Volume 679 Week 9 - Tuesday 1 May 2012 
Text is incorporated into the Bound Volume 
Volume 679 Week 9 - Tuesday 1 May 2012 
[Sitting date: 01 May 2012. Volume:679;Page:1767. Text is incorporated into the Bound Volume.] 
Tuesday 1 May 2012 
Mr Deputy Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Obituaries 
Hon Sir Peter Wilfred Tapsell KNZM MBE 
Mr DEPUTY SPEAKER 
: I regret to inform the House of the death on 5 April 2012 of the Hon Sir Peter Wilfred Tapsell KNZM MBE who represented the electorate of Eastern Maori from 1981 to 1996. From 1984 to 1987 he was Minister of Internal Affairs of Civil Defence and for the Arts and Associate Minister of Local Government and of Tourism. From 1987 to 1989 Sir Peter served as Minister of Police of Forestry of Lands of Recreation and Sport and of Survey and Land Information and was the Minister in charge of the Valuation Department. He was Minister of Defence in 1990. Sir Peter was Speaker of the House of Representatives from 1993 to 1996. I desire on behalf of this House to express our sense of the loss we have sustained and our sympathy with the relatives of the late former member. I now ask members to stand with me and observe a period of silence as a mark of our respect for his memory. 
Honourable members stood as a mark of respect. 
Visitors 
European Parliament—Delegation 
Mr DEPUTY SPEAKER 
: I have much pleasure in informing the House that a parliamentary delegation of members of the European Parliament led by Richard Ashworth representing the United Kingdom is present in the gallery. I am sure members would wish that the delegation be welcomed. 
Questions to Ministers 
Budget 2012—Focus 
1. 
PAUL GOLDSMITH (National) 
 to the  
Minister of Finance 
: What will be the main focus of the Government’s Budget on 24 May? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has a comprehensive economic programme for this term. Our main priorities are responsibly managing the Government’s finances building a more productive and competitive economy delivering better public services and rebuilding Christchurch. The Budget on 24 May will focus on further implementing that programme where we are making substantial progress. 
Paul Goldsmith 
: Why is responsibly managing the Government’s finances and particularly getting back to a Budget surplus by 2014-15 one of the Government’s priorities? 
Hon BILL ENGLISH 
: Through the recession we decided it was appropriate to continue to borrow to protect New Zealanders from the sharp edges of that recession. The result of that has been that Government debt has risen from $8 billion in 2008 to $50 billion today and on the current forecast will reach $75 billion before it stops rising. And the only way we can stop it rising is to achieve a surplus which the Government wants to achieve by 2014-15. 
Paul Goldsmith 
: How fast has Government spending and debt increased in recent years? 
Hon BILL ENGLISH 
: Between 2000 and 2009 Crown expenditure jumped by more than 80 percent from $35 billion to $64 billion. On top of that we have had the expense of the earthquakes. I gave the House before the figures for our public debt. The Government will continue to take considered and balanced decisions to close our Budget deficit and stop the rapid rise in public debt. 
Hon David Parker 
: Did he really call his pre-Budget speech today “sticking to a plan that’s working”; and if so was it always his plan to have a stagnant economy a $1 billion hole in tax revenue a zero Budget a rising current account deficit and record numbers of New Zealanders moving to Australia? 
Hon BILL ENGLISH 
: The Prime Minister did give that speech today and I must say the audience were very grateful that it was not a Labour politician giving that speech because they know what a mess Labour left this economy in when it enjoyed 10 years of benign economic conditions. 
Rt Hon Winston Peters 
: When will he inform the country that provisional tax estimates are proving in reality to be seriously down and that this is one more reason his forward surplus forecasts are now based on pure “hope-ism”? 
Hon BILL ENGLISH 
: No I cannot confirm that. In fact the softest bit of the tax forecast has been the GST take and at least one of the reasons GST is a bit lower than expected is people are saving more and being careful with their spending and that is what they expect the Government to do. 
Paul Goldsmith 
: What reports has he seen on alternative approaches to managing the economy? 
Hon BILL ENGLISH 
: I have seen reports of alternative approaches that involve almost without exception borrowing more money spending more on programmes that do not work increasing taxes and imposing significant extra costs on businesses. They came from the same party where one of its economic spokesmen said yesterday that the last 30 years of economic policy in New Zealand had been a mistake; for about half of that his party was in Government. 
Hon John Banks—Donations to Member’s Political Campaigns 
2. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: What assurances if any has he directly received from Hon John Banks regarding donations he received for his political campaigns and when did he receive those assurances? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 On Saturday my chief of staff spoke with the Hon John Banks and sought an assurance from him that he had fully complied with the requirements of the Local Electoral Act in respect of donations. Mr Banks gave his assurance during the phone call and stated that he was not aware that Mr Dotcom had made the donation to his mayoral campaign. 
David Shearer 
: Why did he accept John Banks’ word without personally speaking to him? 
Rt Hon JOHN KEY 
: Because the standard practice is when my chief of staff speaks to someone they speak for me.  
David Shearer 
: Over a cup of tea indeed. Does he stand by his statement—[ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: Order! I would like to hear the question even if no one else does. Could we have a bit more order please. 
David Shearer 
: Does he stand by his statement: “There is quite a wide definition of ethics … The test I have to apply is the law.”; and if so is he intending to rewrite the  
Cabinet Manual 
? 
Rt Hon JOHN KEY 
: In answer to the first part yes. 
David Shearer 
: Does he stand by another of his statements: “The issue has never been one of legality as much as ethics. The criminal code is the bare minimum standards for society. For MPs we expect behaviour well beyond that.”; and if so how is he applying that standard to John Banks? 
Rt Hon JOHN KEY 
: Yes. The test is whether the Minister correctly applied and did everything in accordance with the law. I have received an assurance he did. 
David Shearer 
: Does the fact that grossly unethical behaviour took place in a mayoral election make the perpetrator acceptable as a Minister in his Government? 
Rt Hon JOHN KEY 
: I have no ministerial responsibility for that. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The Prime Minister is the only person with ministerial responsibility for which Ministers are in his Government. For him to say he has no ministerial responsibility for John Banks being a Minister is absolutely wrong and he should not mislead the Parliament. 
Mr DEPUTY SPEAKER 
: In fact that is not what the Prime Minister said: he had no responsibility for the matter that the Leader of the Opposition raised in relation to a mayoral election. On that point the point of order is not upheld. 
Rt Hon Winston Peters 
: Has the Prime Minister asked John Banks why there are serious discrepancies between Kim Dotcom’s version of events and Mr Banks’ own version; if not why not? 
Rt Hon JOHN KEY 
: No and if I could borrow the member’s sign it would be most appreciated. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. How does that answer the question when he is allowed to finish off that way? Because if we in any way infer such behaviour—particularly from that recluse from Merrill Lynch given its disgraceful international record—then we are criticised by the Speaker. We can have one rule for everybody in this House which is what the whole issue is about when it comes to ethics and standards about which he claimed to be the paragon. 
Mr DEPUTY SPEAKER 
: The member lost ground in the manner in which he raised his point of order— 
Rt Hon Winston Peters 
: Well what about him? 
Mr DEPUTY SPEAKER 
: Order! I am on my feet. Quite clearly the Prime Minister has responsibility for confidence in his Ministers. In relation to matters pertaining to a mayoral election he has no responsibility. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think both members have asked questions as to whether someone who has shown a low level of ethics in a mayoral election should be eligible to be a Minister in that Cabinet. That is the question. John Key has clearly said that he has but he can be questioned on that. 
Mr DEPUTY SPEAKER 
: Well the member is asserting a certain level of ethics upon which the Speaker—it is not his role to judge on that matter. If the member wants to ask questions of the Prime Minister in relation to confidence that is how he should direct the questions and not make assertions about a level of ethics. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. There is growing concern in this House from some of us in respect of such a ruling. He was not asked about ethics. He was asked whether he has spoken to Mr Banks about the serious discrepancies between his story and that of Kim Dotcom. So why are you imputing into this debate anything other than that which he was asked as the Prime Minister to answer in this House? Simply it is beyond reason that a Prime Minister would not have asked such a question in the first place.  
Hon Anne Tolley 
: Actually accepting what the honourable member has just said I heard the Prime Minister very clearly say “No”.  
Rt Hon Winston Peters 
: That was not my point with respect. My point to you as Speaker was why you were imputing ethics into the question when no such issue was raised in the question in the first place. I invite that member to listen for a change.  
Mr DEPUTY SPEAKER 
: With regard to the supplementary question the Prime Minister was asked whether he could confirm something. His simple response was “No” and in that respect he answered the question.  
David Shearer 
: For how long is he prepared to allow John Banks to remain a Minister while he is being investigated by the police for electoral fraud?  
Rt Hon JOHN KEY 
: For as long as he enjoys my confidence.  
David Shearer 
: Does he find it credible that one of his Ministers cannot remember a private helicopter ride to the largest mansion in Auckland and is it acceptable that someone with such poor memory should be a Minister in his Government?  
Rt Hon JOHN KEY 
: I have no ministerial responsibility for the first part.  
Immigration Illegal—Immigration Amendment Bill 
3. 
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Immigration 
: What changes has the Government announced to deter mass arrivals of illegal immigrants and people smugglers from targeting New Zealand? 
Hon NATHAN GUY (Minister of Immigration) 
: 
 Yesterday I introduced the Immigration Amendment Bill which provides a range of measures to deter potential mass arrivals of illegal immigrants and people-smuggling to New Zealand. Key changes include mandatory detention of a mass arrival for an initial period of up to 6 months a 3-year temporary visa and an additional review before residence is granted. People granted residence can sponsor only immediate family members not extended family members. We know that New Zealand has been a target of such operations in recent years. We want to prevent people-smuggling ventures by making New Zealand a less desirable target.  
David Bennett 
: What is the need for the changes proposed?  
Hon NATHAN GUY 
: An attempt to illegally arrive in New Zealand by sea would be very dangerous and would put the lives of those involved at great risk. We want to discourage anyone from taking that risk. We also want to send a clear message that New Zealand is not an easy target for people-smugglers and their customers. New Zealand also remains committed to fulfilling its international good-citizen obligation by accepting refugees through a refugee quota of 750 per annum. 
Hon John Banks—Donations to Member’s Political Campaigns 
4. 
METIRIA TUREI (Co-Leader—Green) 
 to the  
Prime Minister 
: What advice if any has he received on Hon John Banks’ alleged actions regarding donations from Kim Dotcom? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Mr Banks has advised my office that he has fully complied with the requirements of the Local Electoral Act 2001 in respect of donations.  
Metiria Turei 
: Given this case involves a prima facie case of electoral fraud by a Minister of the Crown why is the Prime Minister relying on the second-hand view to him of the accused Minister rather than considered advice including legal advice about those allegations?  
Rt Hon JOHN KEY 
: Legal advice is not required; what is required is that a Minister enjoys my confidence. I have sought an assurance from the Minister that he did everything in accordance with the law. He has given me that assurance as he has to the New Zealand public and I accept it.  
Metiria Turei 
: Has the Prime Minister received advice on the  
Cabinet Manual 
 provision that requires Ministers not only to comply with the law but also “to behave in a way that upholds and is seen to uphold the highest ethical standards.” or is it his view that that applies only when he does not rely on that Minister as a coalition partner?  
Rt Hon JOHN KEY 
: To the latter part of the question no. To the first part of the question no but the Cabinet Office has provided me with advice regarding ministerial and prime ministerial responsibility of the House of Representatives.  
Metiria Turei 
: When the Prime Minister said: “I expect high standards from my Ministers” in relation to Phil Heatley’s financial impropriety was he applying a legal test or the test of the highest ethical standards as set out in the  
Cabinet Manual 
? 
Rt Hon JOHN KEY 
: A legal test.  
Metiria Turei 
: Is the Hon John Banks subject to a lesser ethical standard than other Ministers like Phil Heatley because John Banks and the ACT Party are needed to prop up his Government? 
Rt Hon JOHN KEY 
: No and no.  
Metiria Turei 
: Is it the case that the Prime Minister is standing by John Banks because he genuinely believes that it is OK for a Minister of the Crown to fiddle with the semantics over electoral fraud allegations or is it because his hold over the House is so tenuous that he cannot afford to do what is right? 
Rt Hon JOHN KEY 
: No it is because I have sought an assurance that the Minister did everything in accordance with the law.  
Hon Clayton Cosgrove 
: You sought an assurance from Nick Smith.  
Rt Hon JOHN KEY 
: Well I guess there is one difference between this side of the House and that side of the House: we actually have a chief of staff; you do not. Moving that right along I sought an assurance that the Minister had upheld the law—a law passed in 2001 by Labour a law that Labour did not bother changing when it changed the Electoral Finance Act. So it is OK as long as you are in accordance with the law.  
Metiria Turei 
: I seek leave to table the Green Party member’s bill the Local Electoral (Finance) Amendment Bill which would bring the campaign financing rules into alignment— 
Mr DEPUTY SPEAKER 
: What is the status of that bill?  
Metiria Turei 
: It is a member’s bill.  
Mr DEPUTY SPEAKER 
: It has not been drawn? Right so leave is sought for that purpose. Is there anyone opposed to that course of action? There is. 
Metiria Turei 
: I seek leave for the member’s bill the Local Electoral (Finance) Amendment Bill to be introduced forthwith and for it to be set down for first reading as members’ order of the day No. 1 on the next members’ day. 
Mr DEPUTY SPEAKER 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? There is. 
David Shearer 
: Is he satisfied that John Banks has answered media questions about donations with the fullness and frankness he expects of his Ministers? 
Rt Hon JOHN KEY 
: I am satisfied that the Minister has given me an assurance which is the test that he has done everything in accordance with the law. 
Hon David Parker 
: I raise a point of order Mr Speaker. The question was whether the Prime Minister was satisfied that the Minister had answered media questions with the fullness and frankness he expects and the Prime Minister did not address that question. 
Mr DEPUTY SPEAKER 
: The Prime Minister did answer the question. I am satisfied that the Prime Minister actually answered the question. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Can you give us an indication from your understanding seeing as you are satisfied whether or not he indicated that he was satisfied?  
Mr DEPUTY SPEAKER 
: No I am— 
Hon Trevor Mallard 
: No. So you do not understand either—good.  
Mr DEPUTY SPEAKER 
: Order! I do understand. 
Hon John Banks—Lobbying on Behalf of Donor 
5. 
GRANT ROBERTSON (Deputy Leader—Labour) 
 to the  
Minister for Land Information 
: On what date did Hon John Banks lobby him on behalf of the application of Kim Dotcom to purchase property in Coatesville and how did Mr Banks communicate this lobbying? 
Hon MAURICE WILLIAMSON (Minister for Land Information) 
: 
 Around the middle of last year by phone. 
Grant Robertson 
: Did he keep a written record of Mr Banks’ lobbying on behalf of Mr Dotcom; and if not does he not think this would have been a transparent thing to do? 
Hon MAURICE WILLIAMSON 
: No. 
Grant Robertson 
: Why did he initially take a different view on Mr Dotcom’s character to own the Coatesville property and was this related in any way to the lobbying by John Banks? 
Hon MAURICE WILLIAMSON 
: I took the original view because that was the advice of the Overseas Investment Office—that Ministers should approve it. As the member will know the process is then for Ministers to seek further information—clarify some things that we needed to—and in the end there was only one decision taken and that was to decline the application. 
Grant Robertson 
: Were any of the matters Mr Banks brought to his attention in his lobbying relevant to his initial decision? 
Hon MAURICE WILLIAMSON 
: No. 
Grant Robertson 
: Did Mr Banks indicate the nature of his relationship with Mr Dotcom when he lobbied on his behalf including whether or not there had been any political donations made by Mr Dotcom to Mr Banks? 
Hon MAURICE WILLIAMSON 
: Mr Banks said that Kim Dotcom had been a good friend to Auckland City and had paid for a very large fireworks display. He made no further comment. 
Grant Robertson 
: Was he aware that Mr Banks told Mr Dotcom that Maurice Williamson and Mr Banks were “good friends” and why does he think Mr Banks would mention their friendship as a relevant factor? 
Hon MAURICE WILLIAMSON 
: No. 
Rt Hon Winston Peters 
: How does the Minister explain the chronology whereby the fireworks display and the cheques and the thankyou were 6 months apart or was Mr Banks clairvoyant as to what was likely to happen on that occasion? 
Hon MAURICE WILLIAMSON 
: I do not think I have any responsibility for that question whatsoever. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. In the previous answer he put at issue why Mr Banks had talked to him about this patron of Auckland who had arrived from overseas. At the time he mentioned that there was the question or discrepancy that I have previously referred to between the cheques and the fireworks display which were about 6 months apart. Surely the Minister can see the discrepancy in that and that is why I am asking that question. 
Mr DEPUTY SPEAKER 
: The Minister raised the matter of the fireworks display in his reply. It does not go any further with supplementary questions. It departs from the principal question in the way that the member asked the question. Would the member like to restate the question so that I get an understanding of it. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. Since when has it been the case that you cannot widen a question if the Minister puts at issue a certain subject which he did which was the fireworks display? Why are you saying we have got to go back to the principal question for the parameters when that is a new ruling? 
Mr DEPUTY SPEAKER 
: It is not intended to be. That is why I have asked the member to restate the supplementary question so that I might gauge it again. 
Rt Hon Winston Peters 
: If the Minister thinks that Mr Banks at all points of conversation and engagement with him was acting with integrity why is there such a gap between the fireworks display which was one of the issues Mr Banks said was the reason for Dotcom being a big supporter of Auckland and the cheques and the thankyou note which came 6 months later? 
Hon MAURICE WILLIAMSON 
: That has nothing to do with my responsibility— 
Mr DEPUTY SPEAKER 
: I accept the Minister’s response. 
Hon MAURICE WILLIAMSON 
: I do not know what he means by the cheques. I do not even know what cheques he is referring to. [ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: Order! 
Grant Robertson 
: Noting that the Coatesville property is in the Helensville electorate did the Minister have any letters of support or other representations from the local MP on behalf of Mr Dotcom? 
Hon MAURICE WILLIAMSON 
: No. 
Alcohol Law Reform—Local Policies and Purchasing Age 
6. 
Dr JACKIE BLUE (National) 
 to the  
Minister of Justice 
: How will the Alcohol Reform Bill provide for better community involvement in managing alcohol? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 This Government is serious about letting communities have more say in managing alcohol. The Alcohol Reform Bill means local communities will be able to create local alcohol policies through local territorial authorities. Communities will also have more say in licensing decisions. Communities will be able to restrict and extend maximum opening hours; impose one-way doors which means that patrons who leave premises will not be able to return within a specified time; make sure alcohol outlets are not open near schools or churches; say no to more licences in their areas; and impose conditions on licensed premises.  
Dr Jackie Blue 
: What is the Government proposing in relation to the alcohol purchasing age? 
Hon JUDITH COLLINS 
: The Government has been clear from the start that a vote on the alcohol purchasing age would be a conscience vote. All members in this House will have three options. One is a split purchase age restricting the off-licence purchase age to 20 and retaining the on-licence purchase age at 18. There are also two Supplementary Order Papers that I am aware of one providing for both the on-licence and off-licence purchasing age to be set at 20 and the other for the purchase age for both to be kept at the current age of 18. We are listening to the public of New Zealand and we are hoping to strike a balance between minimising harm and trusting responsible New Zealanders to make their own decisions about alcohol. 
Schools Charter—Criteria for Establishment and Funding 
7. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Associate Minister of Education 
: What progress has he made on setting the criteria for establishing charter schools? 
Hon JOHN BANKS (Associate Minister of Education) 
: 
 We have made very good progress and this initiative is well overdue—well overdue—for the 20 percent of young people at school without any hope. We have established a working group to provide advice on the New Zealand model of charter schools including criteria for their establishment. In fact the group is meeting as we speak to discuss criteria for New Zealand. It will then make recommendations to Ministers and the first recommendations on charter schools are expected shortly. 
Hon Trevor Mallard 
: Do the criteria for selection include availability of funding for the schools from the bidder; if so does it make any difference whether that funding is applied to the school or to the member’s political party? 
Hon JOHN BANKS 
: Charter schools will encourage underperforming students to leave and keep those students’ funding as they have in the United States. The design of our policy will learn from the mistakes and successes of overseas charter schools. A wide variety of enthusiastic and promising operators have approached my office. It is critical in direct answer to this question that there will be a working group. We will establish an arm’s-length body—an arm’s-length body—to approve schools. Approving new charter schools will not be my responsibility and certainly will not be the responsibility of the Labour Party or the unions that do not believe in looking after the kids who are falling through the cracks. 
Hon Trevor Mallard 
: Will the Minister give the House an assurance that the arm’s-length body he is referring to will not be his campaign committee which he used to launder funds in his campaign? 
Mr DEPUTY SPEAKER 
: The supplementary question in the form that the member has given it is out of order because it asserts something that is the member’s opinion and as yet is not proved.  
Hon Trevor Mallard 
: OK. I’ll have another go if you like. 
Mr DEPUTY SPEAKER 
: I think you have used up that supplementary question but you have other supplementary questions. 
Hon Trevor Mallard 
: I will have another go. When he refused to talk to Kim Dotcom earlier this year did Mr Dotcom want to talk to him about charter schools and why did he say that he did not know him? 
Hon JOHN BANKS 
: I have talked to a lot of people about charter schools because far too many of our young people are out of school out of work and out of luck. This Labour Opposition is staying in Opposition because 20 percent of kids up and down the country at school today need this Government and the coalition to put in place an opportunity for them their future and the dignity of work. 
Hon Trevor Mallard 
: Is it correct that he is trying to place a charter school inside the Skycity convention complex so that his cronies stop getting bad publicity about kids being left in cars? 
Hon JOHN BANKS 
: I want to pick up the member’s question about laundering money and cronies. His crony the Labour Party Mayor of Auckland laundered $490000 through a secret trust into his campaign.  
Mr DEPUTY SPEAKER 
: I am having difficulty hearing. Please can we have some order. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. Are you and your advisers going to sit there while that allegation is made about an act that is illegal—alleging corruption on the part of the mayor of the biggest city in this country—or are you going to do something? 
Mr DEPUTY SPEAKER 
: It is not up to the Speaker to judge the validity of allegations that are flying around this House. My sole role here is to try to keep some process about asking questions about ministerial responsibility. It is not my responsibility to assert whether allegations made are correct or otherwise. 
Hon Trevor Mallard 
: I seek leave to table the electoral return of John Banks for the last general election which shows a very large payment from a trust. 
Hon Member 
: It’s already in public. 
Mr DEPUTY SPEAKER 
: It is some time since that was tabled; I am not sure whether it is still public. The member is seeking leave to table a document. If any member is not happy they can oppose it. Leave is sought for that purpose. Is there anyone opposed to that course of action? There is. 
Hon Trevor Mallard 
: If Skycity or Mr Dotcom had approached him with an offer to facilitate a charter school would he remember or does the poor recall he has shown of the Skycity and Dotcom donations apply? 
Hon JOHN BANKS 
: Anyone approaching me to set up a charter school is referred to the working party and on to the ministry. A separate arm’s-length organisation will be in charge of choosing charter schools not the Minister and not the Government. 
Overseas Investment Rules—Aquaculture and Coastal Marine Space 
8. 
STEFFAN BROWNING (Green) 
 to the  
Minister for Land Information 
: Do overseas owned companies need Overseas Investment Office approval to exclusively occupy coastal marine space? 
Hon MAURICE WILLIAMSON (Minister for Land Information) 
: 
 No. When the overseas investment regime was reviewed by the Labour Government in 2003-04 it agreed that the overseas investment regime should not apply to aquaculture. Also as coastal permits are not interests in land the transfer of a coastal permit to an overseas-owned company is not an overseas investment in sensitive land. 
Steffan Browning 
: Why is aquaculture not covered by the Overseas Investment Act when it involves overseas ownership sensitive land and an exclusive occupation of space? 
Hon MAURICE WILLIAMSON 
: I believe I answered that: a review was conducted by the Labour Government in 2003-04 and that Government agreed not to include aquaculture in the regime. 
Steffan Browning 
: Considering that the majority overseas-owned New Zealand King Salmon’s plans for nine new farms would exclude New Zealanders from 200 hectares of iconic protected marine space and produce nutrient waste equivalent to half a million people and that more than half the profits and half the salmon can be expected to go offshore is the Minister going to look at reviewing the Act so that New Zealanders will be able to maintain that space? 
Hon MAURICE WILLIAMSON 
: I raise a point of order Mr Speaker. I think I made it very clear in my answers to the primary question and the supplementary question to it that this issue is not covered by the Overseas Investment Act and it is not part of my portfolio. The member is asking questions about coastal marine space and the right to occupy it which has nothing to do with my portfolio responsibilities. 
Mr DEPUTY SPEAKER 
: And that is how the member should answer the question. 
Hon MAURICE WILLIAMSON 
: I did. 
Mr DEPUTY SPEAKER 
: Yes; OK. 
Metiria Turei 
: I raise a point of order Mr Speaker. The question although containing quite a bit of information actually asked whether the Minister will consider reviewing the law. The Minister has not answered that question which was the question asked. 
Mr DEPUTY SPEAKER 
: The Minister has responded that that is not within his portfolio. 
Steffan Browning 
: Given that the Overseas Investment Office does deal with sensitive land and the foreshore and seabed is included in that—albeit that it is marine space in terms of what the Minister has answered to date—and given the fact that New Zealand King Salmon 51 percent owned by the Malaysian Tiong family has needed Overseas Investment Office consent for its land-based operations including freshwater salmon hatcheries what difference does the Minister draw between a freshwater situation and the iconic marine waters of the Marlborough Sounds? 
Hon MAURICE WILLIAMSON 
: A Crown Law opinion was sought by the Labour Government back in the 2003-04 period which indicated that indeed the exclusive right to occupy coastal marine space was not involving sensitive land and therefore I have to say to the member that it is not part of Land Information’s responsibility. 
Steffan Browning 
: What will be the limits or restrictions on the exclusive occupation of our iconic coastal marine space by foreign-owned companies under this Government? 
Hon MAURICE WILLIAMSON 
: I am just terribly reluctant to keep answering questions that are not part of my portfolio. I do not know anything about that right to occupy marine space. It is covered by other Ministers and the member should ask those Ministers. 
Ministers—Confidence 
9. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Prime Minister 
: Does he have confidence in all of his Ministers; if so why? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes because they are hard-working and they are working hard to bring about a brighter future for all New Zealanders. 
Rt Hon Winston Peters 
: In respect of the Hon John Banks— 
Hon Dr Nick Smith 
: Tell us about Owen Glenn. 
Rt Hon Winston Peters 
: I beg your pardon? 
Hon Dr Nick Smith 
: Tell us about Owen Glenn. 
Rt Hon Winston Peters 
: Tell us about you shall we? 
Mr DEPUTY SPEAKER 
: Order! The member is asking a question of the Prime Minister— 
Rt Hon Winston Peters 
: And he is being rude and interrupting and your job is to stop him so I can ask the question. 
Mr DEPUTY SPEAKER 
: That will equally apply to any member who implies that the Chair is not doing his job. The member should ask his question and get on with his business. 
Rt Hon Winston Peters 
: Thank you very much—and when I get a bit of peace and quiet I will. In respect of the Hon John Banks is he holding Mr Banks to a different standard from the one he would hold a Minister from his own party to as numerous experienced commentators have alleged? 
Rt Hon JOHN KEY 
: No. 
Rt Hon Winston Peters 
: If he has confidence in the Minister for Land Information does that mean that he is holding him to a different standard from Nick Smith Pansy Wong and Richard Worth all of whom were deemed guilty of wrongfully using their influence? 
Rt Hon JOHN KEY 
: No. 
Broadband Ultra-fast and Rural—Progress 
10. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister for Communications and Information Technology 
: What progress has the Government made on its policy of delivering faster broadband for New Zealand? 
Hon AMY ADAMS (Minister for Communications and Information Technology) 
: 
 A well-connected society is an essential component of economic growth so I was pleased to recently announce the Government’s preferred providers for the final Rural Broadband Initiative contracts worth $14.4 million. The contracts provide for 193 provincial schools 183 rural public libraries 37 rural hospitals and 10 health centres to receive fibre connections. In addition 57 remote schools will be upgraded to faster broadband using wireless technology capable of speeds of at least 10 megabits per second which will enable these schools to participate in the Network for Learning. 
Jonathan Young 
: What are the latest regions to begin work on their ultra-fast broadband roll-outs? 
Hon AMY ADAMS 
: I recently visited New Plymouth and Timaru to mark the start of the construction of the ultra-fast broadband network in each of those areas. The build in Timaru is due to be finished by March 2015 making the town one of New Zealand’s first places to experience the potential economic and social benefits of a fully functional ultra-fast broadband network. New Plymouth has also begun the roll-out of ultra-fast broadband which will involve over 265 kilometres of fibre laid along the city’s roads. 
State Housing Auckland—Tamaki Transformation Programme 
11. 
HONE HARAWIRA (Leader—Mana) 
 to the  
Minister of Housing 
: What assurances can he give that there will be no requirement for any existing tenant in any State house to move out of the area as a result of the Tamaki Transformation Programme for the Glen Innes redevelopment which involves reducing the number of Housing New Zealand - owned houses from 156 to 78? 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 I am advised by Housing New Zealand Corporation that it will work with all tenants affected by the redevelopment to find them suitable State housing in areas they wish to live where possible. So far 68 tenants have actually decided to move early and 55 have already been relocated having been offered a number of alternative State houses to choose from which they are pleased with. I am also advised that a number of tenants wanted to move out of the area completely—they wanted to do that—and the corporation is assisting them with that. 
Hone Harawira 
: Can the Minister tell the House why the Government has broken assurances given to the Glen Innes community by chairman Pat Snedden in 2008 and Minister Pita Sharples in 2011 that there will be no requirement for any existing tenant in any State house to move out of the area and that there will be no reduction in State houses as a result of the Tamaki Transformation Programme? 
Hon PHIL HEATLEY 
: I am not responsible for what was said in 2008 before I was Minister and before we were the Government. Things have changed. We no longer house criminal gangs in old cold mouldy State houses on half-acre sections where they have three empty bedrooms. In terms of the Hon Pita Sharples he is working very closely with the local community and has helped people who have wanted to remain in the area to remain in the area and where people have wanted to shift out of the area he has helped them to get State houses out of the area. Minister Sharples has been very constructive and we very much appreciate his work as does the local community. 
Hone Harawira 
: Is it Government policy to force low-income families out of Glen Innes by making them pay market rates rather than income-related rents that they can afford and how does forcing people out of their homes and selling off the land to wealthy property developers fit with Government assurances that every New Zealand family should have warm high-quality housing? 
Hon PHIL HEATLEY 
: To the first part of the question no. To the second part of the question can I reiterate that we no longer house criminal gangs in old cold mouldy State houses on half-acre sections where three bedrooms are empty. Where that is occurring we are making the changes including in Tamaki. 
Hone Harawira 
: I raise a point of order Mr Speaker. That is the second time he has mentioned gangs and old mouldy homes in respect of Glen Innes. That was not the question at all; it is how does forcing— 
Mr DEPUTY SPEAKER 
: Order! That is not a point of order. The member should resume his seat. That is simply not a point of order. 
Hone Harawira 
: Could I put it this way then— 
Mr DEPUTY SPEAKER 
: Are you seeking a further point of order? 
Hone Harawira 
: I am. I raise a point of order Mr Speaker. Could you ask the Minister to answer the question about how forcing people out of their home and selling off the land to wealthy property developers fits with Government assurances that every New Zealand family should have warm high-quality housing? He did not answer the question. 
Mr DEPUTY SPEAKER 
: I believe he did. 
Medical Equipment Subsidised—Glucose Testing 
12. 
Hon MARYAN STREET (Labour) 
 to the  
Minister of Health 
: What reports has he received concerning Pharmac’s provisional sole supplier contract with Pharmaco to provide new blood glucose meters for the 120000-plus diabetics who use them? 
Hon TONY RYALL (Minister of Health) 
: 
 I have received regular reports from Pharmac the media and others. The latest is that Pharmac is considering the results of an extensive consultation process and is in ongoing discussions with consumers clinicians and suppliers. No final decisions have been made. Managing diabetes is a very personal matter and it understands people’s concern about any change—as there was in 2005 when Pharmac controversially limited the supply of subsidised testing-strips for some people with diabetes.  
Hon Maryan Street 
: Does he believe that there is a difference between Pharmac contracting a sole supplier for a pharmaceutical that has known effects on known symptoms and contracting a sole supplier for a medical device without consumer testing that is used to help diabetics manage their chronic illness? 
Hon TONY RYALL 
: The device has been tested. There has been a process through which that happened and Pharmac decided that that was its preferred device. Having said that one of the issues that the member alludes to is the uncertainty sometimes with regard to sole supply. One of the benefits of the agreement that Pharmac tentatively has with the supplier is that the supplier will maintain an inventory of 4 months’ stock in the country during this process. Currently there is no requirement on any of the multiple suppliers to have that sort of stock in the country. 
Hon Maryan Street 
: Does he intend to get Pharmac to reconsider its provisional arrangement with Pharmaco? 
Hon TONY RYALL 
: Pharmac is currently considering the results of quite a lengthy consultation period. It is in ongoing discussions with consumers clinicians and suppliers. I think we should let that process carry on to its ultimate conclusion.  
Hon Maryan Street 
: Has he seen a submission from Diabetes NZ Auckland which says: “Sole supply for a life dependent medical device is dangerous particularly in the instance of quality issues civil emergencies and recall of strips or meters and the delays that occur around shipping and transport … Further we note that no New Zealand pilot of the proposed meter with users has yet been conducted. This should be a pre-requisite.” and if so has this submission affected his view of Pharmac’s provisional contract? 
Hon TONY RYALL 
: There have been a number of submissions. Many are opposed; some are in favour. What is quite clear is that Pharmac wants to make sure that it can do the best that it can for people with diabetes. But we are in a situation where there is limited funding in the health budget and we must make sure that every dollar gets the best value for all patients. We had similar concerns in 2005 when under the previous Government subsidised testing-strips were restricted. There were claims that there would be widespread concern from people with diabetes. As we have seen subsequently we have managed our way through that. 
Hon Maryan Street 
: I seek leave to table the submission from Diabetes NZ Auckland to which I have just referred.  
Mr DEPUTY SPEAKER 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not. Leave is granted. 
Document by leave laid on the Table of the House. 
Hon Maryan Street 
: I further seek leave to table this message from Joel an 11-year-old diabetic who came from New Plymouth today to attend a protest about Pharmac’s proposed contract. I seek leave to table this message. 
Mr DEPUTY SPEAKER 
: It is not in the normal form of messages that we would table in this House but I will put it to the House. Is there anyone opposed to that course of action? There is. [ 
Interruption 
] Order! I am on my feet. 
Urgent Debates Declined 
Overseas Investment Rules—Sale of Crafar Farms 
Hon John Banks—Police Investigation into Electoral Spending 
Mr DEPUTY SPEAKER 
: I have received letters from Dr Russel Norman and the Hon David Parker seeking to debate under Standing Order 386 the Government’s decision to accept the recommendation of the Overseas Investment Office to grant consent to Milk New Zealand Holdings Ltd a subsidiary of Shanghai Pengxin Group Co. Ltd to acquire the 16 Crafar farms. I have also received a letter from the Hon Trevor Mallard seeking to debate the initiating of a police investigation into the Hon John Banks’ electoral spending and the fact that the Prime Minister refuses to stand him down.  
I will deal with Mr Mallard’s application first. Allegations have been made and referred to the police. Allegations can never constitute a particular case of recent occurrence; neither can the absence of action on the part of a Government. The urgent debate procedure is a means of debating matters that have occurred. It is not a means of debating matters that might or might not occur in the future. Therefore that application is declined.  
The decision of Ministers on the sale of the Crafar farms is a particular case of recent occurrence involving ministerial responsibility. Given the significance of the decision I would have been persuaded that the matter warrants the immediate attention of the House. However I am informed that a judicial review of the Ministers’ decision was lodged on 26 April. Given that the matter is again before the courts the application is declined. 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Speaker. Can I ask how then the Opposition would ever get an urgent debate in respect of this issue given that there will be no ministerial decision required if the court finds there was no illegality? Can we then apply again? 
Mr DEPUTY SPEAKER 
: To which letter are you referring? 
Hon DAVID PARKER 
: The decision on the Crafar farms Mr Deputy Speaker is a ministerial decision of Mr Williamson and others. It has been judicially reviewed in the courts as you say. But would that mean that once that judicial review decision comes out we can then put another application in because at the moment we cannot have it heard? 
Mr DEPUTY SPEAKER 
: The short answer is yes. But the member is also aware that the Standing Orders absolutely preclude any opportunity for this House to debate a matter that is sub judice before the courts. And on that basis it is ruled out. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. With all due respect this House is not forbidden from debating a matter that is before the courts. This matter was looked at very carefully as you are aware Mr Deputy Speaker by the last Standing Orders Committee and there are some restrictions and some notice and we do take some deference with matters before the courts. But one thing is very clear: this Parliament regards itself as supreme and does have the ability and reserves the right—and goes to the Governor-General every 3 years to reserve our right—to have free speech. Sometimes we choose not to use it but we do have the right to. 
Mr DEPUTY SPEAKER 
: I think the member makes some fair points during that point of order. Obviously—this is not something off the top of my head—I have had good time to consider the applications that are before us and to assess the status of the legal action that is intended and the subject matter therein. And given the comparatively similar territory of the letters and the appeal that is lodged I have determined that in this particular instance the debate is out of order according to the Standing Orders. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I raise a point of order Mr Speaker. Under Standing Orders 112 and 113 you have the discretion to allow the House to have this debate. It is entirely up to the Speaker to decide whether to proceed. You have certain guidance—there is guidance provided on when you are to use that discretion to allow us to have that debate. For example you have got to balance freedom of speech against the public interest in maintaining confidence in the judiciary. Can you tell the House because this is a very important matter what is the basis for your exercising your discretion not to allow us to have the debate? 
Mr DEPUTY SPEAKER 
: There are a raft of considerations that come in; this is one aspect of it. I have already referred quite specifically to the similarity between the letters of debate and the appeal. There are other issues such as that the House has already had an urgent debate on this matter. So across the spectrum of all of the considerations that come into forming a decision the member is quite correct: it is at the discretion of the Speaker. And on this occasion given all of those reasons I have determined that it is out of order for the House to have this debate and therefore will not be affording it. 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Speaker. Standing Order 113 is interesting. I will read it out because it shows that this is intended to have effect generally in respect of criminal matters rather than other matters. If we are to be prevented in this House in the Opposition from questioning the conduct of Ministers because the Ministers’ conduct is being challenged in a judicial review proceeding then that seems to me to be outside the protection of what is intended by these Standing Orders because what we are trying to do is to stop criminal cases which is what Standing Order 113(1) is mainly about: “in relation to a criminal case from the moment the law … in relation to cases other than criminal from the time proceedings have been initiated by the filing of the appropriate document”. What we are trying to do is protect third-party interests not Ministers’ interests and I would have submitted that it is wrong to use these rulings here to stop us questioning Ministers’ decisions as opposed to protecting the constitutional rights of people who are not Ministers to have their day in court without being interfered with by us. 
Hon ANNE TOLLEY (Deputy Leader of the House) 
: 
 I think the member is being a little selective because if he goes on to look at Standing Order 113(1)(b) it talks about matters other than criminal matters. Mr Deputy Speaker we are getting very close to questioning the decision that you have made in this House. 
Mr DEPUTY SPEAKER 
: I thank members for their participation. I know that this is an issue of particular interest not only to this House but also to the wider community and that is why I can assure the House that I gave this very real and earnest consideration. But this would not be a debate about the principle of overseas sale because the judicial review is of the Ministers’ decision to grant. In that case it gives it a specificity that directly links it to any matters of jurisprudence in the Court of Appeal and that is the principal reason that I have ruled it out on this occasion. I can earnestly say to members that this is not a seat-of-the-pants decision. I have given this serious consideration. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I raise a point of order Mr Speaker.  
Mr DEPUTY SPEAKER 
: I have adduced this matter. I hope the member is not wanting to traverse material that I have already ruled on. 
Dr RUSSEL NORMAN 
: My question to you is: you said we had already had an urgent debate on this matter. Could you tell me when that urgent debate happened? 
Mr DEPUTY SPEAKER 
: Sorry we have not had an urgent debate but the matter was debated in the House during—I cannot recall whether it was a general debate but it has been debated in the House and I gave some consideration to that. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I am going back through my memory but my memory tells me that Mr Speaker Smith in ruling earlier had said that when the decision was made that would be the appropriate time. I think there was quite a lot of discussion earlier about whether it was appropriate to have a debate and he said when the decision had been made it would be. I just hope that you did read his decision and his ruling on that matter before you made this one. 
Mr DEPUTY SPEAKER 
: We are confined by the fact that we have a decision by Ministers of the Crown and a judicial process in the Court of Appeal. That is what actually confines us. 
Kevin Hague 
: Point of order. 
Mr DEPUTY SPEAKER 
: I have dealt with this matter Mr Hague. 
KEVIN HAGUE (Green) 
: 
 I raise a point of order Mr Speaker. I am not intending to relitigate the matters that you have already addressed. 
Mr DEPUTY SPEAKER 
: All right. I will listen very carefully. 
KEVIN HAGUE 
: What I am seeking is an answer to the question as to whether it is your ruling that should the judicial review that is about to become under way in fact not alter the decision that has been made by the Ministers this matter will still fit the requirement of being a Government action of recent occurrence in order to allow urgent debate to be triggered. 
Mr DEPUTY SPEAKER 
: Similarly I cannot predict the nature of the letter that would supply the circumstances at the time. Members know that they can put in a request for an urgent debate at any time but there are specific criteria that actually apply so it would depend on that at the time. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I am sorry for testing your patience but I think there is an important point which I am happy if the Minister corrects me on. It is my understanding that this is a matter before the Court of Appeal and— 
Hon Maurice Williamson 
: It is the High Court. There’s two: there’s the Court of Appeal and there’s a judicial review in the High Court. 
Hon TREVOR MALLARD 
: Oh they have put it in—sorry I apologise. 
Taxation (International Investment and Remedial Matters) Bill 
Third Reading 
Debate resumed from 5 April. 
ANDREW WILLIAMS (NZ First) 
: 
 When the House rose 3 or 4 weeks ago we were discussing the Taxation (International Investment and Remedial Matters) Bill for its third reading. At that time I was able to start only a couple of minutes before the House rose so I would like to continue where the House left off.  
This bill serves to reduce tax barriers for New Zealand companies operating on the global stage. It allows for income that has a source in New Zealand and for which relief from New Zealand tax under double tax agreement is unavailable. This bill also serves to help improve New Zealand’s economic performance. It means that New Zealand enterprise is able to operate on a level playing field in markets where we trade or have investments. This can only be good for New Zealand commerce for New Zealand international trade and to ensure that the New Zealand economy benefits from working on a level playing field with our trading partners and in markets where we have significant economic interests.  
New Zealand First supports fairer taxes for all. New Zealand First has been a party as you all know that has stood up over many many years since the foundation of New Zealand First to stand for fairer taxes including taxes on business. We have been the party most known for ensuring that we expose any tax loopholes and rorts that were going on in the past such as—we all know—the wine-box saga where there was a deliberate attempt to avoid paying what were taxes due to the New Zealand Crown. Hundreds of millions of dollars potentially could have been lost over the years if such tax situations were not exposed and if the New Zealand Government was not on top of the matter in terms of ensuring such tax rorts were not taking place. 
 This Taxation (International Investment and Remedial Matters) Bill in a sense serves to continue that direction in terms of ensuring that there are common taxation arrangements between different countries and ensuring that New Zealand interests are seen on that same level footing wherever we have international financial interests. The New Zealand Government has over the years worked towards ensuring that New Zealand companies can be more competitive. It has worked to ensure that we are able to play a significant role on the global stage and this bill serves to do that.  
New Zealand First certainly supports this bill through the third reading. We believe it has benefits for the New Zealand economy. We believe that as a result it will make this economy more competitive. It will also attract potentially more investment to New Zealand. It has the potential to also attract interest where otherwise there may not have been interest in New Zealand and to ensure that there are not double taxation standards in New Zealand compared with many of the countries where there are potential investors possibly looking to invest in our economy.  
New Zealand First follows this through to the third reading. It has already been covered off to a great extent in terms of what this bill offers. Therefore I rise in support. I commend the bill to the House and we will be supporting this bill.  
Hon Dr NICK SMITH (National—Nelson) 
: 
 I am pleased to join members of the Government and other parties to support the third reading of this Taxation (International Investment and Remedial Matters) Bill as part of this Government’s broader programme of improving the international competitiveness of New Zealand. The key focus of this Government’s economic programme whether it is our work in tax whether it is our work in economic development or whether it is in employment law—right across the board—is in terms of making New Zealand more competitive. In that context this Government is very outward-looking. So often we hear speeches from Opposition members who are so almost North Korean in their view of the future of New Zealand. If we are to make the living standards that we desire for New Zealanders we need to look externally because we on this side of the House believe that New Zealand can compete internationally that we can match up and make investments offshore and that we can without sort of protectionist inward-looking legislation provide those sorts of incomes and jobs for fellow New Zealanders.  
Interestingly the biggest gains in this bill are for New Zealand companies that are investing overseas. For instance if you are Fonterra and you have got substantive investments as Fonterra does in countries like China those companies are currently disadvantaged by those tax rules. So it is sensible that this Parliament wants to make those international businesses more competitive internationally. What I find ironic from the contribution from New Zealand First is that when it comes to an issue for instance of China wanting to invest in New Zealand it becomes North Korean in its outlook but when it is the other way around with this tax bill in terms of wanting to invest overseas sometimes it changes its tune. The difference and the real substance of what this Government is doing in this space is that we are consistent in our view of international outlook and recognising the change of globalisation and wanting to make sure that we have got a consistency of tax rules that ensures that we can invest overseas and that we can have those sorts of global businesses based here in New Zealand.  
I want to compliment the work of Peter Dunne. No area of law is as complex and as challenging as tax law let alone when you are trying to work in the international environment. This is a simple but small and effective part of the incremental plan that this Government has for growing the economy. It is part of that theme of doing everything that makes the boat go faster and getting good international tax rules around investments is part of what New Zealand needs to do to be competitive to create jobs and to grow the wealth of New Zealand.  
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I want to acknowledge Nick Smith. I am not sure whether that is the first speech he has made as a backbencher since he became one and I want to indicate some sympathy for him when he watches in this House the treatment—the preference—that has been given to John Banks in much worse circumstances than that member was in— 
Hon Dr Nick Smith 
: What was this member’s approach when he was convicted of assault?  
Hon TREVOR MALLARD 
: This member has not been convicted of assault.  
Hon Dr Nick Smith 
: With respect to Tau Henare when you got— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! That is not necessary.  
Hon TREVOR MALLARD 
: There is no doubt that I pled guilty to fighting. I did and there was a period of time when I was in some pretty serious trouble and I did not come into this House during that time but we sorted it out. But the point I am making is that John Banks is getting an easy ride. John Banks is getting a very easy ride whereas the Prime Minister knew he could rely on Nick Smith. Notwithstanding Judith Collins dumping on him he knew he could rely on Nick Smith. That meant that Nick Smith goes back and John Banks keeps at least for a period of time his ministerial portfolio. I noted the former Minister also used the expression that “the boat goes faster” under a National Government. I wonder whether he was referring to the cabbage boat going faster as his friend John Banks has been on regular occasions.  
Labour members are supporting this bill the Taxation (International Investment and Remedial Matters) Bill. It is fair to say that we are doing so not with enormous enthusiasm. It is on balance a bill that we are prepared to support but there are some concerns around the removal of the approved issuer levy on the payment of interest on securities meeting certain requirements as notified under the Income Tax Act. What we are concerned about is that this is a further erosion of the taxation base associated with financial transactions. It is both an erosion in the amount of total tax and a narrowing of the systems of collecting tax when we need at the moment especially given the Minister’s billion-dollar sudden deficit all the tax that we can get and it does not seem wise to be sacrificing tax in this way. I think it is also felt that it is better to have a number of bases to the revenue rather than as we appear to be doing at the moment being narrower and narrower in the areas from which we collect tax with the changes here—the changes to do with gift duty and a number of areas.  
It was interesting to look at the submissions and at the way the submitters indicated that the proposals will not help increase liquidity in New Zealand they will do nothing to reduce interest rates and they will not add depth to the capital markets. It is fair to say that the Government is for a National Party Government in a relatively unusual position to be criticised by submitters on this bill and to be criticised by some people who one would have thought would be their real allies on the sale of State-owned enterprises. The submitters were basically saying that although they agree in principle—and in fact I am sure they agree in their pockets—with the sale of State-owned enterprises they think that the Government is making a mess of that particular exercise.  
In addition something that Labour members are getting more and more concerned about is that the current tax system effectively contains a lower rate of tax on offshore sources of capital relative to the tax on domestic savings thereby providing what is really an unhealthy incentive for funds to be sourced from offshore rather than from savings in New Zealand. The effect of the taxation system is that returns are more for offshore lenders than they are for onshore lenders in New Zealand. If the returns are more for the funds that are sourced offshore then the effect of that is that our debt our capital coming into the country will increase and our balance of payments will over time get worse.  
I think that it does not matter which side of the House people are on; there is an understanding that the invisible side of our balance of payments is a major issue. We quite often get into a trade surplus situation—not as often as we should with the very good commodity prices and terms of trade but we often get into positive balance there. But it is the invisibles that are mainly associated with overseas ownership of such a high proportion of our economy and the rents the profits the dividends and the interest that are going offshore as a result of that foreign ownership mean that we have to earn more and more and more offshore in order to stay in balance in the current account. That is why members from our side look pretty carefully at any exercise like this one which in fact worsens the situation. 
 We believe pretty strongly that we do need to have further work to improve the neutrality at least of tax treatment across domestic and international sourcing. In fact I think even to say neutrality might lack ambition. A lot of countries have a preference for sourcing their financing onshore rather than offshore. One of the things that we need to consider is whether rather than giving preference to offshore lenders we should in fact focus on building up our own domestic capital and domestic borrowing in order to retain the financing of our businesses onshore as much as possible and thereby reduce the flow offshore.  
That of course would require more ambition around savings than we currently have. I note that it has been the policy of the Government to not put money into the Cullen fund. I note that it has been the decision of the Government to run down KiwiSaver to reduce the incentives and to reduce the flow of payments into the system and that of course is something that works against the development of capital in New Zealand. I think that has been a short-term approach. It is the approach I think of people who are more used to playing the markets and to being currency traders rather than people who have a genuine view on the importance of investment and of productive investment. I am careful as I say this with the member for Piako or similar— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Waikato. 
Hon TREVOR MALLARD 
: —Waikato—in the Chair but it is not only investment in our farms and our traditional productive sector but also investment in some of the smart new firms that we have around the country. I spent some time over the adjournment going to quite a number in my own electorate and there are a couple there at least that within 10 or 15 years could be billion-dollar industries—if we can hold them. The key to holding them is making sure that we have the onshore capital in order to have the investment in them and to keep the ownership in New Zealand. What is clear is that all around the world there are people who are bidding for those businesses and while we are giving them more favourable terms in their purchases and in their financing arrangements than we are giving to local purchasers that is something that tips the balance towards some of our best businesses going offshore.  
In conclusion the Labour Party will support this bill. We do so because it is not doing massive harm but we are concerned that there is no plan to do what is right in the financing area. 
DAVID BENNETT (National—Hamilton East) 
: 
 This bill the Taxation (International Investment and Remedial Matters) Bill is now coming to its third reading in this Parliament and it is a bill on which it is good to see support from the other main party the Labour Party in regard to taxation policy because it is a complex area of policy and it is an area that you need some consistency in. It is really about New Zealand’s international approach in financial matters. Just like we have consistency in our international approach on diplomatic matters it is quite helpful to also have consistency in our international approach in this Parliament on financial matters. So it is good to see Labour coming to the party on this occasion.  
However through the process it did have some concerns. Essentially this bill extends the active income exemption to offshore subsidiaries commonly called controlled foreign companies or CFCs so that it also applies to joint ventures and other significant shareholdings in foreign companies that are not controlled by New Zealanders. It is an extension of that role and rule to non-portfolio foreign investment funds. When we look at that active/passive taxation exemption there is a big contrast between the earning of active income and passive income. Active income is your typical manufacturing-type business and passive income is more your interest dividends and royalties. This bill is important in that distinction and how we treat income earned by those companies.  
Also there are some changes around the international tax calculation methods—just rationalising those—especially in the case where there is not sufficient information and there needs to be some kind of arbitrary decision on an assumed rate of return. There are also some changes in regard to Australian companies. One of the other areas in this kind of tax area was in regard to having grey list countries and that has been simplified now with Australian treatment and non-Australian treatment essentially. That is another change that is in the best interests of tax simplification.  
So there are a few other changes in this bill but essentially it makes it easier for New Zealand businesses to compete in the international theatre. It is important that as a Government we do that and support our businesses so that they have the ability to compete and the taxation policy of New Zealand is not something that hinders or prohibits their competition. This bill is good for New Zealand business. It is part of that process of helping to grow a stronger economy and we look forward to it being passed through this House today. 
Hon SHANE JONES (Labour) 
: 
 Thank you for the opportunity. This is a 5-minute call and it will be followed up by the Green Party our comrades-in-arms. We actually are supporting the Taxation (International Investment and Remedial Matters) Bill and unlike the previous speaker my contribution will echo something sensible and penetrating as came from Mr Mallard. Naturally we are aware of how important the application of a rational tax regime is enabling us to ensure we gain access to international funds but at all times never lose sight of the fact that one of the maladies confronting our economy is the absence of domestic or indigenous savings. Every step we take in this direction unfortunately proves to be a step away from the orthodoxy that the Government is following.  
On many of these large taxation changes or minor taxation changes we look for what is best in terms of “New Zealand Inc.”. This is a set of refinements and indeed some of them follow the work that Michael Cullen did in terms of changes to the international tax regime and a deemed rate of return so there is some tidying-up that has happened there. But we will always raise questions as to whether or not we are simplifying a process for those who are actually inhibiting the development of a domestic funds industry. Of course we are seeing the worsening of this situation once this foul policy to do with privatising our State assets goes ahead and we unfortunately are going to see a drift of opportunity overseas etc. not the least of which we have seen through the sale of our land etc.  
Dare I say it as of yesterday a number of us have been participating with a host of other stakeholders on what is the future of the dairy industry. I fear under the parlous leadership of the current Minister for Primary Industries otherwise known as the Minita o te Atu Matua of the new Ministry for Primary Industries it is evident that although it is not directly related to the taxation that we are dealing with here there is a connection because every opportunity that we produce for investment opportunities to be scooped by people overseas to the detriment of New Zealand industry or New Zealand funds participants is something that should be raised in this House as a matter of key economic public policy. It is unfortunate that this bill along with a host of other measures has never really represented a coherent response as to how in the 3 years since the last election and in particular since John Key and his soon to be departed to Hawaiki nui Hawaiki roa Hawaiki pamamao for redundant politicians John Banks you will find then that a great opportunity has been squandered.  
We wanted to see in a bill of this nature included possibly in this bill further incentives for deepening our reserves of domestic savings through an improved KiwiSaver scheme. We wanted to see something ambitious to do with superannuation policy because that in itself is related to tax but no we have seen this ongoing tinkering. So we hope to engage in the debate because unfortunately as this policy is implemented the policy pertaining to the privatisation of our key utilities and our key assets an impact that they may say on that side of the House is unintended but an impact that is going to worsen the level of ownership that will come to pass in hands that may not be directed towards the best interests of New Zealand. In that case we will certainly be borrowing more and more money and will be reliant more and more on overseas funds.  
That is not to say that we are islands to ourselves and we should not draw from international capital but over time all economies and all successful regimes have to have a balance. This Government this particular Minister of Finance and his sort of inept helpers have worsened that level of balance and it is disappointing that legislation of this nature has not seized the opportunity to move in the right direction. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: My apology that was a 4-minute bell. I do not know whether the member was going to go for a 5-minute call. I rang the bell at 4 minutes. 
Hon SHANE JONES 
: I will gladly continue in the Ngapuhi dialect. Some would say missionary-trained translator although probably his translation services will be needed somewhere near Coatesville somewhere near Epsom. In fact I think I know the word for Epsom and it is ka mate ka ora—ka mate you die. Anyhow I will come back and round up: yes we do support this bill but the deeper issue which we will never support is an erosion and undermining and an absence of policies to actually grow New Zealand’s depth of savings other than the fact that the current Government believes that by hocking things off New Zealanders are going to be fantastically rich—by hocking things off that are disproportionately going to disappear overseas—and all we are going to see is the new stakeholders wanting to expand revenue. That is higher costs—higher costs in an area where the competition could definitely be improved. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry now to interrupt the member. Before I call Dr Kennedy Graham just to elaborate on the mistake I made I will ring the bell at 4 minutes so you will have a minute to go. 
Dr KENNEDY GRAHAM (Green) 
: 
 Just to pick up from the sublime appellation of our colleague Shane Jones earlier let me greet all 121 comrades-in-arms in the fine art of capitalist taxation tuning. This bill— 
Hon Member 
: I think it’s 120 colleagues you have got. 
Dr KENNEDY GRAHAM 
: It is 120 plus me. [ 
Interruption 
] Well I am not the comrade. This bill the Taxation (International Investment and Remedial Matters) Bill having ground its way through to the third reading has really been damned with faint praise. It is clear that it is going to get general lukewarm support from all parties. I think what it does do is reflect a Government whose ideological conviction largely competes with its rigidity of approach and cautious disposition. That becomes manifest in this bill along with a whole raft of all the economic and fiscal legislation that it has produced both in the 49th and 50th Parliaments.  
The Green Party from the beginning made it clear that it was prepared to support the bill along with other parties but I think largely on the general understanding shared by all that it is not going to change very much. Let me just use my limited time here before we indicate that we will finally vote in this third reading of the bill to identify I think probably a syllogism of three propositions that the National Party works on and offer the alternative three that the Green Party works on. This Government with its ideological view has the following three propositions: one that globalisation is good; two that the economic and tax regime has therefore to be more competitive and can be therefore more competitive and that anyone who disagrees comes from North Korea; and third that the tax rates must be lowered for the New Zealand economy to become more competitive and anyone who disagrees comes from North Korea.  
In contrast the Green Party believes that globalisation can and often does cause more harm than good to the public interest—not to the corporate interest necessarily but to the public interest—secondly that New Zealand can indeed become naturally more competitive through fine-tuning of taxation legislation but not necessarily through the obtuse instrumentation of this kind that we see before us in the current bill; and thirdly that following from that New Zealand tax rates of this kind must distinguish between certain foreign investment inflows and others rather than treating them all as one and that not all will be competitive as we heard from the Inland Revenue Department briefing.  
New Zealand’s economic success is really dependent less on this kind of microeconomic fine-tuning based on ideological conviction which misperceives the reality of where we are in the global economy and more on a broader structural restructuring of our economy pertaining to the value of the dollar pertaining to the current account deficit pertaining to the use of our natural resources in an ecologically sustainable way and also pertaining more to our tax framework rather than to the microeconomic management that is pronounced in this bill. Having damned it with faint praise I reassure the Government that we shall vote for it. Thank you. 
MAGGIE BARRY (National—North Shore) 
: 
 I rise in support of the third reading of the Taxation (International Investment and Remedial Matters) Bill. It is set down today for its third reading and is sponsored by the Minister of Revenue Peter Dunne. It is very much in keeping with National’s policies—our fiscal policies. It is a measure that was first outlined in our 2010 Budget: that we would deliver a major tax package that would reform the tax system to make it fairer more sustainable and a better support for economic growth. I believe that this bill does that.  
The taxation bill is really a natural extension of our earlier international tax reforms and it builds on and extends those reforms. The active income exemption brings our tax system into line with the policies and practices in other countries and it really will help New Zealand - based businesses to compete more effectively in foreign markets by freeing them up from a tax cost that similar companies in other countries do not face. So it is a basic fairness issue. One of the examples that is topical and I think relevant to us today is that a New Zealand - owned manufacturing plant in China will now generally face the same tax rate as other manufacturers competing in China.  
There are a number of measures of course in the bill. It rationalises our international tax calculation methods; it also maintains the exemption for investments in Australia. It also removes a tax barrier to non-resident investment in New Zealand corporate bonds so it will attract investment to New Zealand and that is pretty much in keeping with the recommendations that were made in 2009 by the Capital Market Development Taskforce. It wanted to see the approved issuer levy be reduced from 2 percent to nil for some public issues of debt by New Zealand residents. That has been done by this bill. There are a number of other messages and elements within it that have been outlined by my other colleagues and by the people on the other side of the House. We are all speaking in support of it. I think that from my point of view I see it as a consistent and fair bill that promotes the sort of integrity that we need as a nation. So I commend this bill to the House and look forward to it being passed today. 
Bill read a third time. 
Financial Review Debate 
In Committee 
Debate resumed from 3 April on the Appropriation (2010/11 Financial Review) Bill. 
Ministry of Economic Development  ( 
continued 
)  
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is a pleasure to resume this call for the economic development section of the Appropriation (2010/11 Financial Review) Bill. For the sake of every New Zealand child growing up and wanting to work in a good job in New Zealand for the sake of the grandparents hoping to see their children grow up here for the sake of every Christchurch family and business waiting to see decisive action to lead the rebuild of Christchurch and for the sake of those patriotic businesses that have not yet sold up or been shipped out may the Government please please get a real plan to grow this economy. A real plan has strategy it shows a future state and a plan to get there it has performance measures and it tracks progress towards that. There is nothing—nothing—in the record of the Ministry of Economic Development that indicates that such a plan has yet been effected by this Government.  
I must however praise the ministry for this: its briefing to its incoming Minister has made very clear that a reliance on the negative politics of free markets hoping that cutting selling deregulating and tax cutting our way out of the hole will work is in the ministry’s words in no way sufficient in a small and remote economy. What it says quite rightly is that a much more ambitious plan is required. It must be common ground that a real plan does not rely on light-handed free markets where they are dysfunctional that neo-liberalism gave us the great financial crisis and that austerity economics is giving us a long recession to follow. A real plan does not imagine that balancing the Government’s books at the expense of businesses or the economy’s books is a way to get us out of the hole. As my colleague David Parker has said a billion-dollar Budget hole is a sure sign that the plan is not working.  
In the absence of a credible obvious clear economic strategy something that would guide the actions of Ministers in a transparent and credible way what we see from the Minister for Economic Development and the Prime Minister is a habit now of being involved in one-off questionable deals lacking transparent processes for some of the largest most powerful corporates in New Zealand: Skycity Casino—currently under way—MediaWorks Warner Bros selling the telecommunications company law to split Telecom and now the Dotcom scandal.  
This Government is showing all the signs of being a tired ragged third-term Government on its way to collapse. Will it last to the election? Yes you are looking like a third-term Government only 3 months into your second Mr Foss. “I can count to three” says the Minister of Commerce—wonderful! It is good that he is holding up three fingers. It looks like a third-term Government even though it is a second-term Government and that is the point.  
Third-term Governments sometimes looks ragged they sometimes do deals with their mates they run out of steam and they do not have a clear plan and this Government has got there in record time. It has got there in record time. It might be funny if it were not for the fact that it will impact the lives the careers the incomes and the families of real New Zealanders—the 1000-plus a week who are voting with their feet because they know that their opportunities are more limited here than they are across the Ditch the ones who listened to John Key 3 and a bit years ago when he told them that if he was elected the gap with Australia would be closed and the brain drain would be stopped. Well it has got worse. It has got worse. It is time for a plan time for some strong Government action to get the economy moving and time for growth and economic development before it is too late. 
Hon DAVID CARTER (Minister for Primary Industries) 
: 
 If that was a leadership bid by Mr Cunliffe it was certainly a third-rate effort. I am quite happy to talk to that member about the economic plan of this Government because this Government is absolutely focused on getting the economy performing. We need to do that for the benefit of our children and I need to remind the member that as a former Associate Minister of Finance he is responsible for the mess that this National Government inherited at the end of 2008 when for over 9 years his Government had lived through the most benign economic conditions that I have probably seen in a lifetime and it had squandered every opportunity. 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I just ask you to ask the speaker to come back to the debate which is a financial review of a particular year and going forward. It does not go back that far.  
The CHAIRPERSON (Lindsay Tisch) 
: I am very mindful of comments and I am listening very carefully. 
Hon DAVID CARTER 
: I am happy to outline for that member the economic plan of this Government. He should know it; it is mentioned time and time again in the House. But I am only too happy to outline the plan for him.  
We are absolutely committed to get this economy going so that we do create more jobs. But every time we come up with a proposal that member and his caucus object to it. We are absolutely focused on balancing the books. That Opposition has one solution and that is to borrow more money and pass more debt on to the next generation. Well that is unacceptable to me as a Minister of this John Key - led Government. This Government has an absolute commitment to the rebuild of Christchurch something we incessantly see the Labour Party members objecting to. But there is a great opportunity for economic development in Christchurch and I am proud of this Government’s commitment to Christchurch and that rebuild.  
That member talks about the ability to get the economy going and to get jobs in this country. Well I want to speak to one particular initiative that will deliver a lot of jobs to New Zealand. That is around the Skycity deal which has been the subject of a lot of press in the last few days. That member in his contribution a minute ago referred to it as questionable and lacking in transparency. Well when I was Acting Minister for Economic Development last year I had the ability to well and truly be involved in the process. What the Government did was call for particular proposals. From memory there were five. One stood out that was totally different to all the others. Skycity was prepared to deliver the convention centre to Auckland something that the Auckland City mayor is calling for but the difference between the Skycity bid and all the others was that it did not expect the Government to pay for it. It did not expect the Government to pay for it.  
This convention centre has the potential to deliver not hundreds of jobs but over time thousands of jobs to the Auckland economy and thousands of jobs to New Zealand. Mr Cunliffe shakes his head. Mr Cunliffe shakes his head. That is how bereft of economic ideas that man is when he says that a national convention centre able to take that number of delegates and able to bring that number of people into New Zealand would not create jobs. That is economically naive Mr Cunliffe.  
It will require us to address some issues around gaming machines but if we see the overall number of gaming machines decline from 25000 in the Auckland region when that member was a Minister in the Labour Government to around 18000 we are achieving a significant reduction. So I fully support what John Key as the Prime Minister is doing to develop this. It is a $350 million investment into the Auckland economy. That is just the construction cost and it will deliver jobs. And I say to Mr Cunliffe that if he thinks we can rebuild the economy from the mess that that Labour Government left at the end of 2008—if he thinks we can rebuild the economy and deliver sustained growth to New Zealand and sustained jobs to New Zealanders—and expect the Opposition to vote against every initiative we come up with then it is no wonder Mr Shearer languishes in the polls and it is no wonder the Labour Opposition languishes in the polls. Mr Cunliffe might have come out with a major speech over the last couple of days acknowledging that his Government got it wrong but what he should do is not object to every proposal that this Government has to really get the economy going. 
DAVID SHEARER (Leader of the Opposition) 
: 
 We are not objecting to every proposal; we are just objecting to the shonky ones—the shonky ones. That is what we are objecting to. And this hokey-pokey deal Mr Carter is one of those shonky deals that we are opposing. Let us just take a look at this particular deal because I am really pleased that you have brought it up. We are looking at increasing the number of pokies in Skycity by 500 pulling $42 million a year out of the pockets of ordinary New Zealanders—New Zealanders who cannot afford to give up that sort of money. That is what we are doing here—$42 million. That is how we are going to subsidise this big convention centre.  
But there are two things that really upset me about this—two things. One is how we are going to do that. Well we are going to change our law. We are just going to change our law to enable Skycity to bump up the number of pokie machines increase the number of gaming tables and increase the length of its gambling licence. Let us look at the maths of this—$42 million a year. Look at how much the convention centre will cost—$300 million - ish. After 7 years Skycity will have paid it all off. And then it will have another 13 or 14 years of $42 million - plus a year that it can pull out of the economy. That is good business—that is really good business! Skycity is not looking at this as a way of being able to have a convention centre; it is a way of being able to increase its gambling take. Ultimately it is a gambling organisation. And what is this Government going to do? This Government is going to give Skycity the opportunity by changing the law of New Zealand to enable it to pull massive amounts of profits out of ordinary New Zealanders’ pockets and of those people who are using those pokies 40-plus percent of them have got a gambling problem—40-plus percent of them.  
I happen to be very opposed to pokies as is Mr Banks by the way. Mr Banks spoke openly and outwardly against pokie machines. Mrs Collins over here spoke out against the monopoly that Skycity might have and what are we doing? Well actually we were handing a monopoly over to Skycity because the sinking-lid policy that the Minister of Justice talks about does not actually apply to Skycity; it applies to all of the pokie machines that are out there in the suburbs. This Minister has the audacity to stand up and talk about a sinking-lid policy out there in the suburbs. How did that sinking-lid policy come about? Well actually we changed the Gambling Act. Oh that is great. Who voted for that? Actually the Labour Government voted for that. What did National do? It voted against it. But now it is convenient to say that this sinking-lid policy is a great thing because ultimately we will end up with fewer pokies. But what it will mean is that we end up with more pokie machines in Skycity and fewer out there in the suburbs where they are actually contributing to community events and community facilities. So what an extraordinarily audacious and amazing plan that this Government has come up with: increasing the number of pokies in Skycity!  
But there is more to this deal. The way this plan was put together is that of the five companies that tendered for this Skycity got a wink and a nod and a dinner with the Prime Minister and it got across the line. The others did not. I was speaking with Vector the other day and they said: “Gee we wouldn’t have actually minded a bit of a conversation with the Prime Minister. We might have been able to have come up with a deal that would not involve putting pokie machines up as payment for a convention centre.”  
This Minister talks about a great deal. This is not a great deal; this is social harm in Auckland. This is about $42 million a year being pulled out by Skycity and this is about a shonky deal that did not give the same opportunities to every other company that had the opportunity to put up a tender. What if they had had the opportunity to sit down with the Prime Minister and say: “I think we can do a deal here.”? What about Infratil? If Infratil had the ability to sit down with the Minister it may have had a different deal but that did not actually eventuate.  
Hon DAVID CARTER (Minister for Primary Industries) 
: 
 I am going to attempt to explain to Mr Shearer again the necessity for New Zealand to have a national convention centre. Mr Shearer needs to realise that these things have been a huge success and have had a huge economic impact in any country that has been able to create one. That is the first point. The second point that Mr Shearer needs to understand is that these businesses do not make money on their own—these businesses do not make money on their own. So the Government went through a very transparent process— 
Jacinda Ardern 
: Oh! 
Hon DAVID CARTER 
: The Helen Clark aspirant there keeps yelling at me but the Government went through a very transparent process and the difference between this proposal and the other four is that one was proposing to build the national convention centre without expecting the Government to pay $350 million.  
There are three options here. One is that you decide not to have a national convention centre in which case it costs nobody any money. The second option is that you allow the Government to build it and put up $350 million. Well this Government has not got a spare $350 million. From Labour’s record over the previous decade it would just borrow $350 million and it could not care less about the ability to pay it back. Well that is not what the National Government is prepared to do. 
Hon Phil Goff 
: National’s borrowed $300 million a week. 
Hon DAVID CARTER 
: The third option Mr Goff was to see whether somebody else would do it. What we found of the five proposals was that only one was prepared to do it and it was asking for things like an extension to its current licence. It was asking for an increase in gaming tables. Mr Shearer quotes a figure of 500. Those negotiations are still ongoing; he is making it up Mr Faafoi—he is making the figure up.  
The important thing for me is that this will bring 1000 new jobs during its construction—1000 new jobs. How many times do we hear Jacinda Ardern saying that there are no jobs? Well if you do not create economic opportunity and economic activity Jacinda Ardern—I know this is hard for you to understand—there will not be jobs. There will be 1000 new jobs while they build it and then there are 800 jobs while they run it bringing hundreds of millions of dollars into the Auckland economy. 
Kris Faafoi 
: Who for? 
Hon DAVID CARTER 
: Who for? For the New Zealand economy Mr Faafoi. These international visitors will likely travel on Air New Zealand. They will likely dine out in some of the restaurants in Auckland. They will likely travel to places like Queenstown Mr Faafoi. That is what international conference delegates do. That is why it delivers economic opportunity.  
I know that it is difficult for this Labour Opposition to understand anything about the economy. Labour left it in a mess. This Government is absolutely determined that we will not leave the economy in a mess. We are determined to lift the economy. We are determined to balance the books and we are determined to deliver jobs so that young New Zealanders will see this truly as a land of opportunity. 
Report noted. 
Ministry of Justice  
TIM MACINDOE (National—Hamilton West) 
: 
 I just want to take a call if I may and commend the tremendous job that is being done by officials within the justice department. In particular I acknowledge the great start that our new Minister of Justice the Hon Judith Collins has made since she took over this role. It is significant that our Minister has taken over a very demanding role. Of course in the previous Parliament—and I also want to pay tribute to her predecessor the Hon Simon Power—this was an aspect of the Government’s legislative programme that was particularly demanding and particularly effective and perhaps most important particularly welcomed by the public of New Zealand.  
There is no question that for many many years there has been a concern that we have had a justice system that has to a large extent marginalised victims and put far too much emphasis on to the rights of offenders. In a civilised society of course offenders have rights. But one of the most distressing things for victims in quite serious trials in New Zealand has been that they arrive at court only to realise that they are completely marginalised and in many cases they are re-traumatised by the experiences that they are put through. So I want to canvass just a couple of the issues in the time I have available today to point out to the Committee just what significant progress is being made. 
 Before the House at the moment of course is the Victims of Crime Reform Bill. This is a very important piece of legislation that will ensure that victims of some of the most serious crimes in New Zealand are heard—have a chance to be listened to—particularly with the improvements to the victim impact statements that they are now able to submit or will be able to submit and also that they are assisted.  
One of the great achievements in the previous Parliament was the introduction of the offender levy. I point that out because our opponents on the other side of the House scoffed at it when we suggested it mocked it as it went through the House and told us it would not work. Well look at the results. In its first year the offender levy collected double what was anticipated and although it may not be a huge sum of money we are talking about in the region of $2 million that is now available for victims of crime to receive counselling receive assistance with accommodation costs when they have to move to a major centre in order to take part in a trial and to help with a number of other matters that are very expensive for them and just add to the huge hurt and suffering that they have all endured. So I want to congratulate everybody who was involved in that initiative and say what a fantastic way forward it is. I look forward to hearing that it continues to become more and more successful over the years ahead.  
We are as a Government reforming our justice system to put a stronger emphasis on victims because victims of crime find themselves caught up in the midst of our criminal justice system not only through no fault of their own but in circumstances that most of us absolutely shudder at the thought of. To find that a member of your family has been affected by one of the most gruesome crimes and then suddenly you are at the heart of a criminal trial is just the most appalling experience which all of us would naturally wish to avoid. Not only do we want to protect the interests of those victims and make the system a little bit more friendly supportive and sensitive to their needs but also we are very much committed to building a safer New Zealand. So we have embarked on a comprehensive programme of reform to protect our communities prevent crime and put victims first.  
I think it was a very appropriate step that the current Minister moved up from her previous role as Minister of Police and Minister of Corrections because while she was exercising those responsibilities which she also did with tremendous effect she was able to advance the cause of looking at laws that in some cases needed considerable strengthening to give the police more powers. Now as Minister of Justice she is able to complete the picture and ensure—[ 
Interruption 
] Thank you Mr Faafoi. I am so pleased that Mr Faafoi is enjoying this speech and I trust that in a moment he will rise to his feet and continue to sing the praises of the Minister because well do those praises deserve to be sung and I know that Mr Faafoi is an ideal candidate to do that. It is an important matter. Although it is good to have some humour in the discussion it is also really important that we focus on law and order and justice initiatives. They are absolutely right at the forefront of this Government’s agenda because they matter so much to all New Zealanders. 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 Can I take a moment to thank the member who has just resumed his seat Tim Macindoe for the splendid chairing role that he is undertaking as the chair of the Justice and Electoral Committee. I know that his whole team on the committee is working very hard and I acknowledge all members of the committee because I know that they are doing their very best to undertake their duties with professionalism which is what we would all like to see from all members of the House.  
I need to record here that recorded crime for the 2010-11 fiscal year was a 7 percent fall on the year before 2009-10. The recorded crime rate in 2010 was 9761 per 100000 population the lowest it has been since 1982 and 25 percent lower than its peak in 1992. What we are seeing is a drop in crime that has not been seen at that level since the 1930s. We have prosecution levels in 2010 that were 13 percent lower than in 2009 and that is after they had grown and peaked in 2009 having grown by 25 percent over the previous 15 years. What we are seeing is that the Government’s policies the Acts that this Government has brought through are actually having a huge effect and so too is an attitude that actually crime should not pay that we do stand up for the victims of crime that we do stand up for law and order that we do support the police the Department of Corrections that we do support our court staff the ministry the judges that we get on and we support them and we do not give in to criminals.  
I actually think one of the best things that I can think of in my time in Parliament is what has happened to the crime rate. Of course the crime rate is not just about numbers; it is actually mostly about people and by people I mean victims of crime. When we have less crime we have fewer victims and that is something we should all be very pleased about. What that does mean too is that we have opportunities in the justice system to look at more innovative ways in which we deal not only with crime but in other areas of the court system such as the family courts and other courts to look at how we can do things better and more efficiently and how we can use new technologies. Certainly the audiovisual links that we have introduced in the last few years between corrections and the courts has meant that that has been a huge savings to corrections but it has also taken away a real source of danger for the public.  
We are looking at how we can use technology better how we can look at having an accessible justice system so that members of the public can for instance file their documents online or their lawyers can file documents online at any hour of the day or night and how they can access their own files in a way that is user-friendly. Judges and staff will not have to haul around great big thick paper files that they have at the moment. Things get lost and put in wrong files. We are looking at bringing in an electronic operating model that works well not only for the judiciary but actually for the lawyers and for those people who use the courts.  
None of this should be too much news for people because it is the sort of business operation that businesses undertake and have done for years now. It is important I think for instance that we look at how we use the very valuable dollars that we use in the justice system and that is actually looking at for instance whether we should have lawyers waiting around and waiting around and waiting around for cases to come up for trial when for instance a text message to the lawyer from the court staff would tell them when it is on so that they are not wasting their time and therefore wasting money either on legal aid or through their client.  
So there are ways that we can look at doing that. But that actually requires a really steep learning curve for a lot of people involved in the justice system and that is about working together. I have found that when I have talked to the judiciary and with lawyers that they are particularly keen to do that. They want to work with the police and corrections and the court system so that they can in fact get better outcomes for everyone involved. Better outcomes mean a quicker fairer trial. It means people being able to access the justice system without huge cost. But it also means that those matters that come into the court system are dealt with fairly and according to the law. I think it is also worth noting that we are very fortunate in New Zealand that we have a judiciary that is truly independent and free of corruption that we have a police force that is in a similar situation and we are very lucky in this country. I do sometimes despair at the odd media reports screaming headlines about these things. We do not give enough credit to those people who play their part in the justice system. We are very fortunate indeed. 
Report noted. 
Ministry of Health  
Hon MARYAN STREET (Labour) 
: 
 In an end-of-term review of the New Zealand Government’s actions on five major health risk factors undertaken by the University of Otago department of public health the scorecard of this Government in its first term is woeful. There were five top health risk factors that were assessed in the health portfolio. They go in descending order of importance and the first one was tobacco use. The summary around progress on that one was “Some progress but gaps remain which need to be addressed if substantive progress towards the smoke-free nation goal is to be achieved”. It says further: “there are unresolved issues around achieving the smoke-free nation 2025 goal notably the lack of any coherent strategy or milestones for achieving this goal.”  
The second risk factor that was at issue in this report was alcohol use. The report card says: “Some limited plans for legislative reforms that do not adequately utilise major interventions such as alcohol tax”. That is hardly a ringing endorsement of achievement in that area.  
The third one was high blood pressure and that received a “No progress” result: “No progress on reducing salt intake”. It further says: “This inaction is problematic given the many international studies suggesting how cost-effective interventions to reduce salt intake would be …”. So not even the cheap things have been done by this Government.  
Another is high blood glucose. Well we have just had diabetics lined up outside Parliament today furious at the possibility that they will be required to use an inferior blood glucose meter because of Pharmac’s provisional contract with Pharmaco to be the sole supplier of these critical devices. But even when it comes to high blood glucose what is the scorecard on the Government’s performance in health? “No progress on improving nutrition and mixed progress on supporting enhanced physical activity”. They go on to say: “Others have reported on the lack of a national strategy to address obesity and that in NZ ‘population approaches to reduce the burden of obesity have been systematically cut in the last 3 years; for example the National Healthy Eating Health Action Strategy is no more Mission On has disappeared [a physical activity programme] and the requirement for schools to provide healthy food has been abolished.’ ” 
This Government’s record in the health portfolio is not coming up to scratch. It is not passing. The fifth area was about overweight and obesity rates and the comments were exactly the same as the previous comments on high blood glucose. In other words there was no progress. This is an appalling indictment on what this Government has done in the health portfolio.  
But even more important than that if we go to immediate data—the data of the last year or so that is under consideration—it is clear that New Zealand is experiencing under this Government increasing levels of inequality higher rates of child poverty worse levels of housing provision and the consequent health risks that attend each of those factors.  
Another report that came out was from Otago University’s Michael Baker. The New Zealand Child and Youth Epidemiology Service said hospital admissions of children with serious bacterial infections doubled from 210 for every 100000 children in 1991 to 451 in the meningococcal epidemic in 2001. That fell back to 377 by 2005 after the epidemic was contained. How was the epidemic contained? It was because a Labour Government saw fit to invest in that meningococcal immunisation programme. But admissions have risen again since then since this Government has been in power.  
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It is an absolute pleasure to be speaking on the financial reviews 2010-11 because under this National Government there have been some great gains in health which unfortunately the Opposition spokesperson the Hon Maryan Street has just failed to notice. Of course the health targets are an absolutely classic example of where they are. Firstly let us have a look at the list.  
Immunisation of course has been an absolute gain of the highest order over the last 3 years. Three years ago only 70 percent of under-2-year-olds were immunised. Today 92 percent are and we have almost got 95 percent being fully immunised. That is a huge achievement in health promotion and disease prevention.  
To add to that the National Government has instituted the rheumatic fever scheme which again should have happened under the Labour Government. All it did was talk about it for 9 years but the National Government has actually instituted this programme.  
Three or 4 years ago the average wait in emergency departments in this country was over 6 hours. Today 92 percent of patients get through emergency departments in under 6 hours. District health boards like Waitemata District Health Board where under the Labour Government we heard stories of patients wallowing in the corridors for 24 to 48 hours have just recently reported that 90 to 95 percent of them get into the wards or get discharged in under 6 hours. That is another tremendous achievement.  
Let us go to the issue of radiation therapy. I vividly remember that under the Labour Government only 4 years ago cancer patients were being sent to Australia because the waits in New Zealand were 3 months 4 months 5 months and 6 months. That was absolutely shocking. Today we have the gold standard therapy whereby every radiation patient is being treated in under 4 weeks. That is another tremendous achievement under this National Government.  
We can go on. Eighty-nine percent of hospitalised smokers are given help and advice to quit.  
Hon Maryan Street 
: What about helping them before they get to hospital?  
Dr PAUL HUTCHISON 
: That is an incredible achievement. We have Maryan Street saying that nothing has been done. This is the first Government to put in year on year significant increases in tobacco tax which we know is one of the most effective ways to diminish smoking in this country. Indeed it is working.  
But let us just have a look at some of the other achievements. Now 27000 extra people are getting elective surgery every year since the National Government came into office 4 years ago. That is another remarkable achievement.  
We do know that health systems around the world are characterised by almost infinite demand and finite resources. What we do know is that a Treasury study in 2006 showed no increase in productivity under the Labour Government in the health sector despite it increasing the vote by billions of dollars. Last night on TV we heard that over the last few years there has been an increase in productivity in the health sector by 5 percent year on year.  
Hon Phil Goff 
: That’s right. Across 2007. 
Dr PAUL HUTCHISON 
: This was in anticipation of the National Government. It is great to hear that finally this is being carried on because after all we heard in 1999 in the advice to the incoming Minister of Health that the greatest gains in health would come from health promotion disease prevention and the integration of primary and secondary health. Nothing had happened under that Labour Government year on year other than spending more money. We have established some absolutely great examples in immunisation in the rheumatic fever programme— 
Hon PETER DUNNE (Associate Minister of Health) 
: 
 Can I thank those members who have contributed to the debate thus far. Can I knowledge particularly the chair of the Health Committee and thank him for the contribution that he makes and the advice that his committee has delivered both on the report on the financial review but also more generally. The fact is as the member rightly pointed out the last year has seen significant additional achievement in the area of health. During the time that this Government has been in office— 
Hon Maryan Street 
: Depends what you measure. Depends what you want to measure Peter. 
Hon PETER DUNNE 
: —$1.5 billion extra spending has been allocated to the health sector. I heard the member—and I will come to her point shortly—say many times by way of interjection “What about prevention?”. I agree with her. Prevention is important but so too is providing effective care for those who have moved beyond the stage of prevention. That is why we have seen 800 extra doctors employed in hospitals and over 2000 more nurses. That is why we are seeing new elective theatres being developed: to make sure that people can see real tangible progress and that some of the more fundamental and basic health concerns that arise can be dealt with effectively.  
There was an interchange during the debate about the tobacco policy. Dr Hutchison rightly pointed out that during the last year we have seen significant increases in the excise duty which we all know will have a significant and profound downward impact on the level of consumption. We are also seeing now about 90 percent of hospitalised patients being given help and advice to quit smoking. My colleague the Minister of Justice reminded me as she left the House after her estimate was being considered that during her time as the Minister of Corrections prisons were made smoke-free and around 6000 prison inmates who were previously smokers had to confront giving up that particular habit. So when the member says that nothing much has been done I would say in response that a considerable amount has been achieved.  
There are a number of other areas in health where great progress has been made. Over the last 3 years there has been a $180 million increase in funding for Pharmac. What that has seen is some of the more difficult and rare cases in the areas of some of the cancers diseases like Crohn’s disease and Alzheimer’s disease are now getting the medicines that are needed to be able to give people a better standard of living a greater opportunity for the future and also some real prospect.  
All of this is being achieved against a background of two important things. The demand for health services in the Western World is insatiable. No matter what the level of provision people rightly and understandably are going to demand more. As the march of technology increases that is going to increase as well. We are operating against that general backdrop but also in an environment of the greatest economic crisis to hit the world since the Great Depression where every dollar has to be managed with care where every dollar has to be really scrutinised in terms of the value it achieves for the spend involved. I think it is great that we now see against that backdrop over 90 percent of patients who report to emergency departments are discharged within 6 hours. It is great to see people who require radiation therapy are getting gold standard world-class treatment within a 4-week period. It is great to see the immunisation targets being increased and achieved. It is good to see that we are getting a reduction in a lot of the duplication and wasteful and inefficient expenditure in back-office services and much more concentration collaboration and working together to achieve positive outcomes.  
I am delighted—and again I come back to the prevention theme that the Labour member spoke of—that we are seeing the extension of the free care-hours for under-sixes and that we are seeing also the extension of the number of children able to get the B4 School check. That is early intervention of the highest order. We are seeing more Well Child home visits for at-risk mums. Again it is a positive benefit. There is always a long way to go in health. People demand better services all the time. But this Government and this administration has seen dramatic improvements in the status of the health of New Zealanders over the last 3 years. I acknowledge the role of the Minister in leading this and I acknowledge the contribution of his colleagues in helping him achieve it. New Zealanders’ health is in good hands. 
Report adopted. 
Ministry of Education  
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to speak on this financial review. Can I start off by acknowledging the previous chair of the Education and Science Committee Allan Peachey. He was someone who had a huge respect in this House and I think all members would acknowledge the huge contribution he made to our country in terms of education. Can I acknowledge the Hon Hekia Parata our Minister of Education and the fantastic job that she is doing for us and this Government and the Hon Anne Tolley who also did an outstanding job.  
Many of us in the National Party believe in equality of opportunity not outcome. For many of us we will fight to the death in this Parliament to ensure that some of our most disadvantaged children get the best opportunities in life. A large part of that is access to good quality education. What we are very proud of in this Parliament is that not only have we raised standards but also we have focused on ensuring that we resource our education system properly. When it comes to the Budget we are very proud that the increases we have seen have been in both health and education.  
If we look at some of our achievements we have managed to fund 18 new schools we have managed to fund 400 school buildings we have employed 1600 more teachers and we have focused 50 education experts and $36 million to target those children who are falling behind. We know in this House that actually this country has some of the most outstanding educators in the world but we also know that there are a group of children who are not doing so well. So everything that we do whether it is better resources which we have provided in the last 3½ years or whether it is national standards is about ensuring that those kids who are falling behind get the best start in life that they can. We have also been very focused on programmes like the Youth Guarantee. We know that some children in New Zealand do not suit a classroom environment. We are focused in ensuring that those kids do not drop out of school. The Youth Guarantee offers free study at selected private training establishments and polytechnics and institutes of technology. We have seen 12500 Youth Guarantee places for 16 and 17-year-olds; that will happen by 2014.  
I want to talk about something that I am very passionate about and that is close to my heart which is ensuring that New Zealand schoolkids can lead the world in digital literacy. When you look at the last 3½ years we have committed an extraordinary amount of money through the ultra-fast broadband fund $1.5 billion to make sure that our kids can lead the world in digital literacy. As many members will be aware there is an inquiry in front of our Parliament to ensure that kids across New Zealand whatever school they may be in have equality of access to technology.  
We have also focused on service academies—that is military-style programmes for years 12 and 13 which are run at schools with the Defence Force. We have already opened eight new academies for over 800 students with 13 more opening in 2012.  
We have been absolutely focused as well on ensuring that rural kids get a good education. That has been partly through the Ultra-fast Broadband Initiative and Rural Broadband Initiative. We have committed that over 97 percent of our schools will have ultra-fast broadband access by 2015. The Rural Broadband Initiative will put $300 million into this. I am very proud to be part of a Government that is not only providing extra and additional resources—and we have seen that through the new schools that we have opened we have seen that through the many school buildings that we have built and we are seeing that through the investment that we are making in new technology—but is also saying that we are unashamedly focused on raising standards for our most disadvantaged children.  
Can I acknowledge that this does not just happen. It is not just about money; it is not just about good policy. It is also about leadership. Those members of the House who look at their schools and see that some of their schools are failing know how important leadership and governance is. Can I say that I am very proud to be part of an education team led by the Hon Hekia Parata who has made some hard calls in the last period that she has been in there. She is not afraid to say that this Government has standards and that this Government will not let children be left behind. We have seen some of those hard decisions and I am sure there will be more challenges that we will have in this area. But what we are very clear on on this side of the House is that when it comes to future Budgets we are absolutely focused on ensuring that education is a priority but we are also focused on ensuring that we get good value for money. We are also focused on the fact that we understand— 
MOJO MATHERS (Green) 
: 
 I rise to speak to the 2010-11 financial review of the Ministry of Education. I first would like to note that it is New Zealand Sign Language Week and I want to take this opportunity to acknowledge the many teachers who will use this week to introduce New Zealand Sign Language into the classroom and thereby introduce our children to this beautiful visual language which is the third official language of New Zealand.  
We all know and are agreed upon the importance of investing in education for our children. We know that this means for children with a disability providing appropriate early intervention and adaptive technology so that they do not fall behind their peers. So I am very concerned that the Ministry of Education has changed its policy and is now choosing not to fund remote microphone hearing aids for children with the hearing impairment called auditory processing disorder unless they are also receiving special education support. What this means in practice is that these children have to have another recognised disability such as autism or to have developed a serious learning need. I consider this policy to be both unfair and illogical.  
Auditory processing disorder is a hearing impairment where children are unable to process and understand sound in the same way as others despite the fact that they may pass conventional hearing tests. It is linked to glue ear which is a condition linked to poor housing and poverty and it affects more boys than girls. It also is higher amongst Maori and Pacific Island children—the very children who are often falling behind in classroom situations. I consider the decision to cut funding to be unfair to the child with auditory processing disorder who will be struggling to understand and follow classroom instructions and is likely to be on the path of underachievement. It is unfair to parents who have to choose between watching their child fall behind in the classroom or paying privately for the remote microphone hearing aids themselves assuming that they have the ability to do so. It is unfair to teachers and other children in the classroom because children with remote processing disorder are unable to follow what is happening in the classroom to the same extent as their peers and will therefore often have behavioural problems causing disruption in the classroom. So I consider this decision to cut the funding to be wrong and short-sighted.  
It also makes it impossible for schools to meet their obligation to provide an appropriate learning environment for these children as they are required to do by the National Education Guidelines. Children with auditory processing disorder should not have to be failing the system before they receive the support and the technology that they are entitled to. So although I applaud the ministry for saying that it wants to focus on children who are underachieving it also needs to make sure that children with a disability are given the support they need before they are completely failing in the school system and that I hope will be addressed. Thank you. 
Hon HEKIA PARATA (Minister of Education) 
: 
 Kia ora tatou tena tatou te Whare e whakawhaiti nei i tenei ahiahi. First of all I would like to acknowledge my predecessor the Hon Anne Tolley for her clear focus and tenacity over the last 3 years and also in particular over the year in review. She led a number of changes that we now need to progress and embed in the system and of course those include not only national standards at the primary school level but also trades training academies and a number of other initiatives that have been referred to. 
I also want to acknowledge the former Secretary for Education Karen Sewell who during this period retired from a very long and distinguished service of contribution to the education sector not only as a teacher and principal but also distinguishing herself having been the head of every sector agency: the Education Review Office the New Zealand Qualifications Authority and the Ministry of Education. So I would like to thank her. 
I want to acknowledge our colleague the former chair of the Education and Science Committee Allan Peachey and his passing and I want to thank him at this time for the contribution he made. In so doing I would like to welcome the new Secretary for Education Lesley Longstone who joins us with a considerable and significantly successful career from the United Kingdom and other parts of the world. She brings to New Zealand that experience from which we can benefit. One of the particular points that she made during the select committee review of education was that with a fresh eye she has observed that although many significant changes and valuable contributions have been made as a result of the education reform that we all know as Tomorrow’s Schools one of the changes that she wishes to effect and which I completely agree with her on is that the ministry needs to be repositioned away from administering the system and into one of leadership—one of leadership that focuses on the best evidence that tells us what it is we should be doing in order to raise achievement in New Zealand. 
I would like to acknowledge the work of our new chair of the select committee Nikki Kaye who has already contributed to this debate and who brings a fresh and ebullient approach to the education arena and to her role as chair. She has already focused on as she indicated in her speech digital learning and learning environments for the 21st century. We have as a vision in education that we shall equip our young people to be able to successfully navigate society and the economy of the 21st century. Implicit in that and important to that is that they are able to use all of the social media tools that are available to us. Nikki’s stewardship of the select committee will I am sure be able to guide us successfully through those new and foreign waters for some but of course they are ones that I share confidence in with her. 
We have an education system that is able to deliver a world-class education to the vast majority of our students. That is a great credit to them to their families and to the education profession which delivers that year on year. Last week I had the great pleasure to share with the Governor-General the Rt Hon Sir Jerry Mateparae at Government House the celebration of our top scholars. These young people from across New Zealand and from schools across all deciles have topped the academic excellence in our schools. I want to make particular mention of the fact that— 
Andrew Little 
: How many were from charter schools? 
Hon HEKIA PARATA 
: Well if that member kept up he would know we have not yet introduced charter schools so that would be a little impossible to be able to yet celebrate. We look forward to that but if we could instead focus on the significant numbers of Christchurch students who were top scholars. Despite all the challenges that they were beset with over the last 12 to 18 months their level and quality of education and their own aptitude and application were reflected in their success at the highest level and I want to yet again congratulate them.  
Andrew Little 
: Which just goes to show you don’t need charter schools. 
Hon HEKIA PARATA 
: However we also have challenges in our system if the member cared to listen for a cohort of students who are underserved by the system. Too many of those are Maori and Pasifika come from low socio-economic homes and/or have special education needs. We are particularly focused using the work of the past year and the successes of the past year on how we can raise achievement for all New Zealand students and that will be done by the thing that we know best which is quality teaching and professional leadership. Thank you. 
Report noted. 
Ministry of Social Development  
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I just want to thank those involved in the financial review of the Ministry of Social Development including my parliamentary colleague Jacinda Ardern and others seeking the call here today. I want to commend the report that has been put to the House. That report details explicitly the range and the scope of the services that the Ministry of Social Development undertakes. The breadth and depth of the services are quite remarkable.  
We all know that the ministry deals with the care and protection of vulnerable children. It deals with income support superannuation services funding to community service providers social policy and advice to our Government and student allowances and loans. It administers well over $21 billion—yes that is $21 billion—a year easily the largest Government spend and one-third of all Government expenditure. The running costs of the ministry are around $1 billion a year. It has over 300 sites scattered across our nation and 9300 staff are committed to the effective implementation of programmes and distribution of services.  
The revenue is approximately $1.2 billion and the expenditure of the ministry was $1.198 billion; so as with this Government this particular Government department is operating within its means. It is operating a $5.9 million surplus. The Social Services Committee noted that the Office of the Auditor-General gave the ministry a “very good” rating for its management control environment as well as “good” ratings for its financial services and service performance information and associated systems.  
One of the real tests for the ministry in the last financial year was how it responded to the earthquakes in Canterbury and I will quote the committee’s report: “this was a very good indication of the capability of the organisation its adaptability and its willingness to cope with a crisis and its ability to respond to change which will be important as welfare reform is implemented.” It set up welfare centres. It provided extra staff. It flew in and drove in 800 extra staff from around the country. It ran the Government’s helpline. As people were calling in asking and pleading for help during this crisis the ministry and its employees and its agents stepped up to the mark and assisted over 50000 Cantabrians. It also distributed $10 million through various non-governmental organisations that responded to the crisis in Canterbury.  
The committee also commended the ministry for seeking capability improvements through the use of technology. It is working hard to share better information and this will be demonstrated in the new welfare reforms. Information sharing is a critical part of our welfare reforms. It is working with the Ministry of Education—and I know that the Minister is here today—working between the ministries to deliver services to our young people in particular. An example of this demonstration of the uptake of technology is shown in the Value-for-Money programme. For example Child Youth and Family social workers are currently trialling iPads and the global positioning system feature which improves the security of staff who are out on the front line who are distributing those front-line services.  
Our committee also looked at Future Focus and noted the overall decline of beneficiary numbers. The committee noted that youth unemployment had fallen by 4000 and since that report the March benefit figures show that more than 5000 people who were on the unemployment benefit around New Zealand went off welfare and into work just last month. I just want to repeat that for Miss Ardern: 5000 young people who were on the unemployment benefit around New Zealand went off welfare and into work last month. That is commendable to the Minister for Social Development. It is certainly commendable to the Ministry of Social Development.  
JACINDA ARDERN (Labour) 
: 
 Sometimes I wonder whether or not Mr Lotu-Iiga and I sit on the same committee the Social Services Committee and hear the same pieces of information and reports from the community. It is clear to me that a zero Budget is what you get when you fail and in the social development field we see the repercussions of a failed economic plan—or no plan indeed. 
Although I absolutely acknowledge the hard work that those who work in the social development field particularly Ministry of Social Development staff and Child Youth and Family staff put into their jobs and their roles they are doing it under increasing pressure. One of the things we saw in the briefing to the incoming Minister from this department was the clear message that something has got to give. The ministry is asking its staff to do more with less. The demands on them are increasing not decreasing. Something has got to give and I ask the Minister for Social Development what that thing is. What is that thing that is going to give? Already I am seeing an increasing number of cases coming across my desk of Work and Income staff absolutely stretched treating clients poorly as a result and people finding it very difficult to get the support they need. Although Mr Lotu-Iiga may claim that as a success there is actually an increasing number of cases of people who are going unsupported and in dire need but I will return to that.  
Of course there are major issues in this portfolio. It is one of the most significant that any Minister could hold not just because of sheer budget but because of the impact on people’s lives and no more so than in the area for instance of employment or unemployment as the case may be. The reason we continually refer back to the measure of those not in employment education or training is the unemployment benefit statistics do not pick up young people who are not eligible for benefits. So that is why we continually come back to the figure of 83000 young people not in employment education or training.  
What has the Minister’s response been to deal with those young people? It has been to say: “Let’s focus just on the 16 and 17-year-olds. We are going to spend $13 million just targeting 16 and 17-year-olds.” What I say to that Minister is that you are now saying we will get less and spend the same amount because currently we spend $13 million and we cater for 16 to 20-year-olds. The Government is now cutting out almost 60 percent of the young people that Youth Transition Services deals with in New Zealand and is instead funding them on a bonus payment cycle essentially incentivising the people who are tendering to work only with the easy young people—not the hardest not the most at risk but the easy wins. It is a failed policy. We have seen it before in the UK. It failed. Why are we repeating those same mistakes again?  
I move more broadly to the Government’s other response to the current situation. Just to remind Mr Lotu-Iiga we have seen 67197 more people on a main benefit now than in 2008. We have seen an increase in main benefit rates and why is that?  
Hon Hekia Parata 
: Recession.  
JACINDA ARDERN 
: Quite simply it is the economy. Of course the economy has had an impact. I see that the Minister in the chair the Minister of Education has acknowledged that the economy has had an impact. Why then is the Government’s reform focused solely on some kind of idea that there has been this dramatic change in attitude to work? There has not been yet its reforms are focused on this conception that people do not want to work. They do want to work. That is why we see queues of people lining up for a handful of jobs at supermarkets. They are desperate to be in work.  
 And also that is why in 2006 20 percent of lone sole parents had declared earnings—20 percent of DPB parents were in part-time work in 2006. What is the figure now? Well the Minister has put in place part of her Future Focus reforms. She has started work testing people earlier. And how many are in part-time work? Sixteen percent. It has decreased since she has ramped up her reforms. And why? Because of the economic environment. If you want to fix welfare fix the economy. She claims that 30000 people have come off the DPB. Well 32000 have gone on. And why? Because these are people working in low-wage jobs in the service economy. It is fragile work and it is insecure work. Fix the economy is my message to the Government and then you will genuinely help these people. 
The biggest issue though is poverty—270000 children living in poverty. Three out of five of them are in the homes of people reliant on Government support; two out of five then are in working poor families. The Government’s response is to set up a ministerial committee. I see no result from that and I see no real action from this Government.  
JAN LOGIE (Green) 
: 
 I would like to speak today in support of the concept of an investment approach to welfare but at a Government and a societal level rather than an individual level. The proposed welfare reforms from this Government are missing both the big picture and the individual detail. They are trying to present the welfare reforms as new and innovative—an actuarial approach to welfare and an investment approach. But when you drill down and look at the language and the shape of the reforms in fact it becomes quite clear that there is not much new in this approach.  
Today I would like to focus on just one small aspect of the reforms but a key one: work testing which started with the Future Focus reforms and is now being extended. It is work testing for women on the DPB. I would like to draw attention to the problem of domestic violence in this country. The nature of domestic violence which we know affects one in three women in this country means that its female victims are often unable to work to work in their preferred career or to stay in a job long term. International studies have shown that victims of domestic violence have 15 percent more chance of being jobless and 55 percent more chance of being on a benefit. International research indicates that over a third and up to half of women on the DPB are likely to be in or more important escaping violent relationships—up to a half of the women on the domestic purposes benefit leaving violent relationships.  
To institute mandatory work-preparedness requirements and to pressure women leaving these violent relationships to go into work flies in the face of generations of work in this country to enable women to leave these violent relationships. Admittedly Future Focus does have a work-test exemption for women leaving violent relationships and I assume that this will be in place in the new reforms. But for me this actually heightens my concern with the reforms because it is being used as an excuse: “Don’t worry we’ve got an exemption.” And yet this exemption is not being accessed. When I asked the Ministry of Social Development officials about why such low levels were reported in the ministry’s statistics they noted that staff do not ask. They noted that women may not want to disclose which is my point exactly. These reforms do not protect women. One of the dynamics of abuse is that victims often blame themselves and that makes disclosing difficult. If we are serious about bringing down the rates of family violence in this country and getting women off the DPB then we need to make it as easy as possible for women and children to leave and stay away. Otherwise we are damning women for staying and damning them for leaving. When the Government talks about the decline of the numbers of women on the DPB that is actually something we should be afraid of.  
We need to invest in the structural issues that lead people to need welfare. We need to invest in respectful relationship education strengthening our response to family violence and helping women to leave and get into sustained employment. Reducing family violence and creating jobs will get women off the DPB.  
In 1996 economist Suzanne Snively estimated that the costs of domestic violence in New Zealand then were between $1.2 billion and $5.8 billion a year. More recent research in Australia estimates that there it is $8.1 billion a year in costs. I say to this Government that if you are serious about an economic strategy to bring us into the future address the fundamentals; do not blame the victim.  
TIM MACINDOE (National—Hamilton West) 
: 
 I am delighted to pick up on exactly the point that Ms Logie has just finished on because I can assure her that this Government is not blaming the victim at all. But we are absolutely passionately determined to sort out the problem—the very real problem that this country has had for far too long—of long-term welfare dependency. That is not a question of beneficiary bashing or attacking that person; it is about saying that we are going to put some support structures around them and we are going to intervene in ways that are going to be effective.  
That is what Future Focus is all about and that is what the reform bill that is before the House at the moment—the Social Security (Youth Support and Work Focus) Amendment Bill—is all about. It was very interesting during the adjournment that we have just had to be on the Social Services Committee which heard some of the submissions from people on that bill. I have to say that some made some points that naturally we have taken note of but quite a number showed that they do not really understand this point or they are so ideologically blinded by their party affiliation that they refuse to look at the fact that welfare dependency is an absolute scourge on this society. Long-term welfare dependency causes huge suffering in communities particularly the communities that are most deprived in our country. I would have thought that they would cheer and welcome strongly the Government’s initiatives to do something about that. The wraparound services that we are putting around our young people are long overdue. I am very proud to be a part of a Government that is addressing that problem.  
While Ms Ardern was speaking before Ms Logie she made the extraordinary comment that we should fix the economy. Well as Mr Hayes replied at the time that is exactly what this Government has spent the best part of 3½ years doing. Why? Because the Labour Government made such a hash of things. The Labour Government has to take responsibility for the position we find ourselves in. Let us not for a moment allow the spin doctors on the other side of the House to fool anybody into thinking that it is somehow a creation of this Government. At a time when the Dutch Government has collapsed the Irish are in trouble the Portuguese are in trouble and Greece is in deep trouble what we see around the world is a huge problem with global recession and this is a Government that is really focused with a terrific plan to do something about it—and the results are clear.  
That is why we have taken tough decisions. That is why we are so determined to balance the books. That is why we will get the country back into surplus. And when we get this country back into surplus following on from the 9 years of ineptitude by Mr Goff and his colleagues then we will have choices to be able to do the things that the whole country wants. But in the meantime while we are getting there we can intervene for those who are troubled by this long-term welfare dependency.  
The Ministry of Social Development is ably led by the Hon Paula Bennett and gee she deserves a pat on the back for the fantastic job that she is doing. This particular focus of our Government is one of the most important things that the whole country is firmly behind. I made the point when I was speaking on the reform bill that I believe that it is one of the most important challenges facing not only this particular Parliament but also this particular generation of politicians. There are not many issues more important than this that we will face during whatever time we are given to serve in this House.  
I am absolutely 100 percent behind the welfare reform bill to ensure that we can help young people particularly from going down the path of long-term welfare dependency because all the evidence tells us that if they drop out of school without qualifications and they go on to a benefit at the age of 18 or even younger within several years they will still be on it. That cannot be acceptable. I am amazed that there is a single member of this House who is happy that that is the case. 
 I am absolutely proud of the fact that we on this side of the House are determined to change that. And change it we will because by giving incentives for going on a budgeting course doing a parenting course learning all of those life skills that are so vital for a young person—[ 
Interruption 
] Mr Twyford scoffs at that. You do not want young people to know how to budget? It is unbelievable that Mr Twyford would take that position and he shakes his head. Mr Twyford does not want young people to learn how to budget. Does he not want young people to know how to parent? What could be more important than being able to look after a child to raise a baby to become a healthy young person? I believe that that is an absolutely vital skill and we cannot just expect it to be something that is understood instinctively. In many cases it has to be taught and so we will and we are putting in place incentives. That is not knocking; that is not discriminating. 
Report noted. 
Ministry of Agriculture and Forestry  
Steffan Browning 
: Mr Chair I would like— 
The CHAIRPERSON (Eric Roy) 
: The member must call. You say “Mr Chair” then I respond. 
Steffan Browning 
: Mr Chair. 
The CHAIRPERSON (Eric Roy) 
: I call Steffan Browning. 
STEFFAN BROWNING (Green) 
: 
 I note that the new ministry is now the Ministry for Primary Industries and now includes the Ministry of Fisheries and the whole works. In fact unfortunately some of the parts of what was the Ministry of Agriculture and Forestry and what were the New Zealand Food Safety Authority MAF Biosecurity New Zealand and all that are even losing their identities into this new super-organisation that effectively is a “develop for trade” organisation maybe rather than being focused on the New Zealand consumers and communities. But this particular report is pretty specific. We have got biosecurity and forestry in particular that came up in there but there were also some issues that came up during the questioning of the then ministry’s personnel of both organics and genetic engineering so I would like to cover two or three items.  
One thing that stood out and does stand out with both the old and the new bodies is that there is no holistic approach to agriculture forestry and fisheries in New Zealand. There is no overview as to why you might go down a particular path in terms of sustainability because of the interconnections with the environment and the community. It is all about milk powder and beef it would seem primarily. I wondered and I have asked and will continue to push as to why the Ministry of Agriculture and Forestry and this Government dropped any effort towards the organics sector in New Zealand. The organics sector is showing best practice in terms of sustainability in this country which can actually resolve many many of the issues that we see in our environment which the community at whole is effectively propping up for the primary producers who are doing a bad job. There are plenty who are doing a good job but unfortunately there are a hang of a lot who are doing a very very bad job in terms of our environment. But this Government chose not to reboot the Organic Advisory Programme and the ministry is doing nothing effectively apart from a dribble occasionally with a Sustainable Farming Fund application if we are very very lucky. But at the same time we are still seeing money going into genetic engineering. 
John Hayes 
: Great! 
STEFFAN BROWNING 
: It is definitely not great in any sense of it. We have a fantastic brand and we had one before our current Prime Minister sold it out as Minister of Tourism—“100% Pure New Zealand”. He went to “New Zealand 100% Pure You”. There is no aspiration in there and I have talked on that in this House before. Genetic engineering has no part in Brand New Zealand. It will do us no good in terms of Brand New Zealand and the export of our primary produce. We are very very fortunate at the moment. We only have one field trial—that is the only legitimate genetically engineered material existing in New Zealand at the moment—and that is through animals at Ruakura. No doubt there will be some pine trees replanted when Scion gets over its last breach. That is a really good opportunity for New Zealand. We can actually remove that last field trial and New Zealand will be GE free like so many places in the world at the moment are trying to become again after seeing the problems with GE in their countries.  
Another thing we spoke on and looked at was around biosecurity and the problems we are having with biosecurity. Again we have seen it with this Government allowing border control staff to drop by 60 because trade had dropped off and it did not see the need. Yes we have got some smart new systems in terms of risk analysis but in fact what we are doing is dropping the game big time. We have had the strawberry seed incursion and it will be very interesting to know just how bad that was because I suspect there was an issue in terms of contamination of that because so much of that was suppressed. I have just been talking with the pork industry. 
Hon DAVID CARTER (Minister for Primary Industries) 
: 
 I want to thank that member Steffan Browning for his contribution on the Ministry of Agriculture and Forestry report. Can I first of all say that yes as of yesterday the Ministry of Agriculture and Forestry was finished with. We named a new organisation the Ministry for Primary Industries and I want people in the Chamber to take particular note of the word “for” primary industries. There was a branding issue once the Government had decided to bring three Government departments into one. The Ministry of Agriculture and Forestry already operated under a number of brands. We have taken the opportunity with the integration of the Ministry of Fisheries with the integration of the New Zealand Food Safety Authority and with the integration of the Ministry of Agriculture and Forestry to come up with a new name that is all-embracing: the Ministry for Primary Industries. I want that new ministry to be absolutely focused on the New Zealand economy on the fact that the very base of this New Zealand economy is the agricultural and primary sectors of New Zealand. That organisation now has to be very focused on working with all aspects of the primary industries to make sure that we deliver the greatest potential to the New Zealand economy.  
I do note the member’s comments around organics and the fact that the Government does not now put a considerable amount of money into the organics industry. But the Government has done so and there are a lot of other aspects and farming systems here in New Zealand that if they want to promote themselves are expected to do so. At some stage it is necessary for this Government to cut the umbilical cord and say to the organics industry that if it is so successful if it is so successfully meeting the demands of New Zealand consumers and the demands of international consumers then it should be able to command a premium for its product and in commanding that premium for the product it is time it put some money back into the industry to allow it to expand and grow.  
Mr Steffan Browning shakes his head because he knows that despite considerable money going into organics the industry is not gaining significant premiums for its product either in New Zealand or elsewhere—or elsewhere. I will give you one example that should bring that home to Mr Steffan Browning even though he is a Green member of Parliament. Fonterra used to run an organics operation. A prior president of Federated Farmers Tom Lambie ran an organic dairy farm in South Canterbury. Fonterra said to him and to other organics suppliers here in New Zealand that it was not getting a significant premium for the product. It was uneconomic for it to continue to collect that milk and it abandoned the programme.  
Mr Steffan Browning made some very interesting comments around biosecurity and I say to every audience I get the chance to speak to that that is the greatest risk to the New Zealand economy. It is absolutely paramount that the Ministry for Primary Industries and the Government work hopefully with Opposition parties to deliver the most effective biosecurity systems we can at the border. Yes we did reduce some staffing when trade dropped off through the global financial crisis but I say to Mr Steffan Browning that those services at the border are cost recovered and it would be inappropriate to continue to charge other importers of goods excessive charges simply as a means of maintaining staff at the border.  
The other thing I stated Mr Steffan Browning is we must continually look at the way we manage our borders. Systems change threats change and technology changes and although everybody I speak to around biosecurity concentrates on the system they have at the airports because that is the system most people interact with the greatest risk is actually at our seaports and we need to continue to be vigilant there. We will have incursions occurring sadly—that is a fact. In fact we have had particular insects that have flown over from Australia and landed in New Zealand and no amount of X-ray technology at the border will stop it Mr Browning.  
What we do need when we get an incursion is a means by which we can ascertain how critical it is to any industry. That is the very reason we are engaged so significantly with industries around the Government-industry agreements. Then if it is an economic pest that we have the ability to control we must act and act quickly. The biggest lesson I have had in that regards the  
Pseudomonas syringae  
pv.  
Actinidiae 
 incursion in the Bay of Plenty where the Government has worked very very well with the industry realising we could not eliminate it once it arrived but working with the industry to find means by which that industry can move forward with varieties that are resistant to or tolerant of the disease. I want to take this opportunity in my closing comments to congratulate the kiwifruit industry on the way it has come through what were very very dark days for it. 
Report noted. 
Ministry of Foreign Affairs and Trade  
Hon PHIL GOFF (Labour—Mt Roskill) 
: 
 I want to focus today on the botched job that this Government has done in cutting the Ministry of Foreign Affairs and Trade and supposedly reforming it but in the process destroying it. It is a little bit like the Viet Nam War slogan “We had to destroy the village to save it.” Well they have destroyed the Ministry of Foreign Affairs and Trade. If anyone is in any doubt about that or thinks that that is hyperbole have a look at what the 49 top diplomats in New Zealand the heads of mission had to say to their own ministry about what the impact of those restructuring reforms has been on the ministry. One thing that stands out above anything else is the huge damage done in demoralising and disillusioning the people who work for one of our finest ministries. I can say that with some passion because I have worked with them for 9 years and John Hayes can agree because he worked for them as an employee for a lot longer.  
You know we are a little country we cannot bully our way in the world. We certainly cannot bribe others to make them do what we want them to do so what do we rely on? We rely on the innate skill and ability of the most talented people we can find in our Ministry of Foreign Affairs and Trade. When I became Minister in 2000 I read a great article in the  
International Herald Tribune 
 that said that our ministry was tiny but it outperformed a neighbour five times our size in every category.  
I have always thought that there is a lot of truth in the old saying “If it works don’t fix it”. They have fixed it all right! They started off in September last year doing an independent review and what did that review find? It found that the ministry was able to obtain and retain talented and committed individuals. It found that it had a distinctive professional diplomatic culture that delivered some remarkable successes. Who said that? It was the Department of the Prime Minister and Cabinet Treasury and the State Services Commission.  
What has been the result of this botched reform effort? First of all we have lost some of our best people in the ministry. Crawford Falconer who would outperform any other trade negotiator in the world the former chair of the agriculture committee at the World Trade Organization—gone. Nigel Fyfe the head of the trade negotiations division a very competent ambassador in Chile and a really competent trade negotiator—gone. What I find when I talk to any of my contacts in foreign affairs is that they are either putting their notice in or they are getting their references ready to put their notice in. They are leaving in their droves and it is the best the brightest the most talented and therefore the most mobile who are going and that is the achievement of Murray McCully.  
What does Murray McCully say in response to this? He knows that it was botched. They are now back-pedalling so fast it is hard to know where they are going to end up. But he says that it is all the fault of the Foreign Secretary Mr Allen. Mr Allen is a civil servant. He was actually plucked out of the private sector by Murray McCully to cut the Ministry of Foreign Affairs and Trade and restructure it. But there is this about a chief executive officer: he cannot answer back to lies and criticisms made about him by a Minister. He is defenceless. I cannot remember a time in 30 years Mr Chairman—and nor can you—when a Minister blamed his civil servant in a way that he knew that that civil servant could not fight back. But the ministry answered that. They said that it was the Minister who appointed John Allen and it was the Minister who set the directions and it was the Minister who gave constant oversight. He cannot help himself—he is a micro-manager. Murray McCully is responsible for this and no matter how much he hides behind blaming his chief executive for the botch-up he is responsible and he needs to go.  
Jenny Shipley decided that in 1999 when she sacked him as Minister of Tourism. She sacked him because of his inappropriate interference in the running of the Ministry of Tourism. He did it then and he is doing it now and what upsets me and makes me passionate about this is that he is destroying an agency that has worked professionally capably and competently to serve the interests of our country. We should be proud of that ministry. It has fine people and now they are falling over each other to go because they see that they have no future in that ministry. It is a shocking disgrace what has happened and it is unprecedented that the 49 heads of mission would actually come out and say that what is happening to their ministry is destroying it. It is taking away its fundamental strengths. It is a shame that it has come to that and Murray McCully is to blame. 
JOHN HAYES (National—Wairarapa) 
: 
 No hyperbole in that speech at all—none whatsoever! It is interesting though that there is no public announcement of what the decisions are within the Ministry of Foreign Affairs and Trade and its change until 10 May. No hyperbole at all? What nonsense Mr Goff! Let me say to you this: our Government inherited a situation where the economy was out of control and you Mr Goff—and Mr Peters; you were Foreign Minister at this time in your last year of office—put bucketloads of money into the ministry which this country could not afford. You opened posts in all directions and I know because staff talked to me and they were saying: “We have been given so much money we don’t know where we should put it.” Meanwhile that money was actually coming out of the pockets of your workers and my constituents. This money does not grow on trees and this Government has been put in place by the community after 9 long years of mismanagement to put things right.  
Labour increased spending by $22 billion in the last 5 years it was in office. So we employed a Secretary of Foreign Affairs and Trade and he was given quite clear instructions about looking at the management of that sector and trying to work out how to move resource from the back office to provide services to the community and to provide foreign affairs services. 
Andrew Little 
: Instructed by the Minister of Foreign Affairs. 
JOHN HAYES 
: What happened? A consultation document— 
Andrew Little 
: Instructed by the Minister. 
JOHN HAYES 
: Of course it was constructed by the Minister of Foreign Affairs; that is why you have Ministers. I realise the member has not been in the House sufficiently long to understand how it works but that is another problem.  
The ministry staff were invited to comment on the range of changes that were being proposed back in February and a number of people reared up on their hind legs. The day the document was put on the table people went berserk and leaked documents to Mr Goff who said that he was getting leaks in triplicate. And then Mr Goff started saying that the consultation document a draft document was the end result. Well it is not.  
All of the ministry’s heads of mission were brought back to Wellington about a month ago and their views were taken into account. The Minister was involved through that process as was the secretary and I commend the Minister actually for doing an excellent job. He would be here in this Chamber this afternoon defending himself if he was not doing a particularly good job with his other forum colleagues in Fiji right now. I can assure this Committee that Mr McCully has been doing an absolutely outstanding job helping bring normalisation of events back into Fiji.  
So after the consultation document went to staff there was a considerable amount of feedback from them and from other stakeholders including the Government. Many of the proposals were revised by the ministry’s management. In essence the initial proposal perhaps contained too many moving parts at one point in time and it is good I think that the Minister has said to the ministry that it needs to look at that issue.  
The decision document will be available to staff on 10 May and at that point we will be interested in Mr Goff’s comments because in my conversations with the same staff who talked to Mr Goff it is quite clear to me that younger staff members see huge opportunity in the changes that are coming up and they are really excited about the process. We have to follow the rest of the world. The only way in this country that we are going to move ourselves forward to pay for health and education is if the money coming into the country exceeds the money that goes out for things that we export and the Ministry of Foreign Affairs and Trade has a really important role in this area. This is why we are trying to make sure that we are doing our level best for the ministry to operate in a focused way.  
We are interested particularly in two issues: trade and economic issues. That is why we have strengthened the promotion of New Zealand’s export goods and services through our “New Zealand Inc.” approach of coordinated Government agencies. That is why the Prime Minister the Minister of Foreign Affairs and the Minister of Trade have led trade missions to the Gulf region China Hong Kong Brazil Mexico India Singapore Malaysia and Indonesia. That is why we continue to work with developing a single— 
ANDREW WILLIAMS (NZ First) 
: 
 This is an unmitigated disaster and New Zealand First opposes the manner in which this National Government is decimating the Ministry of Foreign Affairs and Trade with the effect of undermining and placing at huge risk the credibility of New Zealand in our important markets and with our strategic allies and partners.  
I rise not only as a member of Parliament but as someone with previous experience having been a trade commissioner and vice-consul for Belgium for 10 years between 1998 and 2007. During that period of time I had personal experience in the consular corps and in the diplomatic corps of the value of our trade commissioners of the value of our diplomats and of the value of having front-line people in foreign posts around the world. I certainly saw the impact that Belgium had around the world in terms of its posts. I was its representative here in New Zealand and I certainly saw the value and the gains in its economy as a result of having front-line people and properly resourced posts around the world to do that work.  
Also in my former life in the meat industry for many years I saw the importance of the Ministry of Foreign Affairs and Trade in terms of getting access to many of our markets around the world. I started off in the days of Amalgamated Marketing when it opened the markets in Russia Iran Jordan and all those other places. It was very much working hand in hand with the likes of the ambassadors and the ministry people around the world to help open those doors for the early markets for New Zealand around the world.  
That continues and it is a continuing important part of the New Zealand economy. This is an economy that depends on trade. This is an economy that depends on us playing our part in the global market and quite frankly this is a complete undermining of New Zealand’s front-line troops. The Government keeps talking about keeping our front-line troops; this is the undermining of our front-line troops around the world.  
This is also a situation where the Minister of Foreign Affairs Mr McCully has basically hung his chief executive out to dry. He brought in Mr John Allen to restructure the ministry—and certainly there was some fat in the ministry and there was some need for some restructuring—but basically now having held that chief executive on the end of a string for several years he has hung him out to dry. This is the first non-diplomat to head up the Ministry of Foreign Affairs and Trade and now Mr McCully is blaming that very first non-diplomat for the fiasco that we see within the Ministry of Foreign Affairs and Trade now.  
Forty-nine of our 53 most senior diplomats signed a letter protesting the change process that identifies major risks with the proposals including “the absence of any analysis … of the net impact of the changes … on NZ’s external interests”. This is our top diplomats saying this that there was an “absence of any analysis … of the net impact of the changes … on NZ’s external interests”. That is almost verging on treason—the situation where we are seeing our external interests undermined in this manner. Also the wives and partners of our diplomats those important support people around the world have complained bitterly about the way this change process is being executed.  
What was meant to be a way of clearing out some of the extravagant dead wood in the diplomatic corps has backfired on this National Government and this Minister and this Government are responsible. We are now seeing an exodus of some of the best in the Foreign Service who are finding better jobs outside the diplomatic corps such as in academia in the private sector in commerce and in trade. There is a serious loss of institutional knowledge and experience that is of immense value to New Zealand. Morale in our Ministry of Foreign Affairs and Trade is at an all-time low.  
Meanwhile the Meat Industry Association Fonterra and other major export groups have expressed grave concerns at the impact on our Foreign Service and on our nation’s ability to foot it on the global stage where diplomacy and trade are vitally important to a small trading nation like New Zealand. If we do not grow our exports and contain our imports then we as a country will continue on a very slippery slope of ever-increasing deficits.  
Under the details of this Appropriation Bill I note that it says: “This appropriation is limited to the purchase of policy advice and representation directed to the management of New Zealand’s foreign trade relations with other countries bilaterally and in regional organisations including using New Zealand’s international connections to facilitate …”. 
Report noted. 
Department of Corrections  
Hon ANNE TOLLEY (Minister of Corrections) 
: 
 Can I take this opportunity to congratulate the Department of Corrections on a really outstanding year’s performance. If we go through a few of the notable achievements I think the Committee will see that there has been a huge amount of work and the department deserves the congratulations.  
Participation in drug treatment and rehabilitation increased dramatically in that year with the opening of new facilities and the implementation of a new shorter programme. As a result it had the highest recorded number of prisoners participating in drug and alcohol rehabilitation courses and I think that is an area that this Government is really focusing on and looking to grow. We know that that is one of the most significant impediments to those offenders when they go back out into the community and it is one of the most significant behavioural addictions that they have to deal with and that sees them reoffend and come back into our prisons.  
We saw the start of two Whare Oranga Ake with the work of the Associate Minister of Corrections the Hon Dr Pita Sharples. They were established in this financial year and are particularly focused on Maori prisoners—who of course make up too high a number of our prisoners—partnering with local service providers. The early results of this—and I stress that it is very early days—are very encouraging. The majority of prisoners who have left those whare have been gainfully employed in the community and remain gainfully employed. So we are continuing to support them closely.  
The escape figures were at an all-time low in this particular year with only four escapes—two breakouts and two from an escort—compared with nine in the previous year.  
The positive random drug-tests are at an all-time low—an all-time low for those random drug-tests. It has been interesting to watch the Opposition climbing into the figures showing the numbers of people that the Department of Corrections is actually finding who try to enter prisons with contraband. The Opposition has actually been criticising the Department of Corrections for that. I say all power to the department. I think it is fantastic that it is stopping so many people trying to bring contraband into our prisons and it is to be congratulated.  
The other thing that we need to look very closely at is the smoke-free environment that was instituted throughout the department. That followed a long planning period and 5500 prisoners were supported to give up smoking—5500 prisoners. That is outstanding work from this department over this year. There has been a 79 percent reduction in fires. There are lots of pluses in addition to the personal health of prisoners.  
At the same time we have seen an enormous change programme through the probation service. We know that when we came to Government the probation service was in a pretty awful state. The previous Government had lost the plot and we had some awful awful risks being taken with our prisoners out in communities which resulted in lives being lost. So the department has gone through an enormous change programme. The old manual seemed to grow and grow year on year. Every time something went wrong there would be another set of rules added which really constrained the probation service to having to act in accordance with a whole manual of rules. So systems have been put in place now that have some mandatory standards but allow those highly trained people who are working with offenders on a day-to-day basis to use their initiative and be able to make judgment calls on how to manage some of these people whom they are responsible for out in the community.  
So it has been an outstanding year’s work and that was reflected by I think the conversation in the Law and Order Committee when the Department of Corrections appeared before it. The big decision of course is around the public-private partnership at Wiri and the Government has now made that decision which is a unique contract—a unique contract—that focuses not on building prisons but on getting great results— 
Report noted. 
New Zealand Police  
MARK MITCHELL (National—Rodney) 
: 
 I would just like to open by congratulating first of all the Hon Judith Collins who was the Minister of Police from 2008 to 2011 and of course the Hon Anne Tolley who has now taken up the reins and is doing a fantastic job and is continuing the same brilliant work that the Hon Judith Collins started in 2008.  
Andrew Little 
: Tell us about the brilliant work! 
MARK MITCHELL 
: I will tell you a little bit about it Andrew. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! The member must refer to members by their full names or titles not their first names. 
MARK MITCHELL 
: Sorry Mr Chair. I will tell you a little bit about it Andrew Little. I served in the police for 14 years. Unfortunately I served under a Labour Government.  
David Bennett 
: Shame. 
MARK MITCHELL 
: It was a shame. Morale dropped and we were always pressed to fight for funding and equipment. I left the police in 2002 and went overseas. I came back last year and I have started touching base with a lot of my colleagues and I have looked very carefully at what has been happening in the police. I am very very proud to say that morale is at an all-time high. I met with the newly appointed area commander for Rodney Inspector Scott Webb. He was saying he is now commanding a force in the Rodney area that is highly motivated and is contributing to incredible results. We keep seeing our crime statistics drop year on year. 
Phil Twyford 
: Labour policy. 
MARK MITCHELL 
: No it is nothing to do with Labour policy—Mr Phil Twyford is it? Yes. 
Phil Twyford 
: Very good. 
MARK MITCHELL 
: Thank you. It is absolutely nothing to do with Labour policy. It is to do with a National Government that has come in and understood the importance of providing a strong law and order service to our communities to make our communities safer. And our communities are feeling safer. They are seeing more police on the beat. They are seeing police response times decreasing. They are seeing cases being investigated and completed in quicker times. They are seeing new initiatives like the neighbourhood support teams that are going to be out in the communities—what I see as a development of our historical community policing systems. I see a police dog section that is highly motivated and is delivering the best results it ever has. I see a police force that is providing to Kiwis a service that we probably have not seen in the last decade.  
I am very proud to be a member of this Government and a member of the National Party. If you go out and talk to the guys in the street and if you go into the mess room and actually have a chat with them they will tell you they feel supported. They feel that they have a Government that is behind them. They feel that they have a Government and a Minister of Police that are listening to them and resourcing them and are putting the resources in the right place—on the front line. That is where the resources should be—on the front line out there protecting and delivering services to our communities.  
It is with great pride that I took this call and was able to speak to the performance of our police and the services that are being provided by our police. I was very proud to be a member of the police. I am very proud to see the type of leadership that our Ministers are providing to our police and I am very proud to see the services that our police service is providing to our community. Thank you very much. 
Hon ANNE TOLLEY (Minister of Police) 
: 
 I would have to follow on from Mr Mitchell by saying that I am very proud to be the current Minister of Police. I also want to pay tribute to my colleague the Hon Judith Collins who was the Minister in charge during the year we are discussing. During that year we saw a significant fall in crime. 
Andrew Little 
: How many boy-racer cars has she crushed? 
Hon ANNE TOLLEY 
: Well it is “three strikes and you’re out”. Do not hold your breath too long but it will come it will come I can assure you. During this time offences per head of population fell 7 percent—25000 fewer offences. We can talk all we like about offences but actually we are talking about victims. When we talk about 25000 fewer offences we are talking about a large number of people in our communities who were not victims in that financial year and that is to be applauded.  
 The police are working extremely hard and it shows in their public confidence results. Public confidence in the police is on the up. It was at an all-time low as I understand under the previous Government. But in this year they were up to 77 percent and 82 percent of the public were satisfied or very satisfied with the quality of service that they received from the police in 2011. That does not happen without a great deal of effort.  
The road toll in 2011 was 284 deaths. That is the lowest we have had since 1952. Again there are a whole lot of reasons for that like better cars and better design of roads but a huge amount of effort has been put into road policing by our policemen.  
You have to say that during this period of time the police were under enormous demands—enormous demands. We had the Christchurch earthquakes and police from all over the country went down there. I have read some of the reports of some of the individual efforts and we had outstanding service from all of those policemen but from some in particular who were nothing less than heroes and deserve recognition for that. At Pike River who were the first ones there? Our police force. And of course we had the Rugby World Cup. While those of us who did so enjoyed that wonderful time all around New Zealand and went on fan trails and things who were the ones who were out there so evidently working so well with the crowds? It was the New Zealand police. They had a fantastically difficult year to face with huge demands on their resources but they managed to still see a significant drop both in the road toll and in the crime stats.  
How is that happening? Well that is through things like Policing Excellence and Prevention First. They have nothing to do with the previous Government; they have been implemented since this National Government came to pass. They are about making sure that yes we have more front-line policing hours so that we get rid of some of the paperwork so that we give them modern technology so that they do not have to go back into the office and fill an hour’s worth of forms every time they do something. We must acknowledge that this is the 21st century and that these guys need to have access to firearms. By the end of this financial year all the cars will have lock boxes. All of that was started during this financial time.  
Prevention First is around some old-fashioned policing ideas—that is you use modern technology to see where the crime is being committed at what time and where you need to put your resources in. When I went out with the police in Wellington about a month ago on a Friday night I was amazed at how many police there were and the spread that they had throughout the downtown central business district. They were making sure they were on the spot stopping crime stopping incidents from happening through being there and being visible and using the skills that they have to understand where trouble was going to start. So I want to again take this opportunity— 
Andrew Little 
: How many recruit intakes have you stopped this year? 
Hon ANNE TOLLEY 
: —to congratulate the New Zealand Police. This year was an astounding year for them. I am not sure what all that nonsense is about and I would be amazed if there was not a politician in this House who was not convinced that we have the best police force in the world and wanted to take this opportunity. If that member would just use all that energy to say to these cops: “Thank you for the job you’ve done. You’re doing a great job. You are protecting the city that I am supposed to live in which is New Plymouth and let’s have unanimous support for our New Zealand police.” 
Report noted. 
Ministry of Defence  
Hon Dr JONATHAN COLEMAN (Minister of Defence) 
: 
 Thank you very much for the opportunity to speak in this financial review debate. I must say it is a great honour to be the Minister of Defence in this Government. New Zealanders can be very very proud of the efforts of the New Zealand Defence Force wherever it is serving around the world and here in New Zealand.  
I had the honour last week of spending some time with our people in Afghanistan and I can tell you that it was very very impressive to see what our people have achieved there over the course of the last decade. I spent some time in Bamian Province talking to some of the young soldiers who were there and the ones who were back for a second or even a third deployment remarked on how much better things were in the province since they had been deployed there previously. So our people are making very real progress there. They are operating in conditions that are spartan to say the least. We visited a Kiwi base and although the facilities there are certainly adequate for the Defence Force’s needs the fact is that these people are there for 6 or 7 months at a time and what really struck me was the total focus they have on their work over that period. There really is no let-up. There is relatively little recreation. But what struck me also is the absolute enthusiasm of these young men and women to get on with doing the job. If you are in the New Zealand Defence Force the highlight for people at the moment is the chance for that overseas deployment to Afghanistan and I can tell you that those young people coming in as Task Group Crib 20 which is the 20th rotation which changed over from Task Group Crib 19 while I was there were absolutely enthused about the work that lay ahead.  
I want to point out though of course that this is work that carries a high risk for our people and while Task Group Crib 19 was there it unfortunately lost Corporal Dougie Hughes towards the end of that rotation. That certainly had a real effect on the people who were there. But they just got on with the job. They were very professional and continued on their way. Two days after getting back from Afghanistan I had the privilege of going to the ceremony at Government House where Lieutenant Tim O’Donnell’s parents were awarded a memorial cross in recognition of the ultimate sacrifice that their family made in terms of their son losing his life in the service of New Zealand. It just brings home to you that our people in the Defence Force put up with a lot and carry severe risks on our behalf.  
So in that context I just want to speak briefly around the defence white paper launched in 2010 by my predecessor Dr Wayne Mapp. It laid out the vision for the Defence Force over the next 25 years. At the core of our Defence Force will be an amphibious task force. What that paper lays out is the plan for how we are going to configure the resources that we have as a country in terms of defence to meet the expectations of the New Zealand Government. If you look at the range of activity that our people are engaged in in defence a lot of it is actually around humanitarian and disaster relief. If you look at the work they have done in the Pacific and have been doing for many many years now a lot of it is in that sphere. But here of course domestically in New Zealand the New Zealand Defence Force has played a major role if you look at the Christchurch earthquakes. The New Zealand Defence Force has been at the fore of providing a first line of response. Indeed the Territorials have been manning the cordon there right from the start—so a very important role. 
The Defence Force is also very important in maintaining our international reputation overseas. I can tell you that the work that the SAS has done has meant that New Zealand’s reputation at the highest levels of NATO and the International Security Assistance Force which is the body of coalition forces is absolutely up there with the best. So when these people are overseas they are representing their country in a way that reflects very very well on all of us. Of course the challenge for all defence forces around the world is to find savings within their baselines to fund future capabilities. What we are aiming for—and are on track to deliver—are savings of $350 million to $400 million over the next 4 years. That is what the Australians have to do what the US have to do and what the UK is doing. That money is being invested back into new capabilities. I want to tell you that the future of the Defence Force—[ 
Interruption 
] 
The CHAIRPERSON (H V Ross Robertson) 
: Is the member seeking another call? 
Hon Dr JONATHAN COLEMAN 
: I will if I may. 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable Minister. 
Hon Dr JONATHAN COLEMAN 
: What I want to say is that those savings are reinvested back into funding new capabilities. If you look at that 2010-11 financial year which was the first year of the savings plan that produced $47 million of savings that year. What that went into is funding upgrades for the Hercules upgrades for the P3 Orion and of course the helicopter acquisition projects. So it is all going back into the front-line equipment that we need in order to have the best possible Defence Force and the close-in weapon system for the Anzac frigate project.  
If you look at what we need into the future from the Defence Force we will need a Defence Force that is flexible and is configured for our needs here in our immediate area of strategic interest which is in the Pacific. Of course the Defence Force is able to make the impact that we need it to make at home but also it is able to contribute internationally to defence efforts in places like Afghanistan. We have of course two people in Syria at the moment who are contributing to UN missions. We have over 400 people deployed around the world in 19 countries and they are making a real international impact. But the key really if you look at this financial review is about making the savings that fund the capabilities that the New Zealand Defence Force needs into the future. Without those savings without the continued investment in new capabilities we would not have the Defence Force that we are going to need in the decades to come. So the outlook is good. I am very proud to take this call as the Minister of Defence. Thank you. 
Report noted. 
New Zealand Defence Force  
Department of Building and Housing  
Reports noted. 
Department of Conservation  
Hon KATE WILKINSON (Minister of Conservation) 
: 
 Thank you for the opportunity to speak in the financial review debate on the Department of Conservation. Can I say from the outset that we will never have enough money to pay for all the conservation that needs to be done in New Zealand. There was an exercise that was done in relation to biodiversity and they were adding up the figures— 
Andrew Little 
: What about the staff? 
Hon KATE WILKINSON 
: —and when they got past the health budget they had to stop. It is interesting when you have the Labour Opposition quite willing to spend $150 million on extending paid parental leave which is about half the budget of the Department of Conservation but Labour will be the first ones—or maybe the second ones after the Greens—to say that we are not spending enough money on conservation.  
But what this means is that we have the opportunity to look at conservation and look at the opportunities that conservation provides to New Zealand. I do not think we should be afraid of saying that conservation is everyone’s responsibility. Nor should we be afraid of saying that conservation is good for business and business is good for conservation.  
Can I say at the outset—because I acknowledge that the Green member is wanting to take a call—that the memorandum of understanding that we have with the Green Party which is to protect our native species and fund research into 1080 alternatives sets aside $4 million for self-setting traps. When we look at the 1080 debate—and I thank the Parliamentary Commissioner for the Environment for actually putting some common sense and some science around that debate—and if we look at the trends and the learning over the years we see that the standard application rate for 1080 used to be 20 kilograms per hectare. Now the standard is down to 2 kilograms per hectare and they are looking now to go down as low as 200 grams per hectare.  
There is a stunning example of biodiversity in a biodiversity partnership up in the Wanganui area where I was just last week called the Kia Wharite project where they are trialling the 200 grams per hectare. But what this project does is demonstrate several things: first a fantastic partnership between the Department of Conservation the landowners and the Horizons Regional Council—I think it is one of the most significant partnerships with a regional council—but also a partnership with iwi.  
It is one of the largest biodiversity projects in this country. It is focused on an area of 180000 hectares of which something like 157000 is under active pest control and predator eradication. Up in that area there are probably the largest populations of our North Island brown kiwi and also the endangered blue duck. It is also the second-largest stand of lowland native forest in New Zealand. But I think what is exciting about that is the way that the other partners are working with the Department of Conservation. It is a very successful partnership programme. In fact one of the farmers markets his own beef which he markets as “conservation beef”. I think that is just a wonderful reflection on the importance of conservation to New Zealand.  
One of the other exciting recent developments is of course the announcement of our partnership—it is not a sponsorship programme—with Air New Zealand. For many years Air New Zealand had actually enabled some of our flightless birds to fly. It has taken the kakapo from one end of the country to the other. It transports the kiwi to translocated areas to assist in their ability to thrive. This partnership which was announced with the Prime Minister just recently formalises that it is worth about a million dollars annually but actually for New Zealand it is worth a lot more than that. It is worth a lot more in branding. It recognises that conservation is one of the largest if not the largest tourism providers in New Zealand.  
We have the opportunity to really showcase our great walks and showcase our national parks. We have direct investment in conservation programmes. We have thousands of Air New Zealand staff who are now buzzed up about conservation. The walks alone which will be promoted through this partnership bring in about $3 million a year. But it is more important that that; it is more about our brand.  
Our Department of Conservation staff are fantastic people. They are passionate about what they do. 
EUGENIE SAGE (Green) 
: 
 Tena koe Mr Chair. Last month the Department of Conservation celebrated its 25th anniversary and that is a small miracle given this Government’s penchant for expensive chopping and changing of Government agencies. The department’s establishment in 1987 brought together for the first time all of the “green dots” in the former Wildlife Service Department of Lands and Survey and the New Zealand Forest Service into one organisation with a clear mandate to protect and preserve our wild landscapes our native plants and our wildlife. That was significant internationally. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
EUGENIE SAGE 
: I record my and the Green Party’s appreciation of the commitment energy and skill of Department of Conservation staff around the country over the last 25 years who have worked and are working with the community and with the public to protect and preserve our natural areas and historic places. But when we should be celebrating the department’s achievements including the establishment of four new national parks we are seeing instead retrenchment and restructuring in the face of the Government’s funding cuts a failure by the department to focus on the breadth of its statutory purpose and the welcome mat being put out for destructive commercial enterprises such as Bathurst Resources’ major proposed coal mine at Denniston and large-scale tourism developments such as the mad monorail proposal in the southwest world heritage area. 
The Government is miserly when it comes to conservation. It slashed conservation funding by $54 million over 4 years with more cuts to come. The organisational review which the department initiated during the 2010-11 financial year in response to these funding cuts has resulted in at least 96 fulltime-equivalent jobs going with more likely in the current phase of restructuring. Such organisational reviews create morale-sapping uncertainty. They create churn and destabilisation amongst the department’s major asset its staff. They cause a loss of productivity and performance as staff focus on whether they will have a job or not and the redundancies mean a loss of institutional knowledge a loss of expertise and a loss of capacity. It also means that large sums are being spent on organisational reviews and consultants’ reports rather than on real conservation.  
These restructuring costs to date include $1.48 million on the first phase the review of financial services and another $5 million on the review of what departmental managers call “support services”. Support services are in fact the planners the lawyers the technical specialists and the ecologists who are absolutely crucial to the department’s advocacy under the Resource Management Act to protect conservation values outside the conservation estate to protect our rivers against dams and to protect wetlands on private land that are threatened with drainage. It is this advocacy that the department is retreating from—vital work. 
The department is predicting that it will spend another $5 million in the current financial year on the next stage of its restructuring proposals and that will target the kahikatea face of conservation—the field centres and area offices—and further job cuts there are likely. That is $11.5 million over 2 financial years on the costs of restructuring that is not being spent on real conservation work and that is nearly 3.6 percent of the department’s budget. 
There are around 3000 threatened species in New Zealand and many continue to decline because of the impact of introduced predators. The department is on the cutting edge of pest control with its expertise for control on large islands like Campbell and its success in rat eradication there being sought after internationally. Yet with the reduced funding the department is able to actively manage only 10 percent of our threatened species. About 216 species have active threat-management plans in place and the department is only able to sustain possum control over 13 percent of the conservation estate. Information that the Department of Conservation provided to the Local Government and Environment Committee showed that the amount spent on possum control in the 2010-11 year had declined by $1 million compared with 2009-10 and the area under control had declined by 38000 hectares. That is serious because of the impact that possums have both on the health of the forest and on species—a lot of our bird species—by their predation on eggs. So while the planners the lawyers the botanists and the ecologists are being cut through restructuring we have the establishment of a new commercial business unit. And what is its focus? On delivering and extracting value from business and visitors. Thank you. 
NICKY WAGNER (National—Christchurch Central) 
: 
 The National Government has taken a moderate and balanced approach to Government finances. We all know that the economy is tight and we are determined to do more for less to increase productivity and to get better results from everything that we do. We want to get our finances on an even keel because we want to avoid the horror austerity measures that we are seeing overseas. We need to be disciplined and we need to have a willingness to prioritise and to make trade-offs. We have got a plan and we are sticking to it. In terms of conservation this means that we are determined not only to honour our conservation and environmental responsibilities but also to stretch our dollars as far as possible and to develop new ways to support conservation work.  
We all know that New Zealand is a magnificently beautiful country with a unique and hugely diverse fauna and flora. The Department of Conservation is charged with managing and overseeing our natural and heritage assets on land in the marine environment and also in the freshwater environment. It directly manages the public protected land and marine reserves and it facilitates agreements with regard to protection on private land. But it is also responsible for managing protected wildlife and marine mammals and it has a role in fostering recreation in the wonderful public lands that it manages and I believe that the Department of Conservation is particularly good at its job. It is also particularly good at finding ways to get more conservation work done for less. New Zealanders are keen to protect and conserve our environment. Huge numbers of them work closely with Department of Conservation staff as volunteers and increasingly businesses are getting involved with more conservation work.  
The Department of Conservation is absolutely focused on protecting endangered species. There are many successful breeding programmes right across the country. They include the breeding of the takahe the kakapo and kiwis. As a matter of interest my husband was down in Stewart Island just a couple of weeks ago on a yacht. He was anchored out in a bay looked across the bay and there was a kiwi just sauntering along the beach eating up the grubs at 10.30 in the morning. There are not many places in the world where you can see kiwis and there are not many places where you can see them just as you are going about your ordinary business.  
So we are being very successful with some of our breeding programmes. We have done fantastic breeding programmes for kakariki. We have got breeding programmes in Canterbury at Lady Diana Isaac’s property which has got tuatara kakariki skinks and all sorts of things. She is working very closely with the Department of Conservation. There are also good programmes for fairy tern for whio and even for kereru in some places of the country.  
The department also works with the species that are hard to protect from mankind in terms of smuggling. It was very interesting in the weekend. We were talking to Robin Thomas from the Department of Conservation in Otago about the smuggling that has been going on out of Central Otago particularly of skinks and lizards. It is pretty frightening when you think that if you sell a jewelled gecko on the international market you might get $25000 for it and even selling an ordinary skink will give you US$2000. Just recently someone was caught leaving New Zealand with 53 skinks in his underwear. The point is that the department is being very vigilant about that and it is looking at how to increase penalties and at how to protect those creatures.  
Just last weekend I was on the Otago Peninsula and I saw the work that the Department of Conservation has been doing protecting all the fauna and flora out there. There is a magnificent array of wildlife on that peninsula—little blue penguins Stewart Island shags seals and sea lions—but I was particularly interested in the work that the Department of Conservation has been doing with the royal albatross. The colony there has developed to over 260 breeding pairs. That is a pretty amazing exercise when you think that back in the 1930s one egg was there and it was stolen by a member of the public.  
The work that the Department of Conservation has been doing over probably about 80 years is a really good example of how man and nature can complement each other. The observatory is there and tourists go there but the birds seem to manage that fine and without man’s intervention I think it is unlikely that that colony would still exist because as the temperature is warming we are finding that some of those eggs on the very exposed nests can actually be cooked. So I commend what the Department of Conservation has been doing. 
JACQUI DEAN (National—Waitaki) 
: 
 Thank you for the opportunity to speak on the work of the Department of Conservation. There are some pretty notable successes down in the Otago region. My colleague Nicky Wagner has just talked about the royal albatross colony and the ongoing work of the Department of Conservation both in species management and protection but also in allowing the public of New Zealand to have access to what is pretty special and precious to us in New Zealand. As Nicky Wagner said with regard to the royal albatross colony it went from one egg back in the 1930s I believe it was and people used to throw stones at the albatross because you know people were people back then. But these days it is a colony that is well protected and enhanced and you can all go and see it. It is managed by the Department of Conservation and the Otago Peninsula Trust and what it means is that New Zealanders and visitors to our country alike can go and visit the royal albatross without disturbing them. Of course this has become a major tourist attraction for Dunedin.  
So too has the little blue penguin colony in Oamaru which were 15 years ago almost known as a pest. The little blue penguins used to cross the road and get run over by the milk truck and the bread truck and nobody particularly cared and then one woman Lorraine Adams saw that they were indeed special. She was the one who initiated along with the Department of Conservation the little blue penguin colony in Oamaru. Here we are 15 years later and the town rather than just being a place to stop and fill up with gas and buy an ice cream maybe on your way to somewhere else has become a destination. A lot of that has to go down to the work not only of people like Lorraine Adams and the various trusts that started looking after these animals but also of the Department of Conservation because on the ground it takes a great deal of care and a lot of interest in the development of both the species management and the protection. It can identify what needs to be done but also enthusiastically enables those colonies to be made available to and accessible for the general public.  
There are three yellow-eyed penguin colonies along the Otago coast. Again they are maintained and that species is protected and enhanced by the work of the Department of Conservation. Again this is done with a weather eye to how we can make what is precious to us in New Zealand available to other New Zealanders and also to visitors around the world.  
I want to move on to something slightly different because this is another role that the department has been very successful in and continues to be so. It is not so much about species management but its involvement with the Otago Central Rail Trail. The success story of the Otago Central Rail Trail cannot be underestimated. The benefit goes to the national economy because it is now an international tourism destination. But also many of us in this House have either cycled a stage or a leg of the rail trail—or indeed done the whole thing if they are lucky enough—and would have made a wonderful contribution to the economy of Middlemarch or of Clyde and I thank them for that. In the last figures I read and they may well have increased by now around $7 million goes into the local Central Otago community because of the Department of Conservation’s involvement in the Otago Central Rail Trail. It is people like Robin Thomas who is the area manager for the Department of Conservation who have that commitment and that foresight to get involved in that kind of initiative which not only has spin-offs for the local species in the area in terms of their protection and development but also has that economic spin-off. It is incredibly important to this Government to recognise that our natural heritage and those things that are precious to us can go hand in hand with economic development. I think the rail trail is a spectacular example of how those two things can should and do go hand in hand. Thank you. 
Report noted. 
Department of Labour  
Report noted. 
Clauses 1 to 10 and schedules 1 to 7  agreed to.  
Bill reported without amendment. 
The CHAIRPERSON (Eric Roy) 
: I move  
That the report be adopted 
. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Report adopted. 
Appropriation (2010/11 Financial Review) Bill 
Third Reading 
Hon PAULA BENNETT (Minister for Social Development) 
 on behalf of the Minister of Finance: I move  
That the Appropriation (2010/11 Financial Review) Bill be now read a third time 
.  
A party vote was called for on the question  
That the Appropriation (2010/11 Financial Review) Bill be now read a third time. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1. 
Bill read a third time. 
Personal Explanations 
Ministerial Conduct—Quote Incorrectly Attributed to Prime Minister 
DAVID SHEARER (Leader of the Opposition) 
: 
 I seek leave of the House to make a personal explanation to clarify a question that I made earlier in the day.  
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Leave is sought for the honourable Leader of the Opposition to make a statement. Is there any objection to that course of action? There is none.  
DAVID SHEARER 
: During question time I attributed a quote to John Key in one of my questions. In fact that quote was actually made by David Farrar and I would like to apologise to them both.  
Building Amendment Bill (No 4) 
First Reading 
Debate resumed from 28 March. 
RAYMOND HUO (Labour) 
: 
 My last contribution on 28 March has brought me to the fourth issue concerning New Zealand standards but I am conscious of the time constraint so I would like to touch upon two important issues raised by Mr John Green. The first is the express exclusion of subcontracts in new section 362G(3)(b) in clause 44 of the Building Amendment Bill (No 4). Like Mr Green I too find it very difficult to understand why subcontracts have been excluded when one of the most significant objectives of the Building Act review is to improve consumer protection measures. The proposed caveat is completely contrary to the stated objective. It serves to vastly reduce sector accountability and consumer protection measures.  
The second is the exclusion of diminution of value as a remedy for default in new section 362P in clause 44. Diminution of value measures the value of something before and after the causative act or omission creating the lost value in order to calculate compensatory damages. New section 362P needs to be redrafted to account for this possibility in certain circumstances and the word “completion” in the context of the building work needs to be better defined to avoid argument and ambiguity.  
I thank Mr John Green and look forward to the development of the Building Amendment Bill (No 4). Thank you.  
NICKY WAGNER (National—Christchurch Central) 
: 
 I rise to support this Building Amendment Bill (No 4) at its first reading. It was back in 2009 that the National Government undertook the Building Act review and that review was driven by the need to improve building quality to simplify the procedures in construction to contain costs and to remove delays in building consent processes. The review confirmed that change was needed so that builders contractors and tradespeople could take full responsibility for the quality of their work and to make sure that we had professional standards and outcomes. This bill is the second of two bills introduced to implement those Building Act review policy decisions. The Building Amendment Act (No 3) has now passed into law and we are introducing No. 4 today. Today’s bill introduces the most comprehensive consumer protection measures. For example it requires that we have written contracts for most residential building work and ensures that contractors must fix any defect in a building that is reported within 12 months. It also provides processes for the enforcement of warranties. The idea of these measures is to give the consumers much more protection from poor-quality work and to therefore increase their peace of mind during and after a building project.  
The bill also seeks to clarify any exemptions from building consent requirements and it does this by rewriting and reformatting schedule 1 of the Act. It is of particular interest to me as the MP for Christchurch Central that the bill also introduces a new power for territorial authorities to deal with buildings that are at risk because they are close to other dangerous buildings. This is an issue that has come out of the Canterbury earthquakes and it will be really good to have these procedures clarified in legislation. The bill increases the penalties of the offence of doing building work without a consent. The maximum penalty is now $200000 which is up 100 percent from the previous $100000 so it makes it a very serious offence indeed.  
The bill also makes significant and well-considered changes to the legislation around dams and considering the amount of work that is going into that area it is a good thing to see that upgraded.  
The building and construction industry is significant in New Zealand. It currently employs about 170000 people which means about one in 12 New Zealanders are involved in that industry but when we think of the future of the $20 billion to $30 billion rebuild that is going to be focused on Christchurch and Canterbury that number of people involved in this industry can only increase.  
So I welcome this bill. I think we must do everything to make sure that we build quality buildings—quality industrial buildings commercial buildings and residential buildings—but also at the best possible cost. The 2009 Building Act review developed policies to improve both the quality of building and its cost-effectiveness and I think the people of New Zealand really need to have confidence in the construction sector and the work it does. This No. 4 bill I think will deliver on those policies so I commend the bill to the House.  
PHIL TWYFORD (Labour—Te Atatu) 
: 
 Labour supports the Building Amendment Bill (No 4) going to the select committee. It is for the folks at home the latest instalment in a long-running effort to improve the prospect and the performance of the building and construction industry. Ground zero for this story is the leaky homes catastrophe which began in the early 1990s and 14 years later some tens of thousands of New Zealanders had had their lives affected and some $22 billion worth of homes had been constructed with weathertightness problems. It was a disaster born of deregulation poor regulation contracting out building inspections inadequate product certification—which allowed the use of untreated timber to be used in New Zealand homes—and the abolition of apprenticeships among other causes.  
Thousands and thousands of New Zealanders paid the price for what was a terrible system failure in our building and construction industry. Since 2004 when the fifth Labour Government passed the new Building Act very few leaky homes have been built the experts tell us. Since then there has been something of a cross-party consensus to further fine-tune the regulation of the building and construction industry to improve the quality and durability of New Zealand homes to build right first time to protect the consumer and to get builders architects designers and other building professionals to be accountable for their work.  
The 2004 Building Act reinstalled proper regulation and since then there has been a lot of work to try to fine-tune building regulation to lighten the load of compliance while continually trying to improve quality and accountability. I pay tribute to the work of former Ministers Clayton Cosgrove and Shane Jones and also to the work of the current Minister for Building and Construction Maurice Williamson who has continued with this work.  
As I said there have been we are advised very few leaky homes constructed since 2004 but a number of reviews in the intervening period have underlined heavy costs which are ultimately borne by New Zealand families who are paying the bill for new homes that are being built with complexity weighing down the whole process and long delays in the issuing of building consents.  
The main thing on the menu with this bill is a new set of requirements for contracts for residential building. It requires pre-contract information that says a builder must not enter into a residential building contract unless that person has first provided to the client a whole lot of prescribed information. What else does it do? It provides that a residential building contract over a certain price must be set out according to a certain format and methodology and contain all sorts of particular information.  
The other key bit of it is around implied warranties. The bill sets out in some detail a whole lot of implied warranties that will follow as a result of these contracts being put into place—for example that the building work will be carried out in a proper and competent manner that all materials to be supplied for use in the building work will be suitable for the purpose that the building work will be carried out in accordance with all the laws and legal requirements and so on. There is nothing wrong with this idea. I do not think anybody on this side of the House will dispute the basic intention of this bill which is to bring clarity and some accountability to residential building contracts.  
There are a number of other bits and bobs in the bill. One of them that is probably worth mentioning in this debate is the question of dams. Lord knows how this particular issue got shoehorned into this particular bill but it is here nevertheless and what the bill does is try to focus the requirement for regional councils and their monitoring of dams. It changes the threshold so that I think 40 percent fewer dams will be required to be classified for a certain level of monitoring. That will save something like $1.1 million in compliance costs for dam owners. Let us hope that the officials have got the numbers right. Let us hope that this example of risk-based consenting and risk-based management is appropriate.  
The main thing I want to say is that even though there is a high level of cross-party consensus for the ongoing process of the Building Act review—and we will be voting to send this bill to a select committee—I do want to note that in the face of the huge challenges that are before the building and construction industry this bill like its predecessor the Building Amendment Bill (No 3) is a masterpiece of incrementalism. To say that it is a modest effort is an understatement.  
The challenges facing the building and construction industry are massive. It suffers year in year out from a chronic skills deficit that has not been helped by the under-investment by this Government in apprenticeships in the industry. The industry is buffeted by the boom-and-bust cycle possibly more than any other industry in our economy. Every time the cycle goes down skilled workers head across the Tasman and we have seen that time and time again.  
In our country’s largest city the building and construction industry is probably the most glaring example of market failure that we see in the economy today. In Auckland every year we are building more than 10000 houses fewer than we should be just to keep up with population growth. So the market is failing utterly to meet demand in Auckland and the consequences are appalling. Year on year that deficit compounds and the scarcity drives up prices and as a result we have some of the most unaffordable housing in the Western World.  
The building and construction industry is plagued by low productivity. We rank near the bottom of the OECD for productivity of our building and construction industry and as a result we have very expensive homes—unaffordable homes. And finally we are killing people in this country on building sites at more than twice the rate that people are dying at in workplace accidents on building sites in Australia. So something is terribly wrong in the building and construction industry and in the face of those challenges what we see in this bill and I believe in the bill that came before it the No. 3 bill is tinkering by this Government.  
 Instead of tackling the real issue about accountability by bringing in proportional liability what does this Government do? It legislates the definition of roles among contractors clients designers builders and architects. Instead of protecting consumers through a mandatory home warranty scheme backed by insurance what does this Government do? It writes into a bill screeds and screeds of so-called implied warranties.  
Instead of trying to smooth out the boom-and-bust cycle the Government makes no changes to its procurement policies and there is no programme of building State houses. But what does it do? It basically gives up in the face of this challenge and brings in overseas workers. This bill is tinkering in the face of massive challenges faced by the industry but we will support it going to the select committee and see what comes of it. 
HOLLY WALKER (Green) 
: 
 I am pleased to take a call on behalf of the Green Party on this Building Amendment Bill (No 4). I spoke before the adjournment in the Committee stage of the Building Amendment Bill (No 3) which preceded this bill and which has subsequently passed its third reading in this House. That bill as we have heard and this one form part of the Government’s response to the Building Act review which was completed in 2009. Although the Green Party supported the previous bill at its first reading we were concerned when we heard the submissions at the select committee stage at the piecemeal approach that the Government had taken. And we have just heard from Mr Twyford that the Government is taking a very incremental and tinkering approach to the Building Act review. Those submissions on the previous bill highlighted the shortcomings of that approach. Especially because the previous bill lacked reference to consumer protections we in the Green Party found ourselves unable to support the previous bill at its final stage. I am therefore pleased to see that this bill the Building Amendment Bill (No 4) does address the very important issue of consumer protection in the building industry and the Green Party is therefore pleased to support the bill at its first reading tonight.  
Before I talk a little bit more about the provisions in this bill I want to provide some of the really important context in terms of why we must ensure that the regulatory environment gets it right for building and housing in New Zealand. We have a housing crisis in New Zealand and it is a crisis both of housing affordability and of housing availability. Nowhere is that more apparent than in Christchurch where demand for rental housing is out of control. We have seen people needing short-term rentals while they wait for their own homes to be repaired we have seen people needing long-term rentals if they have had to relocate out of a damaged rental property we have seen homeowners selling investment properties or moving back into their rental properties and displacing tenants and we have seen an influx of tradespeople putting extra demands on the rental market in Christchurch. Many State council and community houses are damaged and unavailable at the present time and in that context we need to be thinking about what the building regulations are and what the regulatory environment is going to be as we repair and rebuild Christchurch.  
So far the Government has been satisfied in Christchurch to more or less let the market find the solution but the market will not favour those on the lowest incomes those in the most need—beneficiaries sole parents and people with disabilities. There is a real crisis brewing. There has been some movement we think but not enough.  
As well as short-term intervention in Christchurch to deal with the housing crisis that we are seeing there and temporary assistance from the Government we also need longer term a better regulatory environment for building and construction because there has been a similar crisis brewing in Auckland. We heard from the previous speaker about market failure in the building industry in Auckland. The result is that people are finding it extremely difficult to find a home and extremely difficult to afford to either rent or own their own home.  
This bill is important because it sets the regulatory context in which the construction and the rebuild of Christchurch will take place and it puts in place as we have heard very important consumer protections which the Green Party supports. We have heard already in the debate so far that the bill will introduce mandatory written consents for work valued over a prescribed amount. It will introduce mandatory disclosure of certain information by building contractors. It creates new offences for breaches of these requirements. It adds new powers for territorial authorities to deal with buildings that are at risk because they are near or adjacent to dangerous buildings. It increases the maximum penalty for doing building work without a building consent. It clarifies the powers of the Chief Executive of the Department of Building and Housing to review the performance of territorial authorities regional authorities and building consent authorities and as we have heard in a rather unrelated clause it makes some amendments to the dam safety scheme including giving regional authorities the power to investigate and refer dams for classification.  
We think that the consumer protections in this bill particularly around mandatory written contracts for building work over a prescribed amount and mandatory disclosure of certain information by building contractors are very important. The reason that they are important is because of the vacuum of regulation in the building industry that we have had previously and that was born out of the deregulation of the industry by subsequent Labour and National Governments in the 1980s and 1990s. As we have heard it was this vacuum of regulation this period of deregulation that allowed for the leaky homes crisis to occur and we have seen the terrible consequences for homeowners when poor regulation and poor building and construction standards allowed that to take place. So we think in that context that these consumer protections absolutely need to be reinstated because what we saw with the leaky homes crisis is that many homeowners were left with very inadequate protections and when everything went pear-shaped and when their homes were found to be substandard they did not have adequate protections and we have had to legislate to make up for that fact. So in that context it is really important that we get it right when things go wrong for consumers who have taken the plunge to construct or build their own homes. We support the protections in this bill.  
However the Green Party wishes to emphasise that better warranties and better consumer protections although they are important are only the ambulance at the bottom of the cliff. When things go bad—God forbid—and a homeowner finds that something drastically has gone wrong with their property and it is no longer habitable these protections are great for that scenario. But we need also to be thinking about how to regulate to ensure that buildings are constructed to a higher standard before things go wrong and before we need that ambulance at the bottom of the cliff of greater consumer protections. We have not been convinced by the Government’s approach to the Building Act review in the form of the previous Building Amendment Bill and this bill that the Government’s approach to the reforms is going to achieve an improved regulatory environment that means it is less likely that buildings will be constructed to poor standards to begin with.  
We are looking forward to the contributions in the Local Government and Environment Committee on this bill but I think we would echo the concerns of the previous speaker that taking such an incremental and tinkering approach when what really is required is a more fundamental review of the building regulation environment in this country means we are unlikely to make the really fundamental changes needed to ensure that we do not have to rely on these consumer protections although it is important that they are in place when things go wrong.  
I do want to thank and acknowledge the Minister for Building and Construction Maurice Williamson for the way he has engaged with parties across this House on this legislation and I do look forward to hearing the contributions at the select committee and particularly hearing from consumers about how the consumer protections will affect them and whether they are adequate to meet the needs of building consumers. The Green Party is pleased to support this bill at first reading and we look forward to engaging further in the debate. 
JACQUI DEAN (National—Waitaki) 
: 
 The Building Amendment Bill (No 4) represents a fundamental shift in the building industry in New Zealand. It makes you reflect that building a home—or any kind of building but particularly a home—for anyone is a big undertaking. It might be a person’s most significant asset that they ever have in their life. It is the place where you have your family where maybe your kids grow up or where you retire to—whatever. It is a big deal. It would be good to know that that building has been constructed right the first time and that if there are going to be any issues with the construction of that building then the consumer has recourse back to the builder who constructed that home.  
It is interesting is it not watching the television advertisements—and there are a number of ads on at the moment—for home builders. What they are doing in their advertisements is they are signalling that they understand the content of this bill in that they are now beginning to offer guarantees. They are saying: “We will build on time at the price we quoted.” The language has subtly shifted and I think what that shows is that the building industry is picking up what is coming through Parliament here—and I dare say welcoming it.  
What this bill does is that it will have the happy consequence for the homeowner and the home builder of reducing compliance costs. It will also reduce complexity for the homeowner and the home builder and also delays in the process by reducing reliance on the building consent authorities from the local authority and putting the responsibility on to the builder and on to the building firm. So what will happen is that the person building your home will become much more accountable to the homeowner because they will have to disclose certain things to you when you are contemplating building a house. There will be information that they have to tell you about their company who it is who is working for them who is gong to be working on the construction site and a bit about their track record. Consumers are also going to get a written contract from their building company that says—and which I have just outlined is being picked up by the building industry already—that there will be a written contract for most residential building work.  
There will be specific methods for enforcing warranties and so consumers will know that if something does go wrong they will have recourse. In fact building contractors will be expected to fix any defects in their work that are reported within 12 months of the completion of the construction. So you have lived in your home for a year you have gone through the seasons and if something is defective and you make a notification of it within 12 months then you can expect to get a remedy out of that.  
Of course there will be penalties for failing to comply with building consent requirements and those penalties are doubling. They are going from $100000 to $200000. We have got a busy time ahead of us in places like Auckland but also in Christchurch in the construction industry and within the next few years particularly in Christchurch there is going to be a huge number of new builds going on. So rather than loading up the local authority with all those compliance requirements this bill is enabling the building industry itself to take charge if you like of the situation and provide a good service to the people whom they are building new homes for.  
You know it is like I said at the beginning of my contribution: building a home is a big deal. It can be the biggest asset that many people have in their life and they want it done right. And if it is not done right then you want to have recourse to have it put right. So this bill carries out those functions.  
Of course this bill and also the Building Amendment Act of 2012 are the result of quite a comprehensive review of the Building Act 2004 which was carried out in the first term of this Government in 2009 and 2010. What that review found was that there was too much of a reliance on your local authority so responsibility was not so much on the builder but on the local council. That was identified as a result of that review. These changes will enforce in law once the bill has been through the Local Government and Environment Committee and we have heard submissions on it what is already best practice in the industry. This is a good bill I look forward to its consideration in the select committee and I commend the bill to the House. 
ANDREW WILLIAMS (NZ First) 
: 
 I rise on behalf of New Zealand First as the building and construction spokesperson to speak on the Building Amendment Bill (No 4). New Zealand First has said previously in this House that we will support good policy but we will oppose bad policy. In this case we are opposing this bill because we believe it contains a certain amount of bad policy that is not in the best interests of New Zealand or New Zealanders.  
We seem to not learn by our mistakes of the past and we seem to go full circle and repeat our mistakes. We went through the whole episode of the leaky homes saga in the 1990s and through the 2000s which has cost this country in excess of $20 billion. As a result of that this country now has a huge debt hanging over its head that can only get larger not smaller and in fact more and more leaky buildings are being found by the day. That does not just mean leaky homes; that includes leaky schools leaky hospitals leaky commercial buildings leaky all sorts of buildings and leaky buildings of any nature in this country.  
What we are basically doing in this bill is now opening the books even wider to allow self-regulation in the sense of the building industry to a great extent. It is basically taking the regulatory side away from the local authorities and the councils who would at this point be overseeing much of this work and giving it back to the industry to say: “Well you self-regulate. Here are the rules this is what you will do and you must comply with it.” As we all know rules are there to be broken and that is exactly what has occurred throughout the leaky homes situation and that is what will occur again through this Building Amendment Bill (No 4). I am sad to say that probably in 10 years’ time we will be looking back on this and there will be amendments required to this bill—significant amendments to this bill—because people will say: “How did we ever allow much of that to go through? Why did we go back to the wild west in New Zealand? Why did we turn New Zealand back into a situation where basically virtually anything could go up without too much oversight by the local authorities?”.  
I was a hearing commissioner for 9 years in local government and I sat on many many many building consent and resource consent applications. When you have sat as a commissioner and you have heard the applications before you you do understand why it is necessary to have a regulatory authority that is at least having an oversight to much of the building process that is going on. For instance and I raise the issue of heritage nowhere in this document do we hear the mention of the word “heritage” yet much of this work that will be allowed to occur without any consent from any authority could have a great effect on the heritage buildings within this country. For instance it says here in clause 7 of Part 1 of the schedule: “Repair or replacement of outbuilding—The repair or replacement of all or part of an outbuilding” is permitted. So basically an outbuilding could be there that might be 100 years old it might be 120 years old and somebody without a permit can literally just replace it as long as it is within the same footprint and build a new building on the same footprint. To my mind we could see decimation of heritage buildings throughout New Zealand based on that clause alone.  
It also says here under clause 10 of the schedule that interior alterations to existing non-residential buildings will be a permitted activity so in other words shops offices libraries factories warehouses churches or schools can be retrofitted internally without a consent. Well again we have wonderful buildings throughout New Zealand heritage buildings but basically they could be stripped out gutted completely removed on the inside and replaced with no consent from an authority. So again we could have decimation of our heritage buildings. This also allows for things like carports to be put up without a permit. Again can you imagine what sorts of structures could go up in the form of carports around the country. It also allows for retaining walls to be built as long as they do not exceed 1.5 metres depth in the ground. Well a lot of retaining walls are right on boundaries with other properties affecting neighbours and if there is no consent given for a particular retaining wall you could have a huge impact if it does not have the required drainage put in it if it does not have the right footings and if it is not done to a certain standard. But if it is permitted to be done up to 1.5 metres then this could have a huge impact on property owners and neighbours.  
This bill allows for fences and hoardings to be put up up to 2.5 metres in height. Well most fences in most cities are 1.8 metres and they have discretion usually up to 2 metres in height for most residential areas. This will allow fences to be put up up to 2.5 metres in height. Again this will allow basically large fences to go up all over the place without any authority or consent at all. If you carry on through it allows signs to go up that do not exceed 3 metres in height. Again large hoardings can be put up. At the moment authorities have control over signage throughout the country and can determine where signs go how high they are and that sort of thing. This basically allows for signs to go up that do not exceed 6 square metres and do not go higher than 3 metres. Again we will have outright large-scale erection of signage around this country with no authority being able to intervene and stop it.  
I look through this and I think there are not enough safeguards in here. I have a great impression from working with building inspectors and working with local councils and authorities on the North Shore and in the Greater Auckland area and I have been very impressed with the work that the building inspection people do. They are the watchdogs for building. They are the ones who go out on site and make sure things are done to a certain standard. They have been the ones unfortunately who have been put in the invidious situation of having to approve buildings under the building code that allowed for the kiln-dried timber and the monolithic cladding that ended up in the leaky homes but they were inspecting buildings to the building code that was passed by the National Government back in the 1990s. So they were approving what was an approved building code. However in retrospect many of those same building inspectors would say that the same buildings should never have been allowed to go up in the first place and the building code should never have been amended back in the 1990s to allow those sorts of buildings to be constructed.  
What we are seeing here is basically again a dilution of the building standards. What we are seeing is an opportunity for wholesale erection of all sorts of structures. For instance pergolas—it will be a permitted activity to put up a pergola anywhere you like. And again pergolas do fall down. They do topple. I have personal family experience of a person who has come off a pergola because it was improperly constructed. This allows for tents and marquees to be put up any time you like as long as they do not exceed 100 square metres in floor area. Again sometimes in this situation you do have to have somebody controlling it because again these structures can be built on all sorts of land situations—slopes hills and all sorts of parks and recreational areas that are not really suited.  
This is again basically an attack by the National Government on local government. It is very clear that National does not like local government. They see this as another way of diluting local government. This is basically kneecapping the whole process of local government in terms of its regulatory role in overseeing building inspections. New Zealand First certainly supports the reduction in fees and the reduction in costs in terms of the building sector. We certainly support the reduction in the cost of inspecting the works and finding cost savings but we have great concerns that through this and in years to come what we will see is a lot of shonky building going on. We will see a lot of what we would call replacement of buildings and replacement of structures when in actual fact they will be new structures. We see this as potentially affecting significant heritage buildings throughout New Zealand because people will simply turn a blind eye to what is replaced in an existing situation. So New Zealand First will not be supporting this bill and we will be opposing it through this reading. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am pleased to speak on the Building Amendment Bill (No 4). I want to start by acknowledging the Minister for Building and Construction the Hon Maurice Williamson and I also acknowledge Nicky Wagner the chair of our Local Government and Environment Committee. I think it is really important to acknowledge that we have got support across the House from Labour and the Green Party. I do recognise Andrew Williams and the contribution he has made. I think it is important as well to take a step back and look at the history in this area. We know that there was significant reform in 2004 and I want to acknowledge Clayton Cosgrove and Shane Jones for the contributions that they made. 
But I do want to address an issue that was raised by Phil Twyford previously in the debate. He said the leaky homes crisis was ground zero. He made a number of comments about the 1990s but do you know what he never mentioned? He never mentioned that the last Labour Government actually denied that there was a leaky homes crisis. I was a researcher in this building at the time and I watched for a significant period of time when the last Labour Government actually would not even acknowledge that it was an issue. I do want to say that subsequently there was reform in 2004 but I do want to correct that piece of history because I think it is important for this debate.  
Hon Lianne Dalziel 
: We set up the Weathertight Homes Resolution Service. Is that not acknowledging the problem? 
NIKKI KAYE 
: The member opposite is making comments about the Weathertight Homes Resolution Service. What that member does not realise is that I actually was a researcher who helped draft a piece of legislation that went to Michael Cullen and that formed the basis of the Weathertight Homes Resolution Service. So she may not be aware of that. 
Secondly I just want to talk as well about the contribution to the sector that the construction industry does make. It is worth $20 billion 170000 people are employed in the construction sector and it is worth 5 percent of our GDP. So we need to acknowledge this evening how important this sector is to New Zealand. 
I also want to touch on some comments that have been made about the Canterbury rebuild and housing affordability in Auckland. We know that it is very important to have this legislation through the House but also the reform around the Resource Management Act because we have several significant issues in New Zealand. Part of the issue is around what is the best regulatory environment. The other issue is around the Resource Management Act and whether we have got our consenting provisions right. But the key thing I want to mention and it is actually mentioned in the regulatory impact statement is that this has been driven by a number of things that did not happen in 2004. I want to read this statement from the regulatory impact statement: “While consumer support was emphasised in the Building Act 2004 through a purpose statement and implied warranties no specific measures were included to assist consumers to understand their rights enforce their rights or hold practitioners to account other than through the disputes tribunal … and the courts.” So I think that is a very important point because all of the provisions within this legislation make a number of changes that are targeted to ensure that consumers can enforce their rights and I want to mention some of those changes. 
We are obviously focusing on three things. The first thing is there is going to be a bit of a stick there. So we are going to increase the penalties from $100000 to $200000 for failing to comply with building consent requirements. The second thing we are going to do is to ensure that there are written contracts for residential work and that is about again protecting the consumer. The third thing we are going to focus on is to ensure that building contractors are more accountable by requiring disclosure of information. That will include information about their company and the people who carry out work and their track record. I think that is a really important point because we need to ensure that there is greater transparency around those practitioners who are out there. 
I am pleased to be supporting this legislation. I think the key and the major change of this legislation is that homeowners are going to be able to better identify the difference between a professional and someone who may be considered as not a professional in this industry. I think we need to recognise the huge contribution that the construction industry makes to New Zealand—5 percent of our GDP. I think we also need to reflect on our history and we need to be honest about that history: the contribution that has been made by the last Labour Government but also the fact that the reason we are here is that there was not the ability in the 2004 reform to ensure that consumers were adequately protected. That is why I am glad that there is support across the House to be able to address this and that the bill will go to the Local Government and Environment Committee. I am very pleased to support this legislation in the House. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I thought that was an extraordinary contribution because the member Nikki Kaye stood to describe what the Building Amendment Bill (No 4) was apparently designed to address and this is what the member quoted from the regulatory impact statement: “While consumer support was emphasised in the Building Act 2004 through a purpose statement and implied warranties no specific measures were included to assist consumers to understand their rights enforce their rights or hold practitioners to account other than through the disputes tribunal (for small claims) and the courts.” And actually nothing that this bill does addresses that issue. There were three things that she said were designed to address the flaws in the original legislation which was a major reform in 2004 taking over from the 1991 building legislation which I think National passed in that year obviously with the contribution of a previous Labour Government having done some of the groundwork. This is not something that I would reflect on with any sort of particular goodwill actually because I think we both made terrible mistakes and as a result people have paid for them with their lives and with their livelihoods. So I do not think anyone has anything to reflect on with any particular joy in that regard.  
But she talked about penalties going up for building consent issues. Well that does not improve things for consumers at all. She talked about better information for consumers. Well that does not actually protect them when the company has got no money when it actually collapses. And I would like to refer her to the particular section of the regulatory impact statement that she has avoided reading to the House: “Officials have also considered arguments for shifting to proportionate liability which would be a major change to the liability framework. While not without benefit it would also have drawbacks including likely requiring mandatory surety”.  
And that is what this Government cannot stand. It cannot stand anything that provides real protection. It is all smoke and mirrors. We are going to let this bill go to a select committee but I am saying that we are going to be certainly calling on people—not just consumers but people in the building industry themselves—to have a real good look at this legislation and ask themselves the question whether it provides protection for anyone. I can speak as somebody from Christchurch who has had the recent experience—not so pleasant experience—of having lived through a series of earthquakes that have caused great damage to our city. I am deeply concerned that the Minister who is responsible for this bill Maurice Williamson heads a department that is about to be folded into this new big— 
Darien Fenton 
: MoBIE 
Hon LIANNE DALZIEL 
: MoBIE—what does it stand for? The Ministry of Business Innovation and Employment. I want the next speaker from the National Government to answer this question: why would you roll in the two departments that are the subject of royal commissions of inquiry before they have reported and before they have made a single recommendation to the Government? Why would you fold them into a single department before that? Well I have to say that the commission of inquiry into Pike River obviously relates to the Department of Labour practices and that is why it is so vital that this concept is put on hold in the meantime.  
But let me also say that the royal commission into the Canterbury earthquakes and the building failures that occurred there is going to produce some extremely useful information not just to this current Government but to Governments in the long term. It is the most resourceful of commissions of inquiry because it has actually managed to bring together in one resource a range of informants and information people who have made submissions and people who have been asked to make submissions and we are gathering the best possible information in relation to building safety that this country will ever have the opportunity to have. And if we are to actually respect those who lost their lives in that earthquake then to learn the lessons from what that teaches us is the most important thing that we can do. I urge the House to think on this very carefully.  
The reason why Labour unlike New Zealand First is supporting this bill to select committee is that we want to show good faith to a Minister who has shown good faith to us. He briefed us on this legislation; the Green Party mentioned that he had done so. He has worked I think in a very open way with members of this House in ways that perhaps some of his colleagues do not always see as important. But when you are dealing with buildings which are not just around the safety issue but people’s lifetime savings are committed to their family homes you know these issues are important and it is important to engage with all political parties. So that is why we are going to let the bill go to a select committee. But I have to warn this House that unless there are substantial changes to the detail within this legislation then our support for it will not carry on beyond its report back to this House. 
 But I believe that we actually have a Minister who has taken the issues of building and construction very seriously and does want to see significant changes in this area of the legal framework which is so important to our daily lives. We are willing to work with him to get the changes to this legislation that will make it work.  
I want to say that the legislation itself does focus very much on residential homes but we still have major problems with buildings in this city in Christchurch and in Auckland that have been built to a standard that is not sufficient to stand up to the seismic activity that—we now know—parts of our country are exposed to. There are buildings in this city where I will not go and the reason is that I believe they are not safe. I believe it is important that we understand all of these issues very carefully so that we are able to provide the best possible support to those in the industry who require that support and also to enable them to speak out without fear of having their reputations destroyed as it were by those who want to avoid fronting up to the issues they are raising.  
So I think it is very important that we take this bill very very seriously. But it is not good enough. I am actually quite concerned about the issues that New Zealand First has raised. Members have been talking about self-regulation but in the environment that we have been in in respect of Pike River and the collapses in Christchurch I think one should be very very careful about going down that track.  
Although we are not talking about self-regulation it does not have to be expensive. It does not have to be difficult. It does not have to be problematic. It actually can be done in a way that is commensurate with the degree of risk that is faced and it can be risk-based and it can be proportionate in that regard. We have a real difficulty in Christchurch at the moment. We have detailed engineering evaluations being carried out on buildings on a daily basis at the requirement of the Canterbury Earthquake Recovery Authority. I know there are engineers who are refusing to do those reports. They are refusing to do them not because they are not competent to do them but because they are fearful of the consequences of not getting it right and ending up in front of a royal commission at some time in the future.  
I am saying this out loud because I think we in this Parliament have to be very cautious sometimes about what we do here and the impact that it has on behaviour out there. I think it is really important that we get the regulatory balance right so that we offer the protection that needs to be offered in these circumstances but also enable industry to develop in a way that supports the economic growth of our nation. We have got to get that balance right. I think it is really important that we think about this carefully. So we will support the bill’s referral to a select committee but we really want to see significant change before we support it any further.  
MAGGIE BARRY (National—North Shore) 
: 
 I spoke to the Building Amendment Bill (No 3) which was passed in March 2012. This Building Amendment Bill (No 4) of course is the companion bill. It is the second of two bills to implement the review of the Building Act 2004. This is all part of the wider picture with National’s Better Building Blueprint for better building which is designed to make it easier and cheaper for New Zealanders to build good quality homes and buildings.  
 The cowboys prevailed for too long. Others have documented the human misery and anguish that have resulted from people inadvertently buying homes that were completely unsuitable. This bill in particular addresses some of the issues around consumer protection and I think it also makes the builders who are the people who should be accountable more accountable and that is partly why I support it. The punishments are more severe and I think that when you increase penalties for failing to comply with building consents from $100000 to $200000 you are going to get people paying attention to that.  
The overall situation is that if you are a consumer and you are wanting to buy a property or to buy land either to amend a property or to build one from scratch how do you tell who the cowboys are? How do you know who is the right builder to go to? From now on we are going to be actually getting proper disclosure of information if this bill goes through. It will include information about the company about the people who will carry out the work about the skills they bring to the job and also about their track record. So it will be a lot harder for the individuals who have been involved with shonky practice or who are not properly set up and it will be easier for the consumer to not accept them and not have them build their house.  
This was difficult in the past because the cowboys were pretty well hidden. For a very long time we were held in their thrall and I think this bill goes a long way to help consumers understand how to spot the cowboys and make the sort of informed decisions that we need. After all the rebuild in Canterbury is about to start—$20 billion to $30 billion worth of building—and we have to be extremely careful that we do not get into the situation that has arisen in the past.  
I think that on both sides of the House we have all admitted that there have been problems and as Alan Martin used to say in the old TV ad: “It’s the putting right that counts.” Maurice Williamson is to be commended as the Minister for Building and Construction for working across parties and trying to come up with a piece of legislation that is going to be able to be passed and the bill’s referral to the select committee of course is a very important part of that process.  
But this began back in 2009 when we undertook the Building Act review. It was considered at that time that there was too heavy a reliance on building consent authorities for building quality so that responsibility had been taken away from the builders and the professionals and given to another entity which often ducked for cover. Change was needed. A culture change and an attitude change were needed of the builders and I think that the incentives for building professionals and tradespeople to step up to the mark are there. They need to take responsibility for the quality of their work and stand behind it.  
So consumers will have the knowledge that they will have mandatory written contracts for work that is valued over a prescribed amount. You will also have mandatory disclosure of this information by building contractors as I outlined and there will be these new offences for breaching those requirements. I think that the new provisions that are involved and inherent in this No. 4 bill are going to give more protection for consumers and I think that is a commendable thing.  
I think it is also important that you have the remedy of the defect and you need to have a time frame and I do agree that 1 year is a good period of time for all parties concerned. So if for example there is a problem with a building and you notify under the residential building contract within a year of completion there is an onus of responsibility on that builder to put it right. Those are the sorts of provisions in the bill that make it an important part of the overall package that National is bringing through so I am happy to stand and speak in support of this bill. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am happy to take a call on the Building Amendment Bill (No 4). Labour supports sending this bill to the Local Government and Environment Committee. As many of my colleagues have said we would like to thank the Minister for Building and Construction for the collaborative approach he has taken with regard to this legislation.  
I think that what we are seeing here tonight during this debate is that Labour supports the broad direction of this review but can see that there are some problems that need to be ironed out. My colleagues who have spoken previously have pointed to the fact that New Zealand First has raised some real issues that need consideration. The reason we are supporting this bill at its first reading is so that it can go to the select committee and be heard in this forum.  
What it is for us is that we see that this is a piece of legislation that is looking to fix and unpick a period of our history throughout the 1980s and 1990s when we removed many of the regulations around our building industry that were there to protect consumers and the people who were living in those buildings. As we have heard tonight many times over it was the removal of these regulations that gave us the leaky homes situation and it is also this situation that has made people feel unsafe in terms of the Canterbury earthquake and the surety of a house. Like my colleague beside me Lianne Dalziel as someone who lives in Christchurch the need to have good regulation around housing and home has become more apparent to us in the last 18 months.  
This is not about protection just in terms of whether the architraves in your house are right; this is about protections in terms of whether your house is going to hold up and you are going to be safe within the building and whether you will trust that that building is not going to be part of your demise. So we consider that this really does need to be given a good chance for these issues to be considered. We cannot just think about regulation in terms of building in terms of red tape and as something that needs to be skirted around. We cannot think of this as something that we have to remove to make an industry more efficient when it comes to something as fundamental as buildings in which people’s lives can be put at risk if we get this wrong. We have heard tonight over and over again that if we as legislators in this house get this regulation wrong then we do put people’s lives and we do put people’s livelihoods at risk and we need to ensure that we get this right. This is not consumer protection in terms of whether or not your television is going to work 6 months after you bought it. This is consumer protection in that you are protecting the biggest investment that anyone is going to make in a monetary sense and an investment that people are making in terms of their safety.  
We need to send this bill to the select committee as my colleagues have said. We need to give people a chance to give their feedback and talk to us about how it is that we can get these regulations right. It is our duty as legislators in this House to do this. We have to get these protections right. So I am happy to stand here in support of Labour sending this bill to the select committee. Thank you. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. Nga mihi nui ki a koutou. Kia ora. I rise to take a call on the Building Amendment Bill (No 4). We have heard countless times in this debating chamber the problems we have seen with deregulation in the sector and the leaky homes crisis. I would just like to kick off by acknowledging the comments by the member Lianne Dalziel. Countless times I have heard in this Chamber this side blaming that side and that side blaming that side. It was good to have some responsibility because actually it has been a cultural problem that we have had in our country. I would like to acknowledge that honesty that frankness. This is what we need to have going forward: a realistic appraisal of the issues facing us.  
As many members know the Green Party opposed the Building Amendment Bill (No 3) because it was piecemeal because it did not contain consumer protections. That is why we will be voting for this bill the Building Amendment Bill (No 4) its companion which came out of the building review of 2009. We have got those new sections 362A and 362S which relate to consumer protections.  
The bill does a number of small things. I think Phil Twyford was bang on the money when he said that it was a masterpiece of incrementalism. It does a few things such as the enhanced more comprehensive consumer protection measures. It clarifies exemptions from the building consents makes some amendments to the dam safety scheme and increases the maximum penalty. Our problem with the Building Amendment Bill (No 3) was the lack of the consolidated big picture with which we could have gone to the public of New Zealand and said that the Government had looked at the recommendations that came out of the 2009 report and was giving them a consolidated legislative solution. But instead we went down this piecemeal approach which saw the Labour Party and the Green Party vote against it.  
I will take only a short call but there are a few risks inherent in this approach. It is a deregulation. We are seeing less local body oversight. I could speak about the whole broader context that is the attack on local government which we heard about from Andrew Williams. This Government is reducing the role of local government. We have heard former Minister Smith trying to limit the functions of local government blaming its debt problem. The real debt problem facing this country is at Government level; it is not local government which is borrowing not half as much as central government.  
We have some concerns on warranties like what will happen if you have a fly-by-night company that does go bankrupt leaving the unfortunate homeowner or business owner in the lurch. One area picked up in the Kensington Swan analysis of the bill which I would like to see looked at at the select committee is around the continued responsibility by the original major renovator or builder of a residential property not by a professional builder when it is subsequently being sold down the line. Kensington Swan had the scenario where you could see a house having changed hands six times from the time the original homeowner made the major renovation or built the house. They are still responsible. I think the outcome of this is actually that we will see fewer Kiwis doing it themselves and building their own homes. I do not think that is the message this Parliament wants to send those Kiwis. The bill is a masterpiece of incrementalism. It is a bit of tinkering but we welcome it. We urge the public to make a submission.  
The National Party was elected to Government on the pledge of building a brighter future; I guess it is building a future of some measure for Skycity for Warner Bros for the frackers for the drillers. When we are talking about building we actually need a bigger approach to these issues. Now is not the time for incrementalism. Now is not the time for tinkering. There are huge issues facing us from the homelessness crisis the housing affordability crisis in our big cities the thousands of cold damp rentals making our kids sick the lack of State houses and the myopic solutions which from the Government’s perspective are simply to wipe people off the massive waiting list—at one point it was nearly 10000 people—for State housing. Coping with the leaky home fallout the earthquake retrofitting across the country the lack of apprenticeships—these are huge issues that need serious thought by the Government and by this Parliament but all we are getting is this bill. Still we will be voting for it to go to the select committee. We urge the public and the sector to have their say and we will be going into further votes with an open mind. Kia ora. 
PAUL GOLDSMITH (National) 
: 
 I am very glad to reassure the member who has just resumed his seat Gareth Hughes that we are indeed working towards a brighter future for all New Zealanders not just for the people he mentioned. I am very happy to speak in favour of the Building Amendment Bill (No 4) and I agree with Lianne Dalziel that it is indeed important legislation and worth careful consideration at the select committee. I am looking forward to that opportunity.  
This bill is about productivity and consumer protection in particular. We have heard many lamentations about housing affordability and that is a serious issue for New Zealanders. There are lots or reasons lying behind that. I always find it intriguing particularly when the Greens are concerned about housing affordability as they are very much on the side of those in councils who are very determined to limit the amount of land that can be used for building houses which is one of the biggest drivers of housing unaffordability in this country. You cannot have it both ways. But certainly the building sector needs to be more efficient and that is one element of the costly housing that we have in New Zealand.  
This bill does a number of things and I will not go into everything. Unlike the regulators over there in New Zealand First I am very pleased to see schedule 1 listing a number of things that do not require consents. I think we should strike a blow for liberty from time to time and the ability to build a retaining wall up to 1.5 metres on your property without having to go through hoops of fire seems to be a good idea to me.  
The mischief that this bill is really focused on trying to deal with is the extremely risk-averse behaviour that is rife throughout the building industry which is due in large measure to the leaky homes crisis which has indeed been a terrible blight on many families and many house owners around the country. I have certainly renovated my house a couple of times in recent years and have seen tens of thousands of dollars added to the bill for apparently little benefit aside from ticking boxes required by local government. I remember joking to one of the builders in my house that I did not actually need to land a helicopter on top and that all this wood was perhaps not necessary. But that is the kind of— 
Hon Member 
: John Banks might come and visit. 
PAUL GOLDSMITH 
: There was nobody else involved I am bound to say. This bill focuses on consumer protection. The problem is that frequently there is no formal written contract setting out the nature of the agreement and the rights and obligations of each party. Many consumers and builders are unaware of the implicit warranties. It is difficult and costly for consumers to hold practitioners to account and the consumer has little leverage over the practitioner once building work has been paid for. There is little incentive for the practitioner to repair defective work or pay compensation. These issues are exacerbated very much by the fact that some developers and designers and builders actively manage or set up shelf companies in order to get around a liability.  
So an important part of the bill is implementing the policy decisions about introducing enhanced and more comprehensive consumer protection measures including mandatory written contracts for work valued over a prescribed amount and mandatory disclosure of certain information about building contractors such as what sort of company structure they have in place and that I think will offer a considerable amount of clarity and openness as consumers are making what is one of the biggest decisions of their lives. They will have much more information available to them.  
Where does that get us? Well I think the bill will support responsible builders and separate the professionals from the cowboys. I hope that further down the line in the future the bill will create an environment where greater trust is restored in this industry. Like any industry I think that trust is the key to having an efficient industry because you cannot legislate and regulate for every circumstance. You have to rely on trust and that is what we are trying to rebuild through this legislation. That I think ultimately will be the key to having a more efficient sector. This is a complex area and it is an area where you can make mistakes down the line. So I am looking forward to a careful consideration of this during the select committee consideration.  
Bill read a first time.  
Bill referred to the Local Government and Environment Committee. 
Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill 
Third Reading 
Hon DAVID CARTER (Minister for Primary Industries)  
on behalf of the Minister for Land Information: I move  
That the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill be now read a third time 
. I am particularly pleased and proud to see this bill back before Parliament tonight. I am thankful for the cooperative working relationship I have established with the Hon Maurice Williamson as Minister for Land Information.  
Tonight we see the final stage of what has been a very unfair and very unfortunate battle with a relatively small number of highly specialised South Island high country farmers. This battle was started by the former Labour Government for reasons that fail any logical explanation whatsoever. The former Labour Prime Minister Ms Helen Clark did enjoy the high country. She was known to have an affinity for the high country. She was known to go there and spend her time trekking the high country and her adventures through the high country were well publicised. But if she had an affinity for the high country she certainly had no affinity at all for the farmers and their families who try to eke out an existence in this very hostile and fragile environment.  
What drove Helen Clark’s jealousy and distaste for those high country farmers is something that we will never know for sure. There are lots of rumours around the high country as to what drove this jealousy and this hatred from the former Labour Prime Minister. One rumour was that she had trespassed with her trekking party on to private property. All she had to have done was ask for permission. But of course with somebody as arrogant as Helen Clark she did not do that. And of course the farmer aggrieved by the fact of finding somebody on private property asked her to leave. Whether that was the reason or not the point I make is that she simply had to ask and that access would certainly have been granted.  
Having come up with a dislike of and hatred for these farmers Ms Clark and her Labour Government went out to get these guys. They dramatically increased the rents for the lease that these leasehold farmers would then have to pay to the Government. She was ably assisted in this process by the Hon David Parker who I have no doubt will make some contribution shortly in this debate because he had a similar atrocious attitude to these high country farmers. Again I do not know why he hated these people. It may have been because he came into Parliament as the member for Otago representing the majority of those people and as constituents they quickly realised that he had no affinity with them so they dumped him after 3 years as their member of Parliament. I can now say they are very well served by the current member for that area Jacqui Dean who has got to know those families and to understand their issues. She has developed an affinity with those high country farmers.  
What drove the hateful attitude of Mr Parker and Ms Clark towards the farmers is unknown but what they did then was march the rents up for those properties by not doubling not tripling but in many cases increasing them by 10 times. In cases they drove the rents so high they were higher than the gross income that the farmer received from that property. Mr Parker laughs at this but that is how stupid his policy was. Mr Parker never realised that the major income for those people was an annual wool cheque. Most of their income came from merino wool. He was expecting the rent to be higher than that wool cheque absolutely disregarding the fact that it costs money to run these farms. This Government wants to see these farmers with enough money to spend on weed control wants to see these farmers with enough money to spend on pest control. But Mr Parker wanted to make sure there was no money left for those expenditures.  
So what National did in the 2008 election campaign was to campaign to fix this ridiculous policy. We said we would make sure we established rents on the basis of what a farmer can earn from his land. In times when wool prices are good farmers can afford to pay more to the Government for the rental of that land but equally in times when wool prices are not good they cannot. I want those farming families to stay on that country. I want them to be good enough and to have enough money left to sustain themselves and their families and to improve the property. If they do not improve the properties—and Mr Parker and Ms Clark drove them off the properties and it all fell back on the taxpayer and on the Department of Conservation. You ask any person who logically knows that country who will look after the high country better: a Government department or those farmers who have been there for generations. I tell Mr Parker that it will not be the Department of Conservation. That is not its skill set.  
The responsibility comes back on the Crown if these farmers are not able to physically survive on that land. We have to make sure that we deliver income-related rents and that is the policy that we have espoused tonight. We progressed the legislation as well as we could through the first term of the National Government. We did not get it passed before the last election but I gave my word to the high country farmers that we would do it as soon as possible in 2011-12. We are doing that tonight.  
The final point I want to make is that when the policy was released on 3 August 2010 the Labour Party through Damien O’Connor supported it. Mr O’Connor said on 4 August: “High country rentals based on earning capacity is a good principle on which to base lease payments to the Crown …”. He went on to say: “I am sure farmers will welcome the decision and get on with farming and protecting their leasehold properties”. I agree with Damien O’Connor. He saw the sense in this policy yet when the bill finally came back to the House for its first reading Labour opposed it. Damien O’Connor had been completely embarrassed and rolled by his caucus.  
Hon David Parker 
: Rubbish! 
Hon DAVID CARTER 
: Mr Parker says: “Rubbish!”. Why did the Labour Party through its spokesman at the time support it when it was announced yet when the bill came into the House for its first reading the Labour Opposition opposed it? There can be only one answer Mr Parker unless you are as illogical about this as you were about your original policy. Damien O’Connor got rolled again. It is because of David Parker leading the debate in their caucus room because Mr Parker has never understood these families who farm the high country.  
In closing I want to thank the Primary Production Committee under the superb chairmanship of Shane Ardern for the work it has done in considering the bill. To all of those who made submissions to help get the bill even better I express my appreciation. There has been significant support amongst those submissions. The committee did introduce some useful amendments including the purpose clause. This bill will make the process for setting rents for pastoral leases much more transparent and much more predictable. The process will be less expensive for the Crown and less expensive for the lessees. Crown pastoral leases are a unique form of tenure under which the farmers do carry out their pastoral activities while preserving conservation ability. The Crown gets considerable ecological benefits from having pastoral leases on these unique landscapes of the South Island high country.  
Finally I want to thank officials from Land Information New Zealand and the Ministry for Primary Industries for their help and their work in what has been a complex task of developing this new rental system. The Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill will eliminate the huge amount of friction with the Crown that was developed by Mr Parker and Ms Clark. We have restored the lessees’ confidence in Government. 
Hon DAVID PARKER (Labour) 
: 
 What balderdash we just heard from the Minister for Primary Industries for National. The reason that the National Government is passing this bill the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill is that the practice that it wanted to adopt under the prior law was illegal. That is why it has changed the law. To accuse me and Helen Clark of acting improperly when we were just enforcing the law seems a little bit unusual to me as a legislator. 
Hon David Carter 
: You lost it in court Mr Parker. 
Hon DAVID PARKER 
: Actually I will deal with some of the points that you raised Mr Carter because your understanding of the issues is obviously flawed. When I became Minister for Land Information the cry of the pastoral lessees was that they wanted the Government not to force them into tenure review and to respect their rights under statutory leases. I was at a meeting just the weekend before last where someone came up to me and said: “Oh I remember that first meeting with you”—speaking to me—“as then Minister of Land Information when you had that first meeting with the pastoral lessees.”  
I remember them saying to me on behalf of the Government to please respect the lessees’ rights under pastoral leases. My response to them was: “Yes I will.” They said “Please don’t force us into tenure review” and I said “I agree. I won’t.” And I said: “My duty as the Minister is to enforce the statutory lease on behalf of the lessor because that is who the Crown is and I am going to do that and I am going to only accept tenure review outcomes where I think they are in the Crown’s interest and I am going to do that.”  
That is all I did. I enforced the law. It seems pretty novel to the National Party that one might do that but that is all I did—that is all I did. It is true that the value of some of these properties has gone up hugely. Actually when values of properties go up rents normally follow. That is what happens in the private sector. In fact I think Mr Carter might own a property or two and occasionally when the value goes up I think you might put the rent up. Oh but not when you are the Minister and you have custody of these properties on behalf of the Crown and a voting section of your population. What you do then is you put the rent down for your mates. If this was a point of principle as to why you were doing this I could understand it but there are other mechanisms that could be used to address this.  
What we in the Labour Party found was that some of these rents were ridiculously low. I will give you one example. We had complaints from someone who had a big station in the Kyeburn area. They said it was worth millions of dollars that high country runoff grazing to their lowland farm. How much rent do members think they were paying for this thing that they said was worth millions of dollars to the value of their lowland farm? Less than $1500 per annum—$1500 per annum—plus GST. Less than that—I think it was about $1250 plus GST. It was an absurdly low rent.  
When I was Minister and we had some issues that needed to be resolved in the high country I thought: “Well I’ll apply the law”. So we got some valuation advice. It turned out that we had inconsistent valuation practice and some people were getting rents set on one basis and some people were getting rents set on another basis. So I took advice from Crown Law and I said: “What’s the correct basis to set rents?”. I then instructed the department to assess rents on that basis. These rents are set according to a statutory formula: not 10 percent of the value not 5 percent of the value but 2 percent of the land value excluding improvements. Improvements are excluded because they are already the property of the lessee but the lessor is entitled to rent under the current law which is changed by this bill at 2 percent of the land value excluding improvements if paid on time.  
When we did that we found that some of these properties are being purchased by people who are not buying them for pastoral values alone. People are paying sometimes $10 million for these properties because they are postcard properties. They are picture-postcard properties on the edges of lakes. They are on the edges of Lakes Wakatipu Wanaka Hawea Tekapo Ohau and Pukaki. People who are very very wealthy are on occasions buying these properties as effectively giant holiday homes. Sometimes they are being run as time-shares where a number of wealthy people own fractional interests in these properties and they are effectively using them as a giant holiday home. They purchase them knowing that the rent is 2 percent of the land value excluding improvements.  
In respect of those people I do not think they should get a rent discount. I do not think they should but there are other people who should. There are some farmers who extract only pastoral values—and Mr Carter has said that they have owned these farms for generation upon generation—and they cannot afford to pay the high rent. I have always acknowledged that. When the Labour Government was in we acknowledged that. I wrote to every one of those lessees personally. I can remember what a darned boring job it was signing out 236 letters or whatever it was to these people and I did it twice. I wrote to each of them and said: “If you cannot afford to pay the rent please come to us and we will negotiate a discount.” We wrote to every one of them.  
We said: “Look sometimes there are problems of access to adjacent rivers and lakes that we want to sort out.” because some of these properties surround lakes and there is no decent access for New Zealanders to go through these properties to get to the lakeside. I wanted to regularise access so that New Zealanders could access their lakes and rivers. I also said that there are occasions where we want to stop wilding pines spreading and we might like some wilding pine control or at least access on to the land to control the spread of those wilding pines. We also said explicitly in this letter—I still have copies of the letter and I remember writing them—“If you have an excessive rent that you can’t afford and we don’t need access to a river or lake and we don’t need wilding pine control well we’ll give you the rent discount anyway if you can’t afford to pay.”  
The lessees chose to say that they would not engage in this debate because it was coming to the end of our third term and they thought they would take their chances on being able to delay this long enough so that the Government would change and they could go through the back door and see that duke Mr Carter who would in the face of a $13 billion deficit give up on rents to multimillionaires who paid these prices knowing that the rent was 2 percent of the land— 
Hon David Carter 
: Here’s the envy! 
Hon DAVID PARKER 
: It is not envy. It is not envy; it is a fact. Let us take the example of Shania Twain’s partner Mutt Lange who purchased a property up in Central Otago Mount Soho Station. He has actually done some very good conservation work. He has done some very good work up there and he farms the property very well but do we really think that we should be giving that person a discount when they paid many millions of dollars for that property knowing that the rent was 2 percent of the land value excluding improvements?  
What Mr Carter says is a bit like saying that the rent for a commercial property in Remuera ought to be the same as the rent for a commercial property in South Auckland. That is the logic that he is using. It is a nonsense because the two properties are of different values and the law said that they should be paying rent on the basis of land value excluding improvements.  
Mr Carter the other thing that I would say is I would take you back to that original meeting that I recounted to you where the lessees said they were fearful that the Government would change the law—they actually put this to me. They said: “Please don’t change the law on us. It’s terrible. This is sacrosanct. Don’t change the law.” They were fearful—and this was in the newspapers at the time—that the Labour Government would change the law and that that would be somehow interfering with their private property right. Well actually what Mr Carter is doing is opening Pandora’s box here because he is legislating to interfere with the Crown’s property right in these leases. Once that key is turned and that door is opened it has consequences in the future and it will have those consequences.  
Mr O’Connor said “Yes income-related rents are fine for those people who need them.” and we have said that. I have actually explained the letters that I wrote to similar effect to the lessees. But the people who do not need them who paid multimillion dollars for these properties knowing that the rent was 2 percent of land value excluding improvements ought not to be given a discount particularly when you are running a $13 billion deficit like this Government is and the deficit is worse as a consequence of this bill.  
Finally can I say that there has never ever been any hatred from this side of the House towards lessees. I value that heritage farming that historic practice in the high country. I actually think lessees protect against overdevelopment of the land. I do not think all these leases should be forced into tenure review but it does flow through to tenure review outcomes in a way that is unjust to the Crown. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is a pleasure to rise tonight and speak in favour of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill and can I say so on this basis. Having listened to the last speaker David Parker you would have to really question how the late Howard Paterson got it so wrong and how the good folk of Otago actually made a mistake—only once and they soon corrected it and now are well represented by the member of Parliament for Waitaki Jacqui Dean who does know this issue well and does represent these people very well.  
The concept that we are being asked by the other side to believe is that the Crown’s ownership in this land is such that a massive discount has been given to these folk in the way that the rents are being set. The real irony of that is that it was the last Government that actually said the Crown’s ownership in this land is worth nothing—absolutely nothing. In fact it could be less than nothing if it is possible for that to be. The last Government went in and it bought two stations Birchwood and St James and it paid a price that your colleague Mr Deputy Speaker that good farmer from Southland tells me was five or six times—I said it was five or six times and he said it was more than that—more than the value per stock unit of any equivalent merino run anywhere else in New Zealand. So what does that mean? If the Crown owns the land the Crown goes and buys the lease and it pays five or six times more than what anyone else would pay for a merino station anywhere in New Zealand what value does the Crown place on the freehold part of it? What value did the Clark Government place on that? Zero or even below that if it is possible to be on the other side of that balance. So to say that the leases are too low on the basis that 2 percent of the freehold value amounts to X figure—and it will be different for each particular station—is so misleading and it is the reason why so many of these people have felt so insecure for so long.  
Let us just have a look at what exists here. We have got 212 leases 112 rents in dispute at the Land Valuation Tribunal—so that seems to be a system that is not working too well; something needs to be done to fix that—and $2 million project rents under the new system. So there is an income for the State straight away. Some have suggested doing away with that by charging an amenity value—that is making the price of the lease such that you cannot make a profit from farming merinos because merinos that have a lovely view of Lake Wakatipu Wanakaor somewhere are obviously going to earn a lot more money from their wool than those that are hidden in the back of my good colleague here Colin King’s Kaikoura electorate or somewhere.  
As an aside I actually was flicking through the channels on television on Saturday night and  
Country Calendar 
 was on. I had not seen it for I do not know how long and I happened to stumble upon it. It was featuring a high country lease 5 hours from a tarsealed road—5 hours. You had to travel in a vehicle for 5 hours before you got to a tarsealed road and when you got there you had the tearooms and another couple of hours to get to— 
Hon Maryan Street 
: Sounds like Taranaki—your country. 
SHANE ARDERN 
: It was on  
Country Calendar 
. I thought that here was a rich farming family driving around in their 15-year-old Toyota Hilux that had done a million kilometres and that they were wealthy living way in the back country there and farming. They had a daughter who had recently returned from being overseas for many years. She had decided to come back because she was born and bred there and loved the lifestyle and she brought her family and her husband back. I just looked at that and I wondered how a Government could look upon that family as being vandals to the environment who were ripping off the system and not paying a fair rent and say that they should be taken off the land so that the Crown can take it back. I bet you the Department of Conservation could not find that station let alone anyone from the Department of Conservation driving 5 hours from the end of a tarsealed road to get to it. So whatever is needed to make that family successful and sustainable on that land is what the State has to do in response to that.  
There is something like I understand $3 million worth of merino wool out of just the Otago region alone. I am not sure whether that figure is correct—and the member may be able to correct me—but effectively if you take that income out of there it goes completely out of that community. It just takes that money out of that community. The conservation investment that these families make in the sustainable management of this land is such that the Crown would be likely to have that amount of liability to maintain the land in anything like the state it is in now. So to suggest that somehow or other the National Government is doing some sweetheart deal for its rich mates when you look at the facts is so far from the truth. You may find one or two examples somewhere that you might be able to hold up and it is interesting to note that those members hold up the foreign investors whom they allowed to buy the land when they were in Government. You know how did that get past the Overseas Investment Office? If having foreign ownership of the land is such a dreadful thing how did that happen? I am not saying it is a bad thing. In fact the previous speaker said what a wonderful job those investors were doing of farming it and he talked about the amount of money they were investing in conservation values there. The land and the property will be in better condition when they decide to sell it—likely back to a New Zealand owner—at the end of their tenure there. I do not see any downside from that at all only upside. So it is with pleasure that I stand tonight in support of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. Thank you. 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
: 
 I would like to acknowledge the previous speaker Shane Ardern as the chairman of the Primary Production Committee. I think he did a good job with a difficult bill and one that he actually if he is true to himself will admit does challenge some of the basic tenets around property rights—something he has advocated for so strongly—and the ability of a property owner to get a rightful return on that property.  
Before I go any further I would like to acknowledge one person whom I have always respected as a champion of the high country and someone who passed away recently: John Aspinall. He was a gentleman. He was kind. He was generous with his time with his land and with access through his land. I would like having not had the opportunity to go to his funeral to acknowledge in this House his contribution to the high country and in particular to the Walking Access Commission and the good work he did in that area. I would also like to acknowledge Jonathan Wallis who as a new emerging leader of the high country has put in a lot of time to bring this issue before us in Government and the National Government. I am sure he would be happy with the passage of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill but I know that as a smart farmer deep down he acknowledges that this bill does create some dangerous precedents and it is the property rights one that I raise.  
It was interesting as Mr Ardern was going on about it because I think he comes from the dairy industry and I have yet to find a farmer who in times of difficulty has been able to set aside the charges for grazing or set aside reduce or in fact increase the income for a sharemilker if he needs it. The fact is that solid commercial contracts are written into the dairy industry to ensure protection for both parties and indeed that is the only way that commerce can go forward. The certainty which my colleague David Parker referred to is not unfortunately being entrenched by this legislation. In fact we are opening the long-term situation up to greater uncertainty because if there is one thing that this Parliament usually does it is to rectify law that is bad law.  
Although I support the high country—I love the high country—I have not had enough opportunity to be there but I have certainly spent many many days and weeks there in different ways: skiing walking on farms helping chase a few sheep around or chase a few deer. It is magical it is iconic and it is the true New Zealand. The people who have lived and farmed on these properties have done it hard. As the previous speaker said there are some properties that are small that are marginally economic and where families have battled through heritage really and pride to stay on those properties. Indeed when we put up the proposal to implement the law and to actually implement commercial leases on these properties it was going to cause hardship for some which is why I personally went to Treble Cone in the summer—I usually like going there in the winter—and faced a whole lot of high country farmers and passed on that message. They did not all like it but I said “We as a Government are prepared to sit down and offset the increase in rental.”  
The increase in rental was fair and commercial. It did however for some create hardship and that is where we wanted to go. Income-related rentals are something that we have implemented on the basis of reducing hardship for people in their own homes yet the National Government has opposed that time and time again. In fact what it did in the 1990s was to offset the acknowledged hardship and bring in an accommodation supplement which was actually a subsidy to the landlord to ensure that people could afford to be there but it just simply subsidised the landlord. In this case that is probably unlikely to happen and the taxpayer will miss out.  
If I bring the argument round to the start it will create uncertainty and although there may be some joy in the high country from this I am sure that a future Government—and I am not saying Labour; we have not considered it properly at this point—will see that this is not quite right in the same way that the National Government in 1997 saw that the situation with Maori reserve lands was not right and adjusted the legislation to allow the owners of the land Maori to have a fair commercial rate of return and rental that was fair from their land. That situation needed to be rectified and I think a future Government will do the same thing here. I hope that does not create hardship for high country property owners or lessees who have property rights but do not own the land because they might have capitalised into the price they pay for that lease the deal that this Government has put on the table because it is a bit of a false deal and it is one that will not hold up.  
If I come back to the minority view and report as stated in the commentary on the bill here it is quite clear: “Labour supports the continuation of tenure by leaseholders on Crown pastoral lands to ensure sustainable management and productive utilisation of high country leases.” We want them to be farmed well and for the most part they are. We want farmers to have the money to do the pest control to do the weed control and to have a good fair living and rate of return on their efforts just as the landowner the Crown wants the right for a fair rate of return on its ownership of the land. However back to this: “this bill challenges the basic tenets of property rights between the land owner and lessee.” That intervention is not right and as I say will be rectified.  
The calculation of what that rent will be is another dilemma created by this bill because what is being asked of the valuer is to work out the land value exclusive of improvements—that is the land that was there 150 years ago if you can imagine back that far—and calculate the number of stock that could be run on that piece of land. It is a fairly tall stretch I would say. I guess we could have modern-day efficient merinos we have to calculate; none the less it is a bit of a hard ask. So the valuer has to work out how many stock could have been run on that. There were moa around at that time of course as well or going back a little way so I am not sure of the grazing impact of the moa versus the sheep but none the less this is the theoretical calculation that should occur. Then we have to take in stock values. They change every Sunday night depending on the meat companies ringing up their mates and working out what they should pay for sheep or lamb and I do not want to go into that. The value of stock is something that is not fair and objective at all times. So the valuer has to calculate those two things then work out the economic return on that land and then do a calculation—quite a complex one—around what the rent should be.  
 It is quite frankly ridiculous. It is quite ridiculous because the eyes of everyone on the select committee started to glaze over when they thought of the potential for subjectivity in this whole area and that is not what we want for people running a commercial enterprise. They need certainty. They need to know what their rent is likely to be. So this bill although comforting a few people in the short term is not a good long-term solution. We want to see people on the land farming it well protecting the environmental values and protecting the iconic images that sell this country to the rest of the world. Labour cannot support the bill but we do support the high country farmers. We do support their efforts and we want to offer them certainty into the future. What the National Government has done is offer them a lollipop and unfortunately when the sugar runs out they will have to face reality.  
EUGENIE SAGE (Green) 
: 
 Tena koe. Debate on the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill has been wide ranging and it has gone up-hill and down-dale much like the lands that it will set the rentals for. Nothing that we have heard in this debate has convinced the Green Party to change its position of opposing the bill. It is a bad bill which favours pastoral lessees at the expense of the Crown and the public. Some Government members persist in characterising Green and Labour opposition to the bill as an attack on high country farmers. It is nothing of the sort. It is a debate based on principle on how rentals should be set for the remaining 200-plus pastoral leases covering 1.61 million hectares of the South Island high country and on how the Crown should manage and treat its interest in these dramatic and distinctive lands. It is a debate on whether we should set rentals in a way that is fair to both lessees and the Crown or in the way that this bill does which benefits the leaseholders at the Crown’s expense. The bill charges lessees a rental for their rights to exclusive pasturage but not for their rights to exclusive occupation which they also enjoy. This means that the Crown is giving away a significant share of its interest and depriving taxpayers of a return on the true value of the Crown’s pastoral lease assets.  
The Green Party opposes the bill because it represents the failure by the Crown and by Land Information New Zealand to protect the public interest in pastoral leases. The Land Act 1948 as Mr Parker has mentioned has provided for pastoral leases to have rentals based on 2 percent of the unimproved value provided you pay on time. That has been in place for many decades and it is a very cheap rental. By providing for discounted rents that take no regard of location values quite unlike the rents for most property values in New Zealand the bill will decrease the value of the Crown’s interest and increase the capital value of the leaseholder’s interest. That division of value in the pastoral lease between the lessee and the Crown changes in favour of the lessee and that will further worsen the poor outcomes from tenure review. It will lead to the Crown virtually giving away its interest in Crown pastoral leases during the negotiations because of the bargain-basement price per hectare put on the value of the Crown’s share.  
 Research by Lincoln University’s Dr Ann Brower analyses the returns to pastoral lessees and to the Crown from tenure review settlements between 1992 and 2012. That research highlights the inability of Land Information New Zealand to advocate for and represent the interests of the Crown. Dr Brower’s work is rigorous though it is unpopular with National members because they do not want the facts. It shows that since 2007 lessees on average have received more than double the per hectare payment from the Crown for land that is retired from grazing and restored to full Crown ownership as conservation land that they received prior to 2007. In tenure review settlements prior to 2007 the Crown paid lessees an average of $159 per hectare to relinquish pastoral lease land. Post 2007 the average jumped to $343 a hectare yet on the other hand lessees paid the Crown an average of only $67 per hectare to freehold prior to 2007 and an average of $65 per hectare— 
Shane Ardern 
: What did they buy from them?  
EUGENIE SAGE 
: —after 2007. National members are interjecting because they do not like the results of this research. It has been an objective analysis going through the returns.  
Dr Ann Brower’s analysis— 
Hon David Carter 
: She provided the conclusion before she did the work. 
EUGENIE SAGE 
: —no—shows that the Crown paid runholders around $22.6 million more to buy the option to graze unforgiving high country land and often land that was deemed unsuitable for farming use than runholders paid the Crown for the option to subdivide and develop pastoral lease land. Dr Brower’s research also shows that between 1992 and 2008 46 percent of the land the Crown sold for $6.9 million has since been onsold for $135 million. So pastoral leaseholders have been able to sell land at between 2000 and 27000 times the price at which they purchased the freehold. Land Information New Zealand representing the Crown has totally failed to take account of the location and amenity values that are part of the Crown interest. Land Information New Zealand has failed to take account of the option to onsell when it has been negotiating those tenure review outcomes. Lessees have enjoyed windfall gains as a result.  
As Dr Brower notes the fact that the Crown has consistently undervalued the development options in tenure review suggests that the Crown is “pathologically unwilling or politically unable to exercise its power on its side of the table” in tenure review. In just one example on Rhoboro Downs near Twizel the former lessee was able to privatise 4648 hectares for $55000. Subsequently 127 hectares of that land was onsold in one parcel for $1.9 million. On Pukaki Downs the lessee was able to privatise 3722 hectares for $191000 and then onsell 582 hectares of that for $4.665 million. National members call this the politics of envy. It is more the politics of stupidity when we have a $13 billion debt not to get the full benefits of these assets when they are privatised.  
The Green Party’s opposition is also based on the uncertainty in this bill about whether the Valuer-General’s determination of carrying capacity for the purpose of setting a rental will include a thorough ecological assessment of the pastoral lease. Such an assessment should calculate how many stock can graze the land without harming the vegetation cover such as tussock or native shrublands. 
Hon David Carter 
: It happens already. 
EUGENIE SAGE 
: It does not. The language in new Part 1A inserted by clause 6 of the bill and its references in clause 23A(2)(b)(ii) to using “scientific evidence” and “information about the land” is vague and woolly. The Minister in the chair chose not to take a call during the Committee stage to explain whether there was any intention that ecological assessments would be done to help determine carrying capacity. That is really disappointing because it suggests that the Government is not interested in determining whether high country lands can be better managed to maintain healthy tussock cover to reduce soil erosion to control the spread and dominance of  
Hieracium 
 to protect wetlands as natural sponges to safeguard water quality and to protect the landscapes on which so much tourism marketing depends. So it would be helpful if the Minister did clarify that.  
The landforms we see on many pastoral leases particularly around the southern lakes and elsewhere show their glacial past with their smooth hills. They have got a jumble of moraine boulders and they have got extensive outwash plains. Those landscapes have been millennia in the making. Privatisation through tenure review inevitably leads to more intensive development whether it is through subdivisions for second homes or for new vineyards with their tightly clustered rows of vines. The patterns the colours and the texture of the landscape change and it is domesticated. The indigenous vegetation disappears. This bill will exacerbate that. It will provide windfall profits for lessees and it will provide for unfair rentals and poor ecological outcomes. That is why the Green Party opposes it. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to speak in the third reading of the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill. To open up I would have to take strong exception to the position that the Green Party has pitched its arguments at because when we listen to the arguments nobody has brought up the Crown’s case at Minaret Station. The farmers took the case against the Crown on the way the rents were set and the Crown lost. When we listen to Labour members speaking and we listen to the Green members speaking that fact has never come up—that there was this precedent where the Crown was taken to task at the Land Valuation Tribunal and it lost.  
Another point that has not been made adequately is that the principles behind the original Act the Crown Pastoral Land Act were always intended to take into consideration the earning value of those properties. So what we can say on this side the Government side of the House is that we are restoring those principles so that those farmers can have confidence that they can bank their businesses and they can carry on farming in the successful way they have farmed for the better part of the last 150 years. We hear all those wonderful romantic notions about flora and fauna but let us not forget that these people have successfully farmed through economic cycles and through climatic cycles and they have maintained an asset at the very best cost back to the taxpayer of New Zealand.  
We hear the word “fear” mentioned. When we were on the Primary Production Committee we heard a lot of fear from those farmers because of the uncertainty that was being created by the culture of what we describe as envy which we also on this side of the House see as a dislike. I would not use the word “hate”—it could be interpreted as that if it were directed at me—but it was certainly a strong intention of unsettling what had been a very fine process. 
 When you stop and think about it the money that is directed at looking after these properties that are tenure reviews or pastoral leases is very much a fine balance. We want the Crown in there as well because with the introduction of rabbits and  
Hieracium 
 and things like that these families these little communities that are surviving up in some of the most inhospitable country in New Zealand are quite fragile communities and they do need to be able to have certainty. When we reflect on all that we have heard—we have heard dissertations on academic levels—these families need to be able to front up to their banks. To be able to fund their businesses annually they need to be assured that the way the rent is set is sustainable from a business point of view and that they can have confidence in that direction.  
One other thing that has not been touched on is the wonderful job that Rob Davison and the economic service do for New Zealand in valuing and understanding what properties can run and how they function. I have absolute confidence and I know Rob Davison and his team from the economic service will be eager to get into this situation when this bill becomes law and those 113 lessees at the moment who are before the Land Valuation Tribunal can opt into this piece of legislation because in conclusion it re-establishes the principle that rents should be set based on what a farm can produce. Thank you. 
RICHARD PROSSER (NZ First) 
: 
 I despair of the National Government in some regards and of the Minister in particular. He appears to have such a profoundly good grasp of the realities of high country farming as many members on the Government side do and a very good knowledge of how that farming operation is carried on and of the farming community yet they have managed to create such a terribly dreadful piece of legislation to address the rate at which rents are set for high country farms. 
 We have come to the end of the validation process for what is essentially an unnecessary and in some ways an onerous piece of legislation. The Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill is a bill that sets out to solve a problem that does not exist and it will very likely create more difficulties than its authors have envisaged at this time. The process by which rents for the high country leasehold land are set was not broken. It did not need to be fixed. It certainly did not need to be fixed in the manner in which this Government is attempting to fix it. We are not going forward with the changes this bill brings; we are going backwards. We are returning to the past to a system very much akin to the one that was abandoned in favour of the present system in 1979 because it was not working. This bill is a bit like asset sales. It is very much a case of “Well that didn’t work. Let’s try it again.”  
This bill fails to recognise the inputs made to the high country over the last century and a half by six and seven generations of farming families. It fails to recognise the value of those efforts in terms of preserving the iconic value of our most famous landscapes. It fails to recognise the sheer size and cost of the conservation operation that would be needed in order to maintain the high country in the state in which we have all come to recognise it if it were not for the efforts and inputs of those farmers and their workers. The Department of Conservation would literally need an army of staff in order to carry out the same tasks that the farmers in the high country currently perform at no cost to the taxpayer—quite literally thousands of workers with vehicles dogs horses helicopters tractors sprayers and guns for pest control; thousands of boots on the ground constantly and tirelessly working to maintain this environment for the benefit of the nation. We are not contemplating nor could we afford to contemplate funding the Department of Conservation to carry out this work in their stead.  
The Crown would not miss out on anything by leaving the rents as they currently are nor would the farmers get a free ride. The high country is not off limits to the public under the regime as it stands. As I mentioned in the Committee stage of this bill in 30 years of hunting and tramping I have never been denied access to a farmer’s land. All you have to do is go and ask. You have to know a little bit about when and where to go and ask and there are certain times of the year when you do not go and ask— 
Shane Ardern 
: It doesn’t read good Richard when you spend your whole speech talking in favour and then vote against. It’s not a good read. 
RICHARD PROSSER 
: There are good reasons for that Shane; there are good reasons for that. There would be no disadvantage to the taxpayer in leaving things as they are and no advantage to conservation.  
This bill is an attempt to extract more revenue than is reasonably or realistically possible from the tenuous operation of farming what is very marginal land in a very marginal environment. It is driven by ideology not by any actual need—financial need or economic need—to get more money. It would not cost the Government anything to leave the present rents at or even below the levels that the High Country Accord in 2009 determined were in many cases already too high. But it would cost the Government plenty in order to replicate what the farmers currently do if they were to be removed from the equation. In returning to a regime under which rents are set based on the stock-carrying capacity of the land rather than its unimproved value this bill fails to recognise that in times of downturn farmers will reduce their maintenance of the land and thus reduce the carrying capacity. The upshot of this will be twofold: the value of the land itself will fall both in terms of its monetary value as farmland and in terms of its iconic value to the nation; and as the carrying capacity falls along with this reduced maintenance so the dollar returns to the Crown will also fall and the Government will have shot itself in both feet.  
New Zealand First believes that the Crown should set the rents at a simple low level based on the unimproved value of the land recognising the contribution made to the nation by the activity of farming. This is a complicated system replacing a simple one and history will record it as being one that does not work either. This is a mean and an unnecessary bill and New Zealand First opposes it in its entirety. Thank you. 
JACQUI DEAN (National—Waitaki) 
: 
 The Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill is just about through its third reading and I imagine that in homes all around the high country of the South Island there will be farming families watching and listening only wishing that the third reading was over and this could be passed into law. That would then put to an end the most terrible situation that our high country farmers have faced at the hands of the previous Labour Government.  
Do you know Minister David Carter was absolutely correct: David Parker when he was Minister for Land Information callously and in a calculated way introduced the rent-setting regime in order to force farmers into tenure review. And why did David Parker wish to force farmers into tenure review? It was because the Prime Minister of the day Helen Clark wished to have the high country farmers off the high country so that she could form a high country walking track the length of the South Island. It is as simple as that. So the Hon David Parker did the will of the Prime Minister of the day and ratcheted up the rents to the degree where for many of those high country farmers that level of rent was unsustainable. They simply could not afford the level of rent that was being proposed.  
The stress that that proposal put on high country farming families should not be underestimated. I will never forget the high country farmer with a proposal for his rent increase coming to see me in Ranfurly. The man was in tears and it is a really hard thing for a farmer to come in to his member of Parliament and be under such stress from the Minister of the day that he was completely broken up by it because he simply did not know how he was going to pay that level of rent. And why? So that David Parker could force the high country farmers into tenure review.  
Well the high country farmers lost their respect for the then member for Otago and voted accordingly and I think there is no love lost between that member and that sector of the community. I was not heartened to hear in the Committee stage of this debate a member of the Opposition referring to high country farmers as the privileged few. That said it all to me. The attitude of the previous Labour Government is that the high country farmers of New Zealand are the privileged few and needed to be rented off the land so that that land could be returned for the pleasure of the then Prime Minister Helen Clark.  
This Crown Pastoral Land (Rent for Pastoral Leases) Amendment Bill puts right that terrible wrong. How can it be right for a previous Minister for Land Information David Parker to say: “If you don’t like your rent increase come and see me; we’ll talk about it.”? What kind of law is that? What kind of legislation is it for any Minister to say: “Well I’m sorry if the rent is too much. Never mind—come and see me.”? 
Debate interrupted. 
The House adjourned at 10 p.m.