading and acknowledged as such. One can log on to that service very easily one can register one’s company directors and start-up capital and one can very quickly walk away with a company. It looks as though the Inland Revenue Department will now provide the department’s tax numbers together with that information as well.  
I just hope that the service for the online registration of financial service providers in this bill will be as efficient as the service provided by the Inland Revenue Department and that it can facilitate the easy provision of registration to make sure that we capture the necessary information.  
That is all I would say at this point in time Mr Chairman; thank you very much for this opportunity. 
The question was put that the amendments set out on Supplementary Order Paper 254 in the name of the Hon Lianne Dalziel and the following amendment in her name to clause 66 be agreed to: 
to omit from subclause (4) “subsection (3)(c)” and substitute “subsection (3A)(c)”. 
Amendments agreed to. 
Clauses 1 to 75 and schedules 1 and 2 as amended agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Financial Service Providers (Registration and Dispute Resolution) Bill be now read a third time 
. I am confident that this bill coupled with the two other bills we have passed over the last couple of weeks will increase confidence in the financial sector. They are all very timely instruments to provide that degree of support. I welcome in particular the availability of a register for financial service providers and also for all consumers having access to redress. These are mechanisms that will both result from this bill.  
Hon Clayton Cosgrove 
: It’ll help John Key—those transactions. 
Hon LIANNE DALZIEL 
: I understand that my colleague is chipping in on me from behind in order to make particular points and I am simply responding to him so that it is recorded in  
Hansard 
.  
Hon Clayton Cosgrove 
: Well what is Tranz Rail? 
Hon LIANNE DALZIEL 
: Well if I had that number of shares and could not remember whether I—anyway it does not matter; we will not go there.  
The provision of registration requirements enables a negative vet to occur in respect of people who are acting as financial service providers. I acknowledge the very passionate contribution from the Maori Party member Hone Harawira because I thought that his contribution picked up a very important aspect of this legislation that a lot of people have not quite recognised. It is that by requiring every financial service provider in this country to register we will be putting the spotlight on some people who do not want to have a spotlight shone upon them. I think that it is very important that we have this legislation in place in order to achieve that. That means that the loan sharks themselves will all have to line up to be registered but guess what? They will find out that if they turn up to be registered but are undischarged bankrupts; or are persons prohibited from being a director or a promoter of or concerned in the management of an incorporated or unincorporated body under the Companies Act the Securities Act the Securities Markets Act or the Takeovers Act; or are persons subject to a management banning order under one of those Acts or to an order under section 108 of the Credit Contracts and Consumer Finance Act; or have been convicted of an offence against sections of this particular legislation within the past 5 years; or have been convicted of basically a fraud or dishonesty offence under the Crimes Act within the past 5 years; or have been convicted of money-laundering offences or of an offence relating to the financing of terrorism; or are persons who are subject to a confiscation order under the Proceeds of Crime Act then those people will not be able to register as financial service providers. Although this legislation does not go as far as the fit and proper person test that will be required of people involved in non-bank deposit taking this is very good legislation in terms of providing some basic protection for those who may need that protection and we have heard about those people.  
I will also comment briefly about how important it will be to have access to redress mechanisms but in so doing I will acknowledge again the banking sector and the insurance and savings sector which have already established their own excellent mechanisms to support those sectors to adhere to codes of practice that enable consumers to have their complaints addressed. They have been extremely helpful to work with in developing this legislation and very supportive of it and now we will see consumer dispute resolution services available across the board. That provision will of course be handed over to my colleague the Hon Judith Tizard who unfortunately is not able to participate in this debate but as the Minister of Consumer Affairs it is right and proper that the provision relating to the implementation of the consumer dispute resolution services transfer to her.  
I would again like to acknowledge the officials. Again we have had tremendous support from the Ministry of Economic Development and in this particular instance the Ministry of Consumer Affairs as well. I will mention parliamentary counsel again too. Although the challenges were not quite as great with this bill as they were with the Financial Advisers Bill which was virtually a rewrite in this particular case the Parliamentary Counsel Office was again able to deliver to a very tight time frame. I want to again acknowledge the members of the Finance and Expenditure Committee for the work they have done and also the submitters for their very helpful contributions. There was no controversy surrounding this bill because everyone sees the sense in it. I am very grateful to have the opportunity to express my support to the Opposition for its assistance in this regard as well and I commend the bill to the House. 
CRAIG FOSS (National—Tukituki) 
: 
 This is the third reading and final chapter of a suite of bills: the Reserve Bank of New Zealand Amendment Bill (No 3) the Financial Advisers Bill which we dealt with this morning and this bill the Financial Service Providers (Registration and Dispute Resolution) Bill which has leapfrogged up the Order Paper for reasons we discussed earlier.  
I will pick up on what the Minister said in acknowledging all those who have pulled this bill together. I know we all worked on both financial bills as members of the select committee. It does disturb me just a tad that I do not think we had any speakers from the Labour side of the House who were on the select committee as we considered this bill. It is surprising and I wonder why but there is still time to hear from them. Obviously the Minister was going to speak on it but no members who saw the passage of this bill or listened to the hundreds of submissions on this bill and on the Financial Advisers Bill have spoken. If it is supposed to be a hallmark bill they are proud of I am amazed that they do not talk on it.  
I also note the acknowledgment of goodwill from all parties and particularly from my colleague Simon Power who has had an awful lot to do with the pulling together of this bill and the Financial Advisers Bill. Yes it has suffered a rewrite but at least we got quite good resolution towards the end. As I said earlier this bill always sat on the sidelines a wee bit—it was a bit like the bridesmaid—but it is not too bad in the form in which it has finally arrived in the House. National members have been voting for it all the way through since its first reading and again I acknowledge the cross-party support on this and other issues. I do not think it serves this Parliament very well when members chip in with little niggles and try to make political capital out of this bill given the goodwill that has gone in from all parties to make this bill happen and bring it to the state it is.  
The Minister raised a very good point. This bill brings some confidence back and once it is in place it will along with the other two bills bring some confidence into a sector that is sadly lacking confidence at the moment given the conditions overseas that have washed on to our shores and given some of the issues that have been created within New Zealand itself. I acknowledge that about $5 billion of New Zealand’s funds are frozen or in receivership at the moment in various companies but I reiterate that we have to distinguish between those that have suffered a market loss because market conditions have gone against the investment and those that have allegedly performed potentially illegal or misleading behaviour. Interestingly the kinds of issues that would come up in the disputes sector here would be when someone has given money to a particular institution under whatever prospectus it had at the time but then the company itself has deteriorated on the way through. The person concerned may have inquired about the well-being of that company from an adviser or taken advice that was the same as the original advice but in fact the particular company itself had deteriorated somewhat. That is a very good example there of the need for some kind of disputes resolution process.  
I also acknowledged earlier the foresightedness of not necessarily having to specify financial disputes resolution experts in the bill. I acknowledge that specifying just disputes resolution experts in the bill was very good. Also many existing organisations already follow best practice and best behaviour and have good and solid codes of practice and rightly the Minister acknowledged them. We do too. They are setting the example. Sadly as in so many things in life a few bad apples spoil the whole bunch for a whole sector. There are billions and billions of dollars in New Zealand that are invested and held in trust by various entities that are quite safe robust and fair.  
There is one interesting point that was referred to in one of the earlier speeches. The establishment of this register of all those involved in any financial advisory service in New Zealand forms part of the anti - money-laundering obligations under the Financial Action Task Force which the Minister alluded to in I think her first speech and possibly her second speech. But it is very very wide ranging almost a drift-net to catch each and every person or entity involved in giving some form of financial advice. I go back to my point about how the select committee on this bill and the Financial Advisers Bill spent many many hours with many officials trying to define what that meant. At first cut it sounds easy but when we actually get down to the nitty-gritty it is very difficult. We had examples of the travel agent which Mr Power alluded to earlier and about insurance and I alluded to the buying of foreign exchange when someone goes to a travel agent. Effectively in earlier examples they were deemed to be giving financial advice. But that has been cleared up by the previous bill and if there is a dispute this bill would pick that up under the various tiers.  
Again National has voted for this bill. We are quite confident that it will give some confidence to a very uncertain market. At the moment across the globe other institutions are doing similar work but at the end of the day what we do here is only as strong as regulation and our arrangements with other regulatory bodies overseas and in this very mobile world where capital can flow around all over the place the weakest link is our relationship with other organisations countries and institutions. On that note I do acknowledge work going on with the Minister of Revenue and the Minister of Finance in reviewing our various arrangements treaties pensions and tax arrangements with various entities around the world.  
On that note yes National will be voting for this bill. I have enjoyed speaking to it. I have learnt a lot and again I acknowledge officials the Minister and Mr Power for the way they have worked together to make this good legislation. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to take a brief call to summarise where we have got to and to let the public know that National fully supports the Financial Service Providers (Registration and Dispute Resolution) Bill. Firstly I acknowledge the Ministry of Economic Development and also the Ministry of Consumer Affairs and the efforts they have gone to throughout the consideration of the raft of legislation that has been put before the House. I think sometimes the work that officials do goes unrecognised. If we look in particular at the Financial Advisers Bill which was totally changed from clause 1 onwards we see that a heck of a lot of work had to be done in a very short space of time and the officials should be complimented on that. It was well done I say to them.  
I want to talk about the importance of the financial investment sector. So often we hear in this House the financial sector being slandered. People say those involved in the sector are all loan sharks and they are all trying to make an easy dollar. But without the financial sector we would have very little investment. If investment occurred only through equity then we would have way less business in this country—way less. What the financial sector allows us to do is to invest other people’s capital at a cost. The aim then is to go out and invest that capital in order to get a better return on it. That leverages up the economy and allows us to grow the economy in a way that we would otherwise not be able to do if we did not have the financial investment sector. Members of the New Zealand public need to understand that the sector is critical to growth in our economy. It is very important that we get behind the financial investment sector and not just send a message all the time to those involved in the sector that it is comprised of loan sharks and that they are all a pack of cadgers whom we should pack up and send to Australia. We need to have this sector in New Zealand and we need to have a strong sector.  
This bill together with the Reserve Bank of New Zealand Amendment Bill (No 3) and the Financial Advisers Bill puts in some tighter regulation around the sector to make sure that consumers are given a higher level of protection. But once again as I have said before we are never going to legislate against risk. The fact is that all investments whether they be with a savings bank or in property development carry different levels of risk. People generally understand that the higher the level of risk there is the higher the return will be and the greater the chance will be of losing one’s money. But the important thing is that people are made aware of that—that that information is disclosed to them up front so that they can make a decision based on material information and accurate information.  
We believe that the financial sector is critical to this economy. Getting in behind it and helping it to grow our economy our businesses and our property investment are what will drive economic growth and it is economic growth that allows our Treasurer whichever side of the House he or she sits on to take in a larger tax take to deliver additional services and to deliver the services that we want require and demand as a modern First World economy. It is a building block of our economy and something that we certainly support and we send a strong message to the industry that it is a very important part of this economy.  
In summary this legislation provides much tighter regulation around the financial investment sector and ensures that the disclosure of information is much better than it has been. I think all in all the three bills the Reserve Bank of New Zealand Amendment Bill (No 3) the Financial Advisers Bill and the bill that is before us tonight as a package help to do that. I think this bill will help to take us forward and to get us back on the horse and investing confidently in the economy in a way that can drive us out of the recession we are currently in. Thank you Mr Assistant Speaker. 
Bill read a third time. 
Business of the House 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave for Government orders of the day Nos 7 and 8 which are the third reading of the Te Roroa Claims Settlement Bill and the first reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill to be taken after the third reading of the Central North Island Forests Land Collective Settlement Bill on Thursday morning. I indicated at the Business Committee on Tuesday afternoon that this would likely be the case if we had reached this point on the Order Paper by this stage. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I want to clarify that. So what we are looking to do is to take the next two items on the Order Paper and move them forward to Thursday? Is that correct? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Yes. We will have the first reading of the Education Amendment Bill (No 3) now and then we will proceed to the first reading of the Government Superannuation Fund Amendment Bill. If time allows we will then go to the first reading of the Electricity (Continuance of Supply) Amendment Bill the continuation of the Committee stage of the Walking Access Bill and then sometime early tomorrow morning we will proceed to the third reading of the Affiliate Te Arawa Iwi and Hapu Claims Settlement Bill the third reading of the Central North Island Forests Land Collective Settlement Bill and the third reading of the Te Roroa Claims Settlement Bill. Then we will proceed to the first reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill and if time allows before valedictories the introduction and first reading of the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Bill. We will deal with the settlement bills in sequence at the one time. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: So we will move to Government order of the day No. 6 now. 
CHRIS TREMAIN (Junior Whip—National) 
: 
 I have one other point for clarification. This was agreed at the Business Committee? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I think it is fair to say that it was agreed. I gave this indication and at the time nobody dissented from that course being followed. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is none. 
Education Amendment Bill (No 3) 
First Reading 
Hon CHRIS CARTER (Minister of Education) 
: 
 I move  
That the Education Amendment Bill (No 3) be now read a first time. 
 At the appropriate time I intend to move that the Education Amendment Bill (No 3) be considered by the Education and Science Committee. This bill does two important things. It implements a number of policy changes to improve accountability for student attendance and engagement at school and to make early childhood education services and schools safer for children and students.  
The Government wants to support young people to stay in school complete their qualifications and identify the opportunities available to them once they leave school. This bill underpins this focus by making school responsibilities for managing student attendance more explicit. It sets out the minimum steps that a school board of trustees must ensure are taken to ensure school attendance including taking action when students are absent without reason or justification. More and more schools are searching for opportunities to provide individual learning programmes for their students and to link them with potential destinations beyond school. The $40 million Schools Plus package announced by the Prime Minister at Massey High School last week enables schools to offer new options for secondary students in 2009 with further decisions to be announced next year as we further develop Schools Plus. The bill also ensures that students get good guidance on career choices and pathways. Students will stay at school until at least the age of 16 and boards of trustees will get greater clarity about their roles and responsibilities.  
The bill also strengthens students’ safety in early childhood education services and schools. New measures will improve and streamline the current provisions for police vetting of all non-teaching staff contractors and volunteers who may have unsupervised access to children as part of their role. We are also taking the opportunity to reduce the compliance burden on early childhood services and schools so instead of applying through the New Zealand Teachers Council for a police vet early childhood education services and schools will directly apply to the New Zealand Police. The bill also provides for information matching between the Ministry of Education and the New Zealand Teachers Council to identify those who are teaching in schools without registration and for the Teachers Council Disciplinary Tribunal to suspend teachers for more than the current limit of 3 months if needed where potential serious misconduct is being investigated while the matter is being resolved.  
Other amendments in the Education Amendment Bill (No 3) will enhance the effective governance of schools. The timing of boards of trustees elections will be moved from term one which is the busiest time of the year for schools to later in the year. Establishment boards will be allowed to establish more than one new school and the education Minister will have greater discretion to approve alternative constitutions for school boards. Several other measures in the bill are of a remedial nature and correct a number of unintended consequences of the current law including the retrospective validation following an imperfect change of proprietor in an integrated school and removing the need for an Order in Council to authorise the continuing payment of teachers’ salaries through the central resourcing system. Finally the bill introduces a small number of technical and minor remedial amendments. These include clarifying certain definitions validating Crown payments to integrated schools and correcting drafting errors.  
Taken together the measures contained in the bill serve to strengthen the education system so it can better respond to the different learning aspirations of students and better support improved educational outcomes for all of our students. I commend the first reading of the Education Amendment Bill (No 3) to the House. 
ANNE TOLLEY (National—East Coast) 
: 
 I rise to speak on behalf of National to the Education Amendment Bill (No 3). I read in the general policy statement of the explanatory note of the bill which the Minister of Education Chris Carter has just spoken to that the purpose of the bill is “to enhance student safety in both the early childhood and compulsory sectors; and improve accountability for student attendance and engagement …”. The last sentence of that general policy statement states: “These changes will help to modernise and improve education legislation.” If that is the case it is a very dark day for education in this country as we know it. It is a very dark day because typically the current Minister has over-inflated exactly what this bill will do. 
This bill has no vision whatsoever for education in the 21st century. There is no substance to this bill but a whole lot of rules and regulations. It reflects a socialist agenda reaching out to claw back control from schools and communities and to put in place central control over how our schools are run. In the last week of Parliament we get a bill on education and like the Minister the bill is going nowhere. National is not supporting this Education Amendment Bill (No 3) as introduced to the House. 
The Minister stood in this House and said he and Labour want to support young people in school to gain skills and to learn. But the bill and this reheated policy called Schools Plus—which is actually all about the 2002 Mayors Task Force for Jobs policy which has been pumped up and given a catchy new name—show that this Government has no idea about how to keep and support young people in school so that they can develop some skills and get some qualifications. The bill shows that the Government really does not know what to do. Instead of the Government putting some real support behind the many principals out there who are doing amazing innovative things with kids who are enthusiastic dedicated and what is more very successful despite the meagre resources that this Government is making available to them and instead of the Government getting in behind those principals and asking what it can do to help them keep those kids in schools what do we have? We have a bill that is full of rules and regulations telling those principals exactly what they can do but more important what they cannot do. That is Labour’s answer to everything. 
So let us look at what the bill is all about. We have police vetting. That has been dressed up as trying to keep our kids safe in the school environment and we all want to do that. But because this bill has been rushed into the House without any consultation to show that this Minister who has done nothing for 12 months has finally got off his chuff and done something— 
Hon Shane Jones 
: Widely supported. 
ANNE TOLLEY 
: By whom? Here is a press release from the New Zealand Playcentre Federation that states that 11000 volunteers at playcentres alone would need to be checked. We know that the Labour Party does not care about the parents of playcentre kids because it would not even include them in its 20 hours early childhood education policy. It would not even include them in that. It does not think that parents who take their kids to playcentre are worth supporting—[ 
Interruption 
] 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Politics as we all know is the art of the possible and the possible we will explore today is good order. I refer the colleagues on my right to Speakers’ ruling 57/3. 
ANNE TOLLEY 
: The Playcentre Federation has stated that its whole existence is placed at jeopardy by this bill because of the very rushed nature and non-consultative manner in which it was brought to the House. This is a draconian set of regulations. The New Zealand Educational Institute—a great favourite with this Labour Government—is also concerned that the measures being introduced to Parliament regarding police vetting could seriously impact on community and family involvement in schools and centres. So we have a draconian set of rules and regulations that will change the very nature of parental involvement with children’s education at a time when the Government is saying it wants to do all it can to support students to stay in school to gain more skills and to learn more. 
The information-matching programme is the piece of the legislation that we have all been waiting for for 12 months. I was on the Education and Science Committee and I know that the Teachers Council has been asking for this legislation for more than a year. The Minister promised that it was coming. We simply do not know how many unregistered and unauthorised teachers are out there in our classrooms around the country. Why is that important? Well it is important because there is such a shortage of teachers. In fact last year more teachers left their profession than had done over the last few years. Teachers are leaving their profession in droves. Schools are really strapped to get replacement teachers and they are being forced to take teachers who may not be registered or authorised. So data matching is the important piece of this legislation and it should have come to the House well over 12 months ago. 
Let us talk about early-leaving exemptions. Two years ago anyone could leave. It was easy to get an early-leaving exemption. A bit of heat is put on the Government it goes right the other way and it is now getting rid of all leaving exemptions. What a load of rubbish! There has been absolutely no consultation with schools. Principals up and down the country are saying: “What! Where did this come from?”. The Secondary Principals Association president Peter Gall said that some pupils who have been exempted from school have mental health problems but most were “chronic truants whose fit with school just wasn’t right.” We in the National Party understand. We understand like most Kiwis out there that for some students—just a small number of them—alternative non-school options meet their needs better. Those alternatives meet not just the needs of those individuals but also the needs of the rest of their classmates and the teachers whom they share their classrooms with. So not putting in place early-leaving exemptions is a complete flip-flop by this Government and it will have quite perverse outcomes from those that it wants to achieve. 
I have here a letter that my colleague the Hon Bill English received from the parent of a child. That parent was trying to get an early-leaving exemption for his daughter to leave high school to begin a hairdressing apprenticeship in January 2009 when she will be 15¾ years old. She is a good student does not have any problems at school and therefore does not fit the current criteria for an exemption. If the bill comes into place she will not be able to leave at all until she is 16. How ridiculous it is to stop a child from leaving school to take up an apprenticeship for hairdressing which will give her a good career. Under the current criteria she cannot get an early-leaving exemption but we can appeal to the Minister for an exemption; under this legislation she will not be able to leave at all. That just does not make sense. 
That brings me finally to the legislation around what boards of trustees can and cannot do. Why on earth do we have to put that into legislation? The Tomorrow’s Schools programme has now been working for 18 years. It has been working without any legislative detail on what the responsibilities of a board are. The Education Review Office considers that 60 percent of boards are governing well and that only 7 percent are struggling to achieve good governance. Where is the rationale for suddenly putting into legislation the requirements of a board of trustees? I am talking about the requirements around what boards can do what they must do what they are allowed to do and what they can ask the Minister or Cabinet for permission to do. 
I suspect that this is not actually about boards of trustees. It is the dark hand of socialism reaching into schools and saying that Tomorrow’s Schools gave too much power to communities; it gave too much power to parents to decide what was right for their children in terms of their children’s education in their children’s schools. This legislation is reaching out to pull that back because this Government believes that only it and the Ministry of Education here in Wellington know what is right for those children. I am reminded of  
Yes Minister  
and that magnificent saying that the Government knows best. That sums up what this Labour Government is about. It cannot trust parents. It cannot trust communities. The Government knows best. 
DAIL JONES (NZ First) 
: 
 I have read the Education Amendment Bill (No 3) and I can say that the speech that Anne Tolley has just given bears no relationship to what is actually in the bill. The member created a speech and she has been determined to give it come what may at some stage during the latter part of this year. Tonight seemed to be the time to do it. But what she has just said has no relationship to what is in the bill. I am absolutely astonished that the National Party is prepared to allow people who are not vetted to have unsupervised access to young and little children. That is what this member would allow to happen by opposing this bill.  
This bill is about the safety of children under 5—student safety in the early childhood and compulsory sectors—and the vetting of the people in charge of those children. The National Party says that anyone can be in charge of those children regardless of what his or her criminal record may be. Essentially Anne Tolley is saying that she is not interested in the criminal record of someone who is in charge of a child under 5. She is voting against legislation that says that Parliament wants to make sure people supervising young children are vetted by the police. Surely that is a fundamental point. We do it in every other area of the community; why should we not do it for the early childhood sector?  
Of course the issue in respect of playcentres has to be considered carefully. They have been around for a long time. We know the care and concern that parents have for children in playcentres. But the situation today in New Zealand is unsatisfactory. People with criminal records get involved in these areas for one unsavoury reason and the National Party is opposing legislation that will ensure that there can be vetting of these people. I really do not believe it but I guess I have to. That is the level to which the National Party has reduced itself today.  
On the question of accountability for student attendance and engagement in the compulsory sector Anne Tolley goes on and on about truancy levels in schools and this bill makes a slight adjustment and improvement in this area yet that National Party member who is asking for something like this to happen opposes it now that it is happening even though in a minor way. How can we win with some people? 
Hone Harawira 
: You can’t. 
DAIL JONES 
: I agree with Mr Harawira. Gosh we have agreed for once! It is good to see that I can agree with Mr Harawira from the Maori Party. I say to Mr Harawira that we have to watch this as people might start talking. 
Hone Harawira 
: No chance! 
DAIL JONES 
: Ha ha!  
This bill makes largely technical amendments. We have just heard a dramatic speech from Anne Tolley about socialism in the administration of school boards. Clearly she has never read the Education Act 1989 or the provisions with regard to boards of trustees. She has never read the schedule of the Act that sets out the controls and the constitutions for boards of trustees how elections are to be held and suchlike. They are extensive. On occasions I as a lawyer have helped school boards of trustees with administering elections and suchlike. All those provisions are there already. This bill gives an option as to how that type of control can be exercised. It increases the opportunities that a school has as to the way in which the existing measures can be carried out. It does not reduce the options; it increases them. It gives more possibilities to a board of trustees in terms of how it can carry out some of its requirements. The bill does not limit the boards; it increases the opportunities they have.  
I have one question to ask the National Party. We have this bill. What is the National Party’s policy on education? 
Anne Tolley 
: You’ll see. 
DAIL JONES 
: The National spokesperson on education says we will see. Well we are just over a month out from the election yet the National Party still does not have a policy on education. How can the National Party be critical of anyone else’s policy when it does not have a policy of its own other than to oppose simple legislation of a technical nature? Just because the legislation was introduced by Labour the National spokesperson believes that it has to be wrong and she has given a speech that has no relationship to this bill whatsoever.  
I would have loved to see a bill introduced that introduces a non-repayable student allowance—a universal student allowance which is New Zealand First policy—but of course that might have forced the National Party to say whether it had a policy on that. As we know it does not support a universal student allowance. That is just an aside and I must move on.  
As I see it this bill is straightforward legislation. It deals with various administrative matters. There is nothing awesome about it other than the need to protect our children. For example clause 26 inserts new section 78C “Police vetting of persons with unsupervised access to students at school”. I want police vetting of people with unsupervised access to students at school. National does not want that; National is quite happy for there to be no vetting of persons with unsupervised access to students at school. New sections 78CA to 78CC set out when a police vet must be obtained they set out procedures relating to police vets and they also provide for an exemption. Some vetting-exempted agencies are identified by a  
Gazette 
 notice. So it is a very broad-ranging bill in that respect.  
I am absolutely staggered that National is moving away from a strong law and order policy. We saw that in the Law and Order Committee in respect of legislation relating to Wanganui and tattoos the Wanganui District Council (Prohibition of Gang Insignia) Bill. We saw that National members did not support the Wanganui District Council. We know that National is weak on law and order and that has been confirmed yet again tonight.  
The bill also provides technical amendments with regard to the matching of register information and information about payment of teachers’ salaries at payrolled schools. How can one possibly oppose legislation as technical as that? If there is a drafting error it will be picked up by the Education and Science Committee and we will consider what it says. The National Party wants to oppose a bill that includes the matching of register information and information about payment of teachers’ salaries at payrolled schools. I would have thought that those provisions would improve the situation of the teaching profession. New Zealand First wants the standards and conditions of the teaching profession to improve. The National Party obviously does not want the standards and conditions of the teaching profession to improve. That is why it is opposing this legislation.  
The bill also includes in clauses 50 to 53 provisions regarding the duration of interim suspension investigations by a complaints assessment committee of reports of convictions complaints about competence and the requirement that the Teachers Council must coordinate police vetting. What is controversial or difficult about this legislation? National even opposes a provision relating to the transfer of land.  
This is straightforward legislation largely of a technical nature. It ensures the protection of young people who are in a situation where there is unsupervised access to them which is clearly defined in clause 77 “Interpretation”. The definition of “vetting-exempted agency” is set out there and I am sure the Education and Science Committee when it considers this legislation will have no difficulty working with Playcentre to make sure that its concerns are well noted that steps are taken to make sure that the children concerned are always supervised and that any problems with regard to unsupervised access are taken care of.  
I understand that one of the worst paedophile cases reported was a case involving not a parent but a gardener who was working around a playcentre area. He was the paedophile. We must make sure that that sort of thing does not happen again and we must make sure that unsafe people who are involved in an unsupervised access situation are caught at an early stage.  
New Zealand First has no difficulty supporting the welfare the benefits and the protection of children under 5 and we will be supporting this bill. I am absolutely staggered that a contrary view could be taken by any party in this House. 
ALLAN PEACHEY (National—Tamaki) 
: 
 Well here it is—the Education Amendment Bill (No 3). That is all the Government has to show for 9 years in office three Ministers and goodness knows how many Associate Ministers. In the last days of this Parliament and in the dying days of that Government it has dropped this bill under urgency into the House. That alone is good enough reason to oppose the bill and I say the National Party does oppose it.  
I assume that what we heard from New Zealand First’s Mr Jones was his final address in the House. I wish he had told us that earlier; we could have got a bit of a muster for him. But I hope that he will go back read his  
Hansard 
 and just reflect a little on some of the things he actually said. You see one of the problems with this bill is that it is typical of the Labour Government. It looks back—it looks back. It in no way looks forward to what will be the critical issues in New Zealand education.  
Hon Shane Jones 
: But you don’t know them. 
ALLAN PEACHEY 
: Well the list member Mr Jones has been shouting a lot tonight— 
Hone Harawira 
: Shane! 
ALLAN PEACHEY 
: —oh yes; I would not want him to be confused with my friend from New Zealand First—but he needs to reflect on one thing. I am a bit of a fan of Gilbert and Sullivan operettas and I can see in  
Trial by Jury 
 
a role for Mr Jones. He could be just slipped in there somewhere as the clown or the fool wandering around looking under chairs looking at benches and seeking high office. That is Mr Shane Jones.  
I want to talk a little about teacher registration and the registration provisions of this bill because as I have said it is very backward looking. This bill tidies up the results of the misadministration of the Government but it is very important that this House is under no illusions as to what teacher registration means. I ask members not to confuse it please with teacher competence. It is easy to say we have a great registration system and all the rest of it but that does not equate to having teacher competence. 
Hon Clayton Cosgrove 
: Why isn’t this member the education spokesperson? 
ALLAN PEACHEY 
: The members opposite who are challenging me need to just reflect on that. They can go to any number of Education Review Office reports on schools and they will find statements like “Some teachers in this school”—or “Several teachers in this school”—“do not teach the New Zealand curriculum properly.” or “They are do not know how to maintain correct relationships in classrooms.” That is in report after report from the Education Review Office. But when somebody like myself asks the next question: “Are the teachers to whom the Education Review Office is drawing attention registered?” the answer is always yes. 
Hon Darren Hughes 
: How’s Selwyn College? 
ALLAN PEACHEY 
: Oh Selwyn College will do very very well because the people of Tamaki have a member of Parliament who is prepared to stand up for children. Frankly if some of the members opposite had the same sort of integrity that I have and put the interests of children first a lot of New Zealand children would be getting a better education. I will defend the actions I have taken towards Selwyn College before anybody at any time and I would welcome a debate with the Labour Party about what constitutes a good school.  
I was talking about teacher registration. Many people in the education sector will tell us that the current teacher registration system actually gets in the way of the sort of professional standards that teachers need to be developing in order to have fulfilling successful careers in the 21st century.  
I move now to the truancy provisions in this bill. You know those provisions are a classic example of the Labour Government’s policy towards education over 9 years. What has it done with regard to truancy? It has spent a heap of money— 
Anne Tolley 
: But not very well. 
ALLAN PEACHEY 
: —but not well—and employed a whole new pile of administrative structures again not very well and now that this Government is in its dying days as a Government it has finally occurred to it that even with that expense that waste of billions of dollars none of that has worked. So what has it done? Have Government members gone back and looked at themselves and looked at how they have caused this situation? Have they acknowledged at long last the failure of their approach: building huge bureaucracies and giving people cars to drive around in clipboards and a sense of importance? It is now clear that that approach has not worked. We need just to go to South Auckland and talk to some of the people in the ministry there and they will tell us that approach is not working and why it is not working.  
So what has the Government done? It has landed on boards of trustees on principals and on teachers. That is what it has done. There has been much more work for schools to do and much more money to be expended all because the Government has failed in terms of the bureaucracies it has set up to deal with truancy. Schools were actually doing pretty well in the 1990s with regard to issues like truancy. They were doing pretty well. Truancy is much much worse now than it has ever been because of the way that the Labour Government has handled it. And what is its answer now? You see again this is classic socialist educational policy: find another reason to blame teachers principals and boards. It is classic socialist educational policy. In the last— 
Hon Clayton Cosgrove 
: Let it all out! 
ALLAN PEACHEY 
: Mr Cosgrove has a lot to say tonight. Am I to assume that he will not be giving a valedictory statement tomorrow and this is it? We do not think that he will be back. 
Hon Clayton Cosgrove 
: I’ll see you out Grandad. 
ALLAN PEACHEY 
: Well I tell Mr Cosgrove that we will see—we shall see.  
I will finish with reference to the special education provision here. Although I welcome the acknowledgment of the role of special schools I have to ask the questions: “Why has it taken 9 years?” and “What about the real issue for special schools in this country?” which is the need for them to expand their capability their ability to work on a broader front with the least fortunate of our children. Again that is just another example of this Government— 
Hon Clayton Cosgrove 
: Come on Grandad wind it up. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Repeated reference to a member’s age is out of order; I refer to Speaker’s ruling 38/7. 
ALLAN PEACHEY 
: I am not offended by references to my age because I know that unlike the younger members opposite I have actually achieved something in life. I came to Parliament after I had succeeded in life not instead of succeeding in life.  
I will finish on the point that the capability of our special schools is what people who are looking forward are looking at. But here we have one more example of looking backwards. The National Party will not support this bill; we have very very good reason for not supporting it. I do not believe that it will proceed beyond its first reading. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou e te Whare. The news that broke this morning could not have been more timely when thinking about the first reading of this Education Amendment Bill (No 3). The nation woke to the news that a police officer ended up hospitalised after a mass brawl between pupils of two Hastings schools. It was not just a playground fight. Hell no we are talking about an all-in brawl involving it is said up to 200 pupils aged between 13 and 15 years old. It has been suggested that the fight had been organised via a text message and it quickly steamrolled from there.  
This incident left two officers injured according to the newspapers six students aged between 13 and 15 years old being arrested and charged with disorderly behaviour likely to cause violence and a 14-year-old appearing before the Youth Court today charged with assault. The issues of student safety therefore are clearly uppermost in our minds. The issue of student to student violence however is not identified in the scope of the bill. The matters of safety in this legislation are focused on non-teaching staff contractors and volunteers who may have unsupervised access to children. Students are clearly missing from the list and if this morning’s incident is of any value it may be to ensure that when we talk about safe environments we make the effort to ensure all are encompassed within this brief.  
The bill has a broad focus of enhancing student safety in both the early childhood and compulsory sectors. Measures will be introduced to require police vetting of all people who have unsupervised access to children during the opening hours of early childhood centres and schools. The bill identifies a number of helpful scenarios that show how the regulations will work. A parent who coaches swimming or supervises reading in the school library with no other staff present will be affected by the legislation but whanau members who go on a camp who drive the kids to a school trip or who supervise students with teachers present will not be affected. There seems to be a comprehensive consultation list included in the bill which we were pleased to see including the education sector union and Te Kohanga Reo National Trust. Although these groups were consulted on the statement we believe the select committee hearings on this bill will be crucial in terms of testing that this bill has the balance right.  
I ask whether students themselves should be included in the legislation and whether volunteers will withdraw their services wanting to avoid what Playcentre New Zealand president Marion Pilkington called “the indignity and stigma of a police check.” I ask whether the additional checks will discourage the community from becoming involved in the life of the school and whether it will create a culture of mistrust or alternatively whether the changes will make parents feel more confident that their child is under safe supervision. We will look forward to hearing the responses of whanau members volunteers educationalists education professionals managers and all of those experts in the education sector who care for the well-being of our tamariki of our children.  
The quality of care is an issue that we in the Maori Party are particularly interested in where the amendments in the bill look to improve accountability for student attendance and engagement in the compulsory sector. We are interested in the intention to ensure students receive good counselling and guidance to assist them in determining career choices and pathways. This is a matter we wholeheartedly endorse in the Maori Party.  
We want to make sure that our young people make good decisions about tertiary study or industry training and that they know the financial impact of the choices they make but we are unsure that simply amending the principals’ existing duties regarding guidance counselling is all that it will take. Legislative changes are all well and good but what schools are screaming out for is actual resources and pragmatic investment that will make the difference. It is our policy intention that to improve the choices our young people make Career Services should be moved to the Ministry of Social Development to work alongside the Ministry of Youth Development Work and Income and StudyLink to collectively support the choices young people make. Similarly with the overarching concerns that relate to attendance and engagement the Maori Party from day one of this Parliament has brought to the fore the crucial need to reward school success and innovation in reducing underachievement and disengagement. In fact one of my first contributions to the Education and Science Committee was setting up the inquiry into making the schooling system work for every child.  
The report on that inquiry which was tabled in the House in February of this year revealed data from the Education Review Office that only 44 percent of schools had evidence of improved learning outcomes amongst their Maori students over time. We explored alternative models for Maori education that were benefiting Maori students including kura kaupapa Maori Maori boarding schools designated character schools and programmes such as Tu Toa which uses sport and tikanga Maori as a catalyst to improve learning. In fact a key recommendation in the report was that the schooling system should support worthwhile programmes outside the general stream for Maori.  
It is disappointing that in this bill the focus on improving engagement in the compulsory sector appears to ignore the recommendations of the select committee report instead focusing on technical amendments to monitor absences or repealing the enrolment exemptions. Although contacting parents and following up on absences is useful it still does not do anything to address the large-scale system failure to excite and engage students in ways that will engage them and encourage them to stay at school.  
Another group of amendments in the bill to identify whether teachers are teaching without a current practicing certificate or whether schools are illegally employing teachers is also a bit of a concern. The amendments are introduced to ensure the ministry can keep accurate registration information and that the Teachers Council is able to keep up with current authorisations. Now that is all well and good but again I ask whether the technical amendment is the most important variable in determining the quality of the teachers we put in front of our children. If we want to invest in the future of our nation we must ensure our teachers are culturally competent and professionally capable to inspire our tamariki to a love of learning.  
This same emphasis on technical accuracy carries through to the amendments proposed for school boards of trustees. The bill proposes minor amendments to do such things as repeal the requirement for a board to hold an election of trustees on the second Tuesday of May for goodness’ sake. This is hardly the major issue for my constituents. When they talk about boards of trustees their concern is not to do with the second Tuesday in May or the third Friday in June. Their focus is on wanting to ensure that schools are accountable as essentially community-based organisations. The Maori Party believes the public needs to be provided with much better information on school performance particularly for Maori and Pacific Island student achievement. We want to ensure that boards of trustees are held accountable for Maori achievement that Education Review Office reports are made available to whanau hapu and iwi and that schools must disclose achievement statistics to all of their whanau and community. That would surely have all schools lift their standards in their education of Maori and Pacific Island students but as we in the Maori Party constantly say what is good for Maori will be good for the nation.  
We will support this bill as it is a doorway to other important issues that must be discussed if we truly care for the learning outcomes of the next generation.  
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak to the first reading of the Education Amendment Bill (No 3) a bill that my New Zealand First colleague described as largely technical. I take exception to that. It actually has a large amount of quite substantial policy change in it. United Future is happy to support this first reading because we think the content of the bill traverses a number of issues that should be considered. However I have to signal that we are unconvinced by some of the solutions this bill seeks to provide. We would like to see some work done on those by the Education and Science Committee and we hope the bill will return to the House with some of those issues resolved. We feel strongly enough about them to say that if they are not changed we may have to reconsider our position on the bill.  
Let us look at some of our concerns. The first part of the bill talks about introducing improved police vetting to keep both early childhood and compulsory sector educational facilities safer. Now that sounds very good. However I have already received as I think many members will have letters from Playcentre New Zealand and other groups that have read the wording of this provision and remain unconvinced that it will not be an onerous provision on them. Playcentres that pride themselves on their open-door policy and their open invitation to parents and extended family members to be part of their child’s education may well be disadvantaged if we are not clear that this bill does not capture them in some way. The information-matching provisions will help the Teachers Council make sure that only registered teachers holding current practice certificates are able to teach in our schools. We think this is a good thing and United Future is largely happy with those provisions.  
Around the issues of accountability for student attendance and engagement in compulsory education we are open-minded about the provisions to clarify the steps a school board of trustees must take when a student is absent without explanation and also to clarify the principal’s responsibility to ensure students get the guidance and counselling they may need if they are going through a difficult time before jumping to exclude children or stand them down for a period. We have some question marks around repealing the ability of the Secretary for Education to provide enrolment exemptions for 15-year-old students. We would like to know more about that provision and we will be very interested to see what submitters say to the select committee about this and how it fits into the Government’s announced policy of Schools Plus. Anne Tolley read out a letter about a young girl about to turn 16 who had the opportunity to take up an apprenticeship. If that fits in with what the bill talks about when it refers to valuing offsite experience as a key criterion to be considered by a board and if obtaining things such as work experience counts then it may be OK but we are really unclear at this stage as to whether this provision will not limit the opportunities for some students in a way that could be unhelpful.  
The other thing we find interesting is that any focus on middle schooling seems to be absent from this section of the bill. One of the problems United Future has focused on is that if we look evidentially at when a student is going to disconnect from schooling lose interest and possibly become truant it is often in those emerging adolescent years—years 7 to 10—when students particularly when they reach secondary school are not coping well with 50-minute periods swapping around and a reduced level of pastoral care from what they were receiving in the primary sector. It can be just too much for some students. We certainly support some of the educationalists’ thinking about middle school students: the need to provide a lot more pastoral care within the high school system and to invest in those students so that fewer of them are disconnecting in the first place. We would love to see whether any submissions are received on this.  
On the matter of school boards of trustees we are unclear as to why there is any advantage to moving away from a set date towards a more flexible arrangement whereby the Minister can determine the date of the election. Maybe there are some benefits that we are unaware of but it seems a little unusual. However we are open to being persuaded on that. The amendment in relation to the New Zealand Qualifications Authority is a technical amendment to include private schools in the definition of schools that are eligible to be accredited by the New Zealand Qualifications Authority.  
However this week United Future has raised an additional concern that we think could fall within the brief of this bill and we would love the select committee to consider it. Currently the New Zealand Qualifications Authority is not required to accept National Certificate of Educational Achievement (NCEA) marks from high schools if the students’ parents have not paid the New Zealand Qualifications Authority fee. It is also unclear whether schools are obliged to hold on to a school leaver’s marks in the hope that somebody will then pay the fee so that the marks can be sent on; and if they are required to hold on to those marks for how long. The real risk right now in New Zealand is that there could be literally hundreds and hundreds of New Zealand students who have completed 2 or 3 years of NCEA and because their parents were unable or unwilling to make that payment those marks could literally be lost within a short time after they have left school.  
We would like to call on the select committee and the Government to consider making it an absolute requirement that all marks are passed on to the New Zealand Qualifications Authority and stored there and if it then chooses not to release those marks officially to students who have not paid their fees that could be another consideration. But at least let us make sure that all achievement marks—all unit standards that have been achieved by students—are recorded and held in trust for that student so that he or she can have access to them when that student needs to apply for jobs or for tertiary education. Beyond that if the New Zealand Qualifications Authority is not going to be required to do this then the Government needs to give some very clear guidelines to secondary schools as to how long they are to hold on to the information and even to resource those schools with the storage capacity to hold on to those marks for so many years before they in the end disappear into the ether.  
The third consideration that United Future would like the select committee to consider on this matter is whether there need to be some flexible payment options for students who want to move on to tertiary education. Could the $75 owed by a student to the New Zealand Qualifications Authority be lumped on to his or her tertiary student bill so that it could be paid with that? Could for instance Work and Income be allowed to manage the debt on behalf of such students and subtract it from their parents’ benefit as it does with other debts or are those students allowed to have access to their marks and pay off the bill themselves once they get employment? We think that this is a serious problem and when we talk about the tail of underachievement coming out of New Zealand schools part of that tail could well be hundreds of students who did get some NCEA units have got some qualifications but actually have no way of proving that because the New Zealand Qualifications Authority does not have those marks on record and is unwilling to receive them. United Future would love to see that problem be addressed. We consider it to be a lot more important and a much more urgent need than merely changing the definition of those who are eligible to be accredited by the New Zealand Qualifications Authority.  
We are very happy to support the first reading of this bill but there are some serious things we want to see fixed if we are to support it beyond the first reading. 
METIRIA TUREI (Green) 
: 
 I want to take a very short call on this bill the Education Amendment Bill (No 3). The Greens will be supporting its referral to a select committee and I note that the select committee will not be considering it until after the election so there is some time for its clauses to be looked at by the community and by politicians in the meantime.  
The big issue that has arisen for me has been in relation to playcentres and the issues of supervision and police vetting. I understand that this is a very serious concern for playcentres and I think they are right to be concerned. In our view we do need to look very carefully at balancing the concerns about the impact on playcentres and other centres of police vetting—the costs and the difficulty for especially volunteer activity in these centres—against the needs of children to be safe. It is something we need to look at very seriously at the select committee. I do think the select committee needs to address the issues which is why we are supporting the bill.  
There are a lot of other issues in the bill that we are concerned about but we are concerned about this issue in particular. I support the New Zealand Playcentre Federation in its lobbying of politicians on the issue. We know that it is a serious concern for that organisation. I think there is an interesting discussion about the definition of “unsupervised access to children” in the bill and in time the select committee will need to look at what that means.  
I want to acknowledge the Green Party’s support for the legislation as well as Playcentre and its very real concerns about the bill and I want to send the message that the Greens will be taking this issue very seriously. 
PAULA BENNETT (National) 
: 
 To my mind the best way to describe the Education Amendment Bill (No 3) is that it is the good the bad and the ugly and one starts with the good. The good in the bill has to be around the information-matching programme and the fact that we are finally getting to a stage where the Ministry of Education is talking to the Teachers Council. I have been on the Education and Science Committee for about 20 months now and I was absolutely astounded to hear that the Teachers Council teachers register was not in sync with the Ministry of Education’s register. That meant that teachers who were not registered were able to teach in schools and actually say that they were registered; when their registration was suspended obviously the Ministry of Education and the Teachers Council registers were not matching up. 
The good part of this bill has to be that finally after a long period of time changes are being made. Certainly in the time I was on the select committee I was astounded to hear from the officials that this sort of stuff was happening. The matter arose over a really serious issue: a teacher had been teaching in a school and there had been some inappropriate behaviour and it turned out that the teacher was not registered. But no one actually knew; none of the matching that was needed was going on. So if we were looking for the good in this bill then that would certainly be a small element of what we think is necessary and what we actually need to do. 
We then move to the bad—some of this stuff is just incredible. Really by reading this bill we are getting the sense that this is not currently happening in schools and that the only way the current Government has to make it happen is yet again to just legislate—legislate legislate and overlegislate. 
I want to give those who might be reading this debate later or listening to it a little example of what this bill proposes to do. The explanatory note states that the bill is “designed to improve accountability by—specifying the minimum steps that a school board of trustees must ensure are taken in situations of unexplained or unjustified student absence.” Are we saying that right now school boards of trustees and their principals are not stepping up when children are absent from school for an unexplained reason and are not doing something about it? Instead we should actually talk to those schools and identify where these pretty major problems are. If parents principals teachers and boards of trustees are not addressing truancy and problems with children being away we actually have more of an issue than a provision in this bill. The only way this Government has to address it is to put it in legislation and cross its fingers quite frankly. 
Anne Tolley 
: Put another rule in. 
PAULA BENNETT 
: It puts another piece of legislation in; it puts another law in place instead of actually addressing what is a very big problem and something that is critical. If it is not a critical part of the jobs of principals teachers and boards of trustees to make sure the children are at school then quite frankly this provision is just a waste of time. 
Another method listed in the explanatory note is: “amending the principal’s existing duty to ensure students get good guidance and counselling …”. Do we really need legislation to ensure that that sort of stuff is happening in our schools? We do not. 
Anne Tolley 
: What they need is the finance to do it. 
PAULA BENNETT 
: We need principals to have the resources and the finance to get on and do that job themselves. 
Let us talk a bit more about some of the bad things in this bill. The explanatory note talks about giving “the Minister the power to prescribe a date or range of possible dates for triennial elections:”. The Minister will get a little more Draconian deciding what is best for schools instead of schools and boards of trustees getting on and deciding what works for their communities and what works for them. I pick up on what the Maori Party was saying earlier about what is important to boards of trustees and what is important to schools—it is not about the dates and things; it is about how they are running and about the important stuff that is going on within them. 
It will not be a surprise to those who know of my interest in early childhood education that I certainly presume the ugly to be the stuff around police vetting. Let us not make light of it. Occasionally in certain circumstances some pretty ugly stuff is going on. If we thought for one moment that this legislation would curb some of the abuse of children that goes on then we would not waste an instant in stepping up to make sure it was happening. But this bill is not about that. This bill is about ill-thought-out and Draconian steps that will not take measures to ensure a child’s safety. 
The example that has been used in the cries I heard from the other side of the House earlier—and Mr Jones from New Zealand First raised it—is the safety of children and this issue was certainly raised around Playcentre. Let us think about this logically. I would like to think that maybe the Minister Chris Carter has not visited a Playcentre school and that is why he does not understand them. Actually the Minister likes to go on quite a lot about where he has visited who he has seen and how many schools he has been to. 
Anne Tolley 
: He doesn’t learn much! 
PAULA BENNETT 
: No and when one goes along afterwards and speaks to those schools one hears them say that he may have been there but he did not listen. This might be one of those cases where he did not listen. The bill talks about volunteers needing to be police-vetted but who are the volunteers in a playcentre? 
Dr the Hon Lockwood Smith 
: Parents. 
PAULA BENNETT 
: Parents are the ones who volunteer in a playcentre. 
Allan Peachey 
: Mum and dad. 
PAULA BENNETT 
: Mum and dad and often grandma and granddad are actually the ones who volunteer in playcentres. Under this legislation volunteers in all parent-led centres—such as kohanga reo some of our Pacific language centres and certainly Playcentre—will all have to be police-vetted. So parents who actually have their children with them pretty much 24/7 will now be considered a risk under this legislation and will be police-vetted. Not only is that not possible for playcentres because they do not have the resources and the funds but it is also off-putting for many volunteers to go through the process when a parent turns up to play with their child. 
Have we seen what actually goes on in a playcentre? More often than not when one goes in and speaks with a parent one sees that parent sitting in the sandpit and talking and playing with his or her own child. That parent will have to be police-vetted under this bill. I think the Labour Government is actually taking it far too lightly. We heard from New Zealand First the cries of outrage that all of a sudden we do not support police vetting but let us remember that police vetting is happening now. Police vetting is happening in our centres and in our services now. In fact from 2004 to 2006 35000 non-teacher police vettings were done—35000 police vettings were requested. 
Anne Tolley 
: And how many naughty people were found? 
PAULA BENNETT 
: Well only seven people out of the 35000 were actually identified as sensitive or with red stamps. That is seven out of 35000. Those seven were picked up by the current regulations around police vetting and by services and centres having the common sense to know what is best for their children because the parents know what is best for their children. 
Have members heard about National’s policy? Let us trumpet that. When we took on the 20 free hours’ early childhood education policy we said we trusted parents to make the best decisions for their children and as such we would bring Playcentre kohanga reo and parent-led services into the 20 free hours policy. Let us actually identify them as a quality option. Let us identify them and stand up and say that parents know what is best for their children and their families. There was not a peep from Labour. There were peeps on other stuff and there were squawks on other stuff around the policy but there was not a word from Labour members because they knew that this was what parents wanted. They knew that there would not be a big call to put us down for that one. 
Ideologically Labour stands against parents knowing what is best for their children and as a consequence it could not ideologically support Playcentre and parent-led services being counted in the 20 free hours policy. It was not about the money and it is not about the money. The Minister knows that—it is not about the money for Playcentre and kohanga reo. It is about being identified as a quality service. National will stand up proudly and say that we trust parents to make the best decisions for their children. 
A party vote was called for on the question  
That the Education Amendment Bill (No 3) be now read a first time. 
Ayes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 48 
New Zealand National 47; Independent: Copeland. 
Bill read a first time.  
Bill referred to the Education and Science Committee. 
Government Superannuation Fund Amendment Bill 
First Reading 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Just before I call the Minister I ask that the person who had that phone ringing earlier and all other members please now check that the phones are off. 
PETER BROWN (Whip—NZ First) 
: 
 I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: No telling tales! 
PETER BROWN 
: It is not telling tales. I just say that it was an alarm clock to wake up the National Party. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Down the member goes; he is out of order. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 That was most uncalled for! I move  
That the Government Superannuation Fund Amendment Bill be now read a first time. 
 At the conclusion of the first reading debate I will move that the bill be referred to the Finance and Expenditure Committee.  
This is a simple but important bill. It amends the Government Superannuation Fund Act 1956 to give effect to the Budget 2008 decision to provide all Government Superannuation Fund and National Provident Fund annuitants with an annual cost of living adjustment linked to 100 percent of CPI changes. The Government Superannuation Fund also known as the GSF is a Government-owned fund set up to provide for public servants’ superannuation. It was set up in 1948 and it was closed to new entrants in 1992. It has a liability to pay benefits to members currently valued at over $11 billion which exceeds its investments by over $8 billion.  
As part of Budget 2008 Cabinet agreed to increase the Government Superannuation Fund and National Provident Fund annuitants’ annual cost of living indexation to 100 percent of the CPI. This adjustment is estimated to impact around 17000 Government Superannuation Fund and 2100 National Provident Fund annuitants and their annual cost of living adjustments indexed at rates between 90 and 100 percent of the CPI. I have taken this decision to ensure that all annuitants are treated consistently with regard to annual cost of living adjustments. The cost of this decision—at a one-off figure for balance sheet purposes—is $33.2 million.  
The adjustment had originally been intended to apply from 23 July next year. I have received several petitions including a letter from the president of the Government Superannuitants Association David Swallow to bring forward the date from which 100 percent CPI indexation would apply. This bill brings forward the date to 2 April 2009 to align with the annual cost of living adjustments and we are dealing with this bill now so that the bill can get off to the select committee submissions can be called for and the bill can be passed before 1 April next year.  
One other small clause in the bill—clause 5—corrects an error that was made in the Government Superannuation Fund Amendment Act 1990. In 1990 Parliament increased the amount by which the annuity is reduced by surrender by some nine times. In other words when someone surrenders a part of the superannuation scheme the annual amount is multiplied by nine times. That figure should have been an increase to 10.8 times the annual amount and in fact it was not done so in the law but the practice since then has been to pay the 10.8 figure rather than the nine. This error apparently has not been picked up for some 18 years. Some hawk-eyed person has finally discovered it and this bill rectifies that error in the 1990 legislation.  
I should declare an interest of course given recent events. As a person under the old parliamentary superannuation scheme I would be affected by the latter provision if in fact the current law was to be applied. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I also should declare the same interests as Dr Cullen as a member of the old parliamentary superannuation scheme. In doing so let me make it clear that National will support the Government Superannuation Fund Amendment Bill being referred to the select committee if for no other reason than that we have a pretty unfair situation right now. Some members of the more recent Government Superannuation Fund schemes already receive cost of living adjustments of 100 percent of the annual CPI whereas some members started their contributory service way back before 15 June 1969 when the Government Superannuation Fund Amendment Act 1969 came into force. So some people in Government Superannuation Fund schemes already receive 100 percent annual cost of living adjustments and others in Government Superannuation Fund schemes and National Provident Fund schemes do not. That is clearly not a very satisfactory situation; it is quite an unfair situation. Even if there were no other considerations there is no justifiable ground for having such an arbitrary arrangement for annual adjustments to these schemes.  
Having said that another reason why this issue has become very important is that under this Labour Government the rate of inflation—or the annual CPI—is high again. It is years since it was 5 percent. [ 
Interruption 
] Dr Cullen laughs but this year the rate of inflation is projected to hit 5 percent. I ask Dr Cullen how long it is since we have had a 5 percent rate of inflation in New Zealand. Under Labour inflation has gone up as it always has done. I have been here long enough to remember what it was like pre-1990. Pre-1990 when we had a Labour Government last time around inflation was sky-high. We always get high inflation under a Labour Government and that is why this issue has become important again. When the inflation rate is up around 5 percent the annual CPI adjustment becomes more important.  
Why are we heading towards a 5 percent inflation rate this year? It is actually pretty easy to work out why we are heading towards a 5 percent— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Be careful Dr Smith. This is about superannuation. Do not take off on a lecture on inflation. 
Dr the Hon LOCKWOOD SMITH 
: But Madam Assistant Speaker adjustment for inflation is the very purpose of this bill. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: But the purpose does not need a whole lecture on inflation. 
Dr the Hon LOCKWOOD SMITH 
: Well if it were not for inflation we would not need this legislation. That is the crucial aspect of it. The facts are that last year Treasury warned Dr Cullen that if he increased Government spending by the amount Cabinet was talking about he would see big inflation as a consequence. What happened? Dr Cullen knows exactly what happened. Dr Cullen ignored it— 
Hon Dr Michael Cullen 
: Oh really! 
Dr the Hon LOCKWOOD SMITH 
: I do not know whether Dr Cullen ignored it but his Cabinet colleagues walked all over him and he agreed to a massive increase in Government spending did he not? Against Treasury advice he agreed to a massive increase in Government spending. What has happened? 
Hon Dr Michael Cullen 
: That’s so silly. 
Dr the Hon LOCKWOOD SMITH 
: He says it is so silly! I put another challenge to him. Another reason why we have high inflation is that our productivity growth has collapsed under this Labour Government. The facts are very clear. Compared with the 1990s productivity growth since Labour has been in office has collapsed. By almost any estimate it is certainly under one-half and maybe even down to one-third of what it was during the 1990s. Those are Treasury’s figures not ours.  
When we have low productivity growth we get high inflation. There is no other possible outcome. Why do we have low productivity growth? Because—as we have been debating just now—Labour insists on regulating everything. That is one of the things that contribute to poor productivity growth: the more one regulates and constrains the productive sector the less productivity growth one gets. We have just been debating the latest example: more regulations around education in the Education Amendment Bill (No 3). So it goes on.  
Today all sorts of regulatory legislation has passed through this House and we should not be surprised that inflation under this Labour Government is getting higher and higher. That is why this legislation becomes important. People who cannot protect themselves against inflation and whose income is eroded seriously by escalating inflation are most affected by what this Labour Government has allowed to happen. 
It really is quite staggering to have projected inflation this year of 5 percent. It is years since we have seen that kind of level. Dr Cullen and his Labour colleagues should be ashamed that their policies have led to this. I ask Dr Cullen what the consequence has been for ordinary people with interest rates among the highest in the developed world and an exchange rate that has been very high and very damaging to our export sector. Sure it has started to come back down. The Reserve Bank has been forced in many ways to reduce the official cash rate and the exchange rate is starting to respond. But a lot of people on fixed incomes derived from the Government Superannuation Fund and the National Provident Fund are very affected by these factors. They are very affected by the high - interest rate regime of this Labour Government and very affected by the high-inflation policies of this Labour Government which all stem from its massive expansionary expenditure programme.  
We have all seen the papers that Dr Cullen presented to his Cabinet colleagues warning that increased Government spending to the level contemplated would mean that the Reserve Bank would have to respond. They were told that there would be higher interest rates. What did the Government do? It increased spending. We have seen exactly what was predicted—higher inflation and higher interest rates—and people have suffered.  
That is sadly why this legislation is needed. If the rate of inflation were way down in its proper zone of 1 percent to 3 percent—sitting at around 2 percent—this situation would not be so critical. The difference between a 90 percent and a 100 percent CPI adjustment when the inflation rate is only 2 percent is not great but when inflation is up at the level that this Labour Government has it at CPI adjustment becomes an important issue. The bill has some quite complex mathematical calculations in clause 3 around those whose next adjustment to their payment rate occurs before or after 1 April 2009 but apart from some of those complexities it is a reasonably simple bill. It brings the adjustments up to 100 percent for all people who are dependent on those schemes.  
National will support this bill. In some ways it is sad that we have come to the point where inflation has got so high that the difference between a 90 percent CPI adjustment and a 100 percent CPI adjustment is significant. A lot of people are affected by it obviously because the estimated cost of the change in 2009-10 as the Minister has said is over $33 million.  
Hon Dr Michael Cullen 
: That is the lifetime cost not the annual cost. 
Dr the Hon LOCKWOOD SMITH 
: Well it is an interesting issue that if one looks at the Treasury documents that were provided for the Minister himself—the exact advice from the Treasury—one sees that it has to come into the Budget in 2009-10. It has to pick up that full $33.2 million but the unfunded liability is unknown. The extent of the full unfunded liability is not known.  
Hon Dr Michael Cullen 
: It is $8 billion. 
Dr the Hon LOCKWOOD SMITH 
: That is only a guesstimate obviously for the unfunded liability. But it shows that given the rate of inflation and the projections this is a significant difference. That amount of money shows that it will be significant to the people affected. I repeat that National will be supporting the move and it looks forward to those who will benefit from it deriving the benefits. 
CRAIG FOSS (National—Tukituki) 
: 
 I have been speaking quite a bit tonight and today on various finance bills so I hope there is a free run tomorrow. I hope that “Mr Whip” and Dr Cullen can finish up on these finance bills as it would be most appreciated and that we will get this one through quite quickly early tonight. As my colleague just said yes National is supporting this bill with a very brief change to the indexation and a change to the algorithm which was written in incorrectly but assumed to be correct over many years. I missed the first reading speech but I have just picked up that there was a $33 million cost to the change of— 
Hon Dr Michael Cullen 
: The liability. 
CRAIG FOSS 
: —the liability due to the change in funding from 90 percent to 100 percent. That is fine. I also note that it was announced in Budget 2008 so that was all on the Table at the time. 
I have spoken twice now to the Government Superannuitants Association at its annual conference and I enjoyed the conference recently about 2 or 3 weeks ago when I was there. When I spoke the first time I think the consumer price index adjustments at that time had been talked about and promised by the Minister to go from 80 percent to 90 percent.  
Hon Dr Michael Cullen 
: We did that. 
CRAIG FOSS 
: The Government did that; that is correct. But I have a question for the Minister because at the same conference I was shown a demographic profile of the association’s members who have been asking for this increase for quite some time. Many of the receivers of the annuities or their spouses have been quite elderly and so unfortunately demographics have meant that many have fallen from the scheme and are no longer receiving annuities. So I ask the Minister whether the quantum has actually changed—has the total amount changed even though the consumer price index adjustments went from 80 percent to 90 percent and now are going from 90 percent to 100 percent? The Minister has said that the liability has changed so I presume there is an increase in benefits. I acknowledge that then and thank the Minister for the information. 
I notice though that in my last speech—I suppose it was late 2005 when I spoke there—I acknowledged that the Minister had announced that increase prior to the 2005 election and I predicted at that time that prior to the next election he might also announce an increase to 100 percent of the consumer price index which he consequently has done. So that is all very good. In 2011 I wonder which Minister will announce that the adjustment will go to 110 percent but anyway— 
My colleague talked about inflation as the underlying problem here and that is true. This particular organisation has two issues one of which I will touch on in a minute. But another cost there as my colleague has said is the underpinning of inflation from the fiscal spend-up etc. The cost although small—even when we go from 90 percent to 100 percent the higher inflation is the higher interest rates are—has more impact on members of the superannuation fund once they receive their annuities. As we learnt at the conference the other day the adjustment of the consumer price index for the following year is announced in late January but members do not receive their first payment until the first week in April so they have a small cash flow issue there. The change is of course dependent on inflation at the time. The time period is only 2 months—I acknowledge that—but many of these people are struggling none the less and they do feel hard done by in relation to other issues they are quite strong advocates on. The Consumers Price Index used to be announced in early to mid-March and they would be paid on the first payday in April. As our collection of information and statistics has become more efficient the announcement is now coming out in mid-January. Therefore they feel that they should have their payments as soon as possible after the announcement of the consumer price index rather than just on the old date they are stuck with at the moment. 
I understand that Treasury is doing some work on some of the other issues around this Government superannuation scheme—from when it moved from “exempt/exempt/taxed” to “taxed/taxed/exempt” in 1990—and I will touch on that now. I reiterate what my colleague Lockwood Smith just said—that National will be supporting this bill and that it will go through its first reading quite rapidly I am sure.  
But I acknowledge the other issue that the members of the Government Superannuitants Association are particularly strong advocates for. Their argument is that when their annuities were repriced in 1990— 
Hon Dr Michael Cullen 
: Oh don’t buy into that one! 
CRAIG FOSS 
: —ha ha!—a 33 percent tax rate was used and they are concerned that any changes in personal income taxes may undervalue what they signed up to back then. My point—and I made this point to them at their conference—is that that has not really been an issue for 9 long years because personal income tax cuts have not been on the cards for 9 long years. So it is obviously a more pertinent issue to them at the current time with the tax changes announced in the recent Budget and of course with the National Party’s programme for personal income taxes that will be announced in a few weeks’ time. 
Hon Dr Michael Cullen 
: Oh is a 9-point promise about to come out here? 
CRAIG FOSS 
: No it is certainly not. I am just acknowledging the issues which are quite publicly known. The Minister acknowledged that he is a member of the Government Superannuation Fund as are some of my colleagues and that is all fine. Members have been strong advocates for that change and it has been mentioned in their newsletters for many many years. It has been relayed to me and I understand—and I would like confirmation—that Treasury is doing some work on this issue: costings etc. and an investigation. It will be interesting to see how far down the track that work has progressed. 
On that note I will finish. National will be voting for this bill. It gives a further incentive for the Government of the day to keep inflation down and therefore to keep interest rates down so that people who have done the hard yards and contributed to a superannuation scheme such as this one will get as good and as high-value an entitlement as they believe they should get. Thank you. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I am keen to hear what the National Party people have to say on this bill.  
Hon Members 
: He’s woken up. 
PETER BROWN 
: They are awake; that is good. I did not sense one iota of enthusiasm for this bill from National members. It was almost as if they had their arm twisted up their back and thought they had to support this bill but did not really want to. The Hon Dr Lockwood Smith said that if we did not have high inflation we would not need this bill. That is a preposterous statement. [ 
Interruption 
] That is what the member said. He went on to talk about higher productivity. I spoke to a National Party member not an MP not that long ago and he told me that productivity is a measure of output over cost. If we take that measurement it means the lower the cost the lower the wages and the higher the productivity.  
New Zealand First is much more influenced by people like the young New Zealander who said to me that the reason he was going to Australia was that for the same amount of effort the same amount of determination and the same amount of conscientiousness he would be paid more and would have a better lifestyle and better working conditions. That is why our people are going there. It is nothing to do with productivity. They work just as hard in New Zealand as they do in Australia. New Zealand First supports this bill wholeheartedly because it is fair it is just and that makes it necessary. Thank you. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker. The concept of superannuation is entirely consistent with our commitment as the Maori Party to kaupapa tuku iho. These kaupapa statements of principles and aspirations are absolutely central to every decision we make in and outside this House. These kaupapa drive our decisions and they inform our korero. We will not be bought; we will not lower ourselves to the level of personal attack; we maintain a commitment to integrity as utterly fundamental to who we are.  
So we turn to our kaupapa to consider the position of our elderly in the context of whanaungatanga and in a determination to uphold manaakitanga. Caring for the well-being of our elderly is a value of enormous importance in our communities. Our elderly the fountains of wisdom those who possess the vital archives of family records and who span the generations are regarded as genuine treasures.  
So it was extremely disappointing early this year to read the release from Grey Power which indicated that superannuitants were being let down by the current administration. The release put out by the organisation comprising some 90000 members stated that it is very disappointed that the Prime Minister has rubbished a proposal to exempt food from GST. Superannuitants Grey Power said are very adept at making every cent of their national superannuation count— 
Hon Dr Michael Cullen 
: Perhaps you should write a real speech. 
Dr PITA SHARPLES 
: —it is all right—but ever-escalating costs for essential items such as bread milk meat and electricity are making further belt-tightening impossible. 
Hon Dr Michael Cullen 
: This speech isn’t about this bill Pita. 
Dr PITA SHARPLES 
: Why does the member not listen? It is about superannuation and superannuitants.  
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Dr Sharples it is a problem. It is not really focused totally on this bill. It is focused on superannuation but not on the Government Superannuation Fund. Please keep going.  
Dr PITA SHARPLES 
: We in the Maori Party heard this call and we believe that our proposal to cut GST on food is a tangible way of making a difference in the lives of the elderly.  
OK I will move on to that superannuation stuff. We are pleased that this bill is trying to respond to the needs of our superannuitants through the commitment to address the cost of living adjustments to the Government Superannuation Fund. The bill seeks to ensure that all Government superannuation benefits are adjusted based on 100 percent of the changes in the consumer price index. It has to be said that it is pleasing that superannuation is being described as enhancing the lives and well-being of people because it is only a few months ago that the superannuation fund was linked with companies that invest in cluster munitions nuclear weapons production and that is not all. [ 
Interruption 
] They do not even like that bit. 
Hon Dr Michael Cullen 
: Wrong fund. 
Dr PITA SHARPLES 
: OK.  
The bill will ensure that as at 1 April 2009 the cost of living adjustment provisions will come into effect and make a tangible difference in people’s lives—are the members all right with that bit? We absolutely support this initiative and believe it only right to do so. But we want to raise the issue identified by economist—those members will not like this—Dr Susan St John. She has made the comparison between the granting of superannuation and the lack of secure reliable income for all children. Her assessment is that although citizens over 65 can rely on superannuation—and with this bill of course it encompasses cost of living adjustments as well—the same security does not extend to all children. We in the Maori Party agree with this principle—those members do not like that so I will move on.  
Finally I raise the issue that we have consistently raised when considering superannuation and that is the obvious concern that the shorter life expectancy of some population groups has immediate implications for the length of time they can enjoy the benefits of their tax contribution especially superannuation. We know that Maori die 8 to 10 years earlier than other New Zealanders. The issue of justice that always hits us is that those people like their Pakeha peers have been paying taxes all their lives yet when they finally get to the end of their lives they are missing out on seeing the fruits of their contributions.  
Our position as a party has always been that superannuation policy should be reviewed to consider the appropriate entitlement age for groups whose life expectancy is lower than average. It is an idea we hope to revisit in the next Parliament but until then we are happy to support this bill in the interests of supporting our elders. I have finished. Kia ora.  
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I am sorry Dr Sharples; can I just explain. It is actually very confusing for people who are listening. The bill is called the Government Superannuation Fund Amendment Bill but it is not necessarily about what people generally think of as superannuation. It is about a very specific group of people. So I am sorry; you were taking off and I was trying to bring you back to the point.  
TIM GROSER (National) 
: 
 I did not expect to be asked to take a call on the Government Superannuation Fund Amendment Bill when I came down to the House tonight because I have deliberately recused myself from any involvement in this issue as I have at least two conflicts of interest. The first is that I think my now very elderly mother is a beneficiary of this legislation and second I of course am a beneficiary of the Government Superannuation Fund generally although we are not discussing the fund.  
In response to the comment made by the member opposite I say I am very pleased to see this bill proceeding. I think this issue has been a very very obvious anomaly that has affected a group of very much at-risk people in our community. Primarily they are very elderly people and primarily they are women as a consequence of simple demographic facts and their social consequences. Many of them as the Minister will be aware are people who are living in quite straitened circumstances. For them the increase and the additional sum of money although it may not sound a great deal to other New Zealanders will be deeply appreciated. In the informal discussions—precisely because of my conflict of interest on this matter—with David Swallow and David Thorp I have been made aware of an emotional issue that is involved here. The issue was not just about the money involved; it was also about the perception of those people being wronged. So tonight I am very pleased to support this bill.  
In terms of my own position on the Government Superannuation Fund scheme I say I am a beneficiary of the scheme. To be perfectly frank I am very pleased that at the age of 23 when I threw in a doctorate to join the Public Service for reasons of financial need I was not given the choice of whether I would save for my retirement. Through the vicissitudes of life—and yes I have had one or two little sideways steps on the way to getting here—it has proved to be probably the best decision I was never asked to make at a very young age. It is an age when people are not all that competent no matter what their academic training or professional expertise is to make decisions about their own financial futures 30 to 40 years hence. That has always informed my own personal views on all issues to do with superannuation and savings schemes. I will not go further than that or else we would get into some very dangerous territory.  
I think that there is very little understanding in our community generally about the Government Superannuation Fund. It is probably seen by many people—and I think absolutely inaccurately—as some kind of benefit that is being given to people who have served the public as members of the Public Service in a wide variety of fields. Those fields are as diverse as that of my father who was a radio and TV actor until he became the head of radio drama when he joined and subsequently became a beneficiary of this scheme ranging through to that of my own background. A huge number of different New Zealanders have made their contributions to the Public Service over the decades and have been contributors to this scheme.  
The key point is that the scheme is a contributory scheme but it was set up on appalling principles originally. They were the classic “fly now pay later” principles in which the contributors like my father and like myself in an earlier phase of my career made contributions to the scheme with no matching contribution from the Government whatsoever. I am very pleased that that mess was cleaned out subsequently. It required quite radical change and I think it is perfectly understandable that some technical errors were made. It is with a sense of regret that I see it has taken us as long as this to address this final step. I am a little surprised by the Minister’s estimate of the cost. I had thought that the earlier adjustment from 80 percent to 90 percent was in the order of $7.6 million but I take the Minister’s statement that the cost is rather higher than that.  
But essentially I just stand to support this bill. I think it is absolutely the right thing to do. A number of elderly New Zealanders will be pleased to see that a very longstanding anomaly is finally being corrected and corrected for good. Thank you. 
Bill read a first time.  
Bill referred to the Finance and Expenditure Committee. 
Electricity (Continuance of Supply) Amendment Bill 
First Reading 
Hon DAVID PARKER (Minister of Energy) 
: 
 I move  
That the Electricity (Continuance of Supply) Amendment Bill be now read a first time. 
 I will be recommending that the bill be referred to the Commerce Committee for consideration. The bill amends the Electricity Act to provide an ongoing obligation upon electricity distributors to continue to supply electricity to places that were supplied via lines as at 1 April 1993. The obligation can be met by the lines company either via those existing lines or through electricity supplied through alternative means. Section 62 of the current Electricity Act allows electricity lines companies to cut off supply to places they do not want to supply in 2013. 
Nathan Guy 
: We don’t want that. 
Hon DAVID PARKER 
: Well that provision was one of the more ridiculous ideologically driven ideas passed by the previous National Government. 
Nathan Guy 
: Well what have you been doing for 9 years? 
Hon DAVID PARKER 
: We have been fixing that and many other mistakes made by National. 
Consumers that may be affected by the expiry of section 62 include farmers small communities tourism businesses and owners of holiday homes located in remote areas. The Labour-led Government shares consumer concerns about the potential loss of supply. We in the Labour Government believe that rural customers deserve and need security of electricity supply. Around 1 percent of consumers could be affected. In response to these concerns and to our own the Government has reviewed section 62. We considered what arrangements should be in place to ensure that affected consumers and communities continue to have access to electricity after 2013. 
Providing an ongoing obligation to continue supply obviously improves certainty of access to electricity supply for those people living in remote areas. The bill provides that the obligation can be met by lines or by electricity supplied by alternative means such as remote area power systems. Allowing these alternatives will facilitate investment in these technologies where it is more cost-effective than lines. Existing arrangements for the quality and reliability of supply will continue to apply to electricity supplied from alternative means. 
Supply can be ceased permanently only with the agreement of every affected consumer or with the agreement of the Minister of Energy. The bill includes requirements for consultation and notification where a distributor proposes a change to alternative supply. The distributor must consult with each affected consumer and provide an assessment of how each consumer’s reasonable needs for electricity will be met. The consumer must then have a reasonable period to comment on a proposal. The distributor must also provide for at least 6 months’ public notification of the proposal. 
To ensure that electricity prices remain affordable for consumers supplied by alternatives to lines the bill introduces a new regulation-making power to regulate for the use of pricing methodologies for electricity supplied by alternatives. The amendments made to the Electricity Act by this bill will improve certainty of electricity supply for affected consumers mainly in more remote rural areas as I have said previously. It will enable distributors and consumers to assess whether there are better ways to meet the need for electricity by using by way of example onsite renewable resources or perhaps by also improving energy efficiency to assist. 
Overall what the bill does is to give consumers in remote rural areas certainty that their electricity will not be cut off in 2013 which could happen under the law at present. I commend this bill to the House. 
GERRY BROWNLEE (National—Ilam) 
: 
 The motion that the Electricity (Continuance of Supply) Amendment Bill be now read a first time will indeed be agreed to by the National Party. The history behind this goes back to the— 
Hon Trevor Mallard 
: Flip-flop. 
GERRY BROWNLEE 
: The Minister over there the poor old fellow Trevor Mallard calls out “Flip-flop.” Well if anybody has done a flip-flop on this it is Labour. What I am about to tell Mr Mallard will be I suspect of some interest.  
Back when the Electricity Amendment Act 1993 was going through the House the then Opposition spokesperson on energy the Hon David Caygill was involved in discussions—as is often the case with bills like this which have no political point but have a significant effect on certain communities—with the Hon John Luxton who was at the time the Minister of Energy. A structure was being put together for the way in which lines companies would continue to operate and the way some of the trusts that were around at the time would operate. From my understanding of the situation there were some 68 lines companies—or distribution agencies—in the country at that time. Many of them were metropolitan electricity departments and there were consumer trusts as well as straight companies. When they went through that exercise their number shrank initially to somewhere in the 40s. Today we have 28 companies serving not only tight metropolitan areas but also in many cases quite remote and disparate supply requirements across all parts of New Zealand.  
When consideration was being given as to how big the line should be and how far it should run for any particular company the decision was that it is better to go with the geographical interests that were naturally there and had developed over the preceding 60 or 70 years. That of course meant that some companies picked up people on the end of supply lines who would never ever be able to meet the costs of the energy delivered to them because of the maintenance that would be required on those lines. Any electricity line is an asset that will last for many years. In fact the general thought is that they are 65-year assets. So in order to progress the movement—I suppose one would say the very favourable rationalisation—that was happening it was decided that the particular issue of those at the end of those lines would be put off until some time in the future. By agreement the date was arbitrarily set at 2013—20 years out. The commitment though was that during the intervening years discussions would take place about how those people on the ends of those lines would continue to receive their supply and what the obligations would be on the various companies that were delivering that supply.  
The interesting thing is that 3 years after that when I came into Parliament in 1996—as you yourself did Madam Assistant Speaker—the discussion was still going on. I remember very clearly during the 1998 discussions about electricity reform—5 years after the Electricity Amendment Act 1993—the intense discussion about the end of spur lines as they were known and what was going to happen to them. Spur lines generally refer to Transpower but can be heavy distribution lines as well.  
There was a change of Government in 1999 and much trumpeting from the new Minister of Energy the Hon Pete Hodgson. He said at various points that he had concerns about people on the end of these supply lines. But here we are 9 years later right at the death of the 48th Parliament putting through a bill to sort this out in the way that it should have been sorted out many years ago. Over a number of years plenty of public comments have come from me in my role as Opposition spokesman on energy advocating exactly what is in this bill. There is no point in saying that it is all National’s idea and I am not saying that. It is the logical thing to do.  
This bill will mean that where distribution companies have uneconomic lines they will be able to go to those consumers and offer them an alternative source for their electricity supply. One of the things I am unclear about in this bill though is just what the cost of that supply will be. I would have thought that the bill itself might want to link the end price for delivery—and in fact the cost of energy—to whatever anybody else was paying in the market on any particular day or was paying by way of some longer-term hedge arrangement perhaps. I am saying that if a lines company is facing many thousands of dollars of annual maintenance and can offset that by providing an alternative supply one would think that some of the savings they might make would be passed on by way of direct subsidy on energy cost to those end-of-line consumers. Not many would have expected us to take that position but I think it may in fact be the only reasonable way in which some of these consumers can be fairly dealt with. During the Committee stage this evening it will be very interesting for the Minister to give us a view on whether an amendment to put that provision would be supported by the Government.  
As I said the National Party supports this bill. We see it as the culmination of some 15 years—nearly 16 years—of discussion and it will give certainty to people on the end of those lines who have for some years now been asking what happens to them after 2013. It is clear that continuance of supply will be a requirement on those distribution companies. It is unclear and it is up for negotiation—and quite reasonably so I think—what the generation source will be for the supplied electricity. So we look forward to the Committee stage of this bill and subject to that very important question being answered our support is likely to continue through to the third reading. 
Hon TREVOR MALLARD (Minister for the Environment) 
: 
 For a short period of time I think on two separate occasions I had the honour of being the Minister of Energy. This is an issue that was around in those times and I think the time has come for it to be sorted out.  
I do not agree with the policy that was enacted in 1993 and that is now unfair on people who are in remote areas and have had a tradition of supply but I think we should also focus on some of the positive things that can come out of this legislation. I think of the use of alternative energy and the pulling together of the various methodologies of supplying people on—I do not think they are actually spur lines—some of these very long and uneconomic lines. There are some alternatives and I am sure that over a period of time there will be a combination of probably in some areas wind-fed batteries solar power and possibly some of the more modern generation of battery power being used as well within those places in order to minimise the use of those lines. It might be that in some cases for a small percentage of time some forms of power generation that might not be quite the best will end up being used. But what will happen is that individual packages will be put together for each of these places and they will be appropriate. I am sure there will be negotiations and I am sure that in 2013 or 2023 we will have a much richer and much more diverse form of electricity supply to these places. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 It is a pleasure to speak to the Electricity (Continuance of Supply) Amendment Bill this evening. It is telling that we have had a major U-turn in policy from the Government in an important area of the energy equation and that is what I want to address in the context of this bill. I have been interested in and would draw on the Minister’s comments about some of the changes in the new energy technologies New Zealand needs to adopt if it is to be able to reverse the trend towards more and more dependence on thermal energy but the comments I will make are in respect of solar water heating.  
Today we saw an absolute U-turn from the Government. National announced in March a policy in which we said that the Government’s policy of having a price control on the solar water grant scheme was a disaster. The bizarre and unusual feature is that for the last 2 years we have seen a decline in the number of solar water installations. The Government has vigorously defended and Jeanette Fitzsimons in the House this evening has vigorously defended the Government’s policy and in a little sneaky press release yesterday did a complete backward flip and adopted National policy. The price control on the Government’s solar grants scheme is a goner. The grant has been doubled to $1000. They have even picked up National’s policy—that is to provide for the inclusion of hot water heat-pump technology. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Excuse me Dr Smith. I am having difficulty. I have the bill in front of me— 
Gerry Brownlee 
: Point of order— 
Hon MARIAN HOBBS 
: No—can the member answer me. Is he talking to this bill? 
Hon Dr NICK SMITH 
: Indeed I am.  
Gerry Brownlee 
: I raise a point of order Madam Speaker. You will see that clause 4 talks about new sections 62 to 62B being substituted in the principal Act—this is an amendment bill. New section 62 deals with the continuance of supply new section 62A is headed “How certain enactments apply to persons subject to obligation in section 62(3)” and new section 62B is headed “Proposals to supply electricity by alternative means”. It is no surprise to any of us that if we are looking at alternative forms of electricity solar heating for water is a major component. Indeed I can recall numerous speeches made by the Minister of Energy and indeed I think by the Prime Minister on at least two occasions— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Are you taking a point of order or making a speech? What is your point? 
Gerry Brownlee 
: My point is that Dr Smith is totally in order to talk about as it is said here certain enactments that relate to alternative means of supply. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I will make a ruling and it may not be very pleasant. Sometimes a game is played in this House. It goes: “I take a noun or a set of terms in the bill and although the subject of this bill is about the continuance of supply lines I take something it says from that and I take off on a totally different topic.” I am afraid that I had to stop another member from another party before who was speaking about general superannuation instead of a special fund and that was quite embarrassing. I am trying to be consistent. 
Gerry Brownlee 
: This bill has nothing to do with the continuance of supply lines. It has everything to do with the continuance of supply. The very purpose of the bill is to enable distribution companies— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Point taken. 
Gerry Brownlee 
: —to remove the lines and put in alternative energy sources. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Your point is taken. Dr Nick Smith may talk about those issues but please do not take off on to press releases and other issues that are slightly extraneous to this. 
Hon Dr NICK SMITH 
: Let me make the point very plain. We have in this bill an attempt in an area of energy policy where we have seen one Government failure after another. I know it is embarrassing for Labour but I will highlight the failure of this Government’s policies where we have seen over the last 2 years the biggest drop ever in the number of solar water installations. We have seen a major policy failure.  
If we look back on the record we will see that in 2000 2001 2002 and all the way through to 2006 there was quite substantial growth in the area of solar water heating. The Government has come out with an announcement that is not dissimilar to what have in this bill and suddenly we see a policy called Switch on the Sunshine. Since the Government announced its Switch on the Sunshine policy we have seen the sunshine switched off. We have seen an embarrassing decline in the number of solar water installations and we have a solar water industry that is on its knees and is in crisis. 
Peter Brown 
: Why is that? 
Hon Dr NICK SMITH 
: I will tell the member why. It is because the Government’s policy worked out with the Greens in terms of alternative energy has been a flop and a disaster; it has not worked. Why has it not worked? It is not dissimilar to the provisions in this bill. The Government and the Green Party have attempted to regulate the solar water industry by using price controls.  
Jill Pettis 
: What did you ever do? 
Hon Dr NICK SMITH 
: The member Jill Pettis asks what National would do. 
Jill Pettis 
: What did National do? 
Hon Dr NICK SMITH 
: What would we do? There are three things. The first thing is that National announced a policy in March of a $1000 grant for all households either for a retrofit or alternatively for a new home for solar water systems. The second thing we announced in that policy was that there should be the same opportunity for hot water heat-pump technology to get those $1000 grants. That is the second thing that we announced. [ 
Interruption 
] The third thing we announced I say to Mr O’Connor is that we would get rid of the stupid price regulation which is killing off alternative energy technologies.  
The busybodies in the Labour Party and the Green Party cannot help themselves but regulate. The interesting thing was this. When we announced our policy what did the energy Minister say? He said that it was a mad naive idea. And do members know what he did yesterday? He adopted the policy. 
Jill Pettis 
: I find that hard to believe. 
Hon Dr NICK SMITH 
: I would be happy to table it. Jeanette Fitzsimons who made the announcement on behalf of the Government and who as the Government’s spokesperson on energy efficiency for the last 2 years has been vigorously defending the price controls on platforms up and down the country says no the National Party is wrong. What did Jeanette say yesterday? She said: “Oh we will just take their policy.”  
The question I have for Jill Pettis for Damien O’Connor and for others who have been chipping in is why it is that for 2 years they have wreaked havoc on the solar water industry. They have seen businesses up and down New Zealand close down they have seen a record drop in the number of solar water installations and they have refused to take on board the clear message from the solar water heating industry and from the National Opposition and then a few weeks away from the election they have suddenly done a U-turn.  
Do members know what the excuse was? The press release stated that the Government was dropping the price regulation because it will now be including the heat-pump hot water technologies as one of the alternative energies that will be eligible for the subsidy. That is weak I am sorry. There is absolutely no justification on the basis of including heat pumps to get rid of the price regulation.  
The real answer is that the price regulation policy was always a failure. It was never going to work. The only reason the policy has suddenly been changed a few weeks out from an election is that the Government and the Greens could not spend the next 6 weeks defending the indefensible defending what was a flawed policy.  
I do not mind all of that. I welcome the change of heart. I just would have expected a little bit more straightforwardness from the Greens and the Government as to why they have changed tack and some acknowledgment of the fact that their policy was exactly what we announced in March. With this bill and with the future we have a— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: How wonderful! For the last 2 minutes we will have the bill debated. Please go on. [ 
Interruption 
] Yes I can. Sit down. I have tolerated for 6 minutes the member not talking on this bill. When I tried to point it out he argued through Mr Brownlee that this was talking about solar energy. It was solar energy as a means to a continuation of supply. The member actually diverted. I gave a warning. In order to save the House’s time I have let the member talk off the bill but I feel that the member has trifled with the Chair and the House. 
Hon Dr NICK SMITH 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Are you going to trifle with me? 
Hon Dr NICK SMITH 
: I am simply asking for consistency of rules. I listened very carefully to the contribution made by the Minister Trevor Mallard. In all of his speech he talked in a very generic way around the issues facing the energy sector when he was the previous Minister. He did not mention any of the detailed provisions in this bill. I have in the same way talked about the generic issues. I simply ask that the same rules apply— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Sit down please. I listened and I heard the Minister very clearly describe how alternative energy supplies could be used at the end of the line when we could not take electricity down the line to them. I am sorry but that is what I heard and that is what I was waiting for from you. We will now continue please. [ 
Interruption 
] Would you both sit down. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Is this a new point of order on a new topic? I have ruled. 
Gerry Brownlee 
: Yes. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Are you sure you are not going to trifle with the Chair? 
Gerry Brownlee 
: I do not believe I am trifling with the Chair. I do believe that the Chair is trifling with the right of members to take points of order. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Point of order Gerry Brownlee. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. Could you explain to us what you understand by section 62A “How certain enactments apply to persons subject to obligation in section 62(3)” if we cannot mention other Government policy where it refers to enactments that apply? The solar water heating provisions apply. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Sit down please. I did that once and I will do it again and I do not expect another trifling with my ruling. My ruling is that it was perfectly all right to talk about alternative energy in the context of the continuance of supply. Instead we have heard a discussion on alternative energy outside the notion of continuing supply to the end of the line. That is where the difference is. Please would you continue Dr Smith. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I am sorry Mr Brownlee. I really think that unless you are going to take a new point of order on a new topic— 
Gerry Brownlee 
: Well Madam Speaker I still have not had the Chair explain to us how we talk about certain enactments without referring to those certain enactments. The Government’s solar heating policy— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Sorry the member will take his seat please. I have said that the bill is in relation to the continuance of supply. When the discussion is not in relation to the continuance of supply I see it as being outside the bill. Would the member continue please. 
Hon Dr NICK SMITH 
: In talking about the future of supply for those people living at the end of the line alternative energies will be important.  
I will hold this Government to account because for every year this Government has been in office we have seen a decline in the proportion of renewable energy. When this Government came to office 73 percent of our electricity came from renewable sources and that figure has dropped in each and every single year since. For all the rhetoric we have had about carbon neutrality and about climate change and those issues the reality is that this Government’s energy policies have failed. They have failed in the area of getting renewables they have failed in the area of solar and the Government has not achieved its objectives in terms of energy policy. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I am going to take a short call. I assure the Chair that I do not want to trifle with her but I would like to respond briefly to some comments that Dr Nick Smith made in terms of solar energy. It will take 1 minute at the maximum. What he told us tonight is pleasing news. If the Government has changed its mind we are very happy about that. We have long been an advocate of developing solar energy in this country and we have always suggested that it should be developed along the lines of that in Australia in terms of finance. I think from memory and from what Dr Smith has said that the Electricity (Continuance of Supply) Amendment Bill is still short of what Australia offers. Am I correct? 
Hon Dr Nick Smith 
: Yes. 
PETER BROWN 
: The member is nodding that I am correct. The Minister of Energy David Parker summarised this bill very well. I am not going into any detail. He said it will give consumers in remote rural areas certainty that they will have access to electrical power on an ongoing basis from one means or the other. That is my summation of what he said. We wholeheartedly agree with that and we support it 100 percent. 
But I am compelled to say that some years ago I was sitting on a select committee discussing an electricity amendment bill of some form—I think it was the bill that dealt with lower charges for low-paid people. I can remember some farming people coming before us. I think they were Federated Farmers members but I have to be careful because I cannot remember exactly. I think they were representatives of Federated Farmers. They told us in no uncertain terms that electricity should be provided only on a user-pays basis. I took them to task on the cost of the lines and pointed out to them that they were being subsidised by urban users because the urban users of this country were paying more for their lines so that the rural community could have access to lines. The rural farming people would not have a bar of it. They threw that point back at me in no uncertain terms. 
I am very encouraged that the explanatory note outlines quite clearly under the heading “Status quo—benefits” that “For urban consumers it is reasonable to assume that their service cost should reduce. They currently pay more for their line services than they otherwise would as they subsidise the costs of supply to remote areas where revenue from those areas is insufficient to cover costs.” 
We support this bill which will deliver electricity on an ongoing basis to rural communities despite some of them wanting the contrary—wanting the opposite. We are 100 percent behind the bill. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The Electricity Act 1992 was passed when the doctrine of user-pays was at its height. Even if those people were in remote areas producing high-quality farming products for New Zealand’s exports they were expected to pay whatever it took to take electricity to them regardless of the usefulness of the economic work they were providing for the rest of the country. That was the way the National Government worked at that time. It was right into user-pays. And the threat that the power supply of rural communities might be withdrawn in 2013 has been hanging over them ever since particularly in areas with high wind speeds where weather conditions often crash the lines and where the maintenance costs are therefore very high. So we welcome the fact that security is being restored to people who live in those remote locations often performing very useful work for the economy as a whole.  
That year 1992 was also an era of rapidly advancing technology when distributed generation showed promise for being able to relieve the grid in many cases of the burden of having to service very far-flung areas. So even at the time this legislation was passed there was a thought I think that by 2013 the distributed renewables would be in a position in many communities to take over. They are still priced a bit on the high side but there will be some areas where that is true. It means that for the first time people will start to think in terms of energy services rather than just wires and kilowatt hours. They will think about the end use of energy that they actually want to achieve and what is the best way to get there. It may not simply be more kilowatt hours it may be greater use of firewood it may be greater use of solar or wind it may be small-scale hot spot geothermal—a range of renewables that back each other up. It is much easier to do it at community level than it is at single house level. The technologies of wave and tidal generation are advancing. We have some equipment now being tested in the water and the best places for that tend to occur in quite remote locations dotted around the periphery of New Zealand.  
We may well find that there are areas where a mix of these distributed renewables will make it possible to let the line go down altogether. And we will find in those communities that it is often much cheaper to manage demand down than it is to build supply up—that more efficient equipment is usually a much cheaper way of reducing electricity consumption than simply building more supply or putting in more solar panels. I have a little experience in this having lived off-grid for 13 years. I know that batteries are the weak link in the system and therefore a larger community of people and a range of sources of generation that needs less storage is a good thing to aim for. This may in fact turn out to be the jumping-off point for distributed renewables around New Zealand to give us the experience of development so that they then move more into the mainstream.  
I also want to say a few words about solar water heating. I could only laugh when Nick Smith talked about the need to include hot water heat-pumps in the solar scheme and said that that was National’s policy. When the solar scheme was first announced a couple of years ago we made it very clear that there was work under way to look at including hot water heat-pumps in the scheme. It was not possible at that stage because we had no equivalent way of measuring the energy performance to compare them with solar. That work has been done and yesterday’s announcement signalled the fact that we now can measure the energy performance of hot water heat-pumps and we therefore are in a position to give them a grant in the same way that we give solar. This is hardly adopting National’s policy. This is carrying out precisely what we said we were going to do 2½ years ago and the work plan to do that has now been completed.  
I was also very interested when Dr Smith announced a policy of doubling the grant to $1000 some months back—early this year—because it happened the week after we had made that decision with officials and it was not yet public. I did wonder how he got had hold of that information but that work was— 
Peter Brown 
: I didn’t say that. 
JEANETTE FITZSIMONS 
: Well if the member is telling me that I lied to the House I take objection to that. 
Peter Brown 
: I’m not telling you that you lied to the House. 
JEANETTE FITZSIMONS 
: Well it is one thing or the other. It is either true or it is not and it is actually true. That has been the position for some time; it was announced many months ago that the grant had been increased.  
In terms of the financial assistance I want to mention Dr Smith’s position on solar water heating. [ 
Interruption 
] Madam Assistant Speaker I think I spent quite a lot of time speaking in detail about the bill. I am now talking about one technology that has the ability to significantly reduce energy demand at the ends of lines so that alternatives can be developed and answering some matters that have been raised in the House that were simply untrue. Dr Smith’s policy was simply to throw money at any solar water heater that wanted it never mind how much energy it would save never mind the quality standards never mind the training programmes for the installers—just throw money at mates in the solar water heating industry.  
The Greens did not do that. We set up training schemes because we found that a lot of solar water heaters in the past had been put in very badly and we now have quality standards for installation. We have quality standards for the hardware because some of that did not measure up. We have performance modelling for the systems so we know how much energy the solar water heaters will save. The National Party’s policy is to just throw money at it regardless of what it does—to not require it to be cost-effective for the consumer and to not require it to save energy. I guess that is why National has to borrow so much for its policy—in order to pay for this kind of largesse. 
TIM GROSER (National) 
: 
 As the House knows National is supporting the Electricity (Continuance of Supply) Amendment Bill. We support it because its underlying objectives are obviously commonly shared around the country. I think there is a fundamental point of equity that all the parties agree on. One cannot allow a rampant marginal costing regime to apply even within metropolitan areas so why should it apply throughout more remote rural areas?  
The idea of ensuring security of supply is something that affects all New Zealanders. Of course there are some rather bigger issues than are dealt with in this bill which certain aspects of Government policy have raised concerning the actual long-term availability of supply but that would lead us into another debate with you Madam Assistant Speaker over the purpose of the bill so I will steer clear of that in deference to your very robust position on this matter.  
What concerns me about the bill is that it has an air of kicking for touch about it. It has obviously come up to a deadline in terms of the original deal done in the early 1990s of this 20-year grace period in the expectation that a fix would be found. No fix has been found and as various speakers from our side have pointed out a “kick for touch into the future bill” has been put into place in the last days of the Parliament to deal with a problem that might have actually benefited from more serious and systematic attention in the last 9 years.  
The bill does the easy stuff in terms of the definitions in it and I will not go systematically through that. What it does not do—and this is the nub of the point that Mr Brownlee our energy spokesperson was making—is deal with the real devil in the detail here about what the actual process going forward is. There is plenty of clarity around what I would call trivial aspects of the process; for example new section 62B in clause 4 states that the supplier must fulfil the obligations by giving notice outlining the proposal and must describe how under the proposal the consumer’s reasonable electricity needs will be met. This new section also refers to the public’s access to information and so on and so forth.  
The crucial point though concerns how this will be resolved in a fair and balanced way. All we know is that clause 5 which deals with electricity governance regulations states that the relevant section section 172D(1) is amended by inserting paragraph (9A) which states: “requiring any person who fulfils the obligation in section 62(3) by providing electricity by alternative means to use a specified pricing methodology in setting the price for electricity supplied by alternative means:”.  
That is a wide open loophole in this bill. That basically describes a situation at least on my reading of the plain language of the bill of an enormous lack of certainty into the way forward. It is relevant to the discussion of this bill to try to foreshadow in the light of recent energy price shocks what will happen to micro-energy development. I think most people accept that with the price of oil being very very low for a very long period of time we have seen these spikes in price primarily as a consequence of no investment in refining capacity around the world and frankly of a lack of economic incentive to develop much of the alternative energy resources right around the world.  
We in New Zealand are unusually richly placed in this area but the point is that we will now see literally trillions of dollars being invested around the world because there are trillions more dollars to be made out of such investments in alternative energy resources. Given the development of new technologies—and the miniaturisation of technologies will continue just as powerfully in the next 10 years as it has done in the previous 10 years—it is not implausible to take the view that there will be more cost-effective micro-generation facilities available through technologies such as those that various members in the House have mentioned—solar technologies wind technologies and perhaps all manner of combinations of technologies that we just cannot envisage.  
The price still remains the crucial issue for the consumer. We have not yet defined what we mean by the end of the line. Is it one consumer? Is it a group of consumers? We have not defined what type of caveats will be around the actual process of defining the price. I see a real danger here. In spite of all the formalistic protections in terms of giving due notice and so on and so forth where actually is the negotiation in this process? Where is the guarantee that consumers at the end of the line will not be forced into a position where they say to the supplier: “Well thank you very much for meeting your obligation to give a specified pricing methodology for setting the price but the specified pricing methodology that you put forward means that you’re putting us out of business.”? I really think that a little more work is required on this.  
But yes the bill introduced for this longstanding and long foreseen problem right at the end of this Parliament kicks for touch on the underlying principles. I am certain that we have not heard the end of this issue and that future Governments will have to attend to this matter with a little more rigour than has been the case with this Government over the past 9 years. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Twenty-year-old Ietitaia Muliaga puts the Electricity (Continuance of Supply) Amendment Bill into perspective with a comment he shared as he remembered the last hours of his mother’s life. Mrs Muliaga who was hooked up to an oxygen machine with tubes running to her nose asked to speak to the contractor who had come knocking on their door that morning to turn off the switch because a bill of $168.40 had not been paid. His son remembered: “She asked him to just give us a chance.” Last week Gordon Matenga released his coroner’s report into the death of Folole Muliaga. His formal verdict was: “The cessation of oxygen therapy and the stress arising from the fact of the disconnection have contributed to her death”—“just give us a chance”. Mrs Muliaga did not get that chance but perhaps we as a nation have learnt through this tragedy to ensure that the crisis we have endured in the last 18 months will never occur again. 
So we come to this bill considering the vital purpose of continuing the supply provisions to ensure an obligation on electricity distributors to supply electricity. The amendment brings relief to affected communities which will continue to have access to electricity supply after 2013. It is about giving them a chance to enjoy the services and facilities that we expect any citizen in this land to have access to. We know that a fear in many rural Maori communities was that the deadline of 2013 would slash services and push companies out of town. In this context we were interested to see that the extensive consultation exercise included a submission from Ani Pahuru-Huriwai of Te Aroha Kanarahi Trust. 
We are pleased that the consultation with key stakeholders held toward the end of 2006 and early 2007 included the affected communities. We would note however that with the exception of the eight submissions from individuals Te Aroha Kanarahi Trust French Pass Residents Inc. and Rural Women New Zealand the bulk of the groups consulted were local government businesses and business lobbies distributors retailers energy trusts central government district health boards and a Government agency. We in the Maori Party believe that any policy is only as good as the people’s voice and we would hope that in the select committee process of the bill there is able to be full and diverse representation from the affected communities to ensure that the options receive a solid analysis. 
I think it is fair to say that this bill although it might not have affected a wide group of New Zealanders would certainly have had a dramatic impact on the affected communities if the amendment had not been put forward. The number of connections that as at 1 April 1993 were theoretically at risk of not being maintained was estimated at about 16000. Some analysis of the impact of this legislation has suggested that the impact was minimal—just 1 percent of about 1.8 million connections. But I would put it to those analysts that it is all a matter of perspective. The impacts of even the potential threat of electricity being cut for some of our people is extremely distressing particularly for those living in remote rural locations. 
Section 62 of the Electricity Act had set the alarm clock for 31 March 2013 and for some of our communities that time was getting perilously close. The purpose behind the original 1992 time frame was never understood. It was never clear why there had been an expiry date. All that we could make out was that it was a decision probably made purely on economic lines. It appears that in areas where the provision of lines function services were uneconomic due to the large distance between customers and the expense of servicing the lines the decision was made that come the magic date of 2013 lines companies would no longer be statutorily required to provide a connection to those remote rural locations. The most likely scenario was that 5 years on from here if a flash flood occurred an earthquake erupted or some other unforeseen freak of nature took place supply would either be terminated or the cost to consumers would rise significantly. 
Let us look at this a bit more closely. Let us take some of the adverse weather events that have tormented Te Tai Tokerau Waiariki and Te Tai Hauauru in recent months. A month ago Mount Manganui was hit by a mini tornado. Significant flood-producing rainfall occurred in Northland Coromandel the Bay of Plenty Whanganui Manawatu Marlborough and parts of the central plateau. There have been flooding high winds and earthquakes—all of them weather risks for the more remote locations. The possibility that lines supply might suddenly cease in say Tolaga Bay Takapau or Te Teko is a hardship that no member of Parliament could possibly sit by and allow to happen. Cessation of supply could mean as it did in the tragic case of Mrs Muliaga a chance of life snuffed out. Cessation of supply would inevitably impact on the health well-being and capability of any community to survive. Cessation of supply would impact on the viability of economic development on domestic services on farming and on rural life in general. 
The Mayor of Ruapehu District perhaps summed this up in a release she issued on 28 May: “The concern for Ruapehu District Council and the rural communities we represent has been that lines companies will withdraw rural power lines once the continuance of supply guarantee expires claiming a lack of economic viability. Historically the provision of electricity to rural areas was seen as an essential component of encouraging agricultural production and efficiency with electricity seen as a right for all New Zealanders.” 
This is one bill that we are happy to support under urgency. The matter of security and assurance of supply to many of our constituents throughout the seven Maori electorate seats is absolutely critical. We are glad to be able to vote in support of the bill going to the select committee as a vote of confidence in investment in the rural economy. I hope this speech has been close to being about what the bill is about. Kia ora. 
NATHAN GUY (National) 
: 
 I think it is very appropriate that I take a call on this bill because it is very important to rural New Zealand. Most of rural New Zealand will be tucked up in bed now at 10.35 in the evening on Wednesday night because that is where most normal people doing a hard day’s work actually should be. But the Government wanted to put the House into urgency up until midnight this evening and midnight tomorrow night and this is one of the bills it wanted to pass through. That just shows how disorganised after 9 years the Government is. 
This bill is vitally important for rural New Zealand which is often forgotten in this Parliament. It is important that I make a contribution as we come to the end of the 20-year sunset clause for this legislation which for those who are interested and who are still up listening—they may be having their cup of hot chocolate before they nod off to sleep—is the Electricity (Continuance of Supply) Amendment Bill. Section 62 of the Electricity Act will expire in 2013 which allows the lines companies to be able to review that section. 
One of the most important things for rural New Zealand—which is often forgotten in this House so I will make a contribution on it—is the continuation of electricity supply right through not only to the farm gate but to rural communities. When we think about all the isolated parts of rural New Zealand—it might be Mount Peel it might be an area over on the West Coast or it might be up and around the East Cape of the North Island or in the far north—we know that we have big tracts of rural New Zealand where electricity is supplied on power lines that might run down long kilometres of rural gully roads and it is important that lines companies do supply that electricity to those properties. For those properties electricity is actually their rural lifeblood is it not? We can think about how they are able to milk their cows shear their sheep or just keep their refrigeration going—their freezers in their own family homes. Electricity is vitally important. 
This legislation will mean that lines companies will still have to provide electricity but it might be in a different form from what is currently there. It might be more cost-effective for properties to think about an irrigation-supply generation dam option. Of course that will not happen under this present Government because it will need the reform of the Resource Management Act which is one of National’s key platforms going into the 2008 election. We are looking forward to getting into Government. That is one very important policy announcement for rural New Zealand and there are several others. Of course rural New Zealand is waiting on our tax policy which will also be vitally important for it as well. 
I have touched on how lines companies will still have to supply electricity to these remote parts of rural New Zealand but it may not be just an irrigation-supply generation dam option. It might be something to do with solar power or a localised scheme to do with wind turbines. There are several options. But the fundamental thing with this legislation is that rural New Zealand should not be forgotten. 
The important contribution I want to make in the debate this evening is to say that not so long ago in my area of Horowhenua-Kapiti we had what I guess we could call a very localised mini-cyclone. It came through wiped out trees and knocked over power lines. On our particular property we did not have power for about 6 days. Of course it makes us realise how reliant we are on electricity in New Zealand. When we cannot flick the light switch on when our cows cannot be milked and when all of our frozen items in our freezers are starting to thaw out we pick up the phone and think “I will just get a generator from the local hire company down the road in our local town.” But if someone from the hire company says “Sorry we sold out 2 days ago.” we look through the  
Yellow Pages 
 because we cannot use the white pages on the Internet as we have no power and the battery has gone down on our laptop.  
So we look through the  
Yellow Pages 
 and start ringing around. Suddenly we find that there are no generators in Horowhenua-Kapiti. We ring Palmerston North because we think we might get a generator there but we find they have all been hired out. Then we think that we can get something from Wellington but we find that they have all been hired out. In the end I found a generator that came all the way down from New Plymouth.  
Jill Pettis 
: Do you remember the blackout in Auckland when the generator crashed—when National was in Government? 
NATHAN GUY 
: The generator came through that former member’s area of Whanganui. We are looking forward to hearing her contribution for the final time tomorrow. It just shows that she has had several years in Parliament and has not been able to sort out this issue for rural remote areas around Wanganui. Chester Borrows is doing a fantastic job there representing that township and that area of rural New Zealand. 
In summary I say that this debate shows just how important it is that we get the Electricity (Continuance of Supply) Amendment Bill right. This is a first reading. It will go off to the select committee. Rural New Zealand will be able to have its say. It seems in recent times that the Government has just put the bulldozer blade down in urgency and just rammed legislation through. It is important that people have the ability to have some dialogue with the Government even though we all know that the Government is in its dying days now. There are just a couple of days to go under this urgency motion before we say ta-la-la not only to Jill Pettis but to all the other members on the other side of the House. We are looking forward to reigniting rural New Zealand. [ 
Interruption 
]  
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Order! 
NATHAN GUY 
: I am coming to a summary. I know those members do not like hearing the truth and I know it hurts them. 
We need to acknowledge rural New Zealand. We need to acknowledge the powerhouse of this country. Of course we remember the contribution former Prime Minister David Lange made when he said that rural New Zealand the primary sector was going to be the sunset industry. How wrong that has proved the Labour Government! This bill is important for rural New Zealand. It is very important for the continued supply of electricity through to those areas. This will enable the line companies to investigate a whole lot of options. The most important thing I say to rural New Zealand is that electricity will continue to be supplied under this legislation but of course there will be some costs associated with it. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I am very very conscious Madam Assistant Speaker that you came to this House from a previous life with a most formidable reputation as a headmistress and I would not want to trifle with you at all but I would seek a little bit of room to move in rebutting some of the arguments that have been put up in this debate to date. We have here again with the Electricity (Continuance of Supply) Amendment Bill another bill having its first reading in urgency in the last couple of days of the Parliament under a struggling strangling dying Government—and we wonder why. I think about the comments made by the two Ministers who spoke and we should observe that no other Government members have taken the call. It seems to have become their style now not to stand up and debate openly and according to the rules of debate but to sit there and bellow snipe sneer and that sort of thing. That is regrettable Madam Assistant Speaker as I am sure you will agree and it does nothing to enhance the reputation of the Parliament.  
Let this House be very very clear as to the context in which this bill has been introduced and in which we are having to debate it. For all the socialist rhetoric from the other side of the House the reality is that the Government’s energy policies have been a failure. That is a comment most relevant to this bill when we appreciate that the intention of the bill is to make a change to the Electricity Act 1992. It had always been the intention of that Act to guarantee continuance of supply but now as the sunset clause approaches it is also appropriate to consider whether that clause should remain. This bill of course gets rid of it. Let us not forget that the 2013 clause was put in the 1992 Act for very very good reason. The reason had to do with flexibility with looking ahead and with the anticipation that new forms of energy would be developed. We cannot blame the legislators of 1992 for not anticipating that there would be 9 years of failed socialist government and that energy policy like so much other policy would just be allowed to drift. New Zealanders will take great heart from the knowledge that they can—and will—very very soon put an end to that drift.  
There is mention in the bill of alternative means. That is my point. The Government has not done its work. I think that if we could turn the clock back to 1992 and talk to the people who were in the House at that time we would see they would not have envisaged a Government that would fail so badly. I want to take a moment to make reference to the comments—[ 
Interruption 
]. Is that the final speech by Peter Brown? If you want to have a say Mr Brown through you Madam Assistant Speaker have it now because I do not think we are going to see you back. Snipe away as much as you like. Enjoy it for the last few moments— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Do not bring the presiding officer into the debate. No second person references please.  
ALLAN PEACHEY 
: I apologise Madam Assistant Speaker. You are quite right.  
I refer to what the member for the Green Party had to say. There was not a great deal of substance to it. It was not a new wider or different perspective. It is disappointing that that party actually brings so little to the table in terms of the energy debate. Perhaps I could issue a caution having listened when sitting on election platforms around the country at which some of the Green Party’s candidates have been present. It is easy to criticise. It is too easy to go all the way back to 1992 and have a crack at the National Government Ministers of that time but sometimes one has to take responsibility for something. That is the experience the Green Party does not have—experience in Government. I think that in future debates on energy and in the debate on the Electricity (Continuance of Supply) Amendment Bill a party like the Greens would do well to try to bring a different perspective rather than simply to indulge in criticism of legislation passed through this House in 1992 with the very best of intentions. I reiterate the point that the original intention of the bill in 1992 was for ongoing universal supply. The repeal date was put in there to build in flexibility and to try to anticipate what alternative technologies might be available and what would be developed over a—what was it—25-year period. That was not an unreasonable thing to do. Now we find ourselves at the end of 9 years of failed energy policies in a position where things have not developed as we would have hoped. As I have said before we cannot blame the legislators back in 1992. I am sure they did not contemplate 9 years of socialist rule—who would have? But given that that has happened it is appropriate that the 1992 Act now be amended.  
It is for that reason that the National Party will support the first reading and the referral of this bill to a select committee. As other speakers across the House have commented New Zealanders need to be guaranteed an assured supply of electricity. That is a basic feature of New Zealand life and every New Zealander wherever he or she lives and whatever his or her circumstances is entitled to that. In conclusion I say that we must be very very clear about the context in which this debate is occurring and in which this legislation is receiving its first reading. That context is of a dying Government that has failed to move the energy debate forward in 9 long years.  
PETER BROWN (Deputy Leader—NZ First) 
: 
 I raise a point of order Madam Speaker. I listened to the honourable member’s speech with interest and noting that he is a former school principal I wonder whether he could explain to the House how he can say that from 1992 to 2013 is 25 years. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I am sorry Mr Brown but that is a debatable point. It is not a point of order. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I raise a point of order Madam Speaker. Mathematics is not debatable. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I am sorry Mr Brown. 
Bill read a first time.  
Bill referred to the Commerce Committee. 
Walking Access Bill 
In Committee 
Debate resumed from 11 September. 
Part 1Preliminary provisions  ( 
continued 
)  
Hon Dr NICK SMITH (National—Nelson) 
: 
 Part 1 of the Walking Access Bill establishes the New Zealand Walking Access Commission. I think the first thing to do is to give some context to the broader debate that has occurred in the development of this legislation. 
At the core of New Zealanders’ unique sense of being Kiwis is having access to the outdoors and increasingly having access to the unique lakes rivers and mountains that make up this beautiful country. Alongside that is a tourism industry that has become increasingly dependent on those overseas visitors who contribute over $8 billion a year to our economy also being able to have access to our wild places. In this Walking Access Bill Parliament is seeking to set up a commission that will provide leadership on and have the capacity to negotiate the facilitation of walking access. I think it is also proper that in this health-conscious age we acknowledge that more and more New Zealanders want to get outside go outdoors and have the opportunity to walk this stunning country of ours. 
I think it is also important to recite the history. New Zealand had a body very similar to the Walking Access Commission that was abolished in 1990 by the previous Labour Government. When the Department of Conservation was established it was intended that this role would be a function of that department and a decision was made then to get rid of what was seen as an ineffectual body. 
National members at the Local Government and Environment Committee—and I am talking specifically on the purpose clause—are of the view that we need to do more to improve public access. However that requires a careful balancing of private property rights—people purchasing freehold property and having a reasonable expectation of being able to have the enjoyment of that property—versus the tension that exists in spots around New Zealand where people who own property can effectively gain a monopoly right to access to a public good such as a lake river or mountain as a consequence of other people not being able to have access to it. We believe that this commission will have a useful function in terms of negotiating solutions. 
I have dealt with a vast number of these examples as a constituency MP. I have to say that this issue is quite regionally based. If we go right back to when Queen Victoria gave her instructions for a Queen’s Chain to be set aside alongside water bodies—lakes rivers the ocean—we see that there was quite a lot of variance in the degree to which the Queen’s Chain was provided. Quite a narrow view was taken in my own area of Nelson about the areas where the Queen’s Chain would apply and as a consequence I have large amounts of riparian rights adjacent to many streams much of the coastline and a few of the lakes in the Nelson region. 
The view of National members is that providing for a commission that does not override the right of private landowners but can negotiate is the right way forward. When the Government first proposed its more radical proposals under Jim Sutton National opposed them. We said that they went too far we said that they had lost balance and we said that negotiation was the right answer. We are pleased that what we see in the purpose of this bill is a reflection of that approach of negotiation. We believe that in relation to the vast bulk of access problems that develop in corners of New Zealand with good faith and some sensible resourcing from the Government the negotiated approach proposed in the purpose of this Walking Access Bill will take us forward. 
I would be interested in getting from the Minister in the chair the Hon Damien O’Connor some feel for the resources that will be made available to back up this commission. It seems a little bit strange that the administration of this bill will fall under the responsibility of the Ministry of Agriculture and Forestry. Previously this issue has been a responsibility of the Department of Conservation. If we look back to the commission that was abolished by Labour in 1990 under the Lange-Palmer-Moore Government we see that one of the key reasons that it failed was that it did not get the resources it required. So I am very interested to hear from the Minister what sorts of resources will back up this bill in order to make the commission worthwhile. The truth is there will be practical issues like providing fences stiles and signage and if we are going to make some practical progress on these issues of access then providing some budgetary allocation for this new commission will be critical to its success. 
The National Party is saying that the bill takes a good approach—far better than that previously put forward. We have got rid of compulsory acquisition and got rid of the “walk at will” ideas that had been advanced and that caused such furore amongst the farming and rural communities. But if this voluntary approach is going to work then we need to provide some cash to pay for the practical fencing practical stiles and signage that will make this bill workable. I would be very interested in a contribution from the Minister to outline what commitments the Government has made in that respect. 
JOHN CARTER (National—Northland) 
: 
 The best way to describe the Walking Access Bill and its history is probably to look at Part 1 and at clause 3 the purpose. Members should look at the subclause that is actually struck out which stated: “(b) to provide for walkways to be declared over public and private land;”. That sentence says it all. It was the Government’s intention when it first introduced this bill a good while ago to actually affect property rights—to a limited extent it still does. But in its raw stage as it was first introduced it certainly would have had a major impact on property rights in this country. I say as an aside that what interests me with this is that there was a huge uproar about property rights around this bill yet there was only a muted response when the Government introduced its seabed and foreshore legislation which also was about property rights. It surprises me that there was not the same furore from the public right across New Zealand in regard to that legislation as there was over this bill. However that is an aside.  
It seems to me that the difference between where the Government started from and where it has finished up has been a real smack in the face for it. It started off saying basically that people in this country can walk pretty much where they like. If it is deemed that that is in the interests of the community they can walk across people’s farms they can walk across parks they can walk across multiply owned Maori land they can walk across someone’s backyard and potentially they can even walk through someone’s lounge although that is unlikely. Nevertheless that was the thrust of the bill. It has been brought back to being sensible legislation that the National Party having worked as hard as it did during the select committee process can now support. It brings some common sense to an issue that needed to be addressed and now will be when this bill passes. Basically it says that we recognise that there is need for people’s recreation and for some places where the public can walk but we must also recognise the rights of the property owner and where there is suggestion that a walking access be established it should be done by way of negotiation. There are a number of rules around the way in which that negotiation is to be done which will be debated as we progress further through the legislation.  
The other interesting aspect is that as my colleague Nick Smith spoke about this bill also establishes the Walking Access Commission. I think that is a good positive step forward as well because it means that we have a body of people who will take responsibility to ensure that the interests of the individual as well as the community are taken into account. The interesting issue that came before the select committee was when we started talking about the matter of walking access. We then got into the issue of the paper roads that there are so many of across this country and the right that New Zealanders have to use those. Of course that brought in the fact that there is not just pedestrian traffic but also vehicular traffic and how that was to be dealt with as we went through the issue of deciding which of the roads may be used as walking tracks. As there was debate around that a number of clubs came forward and said they were concerned about the paper roads they use by way of their four-wheel drive club or gun club for access—for those who are interested in the sport of shooting or whatever it may be. Motorcyclists often use these sorts of facilities for their enjoyment. It meant that it would bring conflict between vehicles and people who walk for recreation. The purpose of the commission is to resolve those conflicts. Given that often common sense can and does apply and people come to compromises there is no reason why that will not be achieved; this legislation sets parameters for that to happen.  
But as I say it was an interesting debate because it brought to the attention of New Zealand and certainly to the attention of Parliament the fact that as our population grows as demand for recreation spreads and as various forms of it develop we need to take great care to ensure that we do not establish something that detracts or interferes with the rights of others or causes conflicts. So I think it was a learning curve for the select committee members who had to get their heads around some issues that prior to looking or delving into the issue one would have thought was not such a difficult subject to consider—that we will just develop some walking areas for the public to have a nice Sunday stroll on a warm afternoon or maybe somewhere where they might lead their dog their pet duck or whatever happens to interest them. But of course as one delves into these things they are never quite so simple.  
Part 1 as set out here confirms the fact that we have moved away from interfering with private land in a compulsory manner and that we have allowed for voluntary giving of land but under certain conditions. It gives recognition of the rights of the property owner and it also sets up the commission as we have said. I think the bill as structured in Part 1 has actually ended up being good legislation.  
The Local Government and Environment Committee worked well and constructively on this legislation. This is another example of Parliament actually working together on an issue that was contentious; it has to a large extent solved that problem. It does show that as so often we can work together on a problem but the public do not know it. The sad thing is that the media should be out here reporting that Parliament is working constructively on legislation but of course that does not interest them very much. 
Dr Jonathan Coleman 
: You’re sounding like Blumsky. 
JOHN CARTER 
: Well it is true though. My colleague says I sound like Mark Blumsky—I hope I do for the very reason that often we do not promote ourselves enough as a structure that can work together and that we often do so more than we actually fight. The sad thing is how the media portray it.  
In concluding I draw the Committee’s attention to that point—that we have worked constructively together. This is a good bill. The National Party will support it—I understand that most of the other parties in the House are now doing so as well—and we should allow this bill to move on to its third reading so it can be concluded. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to take a call in the Committee stage of the Walking Access Bill. It is a bill that sets out what I believe is the inalienable right of Kiwis to access key parts of New Zealand: our lakes our rivers our seas and our mountains. That right represents who we are and provides us with part of our identity as New Zealanders. Nowhere do we find that to be more so than when we look at Maori who on entering a marae or any meeting place will conduct a mihi and within that mihi they will whakapapa back to their maunga their awa and their beach.  
In my own mihi I say “Ko Tutaekuri toku awa.” and I relate back to the Tutaekuri River at the bottom of Taradale. I say “Ko Otatara toku maunga.” Otatara is the mountain the maunga just behind Taradale to which I personally relate. And I say “Ko Waipatiki toku one ki te tai Tokerau.” Waipatiki Beach north of Napier is the beach that my family particularly relates to. I think this bill is immensely important to all New Zealanders as we increasingly through the generations relate back to the land and what that land means to us as Kiwis. I can certainly say that when one is sitting in a pub on an overseas journey and thinking about New Zealand one thinks back to the mountains the lakes the sea and the rivers around the place where one grew up.  
Part 1 “Preliminary provisions” sets out the purpose of the bill which is to give us the ability to continue to have access to those important areas. Clause 3(a) states that the purpose of the legislation is “to provide the New Zealand public with free certain enduring and practical walking access to the outdoors (including around the coast and lakes along rivers and to public resources) so that the public can enjoy the outdoors;”.  
I will take up a point made by my senior colleague Nick Smith who talked about his electorate and some of the issues he has had within it with regard to accessing areas such as the ones he was speaking about tonight. In Hawke’s Bay we have not had such issues but I think about some of the wonderful aspects of Hawke’s Bay where the public want to get access—particularly in the area where my new electorate which I will be standing for at the upcoming election has grown to. The Napier electorate boundary has now moved north to include Mahia and Mahanga Beach but it also includes Lake Waikaremoana. If there is a more amazing walk in the North Island of New Zealand than the one at Lake Waikaremoana then I am yet to find it. The public access to that lake is at this point in time quite accessible through certain entry points and it will remain that way. I certainly have not had any complaints about the access to the lake.  
As we move down through Hawke’s Bay to Mahia and some of the amazing beaches that are there we find the access to those beaches is an inalienable right and people have that access. We have not had any complaints about access there. If we go down to the beautiful Mohaka River which wends its way through the province of Hawke’s Bay we find there is amazing trout fishing and white-water rafting. There is access to that river along the waterway and I have not had any complaints in that regard from the public either. Moving down to Waipatiki Beach and various other beaches we find there are no real issues there in terms of access for the public which is good.  
On moving out of the electorate and further south of Napier we are in Craig Foss’s electorate of Tukituki an electorate I am confident he is going to do well in at the next election. If we think about Tukituki we realise there are a number of potential issues around the subdivision of Ocean Beach and also around access to Cape Kidnappers. Access is currently available along the beach the land above which is currently owned by the very well-to-do Julian Robertson who has developed the cape and is turning it into an amazing wildlife sanctuary. That will do amazing things for Havelock North and for the wider native bird community. But I guess over time people may want access to that area and there could be issues around the fact that it is private land now.  
But those are examples of people who are prepared to negotiate access and that is the experience that the National Party has had. That is why we have reached a good position with the removal of clause 3(b) which originally stated that a purpose of the legislation was “to provide for walkways to be declared over public and private land:” There were always going to be issues there in terms of property rights with the Government coming along putting its foot down and saying it would allow people to get across private land when it is our experience on many occasions that where people want to get access most farmers or people who own private land are happy to work with the public to provide access in one way shape or form. They do not want to allow carte blanche access without their knowledge to various lakes and rivers but they will certainly work in conjunction with the community to provide access.  
I think this is a good bill. The National Party will be supporting it through the Committee stage and through the next reading. I think the purpose clause outlines an excellent way in which we can work towards improving the access to our lakes to our rivers to the seashore and to our mountains. Thank you Mr Chair. 
SANDRA GOUDIE (National—Coromandel) 
: 
 National is supporting this bill but it is interesting that there is no provision for any funding for any walkways that might actually be established. If we look at the definitions around “authority” we see that councils will be required to make some decisions and maybe even to take on the responsibility of being an authority for the establishment of a walkway. And quite patently not everybody wants to have people traipsing over his or her property as part of a walkway even if it is round the coast for example. If a council is going to go down that path and set itself up as an authority it then has to consider how it will meet those costs.  
That raises the question of whether such a council will put its hand up to become an authority in the first instance manage a walkway and have responsibility for any of the costs associated with that walkway. There is also the associated cost of enforcement in terms of the number of police who will be required to act as enforcement officers if someone is stepping outside the codes—they will be developing codes as well.  
When people go for a walk along a walkway they will not necessarily be aware that there is a code of conduct they will have to adhere to so the enforcement officer will have quite a job to make sure that people comply with a code they know nothing about but that does exist on a shelf somewhere. Those people may be happily walking over the walkway and may not necessarily be acting in accordance with that code. I can see that there will be one or two issues along the way.  
There are costs to these walkways as well. There is the cost perhaps of fencing. There is the cost of enforcement and there is the cost of some associated requirements that adjacent landowners may require in negotiating a walkway across their property or on public land through their property because it may encompass paper roads. It was quite good to see that the wider issue around paper roads was taken out of this legislation and I think that is in large part due to the excellent work done by Eric Roy and the National members of the Local Government and Environment Committee. Some very good work was done there.  
What happens in essence is that if a person has some private property is in the middle of two parts of a walkway and does not want to negotiate fortunately there is nothing within this legislation that compels that person. It would have to be done under negotiation and a person cannot be compelled to even enter into negotiation if that person decides he or she does not want to. I think that is a good aspect of this bill.  
Right now any council any regional council any conservation department or any conservation board can get around the table and negotiate. There is nothing to stop that. There is nothing to stop any party from participating in the negotiation process to establish a walkway. But that is OK—we will still develop and support this bill which puts lots of words and bureaucracy around all that just to make it a little bit more problematic rather than just leaving it up to the free negotiation processes that already exist.  
One of the other things that I found interesting is the definition of “controlling authority”. In actual fact a controlling authority can be anybody; it can be a council and it can be an individual. I thought it was quite interesting that if a walkway is negotiated a controlling authority could be an individual but I could not see why an individual would want to be one because he or she would then incur the responsibilities and the costs that accrue to that. Maybe the Minister would like to take a call and outline some of the matters I have raised. It would be very interesting to hear what the Minister has to say with regard to those sorts of things.  
One of the other issues that came up was the naming of walkways where priority is given to one sector of the community without the rest of the community having any input into the naming. Priority was given to Maori naming of walkways without any reference to any other member of the community which I thought was unacceptable frankly. I am not sure whether there have been any amendments to change that so that everybody has an opportunity to participate equally.  
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I rise to speak on the Walking Access Bill. [ 
Interruption 
] I actually compliment members opposite on their contributions so a little bit of graciousness from Dr Nick Smith would not go amiss at this time of night. As this is a fairly wide-ranging debate in terms of the Committee stage I will talk a wee bit about the New Zealand Walking Access Commission in the context of this bill and its intention.  
Sandra Goudie talked a wee bit about bureaucracy but I do not think her fears will be realised. The Walking Access Commission potentially has a very important role for a bit of strategic thinking. Speakers have spoken previously on their parts of New Zealand—for example Coromandel. One of the things that I hope that the commission could do in the Waikato with the Department of Conservation and other agencies is to start developing a bit of a strategic framework of where future walkways may go. There may be long-term planning objectives.  
For example there could be great potential for a walkway from say the Pacific Ocean at the Bay of Plenty and right across to the Tasman Sea. I know that Metiria Turei would certainly agree with that as would Barbara Stewart. If we look at the links we already have with walkways in the Te Aroha mountain area we see there are a series of rail trails such as the Hauraki rail trail. There is a whole range of things. It may take 30 years but I am saying that one of the great things that the Walking Access Commission could do is to start scoping some of those long-term visions—for example Te Araroa the North Cape to Bluff walkway. Hopefully the commission will be looking at these other ideas.  
I say that because in 20 to 30 years our population may be 5 million to 6 million and the bulk of the population will live north of Lake Taupo for example. There will be increasing population pressures in that area and there has to be some strategic thinking now about the ability of people to get out of urban areas to enjoy the countryside—particularly with the development of peri-urban walkways—and to enjoy walking access. The key thing about this bill which I think is a really good thing is that it will be done by a process of negotiation. It is not just drawing a line across a map; it is actually negotiating that line across a map. It may be if we are being really lateral in our thinking—and I know that the member Sandra Goudie from Coromandel was extremely lateral in her thinking—that we would be looking at a negotiation process.  
I take the point from members opposite and from other members in this Chamber who talked about the protection of the rights and interests of property owners. It may be that one negotiates an access strip across the back part of a property. One may not pick it up immediately but one may do so further down the track subject to budgets and financial incentives. But having a caveat against the title initially means that it can be used in years to come.  
One of the issues that I have noticed in my area is that on the route from Ngaruawahia on the Turangawaewae side to Hamilton through to the eastern suburbs of Hamilton previously one could drive right down River Road from Ngaruawahia to Hamilton City and one could see the beautiful Waikato River. Over the years the views of the Waikato River from the road have being gradually obliterated by some very expensive housing. That has not been matched with adequate walking access from Ngaruawahia township through to Hamilton. Hence again strategically we could have the Walking Access Commission working with the Waikato District Council Hamilton City Council and other agencies on this issue. Frankly we are losing views bit by bit on some of the road along New Zealand’s premier river and that is a noticeable aspect. Those are the kinds of strategic things that the Walking Access Commission could also be looking at and this bill gives scope by a process of negotiation to ensure that.  
The prediction I have concerning some of those property owners as is the case in Hamilton is that technically there can be provision for a walkway but people build right up to the boundary of a river. Then when one tries to retrofit a walkway there is opposition to it.  
Part 1 agreed to. 
Part 2New Zealand Walking Access Commission  
Hon Dr NICK SMITH (National—Nelson) 
: 
 Part 2 of the Walking Access Bill sets out the establishment of the New Zealand Walking Access Commission as a Crown entity. The first question that National would have of the Minister in respect of this part of the bill is where walking access should sit in the bureaucracy of Government. There are those of the view that the Department of Conservation is the dominant agency with responsibility for recreation activities. It manages about 10 million hectares of the public estate and in many respects when we are talking about public access it is about getting to and from the conservation estate. A second possible candidate which it seems the Government favours is the Ministry of Agriculture and Forestry. The concern that many would have is that the Ministry of Agriculture and Forestry is—rightly so—a very commercially focused ministry; it is about supporting New Zealand’s biggest export industry. We are all aware that about $20 billion a year is generated from those primary industries and National is concerned about whether there is a comfortable fit between the Ministry of Agriculture and Forestry and this new Walking Access Commission.  
There are those who argue that this commission actually fits more comfortably with the work of Land Information New Zealand. The reality is that many of these issues are around land title. It is interesting if we reflect on the history of this Parliament—and it is actually a real success story of our forebears—to realise that the Minister of Lands used to be one of the most important and one of the most contentious roles in Governments of the past. But the law has become so well settled there is little area of contention albeit this issue of walking access which is a debate around land law around the areas where people can have walking access and within what legal parameters it can happen.  
We are a bit concerned. Yes the commission is a good idea but where should it sit? We are not convinced that the Ministry of Agriculture and Forestry is necessarily the right place for it. I suspect the reason the commission has ended up there is that in the process of the debate on the forerunner to this bill the previous agency the Department of Conservation and the Ministers who led that agency have so alienated the rural community that if the Walking Access Commission is in the framework of the Department of Conservation it will automatically get a negative reaction from many farming communities such that it will not be able to perform its task. But that does not necessarily take away the fact that the Department of Conservation may be a more comfortable fit given the level of recreational interest that comes with the role of the Department of Conservation and because it manages such a large area. Over $100 million a year of the department’s budget is indeed for provision of recreational facilities—the huts and the tracks. We have over 10000 kilometres of Department of Conservation tracks on public land which this bill is designed to extend.  
I would be interested in the Minister’s explaining where this commission will sit within the bureaucracy of Government and why the Government is sitting in that particular spot. It is our view that that decision will have a significant impact on whether the commission as it is established under Part 2 of this bill will be able to successfully carry out the functions that are being set out for it. I also think that we need to note the amendments that were made by the select committee to Part 2. It is my view and it is National’s view that these issues of access are best resolved at the local level. These issues are inherently local by nature and to some degree central government agencies will always be handicapped. I commend my colleague Eric Roy for his announcement as National’s spokesman on outdoor recreation policy that the conservation boards need to have a greater focus of people with an outdoor recreation involvement and that they should have a role in the interaction with the commission.  
The amendments that National successfully advocated during the select committee process provide for walking access to be developed in close collaboration with local authorities. I give a good example in my own constituency: the proposal to develop a walkway along the Waimea estuary between the communities of Richmond and Mapua which is a magnificent and beautiful area. But one of the difficulties is the interaction between the local authority—the Tasman District Council—the Department of Conservation and the Land Information New Zealand. That is why in the select committee there was a push to include in clause 10(b) the words “in collaboration with local authorities:”. If we are going to have this nationwide body we do not want it running roughshod over the local authority; we want it working in partnership with the local authority.  
I also think we need to give some thought about the Walking Access Commission in respect of Sport and Recreation New Zealand. We have this other agency and I think all members of the House would be aware of the level of concern amongst the public about the growth of bureaucracy. Bureaucratic numbers have expanded by about 10000. It is unbelievable that we have had another 15 hectares of bureaucrats in Wellington during the term of this Government and there is a legitimate concern that this bill is just going to add more bureaucrats. I would like to hear an explanation from the Minister as to how when we have the Department of Conservation with a recreation focus when we have Sport and Recreation New Zealand receiving taxpayers’ money and having a heap of bureaucrats working in this area the Minister will make sure that we do not end up with just more bureaucrats. How will the Minister make sure that the role of the Walking Access Commission is clearly defined and is not going to clash with that of Sport and Recreation New Zealand?  
The last point I make in speaking to Part 2 is on the issue of defining the degree of walking access and what we mean by it. Are people going to be able to carry firearms are they going to be able to have dogs and what are the issues in respect of motor vehicle access? I think most New Zealanders would view a huge difference. It is the business of the New Zealand Transport Agency—it used to be Transit it used to be the Roads Board we keep changing the names of these things—which is responsible for looking after access for motor vehicles for commercial agricultural and other purposes. This is about walking but where does “walking” end—are there going to be generic rights around walking access provisions to be able to carry firearms and to be able to have a dog? There are implications for landowners from those issues. Will there be clear provision in that regard?  
The last point I make is in respect of clause 10(2) which ensures that walking access is culturally sensitive. Now I have to worry that we are getting awfully politically correct. I have difficulty in sorting out what is a culturally sensitive walkway and what is a culturally insensitive walkway. 
Hone Harawira 
: One that doesn’t go through the lounge! 
Hon Dr NICK SMITH 
: One that goes through the lounge might be deemed culturally insensitive! I just worry that— 
Hon David Cunliffe 
: The member’s slipped from being the green conscience of the National Party. 
Hon Dr NICK SMITH 
: The member David Cunliffe worries about the Bluegreens and our very clear philosophy about how we deal with these issues. I have to tell the member that the Bluegreens have as one of their key founding principles support of public access. But I tell members another very important principle: good quality law not this mushy law not this woolly law. We would just like some definition around what is culturally sensitive because we worry the lawyers are going to have a field day and we are going to be none the wiser about that access.  
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I want to talk about the functions of the Walking Access Commission in Part 2. I would have thought just briefly on the issue of cultural sensitivity that we do not need too much debate to know that we do not put a walkway through say a grave site or an area of archaeological significance. I think these things frankly are taken as read and I am sure that other members may take a call on that issue. Again this is something of a chilling reminder to some parties should they ever entertain even the thought of engaging with those people if the numbers stack up in terms of post-election to please take note. It is but another warning signal.  
I am sure the Minister in the chair the Hon Damien O’Connor may or may not want to take a call around some of the points that Dr Nick Smith has made in terms of the role of the Department of Conservation and in relation to the functions of the commission. I do not want to turn this debate into one of antagonism but I do personally think that all the hard-working people who are public servants who have suddenly been likened to so many hectares of bureaucrats on the Wellington foreshore or whatever by Dr Smith could take some offence. Just the other day I visited the Department of Conservation and met with the Waikato Conservation Board. I do not know that our wonderful hard-working heroic department staff who are wonderful New Zealanders should be somehow classified and demeaned as one of those extra hectares of bureaucrats. Are they the people whom Dr Smith is talking about? When he talks about bureaucrats I would say that it is an invitation to members opposite to please identify the people whom they are demeaning by using this term.  
In regard to the functions of the commission I commend the Local Government and Environment Committee for its work. I think that the functions of the commission are well laid out in very plain simple English in Part 2. Again I note that it provides national leadership on walking access by preparing and administering a national strategy coordinating walking access among relevant stakeholders and central government organisations including Sport and Recreation New Zealand and providing local and regional leadership on and coordination of walking access in collaboration with local authorities.  
I think reference was made to the role of conservation boards. Personally I would see the Walking Access Commission working very very closely with conservation boards throughout New Zealand. As I mentioned it was my privilege to sit in on the Waikato Conservation Board meeting the other day and see the incredible wonderful work it is doing in conjunction and collaboration with the excellent Department of Conservation staff in my area. I think they would certainly have a degree of expertise and vision that would work with the commission in this way.  
I also note that local authorities as the level of government closest to the people will also have a key role. I compliment the local authorities in my area on some of their visionary work particularly the Waikato District Council and the Waipa local authority. With no disrespect to Dr Nick Smith—because I obviously do not question his sincerity—I say that I think he is possibly looking for issues and problems that do not exist. Mr Chair I know that you and the Minister in the chair the Hon Damien O’Connor are listening intently to my contribution but the Minister may want to take a call in regard to some of the issues that Dr Smith has raised. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe uncle. Kia ora tatou katoa e te Whare. In response to the comments made about cultural insensitivity I would just like to say that we consider those comments about the Maori Party possibly jumping into bed with the party that wants to get rid of the Maori seats to be highly culturally insensitive. In the same way we consider comments made on this side of the Chamber that we might want to jump into bed with the people who just stole our foreshore and seabed to be equally culturally insensitive. We are already there; it is just a case of who wants to jump in with us.  
In respect of this particular Walking Access Bill and the regular comments from the Government side of the House about how pro-Maori those members are and how supportive they are of Maori endeavour and given the number of Maori MPs in the Labour Party including Parekura Horomia Nanaia Mahuta Mita Ririnui Mahara Okeroa Dover Samuels Dave Hereora— 
Chris Tremain 
: Shane Jones. 
HONE HARAWIRA 
: —Shane Jones and others I wonder why in clause 8 “Board of Commission” instead of stating: “The Minister must after consultation with the Minister of Maori Affairs appoint at least 1 member who has a knowledge of tikanga Maori …” the Government did not just put “the Minister must appoint a Maori”. I wonder why the Maori members of the Government have not said boo about this at any time during these proceedings. I wonder why they do not say it and I wonder whether it is one of only two options—they have been told they cannot say it or they believe that it should not be there.  
As a member of the Maori Party I would have thought absolutely that the role of Maori MPs and particularly Maori MPs pretending to represent Maori seats and therefore Maori voters on something as important as the Walking Access Bill which will have a huge impact on Maori land right throughout Aotearoa would be to say that it would not hurt for the Maori members of the Government to call for one of the members of the board of commission to actually be Maori and to accept that this is simply not a position that any Maori member of Parliament should be agreeing to. The fact that the Government Maori members of Parliament can accept this suggests that this Government is not nearly as pro-Maori as it makes out.  
Furthermore given how pro-Treaty this Government has been claiming it is and will be over the next few weeks I wonder why it did not take up the submission from Te Runanga o Ngai Tahu and other Maori people to include a Treaty clause in this bill. I ask that because I understand that it is Labour policy not to include the Treaty clause in non - Treaty-related legislation. Well one could hardly assume that legislation referring to lands owned by Maori right throughout the country is not Treaty-related. Again I am wondering why given how many Maoris there are within the Labour Government including Parekura Horomia Nanaia Mahuta Mita Ririnui Dover Samuels Mahara Okeroa and others the Treaty clause has again been voted down. I ask that because I know that it was not just Ngai Tahu who recommended that that Treaty clause go into this bill; other Maoris recommended also that the Treaty be included in this bill and most of the Maori submitters were concerned that the Treaty was not in the bill.  
Here again was an opportunity for this Government to back up all of its talk about the Treaty by including the Treaty itself or a reference to the Treaty in this legislation. That it has chosen not to do so is in my view the clearest statement of its Treaty intentions. Kia ora. 
JOHN CARTER (National—Northland) 
: 
 I will talk about something that no other member at this stage of the debate has alluded to. There has been discussion about bureaucracy and about the possibility of increased bureaucracy. My colleague Sandra Goudie mentioned issues around local government. Nick Smith talked about the expanded bureaucracy and about there being 15 extra acres of bureaucrats in Wellington which is an extraordinary way of putting numbers together but I guess it makes the point. 
I draw the Committee’s attention to Subpart 2 “Code of responsible conduct” in Part 2. If members read it they will see that it makes very interesting reading indeed. Clause 15 states that the code’s purpose is “to provide for the development and issue of a code of responsible conduct in relation to walking access for the general guidance of—(a) users of walking access; and (b) landowners of land on which walking access is located;”. Clause 16 “Contents of code” states: “(1) The code may include all or any of the following:” and it goes on to give a number of different things that can be included. Then Clause 17 talks about the preparation of a draft code. It establishes that “The Commission must prepare a draft code …”. The commission then has to let the public know so it has to give notice of the draft code. It then has to invite members of the public to make comments on it. The commission must ensure that the notice is widely published and that the draft code is readily available to members of the public. Under clause 19 “Matters to be considered” the commission must consider the content of a draft code—this is before it issues a code under clause 20. It must be satisfied that the recommendations on standards of behaviour if any are appropriate. And so it goes on and on. Finally when all that is done the code is issued. 
What interests me is what happens then. We have a code— 
Sandra Goudie 
: It would be contrary to the negotiations. 
JOHN CARTER 
: Well it may be contrary to a whole lot of things but the point is who will administer the code. Who will police the code?  
Sandra Goudie 
: Oh the enforcement officers. 
JOHN CARTER 
: Well I cannot read it in here. There may be a reference to enforcement officers; I have not found it although it may well be there. 
Sandra Goudie 
: Honorary. 
JOHN CARTER 
: Yes but the point is this: are we going to end up like taxi drivers? Taxi drivers as members know have to get a certificate of fitness. They do not get just a warrant of fitness; they actually have to go a step up. I have recently discovered that Land Transport New Zealand now has a fleet of Holden utes with jacks and all sorts of equipment that drive up beside taxis in the middle of the street pull them over and inspect them. They do spot inspections of those vehicles. Taxi drivers have gone through a higher level of certification that than just the normal warrant of fitness but these taxi police are out there checking up on them in the same way that truck drivers are checked up on. 
What worries me is that if we follow down that line we will have walking police who pull people up to look them over— 
Sandra Goudie 
: Checking the hem of your walk shorts. 
JOHN CARTER 
: Yes absolutely. They will be making sure the hems of people’s shorts are right or making sure the soles of their shoes do not have too much rubber on them or do not have pointy spikes. I can just imagine the bureaucracy that could develop. People with little pointed hats and funny big sleeves with pens and paper stuffed up their sleeves and goodness knows where else could be hiding behind trees waiting to spot-check people. 
Hon Damien O’Connor 
: The bill! 
JOHN CARTER 
: I am talking about it. This is what it could lead to. It is actually frightening when we start thinking about it. The problem is the flow-on effect. The Minister in the chair is saying I should come back to the bill but I am in the bill—right in it. My mind is right in where it is likely to lead us. Within the next 10 or 20 years there will be a socialist Government saying it now has an opportunity to employ more people and create more bureaucracy. It will have people hiding behind trees spying on people looking through binoculars down the track to see whether people are coming along the track with their trousers on the right way round. All sorts of things could happen. 
If we really think about this sort of thing we realise that we have to be concerned. Here we are talking about a code of conduct but if we cannot police it why have it and if we are going to have it how are we going to police it? Parliament should be seriously concerned about that issue because sooner or later we will be in a situation where people walking their dogs down a walkway somewhere in New Zealand are pulled over because the dog’s tail is too long or too short or because the dog did something that doggies do that it should not have done right there because the code of conduct says “You can’t do doo-doo right where you did do the doo-doo.” All those sorts of things could happen. I just make the point that we need to actually understand when we are passing legislation like this—particularly when we are doing it in the dead of the night and as we move towards the end of this session—what possibly could happen if it goes forward as it is. 
I ask the Committee to have a look at Subpart 2 of Part 2 read it and digest it. It has serious implications. As I have said we now have taxi police out there jacking up taxis all over the place. We have other police—and I cannot think of the right name for them; they are not actually police—who go around looking at trucks taking logs off lorries and doing all sorts of things because some truck driver’s load is two or three kilos overweight. We will have the same thing here—you can bet your bottom dollar on it. Somebody will be walking down a track somewhere and some little guy will squirt round the corner and say: “Sorry you’re too big to be on this track. Off you get. You’re overweight.” Well that is the reason why the guy is out walking in the first place—he is trying to get underweight. But he will not be allowed to get underweight because he is overweight. 
I say to members that we seriously need to be concerned about the sorts of implications that this measure could have. Members can imagine the members of the Parliamentary Rugby Team deciding to use a walkway for a training run and they are halfway through their training run jogging along getting fit to take on the French in the next world cup and what happens? Someone says the track is not a jogging track but a walking track. “You can’t do this Parliamentary Rugby Team. It’s not in the code of conduct. You’re outside of it. Take your trousers off and your socks.” The team members would have to walk home with just their shoes on. Members can imagine the implications of it. The mind starts boggling. The more I think about it at this time of night at five to 12 on whatever the day is—yesterday—the more my mind starts wandering all over the place. 
I am thinking about Damien O’Connor. Can members imagine him jogging down the walking track then being stripped of his gear because he was running too fast? It would be the only time he ever did run fast; he cannot run fast on the paddock but he could be running fast down one of these tracks and one of these code of conduct police could say to him: “Sorry Minister. You’ve got it wrong here. You should have tied your shoes together so you could not run so fast.” That is the sort of idiocy that we could be passing at this time of night. 
None of us understands enough about it because when we look at this bill we see that it does not actually give us enough details. I start getting concerned at 5 to 12 on a Tuesday which is actually Wednesday that we actually are debating things we do not understand. I really start getting anxious. I think Parliament needs to be concerned when we debate these bills that we look at these things. The Local Government and Environment Committee has gone through them but all of a sudden we find that goodness gracious there are some implications beyond them. I can just imagine that the code of conduct walking-track policeman will have to share a ride with the taxi policeman guy because the taxi driver could not take someone to the walking track because he could not drive his car there and the guy could not get there because he could not walk there because the taxi driver could not get him there. Try to figure that out! I cannot and I just said it. I do not understand what I just said. So how in the world will some member of the public be able to understand what was said when we are passing this bill at 5 to 12 at night and we do not even understand what we are saying. 
So I say we should beware. Mark my words as a result of this bill there will be walking police all over the place in times to come and we need to be worried about that. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 The previous speaker I have discovered was the deputy chair of the Local Government and Environment Committee when this bill was considered. I ask members to tell me where in the commentary on the bill there is any talk about the code. I have to talk to my colleagues on this side of the Committee. I ask them to tell me what issues and what concerns the member raised during the hearings on this bill.  
I would be very afraid if that member was anywhere near any form of outdoor recreation policy as he does not understand about the code. The code is very simple and very clear—it is to protect the rights of adjacent landowners and the rights of walkers who need access. There is no rocket science here. That is really all I have to say.  
I am amazed that that member as the deputy chair of the Local Government and Environment Committee did not raise these issues at the select committee. Where is the minority report? I cannot see it. 
SANDRA GOUDIE (National—Coromandel) 
: 
 How can we have a code of conduct when we are meant to be negotiating agreements to create these walkways and the agreement could be quite contrary to what is in the code of conduct? How on earth can we have a code of conduct that will apply generally to all these walkways when the negotiated agreements between adjacent landowners or private property owners could have matters quite contrary to whatever we have in the code of conduct? The whole thing is a load of nonsense.  
There will be negotiated agreements of parameters of the conditions that will be set on a walkway and when we are talking about cost there certainly is a cost to the commission which will be a Crown entity. There certainly is a cost to the establishment of walkways because the very nature of a walkway is that people are able to walk on it and most of the terrain will have to be level so that they can walk on it. Will that be accessible to people with disabilities? Will they be able to use wheelchairs on it? People with a disability need to be able to use a wheelchair—that is their idea of being able to have access—on those walkways. The cost of establishing a walkway and establishing the right sort of terrain to walk on will be an additional cost.  
This code of conduct will go on ad infinitum just as John Carter said. We only have to look at Part 2.  
Martin Gallagher 
: Here’s Part 2. 
SANDRA GOUDIE 
: Has the member read it? 
Martin Gallagher 
: Absolutely. 
SANDRA GOUDIE 
: Then he will be able to see for himself quite clearly. When I look at clause 10(1)(e) I see that it talks about the commission facilitating resolution of disputes processes. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Thursday)