Volume 609 Week 29 - Tuesday 1 July 2003(continued on Wednesday 2 July 2003) 
Volume 609 Week 29 - Tuesday 1 July 2003(continued on Wednesday 2 July 2003) 
[Volume:609;Page:6761] 
Tuesday 1 July 2003 
( 
continued on Wednesday 2 July 2003 
) 
Shop Trading Hours Act Repeal Act (Abolition of Restrictions) Amendment Bill 
Procedure 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave for the time by which the Commerce Committee must finally report the Shop Trading Hours Act Repeal Act (Abolition of Restrictions) Amendment Bill to be extended to 18 December 2003. 
Mr SPEAKER 
: Leave is sought. Is there any objection? There appears to be none. 
Immigration Amendment Bill (No 2) 
Second Reading 
Debate resumed. 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: ACT will be opposing this legislation. What we see with this bill is this Labour Government doing it again. Here we are in urgency debating a bill that is being rushed through the House. It is ill-conceived legislation and a knee-jerk reaction. This Government it seems has developed a tendency to panic. It gets itself into a spot panics then throws legislation into the House—usually under urgency like we are having today. That is not good government. It is a panicked response and inevitably leads to bad legislation. We have seen numerous examples just this year. I invite members to think back to that bizarre situation over the tax on alcopops which so-called young people are drinking. That was a classic example akin to this bill of this Government panicking and introducing a measure that clearly will not work. 
ACT New Zealand supports immigration. We say that immigration is a key part of our nation. In fact we are all immigrants in this country; it is just a question of what date our forebears arrived here. The strength of our economy has been based on immigration—the skills and the talents that new immigrants have brought here over many years. But there must be steady consistent immigration policy. Knee-jerk policy is the worst thing possible for immigration. It sends bad signals it creates distortions and it creates loopholes. I ask the Minister of Immigration how many loopholes are going to be created by the panicked knee-jerk reaction in this bill before us today. 
We know that this Minister has a hatred of immigration consultants. I think she has even said so publicly. She hates and despises immigration consultants. Unfortunately for her there are some very honourable immigration consultants. I can think just off the top of my head of three former Cabinet Ministers who are practising immigration consultants. This Minister has totally overreacted with this bill. When we look at this bill we can see what this is all about. The Association for Migration and Investment took her to court. It won. She lost. She appealed. Now she wants to change the law. This is retrospective legislation. She has had legal advice telling her that this is retrospective. It is bad legislation done in a panic in a knee-jerk manner. I am very fearful of the new loopholes and the new problems that it may create. 
When we consider the points system we see it has served us very well. In fact a former Labour Minister claimed credit for the points system and I quote David Caygill: “I support the points system and the Minister and other Government members might have been gracious enough to acknowledge that the Labour Government devised the points system. I do not say they invented it.” That was said by David Caygill in responding to Bill Birch in this House. This Government is overturning the existing categories and criteria and one of the real concerns that is terrifying those involved in immigration is the incredible discretionary powers that this bill will give to senior officials—senior immigration bureaucrats. The danger is that the bill will create massive inconsistencies throughout the country in different regions because of these delegated powers to senior bureaucrats. They are awesome powers. 
Hon Lianne Dalziel 
: They are already delegated. 
Hon KEN SHIRLEY 
: Yes but what we have here is extended delegable powers and the real fear is that that will create regional inconsistencies. That is the point that the Minister does not seem to have grasped. She certainly has not consulted the immigration consultants. We have heard various reports on that today. She says she did not consult because they would have taken financial advantage of the situation if she had given them any warning. So rather than consult those who actually understand the business and actually understand what is required she went off on her own bat drafted this legislation and threw it into the House in a knee-jerk panicked manner. I say we should all be very fearful of the new loopholes— 
Hon Lianne Dalziel 
: All good consultants have come out in favour of this bill. 
Hon KEN SHIRLEY 
: The ones I was listening to on the wireless this morning certainly have not. Perhaps the Minister tunes into a different station or perhaps she was not up that early. Certainly the immigration consultants that I have heard commenting on this bill are not in favour of it. 
We should bear in mind that their first chance to comment or even to examine it was after it had been introduced to this House and that is the real shame. There was no consultation. The bill was drafted by the Minister who was driven by her hatred for the immigration industry and we should all be very concerned about the new problems that it will inevitably create. Whenever this Government has panicked and brought in legislation under urgency it has always got it wrong. The sad thing is it does not learn. It keeps repeating the same mistake. We know that adults learn by their mistakes but it seems that this Cabinet does not learn by its mistakes. It keeps repeating the same mistake in this respect. 
ACT will be opposing this legislation. We believe that it is bad legislation and we are fearful of what it will do. It sends the wrong signals. It will not give stability. What about the people who have planned ahead and made the decision to immigrate? What bigger decision can people make than to immigrate to a new country—to bring their skills and their talents here? Now they find that the rules have changed on them after they have made their applications and after their applications have been received. It is retrospective; that is the worst aspect of this legislation. 
GRAHAM KELLY (NZ Labour) 
: I am very pleased to support the Immigration Amendment Bill (No 2) and I do so for a very fundamental reason. For years and years we have had good people qualified people coming here but there has been a mismatch in terms of where they go because they go where jobs may not be available. They have tended to congregate in the north of New Zealand—in Auckland—and we know about the problems the infrastructure difficulties that this Parliament is going to have to address because Auckland has grown faster than the rest of the country. This bill will promote balanced growth around the country. Regions that need skilled people will get skilled people. Those people will not end up in one part of the country as they do now. 
This bill will provide what employers want. Employers have said to me and I guess they have said it to every other member of the House that they find it difficult to get this or that sort of specialist person. It has simply driven them mad over the years with frustration. The bill will end that. The regional inconsistencies that Ken Shirley talked about will disappear because there will be a consistent approach to filling a need—to matching skills with the vacancies that exist. So we will not have our industries congregating in Auckland and closing down in other areas. 
The good immigration consultants are in favour of this bill. 
Hon Lianne Dalziel 
: That’s right. 
GRAHAM KELLY 
: They are in favour of it. I shall finish by mentioning one story. I was recently in Canada which was proposing at the beginning of last October to change its immigration laws so that its immigration policy would target outlying areas where populations had decreased. Immigrants would have to live there for 10 years. I discussed that with the Minister shortly after and I think that what we have done is even better. In Canada there is no guarantee that immigrants’ skills will match what employers want. What we are doing with this bill will give us the best of both worlds. I am very happy to support the bill. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: That member who is very happy to support a very good bill as he says gave it precious little time in this House to point out its so-called good points. But the reality of it all is that the Minister of Immigration just the other night was asked a question about whether she had brought this Immigration Amendment Bill (No 2) to Parliament to offset her dramatic loss in a court case and she had the effrontery to say no when every other New Zealander knows that the answer is yes. 
But my real point is this: from the kind of speech made by Mr Kelly and members of the United Future party—whatever “United Future” means—it is clear they do not understand at all what is going on. If those men from the United Future party do not believe me they should have a look at today's  
Dominion Post 
 where a so-called independent source comes to the same conclusion. If we look on page 1 we see these words in respect of the changes: “But they could also benefit foreign tertiary students including many from China. She indicated they would get priority especially if they had a job offer.” What it all means is pretty significant. If we look at the Waikato University analysis of just the end part of 2002 we see that it says that in total 190000 people including international students were approved for permanent and temporary residence in the year ended June 2002. Then it says that only 52800 were in the “immigrant” category—their quotes not mine. What that really tells us is that 137200 are in the category described in this morning’s  
Dominion Post 
. 
In short I say to the Minister that she has no idea whatsoever what she is doing. The Minister has no idea whatsoever as to what she is up to. She went on radio this morning and said: “Oh this bill will not affect anybody in New Zealand.” Again that is utter poppycock. She has no idea whom it will affect because she simply has not had the analysis done and simply because as Waikato University pointed out in its analysis thus far something like two-thirds ofNew Zealand’s approvals for residence were granted to people who applied while they were in New Zealand on temporary work or student visas and permits. The Minister is shaking her head and saying no. That trade union lawyer has got the effrontery to argue that a person who is a professor of geography and deputy vice-chancellor is wrong and she is right. 
Hon Lianne Dalziel 
: No. 
Rt Hon WINSTON PETERS 
: No no—it is just arrogance of the worst sort. He says that in the year ended 30 June 2002 for example almost two-thirds of New Zealand’s approvals for residence were granted to people who had applied while they were in New Zealand on temporary work or student visas or permits. I recall being in China in 1997 and this country giving China an undertaking that the students we took from that country under our new visa arrangements would all be sent home. 
Hon Lianne Dalziel 
: No. 
Rt Hon WINSTON PETERS 
: Oh yes we did. The Minister was not there so she does not know. I was and I do. The Chinese Government specifically said: “Would you make sure though in making these new visa arrangements”—which were new were being introduced for the first time ever—“that they are all sent back home.” Now we find that two-thirds of those who get approval actually came here under the category of work or student visas or permits. 
What is amazing about this Minister’s policy is that we know it takes 3 percent of gross domestic product to provide work for those students who leave schools or tertiary institutions in our country. It takes 3 percent of gross domestic product. We have always known that; we have known that for 40 to 50 years. But we have gross domestic product of 2 percent coming up and probably worse so we will not be able to provide for our own students who are leaving our universities and schools yet in will come not the 45000 on the Minister’s fact sheet but something like 72000-plus which is the current rate of people migrating to this country. What does it mean? It means more gridlock more demand on services and more charges that are a loss for the New Zealand people. 
There is one other thing I want to say while I am on the question of the bill before us. The Minister in seeking to get around the case she lost on 16 May of this year and having said on I think 17 June this year that she was going to go to a higher court of appeal namely the Court of Appeal—she said she had such a good case that she was going to appeal—decided that somehow she might have got it wrong and that she should bring a bill to Parliament and get a bunch of wide boys with no experience namely the United Future party to back it so that the Government could get it through. 
Edwin Perry 
: Did she win? 
Rt Hon WINSTON PETERS 
: No she lost. But never mind that trade union lawyer said: “Don’t worry about it. I know that the High Court got it wrong. I will go off to the Court of Appeal and I will have that decision overturned.” So why did she not have it overturned? How can we believe a Minister who says no when asked whether that was the reason for the bill? What sort of integrity has such a Minister got? Barefaced! And the other proponent in that case sitting on the other side of the television set someone called Milnes knew it was not true as I knew it was not true. Of course we had the “deer in the headlights” performance again where her idea was: “I’ll just keep talking—no matter if I don’t make any sense—and make sure that they can’t get a word in edgeways.” There it was—open mouth disengaged brain let it all go! But unfortunately it did not look good on television. Just to make sure I asked my colleagues how the Minister looked. They said: “Actually Winston it was pathetic and sad.” 
It is sad that Labour should think that on this key issue a determinant for the next election it can get away with saying it has changed the policy. But the  
Dominion Post 
 is on to it. The  
Dominion Post 
 knows that Labour has not changed the policy. If we look at the bill we see again that all the Government has done is reshuffle the immigration queues and worse still deny tens of thousands of people their rights. 
My question to Mr Hereora who is about to rise to his feet—and I hope he makes a longer speech than Georgina Beyer did; she spoke for 30 seconds—is this: can we have 10 minutes on how this bill is good for the tangata whenua whom he claims to represent? How is the bill good for south Auckland Maori? Perhaps he can tell us how many Maori around the marae of this country support mass immigration of 72000 foreigners per year? Before he rises perhaps he can ask Mr Horomia what Ngati Porou think of all of this. Frankly we are sick to death of what I call “Sunday afternoon Maori”. On a Sunday afternoon they get out and parade their Maoriness but when they get down to Parliament on Tuesday they forget about the people who put them there. [ 
Interruption 
] They stand for Maori seats; do members realise that the proportion of Maori seats is less now than it ever was in history? 
Mr SPEAKER 
: The member will come back to the bill. 
Rt Hon WINSTON PETERS 
: Do members realise— 
Hon Chris Carter 
: What nonsense! 
Rt Hon WINSTON PETERS 
: Chris Carter says: “What nonsense!” Who does he represent? 
Hon Chris Carter 
: 50000 people in Te Atatu. 
Rt Hon WINSTON PETERS 
: No he does not. If it were not for the Labour Party he would not have made it to Parliament. 
Hon Chris Carter 
: I have got a bigger majority than you. 
Rt Hon WINSTON PETERS 
: No the member does not. 
Hon Chris Carter 
: It’s true. 
Rt Hon WINSTON PETERS 
: The member should not make himself look silly. I say to him: “Do not make me laugh!”. He does not. The reality of it all is that— 
Mr SPEAKER 
: I am sorry to interrupt the member but his time has expired. 
Rt Hon WINSTON PETERS 
: I seek leave for an extension of time. 
Mr SPEAKER 
: Leave is sought for an extension of time. Is there any objection? There is. 
DAVE HEREORA (NZ Labour) 
: I rise in support of this bill. I congratulate the Minister of Immigration on articulating a practical way of benchmarking a process of selection and more important—and I agree with my colleague Graham Kelly—on acknowledging the call from employers who have continually complained to me about the skills shortage. I commend this bill to the House. 
PANSY WONG (NZ National) 
: I think the  
New Zealand Herald’s  
headline says it all for the two immigration bills that are being rushed through this House: “Govt shuts door on migrants”. The  
Dominion Post  
went further and actually identified the changes that negatively affect in particular potential migrants from China and India. That indeed was the intention of the legislation. The only mystery is why the Labour Minister of Immigration continues to deny that this immigration policy was introduced to restrict the number of migrants. Last night Mr Paul Adams of United Future was at least being honest. He admitted that United Future and Labour actually looked up the New Zealand First immigration policy and modelled this policy on it in terms of migrants’ intentions and contribution to New Zealand. But we will come back to that slightly later. 
I want to take up the point that the Minister of Immigration the Hon Lianne Dalziel was very upset with the immigration consultants organisation the New Zealand Association for Migration and Investment. She said it embraced some consultants who were not doing their job properly. I remember that she promised about 4 or 5 years ago when she was in Opposition that when she became the Minister of Immigration she would fix those immigration consultants who were ruthless and not doing a good job. I wonder what happened to that promise to sort out those immigration consultants whom she blamed for causing problems. 
Hon Lianne Dalziel 
: What’s this got to do with the bill? 
PANSY WONG 
: Oh so the Opposition is not even allowed to ask a valid question! It has everything to do with it because you raised it when you were giving your second reading speech about immigration consultants. 
Mr SPEAKER 
: I was not doing anything. Please do not bring me into the debate. 
PANSY WONG 
: I am sorry about that. I would never dream of implicating you in that way. You have been very tolerant and understanding. I am sure this debate will go very well. The Opposition is seeking a lot more calls. 
This piece of legislation has two parts to it. First of all it will enable the Immigration Service to prioritise applicants on a global base. The Minister of Immigration tried to tell us that that is sensible. The Hon Michael Cullen also said that that sounds eminently sensible as potential migrants should be prioritised on a global base and their ranking should not be based on whether they go to the immigration offices that have the most staff and can assess potential migrants. The only trouble is I read a lot more into that. I think any coded statement like “global prioritisation” basically means that New Zealand can favour migrants from European and English-speaking countries. I think it is a shame because since 1987 the public has continually been told by Labour that the Labour Government’s changes to immigration legislation had removed bias against any country in terms of attracting potential migrants. I think “global prioritisation” is a coded phrase and means that the Labour Government has reintroduced a system that is less than transparent in giving priority to English-speaking migrants. I would put my money on it. 
Of course the Government has the right to do that. What the Opposition wants is for Labour to come out and admit it and then at least we can debate the merit of it. For Labour not to admit that that was the intention and to use phrases like “global prioritisation” is indeed very strange. If the Minister is so confident in saying that if an overseas office of the Immigration Service has more staff than others it should not process migrants is she trying to tell us that New Zealand will also centralise the whole Immigration Service and bring its overseas staff back to New Zealand? If indeed “global prioritisation” is the way to go one will see the Immigration Service in this country expand its staffing resources and some of the overseas offices consequently will have their staffing requirement reduced. 
We have a lot more questions to ask and I hope the Minister will continue to take calls to answer some of the questions that remain a mystery to us on this side of the House. 
Part 2 deals with the court case that the Labour Government lost to the New Zealand Association for Migration and Investment. This case was to do with the Labour Government failing to obtain expert advice and deciding shall I say to enforce a policy that it now argues is not correct. It wanted to enforce an immigration policy that if applicants who had submitted their applications for immigration before 19 November did not have enough points they could embark on a period of grace for job seeking. During that period the policy has changed. The immigration consultants tried to persuade the Minister that for those people who had submitted applications before 19 November the same rules should apply and they should have a few months’ grace to make up the extra points. The Minister would not listen. The judge said it was very clear that people who had submitted applications before 19 November should have the same rules applied to them if their applications have not been assessed. 
The Minister was very confident that the judge was wrong and told the public that she would appeal. But yesterday under urgency we were suddenly faced with a piece of legislation that indicates that the Minister was no longer confident that the appeal case would be won. That is why we are being dragged here—to cover up a mistake. The Minister should have accepted that the judgment against her in the first place was the correct one. We are about to embark on the Committee stage yet many questions remain unanswered and the Opposition will certainly continue to raise them. 
A party vote was called for on the question  
That the Immigration Amendment Bill (No 2) be now read a second time. 
Ayes 60 
Labour 52; United Future 8. 
Noes 54 
New Zealand National 25; New Zealand First 13; ACT New Zealand 7; Green Party 9. 
Bill read a second time. 
Instruction to CommitteeCWH 
Hon LIANNE DALZIEL (Minister of Immigration) 
: I move  
That it be an instruction to the Committee of the whole House on the Immigration Amendment Bill (No 2) that it take the bill part by part and consider any schedules as one question. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 54 
New Zealand National 25; New Zealand First 13; ACT New Zealand 7; Green Party 9. 
Motion agreed to. 
In Committee 
The CHAIRPERSON (H V Ross Robertson) 
: Before we begin I remind members that as this bill has not been to a select committee the title debate will be wider than usual. Members can discuss the bill as a whole though they should not range wider than that. 
DAIL JONES (Junior Whip—NZ First) 
: I raise a point of order Mr Chairperson. Thank you for mentioning that we should stay within the confines of the bill but of course the bill is a reference to the cancellation of the court case concerning the New Zealand Association for Migration and Investment Inc. If we read the court case we see that it goes virtually through sections 13A 13B and 13C of the Immigration Act. It looks at section 14 and has a good look at the issue of the general skills capacity as it relates to that case. Our debate will obviously have to refer to the sections referred to in the court case. We will stay within the scope of the bill but if the court case takes us to section 13 and other sections we must be entitled to refer to those sections as well. So with respect I suggest that we are entitled to refer to the various aspects of law referred to in the court case that this Government effectively is attempting to repeal. 
The CHAIRPERSON (H V Ross Robertson) 
: I say to the member that we should not go too widely into aspects of the court case but I will use my discretion. 
Clause 1 Title 
PANSY WONG (NZ National) 
: The title of this bill is the Immigration Amendment Bill (No 2) and we have raised many times in the past the fact that contemporary legislation requires the title to be more transparent and informative. I suggest that variations of that title that would be a lot more informative to the public would be titles like the “Immigration (Government Shuts Door on Migrants) Bill” or the “Immigration (Rejection of Application Without Transparent Reasons) Bill. 
It is indeed quite disturbing to be debating this legislation under urgency under a very uninformative title. The Government’s spin is that the reason for introducing the legislation under urgency is that it could have led to a major increase in applications. In this case that reason is extremely weak because the legislation could be introduced with a time line and certainly would not lead to a flood of applications. On the contrary it actually allows the Minister of Immigration and the department very wide-ranging powers. In this case about 10000 applications will be dropped because the Minister has simply said that those applicants would not contribute to New Zealand. If that is the case I wonder why their applications were accepted in the first place. 
I think that the Minister should take a call and tell us why she did not have a more transparent title for this legislation that would tell the public that this particular bill is an “Immigration (Close the Door) Bill”. Or it could be an Immigration (Legislating Away the Fruits of Victory) Bill” because the second part of the legislation is to do with the lack of confidence of the Minister to win an appeal case against the New Zealand Association for Migration and Investments. 
In the case of this bill when people look at the title they might think that it is just a technical amendment because some Labour Party members have stood up and said that it was a good bill consisting of technical amendments. I reckon that the Minister should take a call to explain that the bill goes a lot further than consisting of just technical amendments. She should take some time in explaining not just to the Opposition but to her own caucus that this little bill goes a lot further than that. It empowers the Minister and the department to lapse applications without having to give those applicants very very good reasons for their applications not being processed any further. Why have those applicants apart from receiving refunds had to wait for 2 years just to have this change suddenly hoisted upon them? 
This title certainly does this bill no justice. It is a bill that has far-reaching and wide-ranging implications. It will impact negatively on New Zealand’s status internationally whereby applicants who have waited for 2 years and who have no idea that their applications will not be paid due consideration under the guise of this bill being passed in urgency will now receive letters from the Immigration Service that do not give them very good reasons for their applications not proceeding further. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: This bill’s title should not read the Immigration Amendment Bill (No 2) but the “Lianne Dalziel (How I Stuffed Up on Immigration) Bill” the “How to Climb Down from an Immigration High Horse Gracefully Bill” or the “I Don’t Know What I am Doing but I Like the Baubles of Office Bill”. 
If members look at paragraph 94 of the court case they will see that the judge said: “A theme of the Minister’s submission was that the job-search visa might not be granted and that in any event the Minister had a discretion as to whether or not it should be granted. It was also submitted that even if the job-search visa were granted a relevant job offer might not be obtained. All this”—said the judge—“is beside the point. The plaintiff seeks only that general skills applicants should have the opportunity to apply for job-search visas under policy existing at the time of their residence application whether or not the application is ultimately successful.” There it is in a nutshell. The Minister got it wrong but not just in a small way she got it wrong for tens of thousands of people who had a right through their immigration agents to bring their case. 
So what does she do? She sets out to damn immigration agents—all of whom she has empowered of course—and then she says something else which she knows nothing about. She says these people are all overseas. She does not know that of course. She does not know anything about her portfolio and my evidence for that is that there are almost 20000 overstayers in this country. In a computerised society she has no idea where they are. That does not happen in any other business I know of. If a library book is overdue the day it is overdue up flips a card and someone goes and finds where that book is and who the last borrower was. It should be likewise for immigration. In a computerised society the day a person does not leave and appears not to have left up comes the card and the department goes and finds where 20000 people are. 
Dail Jones 
: They don’t want to do that though. 
Rt Hon WINSTON PETERS 
: No the department does not want to do that does it? That is because it has such crap programs and administrative devices that do not work that it has no idea what is going on. Yet she has the effrontery to go on radio and television saying it is all about foreigners. 
Craig McNair 
: They don’t have the will. 
Rt Hon WINSTON PETERS 
: The Government does not have the will it does not have the nous it does not have the wit and above all it does not have the commitment to this country’s long-term economic and social interests. 
It is extraordinarily embarrassing to see someone who has legal training—I do not know what sort of legal training—come along and argue that retrospective legislation is of no moment. Members will know there is a party that prides itself on decency and family values; I wonder which party that is. Members would probably think that a party that says it is for family values would consider fairness a family value would they not? Members would think that treating people as equals before the law was a family value would they not? They would think upholding rights under the law was a family value. But for the United Future party it is not. A family value for that party is hugging up to the Government and being a doormat so its members can keep their jobs. Those members know that if they were to stand up for their own people and for the interests of the people of this country there would be a snap election—goodbye United Future goodbye salary. 
Craig McNair 
: Goodbye Pork Pie. 
Rt Hon WINSTON PETERS 
: Goodbye Pork Pie. The question of retrospectivity is the core of this issue. The question of whether we can just legislate away people’s rights goes to the heart of how Parliament operates. Lianne Dalziel having screwed up and mucked up would not be getting away with it were it not for Peter Dunne and his merry men. That is a fact. I thought these United Future people when they campaigned were people of honour. I thought they were people of integrity. There was not a family value they did not stand for: Easter Christmas holidays the tooth fairy—you name it they were for it. But they are not for fundamental human rights they are not for standing up for the law and they are not for doing their duty. That is why both the Labour Party and United Future will go down at the next election. 
I will tell the Committee why that is. Lianne Dalziel just found out— 
Hon LIANNE DALZIEL (Minister of Immigration) 
: Mr Chairman— 
Rt Hon Winston Peters 
: I struck a nerve. 
Hon LIANNE DALZIEL 
: The only nerve that has been struck by the member is the one that has reacted to the fact that I never thought I would ever sit in this Chamber and hear that member promote the interests of migrants coming to New Zealand. I am absolutely gobsmacked to be hearing that member stand up and justify the bringing to New Zealand of up to 10000 migrants who have applied for residence in New Zealand when there is not one shred of evidence—to use a phrase that is well known to that member—that they will ever get work in their area of profession expertise or skill. And that member wants us to continue to invite people to this country when we know they are being set up to fail not set up to succeed. The Rt Hon Winston Peters is arguing that in this Chamber. 
I am going to quote from a letter I received from a man who is here from India on a job-search visa. He wrote to the Prime Minister earlier this year and I think it is important that people hear what he says. He says to me in this letter that his job-search visa does not expire until September but he has already booked to go home and that is as a result of the multiple job rejections he has suffered in the time he has been here under a job-search visa. There is no guarantee of residence when one gets a job-search visa. There is a 6-month period non-transferable and non-extendable to come and look for a job. 
He speaks of meeting other Indians 95 percent of whom he says are working in menial jobs. In fact he tells me in the letter that they have actually even had to undersell their own qualifications—pretend they are not engineers; pretend they are not highly skilled migrants—so they can work as forecourt attendants in garages as cleaners or as farm labourers. It is an outrage that any member of this Committee would support that occurring. He is going home because he has pride. He said he is prepared to take a step down on the ladder but he is not prepared to go to the bottom of the ladder and start all over again. 
This is what he says in his letter: “In my case I am almost ruined. I left my Class 1 engineer post in India and I have already spent about half a million rupees. Even I had to ask my son in the UK to send some money meant for his studies.” That is what the current policy does to people. It brings people here to fail. 
Rt Hon Winston Peters 
: Your policy. 
Hon LIANNE DALZIEL 
: The member says it is my policy but it is not. It was the policy I inherited. People can argue about how long it has taken to address it but that is not the issue. The issue is that this Government has the courage to face up to the fact that we cannot allow that policy to continue to operate in this way. 
This bill does three things. It introduces global prioritisation so that those people with relevant job offers are able to have their cases determined first. Of course that will advantage those migrants who have their residence applications in the system who are already in New Zealand and who already have job offers. Those people are going to be at the top of the list. They will be advantaged by the changes we are ensuring can be introduced. We are lapsing applications from those who applied last year and who do not have high points a job-search visa or a skilled job offer. Why would we not lapse them? If we did not lapse them we would be inviting them to come to New Zealand to fail and New Zealanders have had an absolute gutsful of seeing engineers Korean pharmacists Indian information technology specialists and Russian agricultural scientists—these are real people I have met—who should not be in our country driving taxis. If they come to our country they should come here to do their real jobs. 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: 
 We are here in the Committee stage under urgency debating the title to this bill which as Mr Peters has told the Committee is a monument to the failure of the current Minister and her predecessor over the last 4 years. I turn first of all to the fact that we are dealing with this matter under urgency. On a previous occasion when an immigration bill was before the House a member had this to say about dealing with immigration matters in this way: “I do not appreciate a Government using the urgency provisions of Parliament in order to avoid due process. Due process would require the matter to be referred to a select committee …”. There is more: “These matters ought to be addressed in terms of proper process …” said the member. “I say that is not good enough. That is not how the Labour Party will work in practice. We will allow for open government for proper consultative processes and for real involvement of members of Parliament in these decisions.” That is wonderful stuff! Members are still guessing who said that I see. It was the Minister in the chair the Hon Lianne Dalziel when she was in Opposition and was attacking a former Minister for using the urgency provisions to make changes in exactly in the way that she has embarked on the use of urgency today. 
I say to the Minister in the chair that those words will come back to haunt her time and time again this morning because there is a word that starts with “h” that the Standing Orders will not allow me to use in the Chamber. 
Rt Hon Winston Peters 
: It ends with a “c”. 
Hon MURRAY McCULLY 
: It ends with a “y” actually. Members who say when they are in Opposition that they will do one thing and then come to the Chamber and do another when they are in Government are the ultimate enactment of the “Maharey principle”. Ministers who do that deserve to be roasted when they bring their bills to the Committee and that Minister will be roasted by Opposition speaker after Opposition speaker for an ultimate act to which that “h” word applies. 
I also lament the fact that we are here in urgency because the toadies and lackeys of the United Future party have decided to sign up to the use of urgency without even testing the questions that they should properly have asked. I have been doing some research on them. Mr Peters expressed an interest in knowing what was in United Future’s policy given that party’s strong commitment to the rule of law family values and so on. I tell Mr Peters and other members of the Committee today what United Future members had to say. They said: “United Future is committed to policy which gives certainty to immigrants”—certainty to immigrants—“and provides a mutual benefit for them and existing citizens. Immigration is seen as entirely positive and beneficial. We must have faith that our immigration policies are fair objective and sustainable.” 
The United Future members have done a grubby little deal with the Minister of Immigration to support the use of urgency in order to try to cover up that Minister’s and this Government’s 4-year mess in the immigration area to change the circumstances retrospectively of a large number of Africans who have applied to become New Zealanders and what is more to change retrospectively the decision of a High Court judge that is currently before the Court of Appeal. The United Future party which stands for the rule of law has decided to help the Minister out. Having lost the case in the High Court and having told the country on 17 June that she would go to the Court of Appeal the United Future party has come along and told the Minister not to worry about the old appeal court judges. It has said the Minister need not bother with them because it would help her to slide some legislation through under urgency in the middle of the night. 
PAUL ADAMS (United Future) 
: I have heard the name United Future a few times in the last few speeches and what a great name it is: a united future for New Zealand. I think it is a fantastic name. United Future is pleased to support this legislation because we are working towards a better New Zealand for all New Zealanders. 
At the current time in an industry that I am involved in the motor industry there is a shortage of tradespeople. This legislation will bring them up according to priority and we will be able to have more mechanics. Winston Peters will be very pleased to know that we are training New Zealanders through the apprenticeships scheme so that they can also become mechanics and work within this country. But we also recognise that there are skills shortages in a lot of trades right throughout this nation and this legislation will bring in priorities so that we will be able to address those shortages. 
Winston also accused United Future of selling out its supporters. Does he not remember that in— 
Madam DEPUTY SPEAKER 
: The honourable member cannot refer to someone by his or her first name. Speaker’s ruling 6/1 (Supplement) states that the reference must be to the member’s full name title or portfolio. 
PAUL ADAMS 
: The Rt Hon Winston Peters—that name has a nice ring to it. He is very charismatic and I enjoy his speeches but it is the same old record. We need to hear something new. We need something for the future and we do not want to play the record again I say to Winston Peters. Does he not remember that in the leaders’ debate on Television One before the last election it was Peter Dunne who made the very popular suggestion that the shortage of rural doctors could be solved by making it easier for qualified immigrant doctors to fulfil that role? This bill will enable that to occur by prioritising those applicants for residency. 
I stand to confirm that United Future supports this bill because we believe it is good legislation. We believe it will be good for New Zealand and will get the country moving again. We want there to be a united future in this country. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: That was an extraordinary contribution from Paul Adams. While he accuses other parties of singing from the same record we just wish the United Future party would keep calling from the same record. We see in this bill the exact opposite of what the electorate was told the United Future party would bring to Parliament; it said it would bring good parliamentary process. How many lectures have I had to listen to in this Chamber from the Hon Peter Dunne about good parliamentary process? What is good I ask Mr Adams about announcing a bill at 4 p.m. yesterday and taking it through all stages under urgency this week with zero public consultation? How can we justify that I ask the Minister in the chair the Hon Lianne Dalziel in terms of her track record and public comments? Does the Minister deny what she said in Parliament on 15 June 1999? 
Hon Lianne Dalziel 
: No I do not. 
Hon Dr NICK SMITH 
: Why did the Minister change her mind I ask her? 
Hon Lianne Dalziel 
: Because this is a different set of circumstances. 
Hon Dr NICK SMITH 
 There we have it. Even the Minister could not keep a straight face when she said that “this is a different set of circumstances”. 
The Minister and the Labour Government have now been in office for 3 years and 8 months. The policies that the Government proposes to change have been in place for all that period. Why I ask the Minister does Parliament need to change in a day a policy that has been in place for 15 years? Why is she treating this Parliament with such disrespect? Even though the court decision came down in May it was good enough for the Minister to have 6 weeks. It was good enough for Labour to sit on this policy for 4 years but New Zealand’s Parliament is being asked to ride roughshod and push this bill through in less than 24 hours. I say that that is an outrage. 
I ask the members of the United Future party whether that is what they meant when they said they would stand up for proper parliamentary process. I think not. Is it not interesting how the United Future party was to be the new migrants party? United Future members were to be a great multicultural lot who would stand up for the rights of migrants yet they act as the doormat any day that the Government wants to push through legislation to trample all over the rights of people who have in good faith set aside money and made life plans to come to this country and who are now being ridden over roughshod. 
In all those greasy meetings of the Prime Minister and the Minister in the chair when they dribbled all over migrants—whether they be from Asia North America or Europe—the Labour Party said it was the pro-migrant party. But when the Minister scratches a bit of an itch whammo she is prepared to dump all over them. And thousands of people will have made life decisions on the basis of the assurances given by this Minister. She is wrecking lives by trampling all over people retrospectively. She thinks it is funny; she thinks it is a joke. I ask the Minister why she will not give those people the right to be heard at a select committee. Why will United Future not even give the people who are affected by the changes in this bill the opportunity to be heard at a select committee? 
Hon Lianne Dalziel 
: For what purpose? 
Hon Dr NICK SMITH 
: Well it could be to be heard. It could be that migrants have a point of view. It could be something to do with what she said in 1999: that this process was a breach of United Nations principles. In 1999 Lianne Dalziel raved on about great process and accused the Government of breaching the United Nations principles saying “This is not how the Labour Party will work in practice.” and that is exactly what this Government is doing. It is riding roughshod over good parliamentary process. 
This bill will be a mess. Legislation that is passed in this sort of rushed process always ends up doing things that are not intended and I say the Minister should rethink. 
DAIL JONES (NZ First) 
: New Zealand First opposes this legislation which is clearly rushed legislation. It breaches all constitutional aspects. It is part of our traditional parliamentary process that legislation should go to a select committee and this legislation is not to go to a select committee. Obviously the Minister in the chair the Hon Lianne Dalziel is dreadfully embarrassed about the entire mess of her portfolio and this bill should really be called the “Immigration Amendment (Why Lianne Dalziel Should Resign as Minister of Immigration) Bill” forthwith because she is totally out of touch with her portfolio. 
When we look at why this bill is before the House and at the court case we see that all the plaintiff wanted to do was to allow general skills applicants to have the opportunity to apply for a general skills visa under existing policy at that time. There appears to be a distinction made in that case between those people who had their visas cancelled from 20 November 2002 onwards and those who did not have their visas cancelled prior to that date. As I read the case and the legislation it seems to me that if one had lodged an application before 19 November the court case states in paragraph 97 that: “The announced policy is not invalid insofar as it relates to persons who have been invited to make a job-search visa application prior to 20 November 2002.” That seems to be the situation there. 
This Minister just seems to want those people who are merely applying for a visa and who have lodged their application to be unable to continue with their application. 
Hon Lianne Dalziel 
: If they have lodged an application for a job-search visa they are OK; their applications are not lapsed. 
DAIL JONES 
: OK so if they have lodged their application for a job-search visa they are OK but if they have not lodged their application and are in the process of doing that— 
Hon Lianne Dalziel 
: No. If they have been invited to lodge an application they are OK; they will not be lapsed. 
DAIL JONES 
: Only if they have been invited but if they have not been invited— 
Hon Lianne Dalziel 
: If they have not been invited to lodge an application for a job search visa they will be lapsed unless they have 28 points or more or have the offer of a skilled job. 
DAIL JONES 
: I appreciate the Minister taking the time to try to explain the situation but would it not have been very much better if we had been able to go to a select committee and discuss the matter there? We could then have had a clear indication of what was happening. But I paused so that the Minister could at least make that contribution to the Committee and we would be better informed. 
However from reading the  
Dominion Post 
 today it seems that if one is in New Zealand now one will get a head start under this legislation as opposed to those who have followed the previous practice and waited to lodge their application having gone through all the proper rigmaroles. Those who have taken the time and trouble to comply with the law as it stood when lodging their application and who are not yet in New Zealand will be out of luck because this Minister is saying that people from overseas who are in New Zealand on other types of visas will have priority over those who are not here—even though they may be here on totally different grounds and may not be as eligible as someone else who may have applied. 
For example we have 63500 people here who have been admitted under temporary work policies so their situation may be changed by the very fact that they are here now only as immigrants under a temporary work policy. We also have another 73800 people who are covered by student visas and permits. In terms of the New Zealand Immigration Service’s statistics for 2002 all those people are part of the 190000 people who were here as immigrants in the year 2002. As set out in today’s  
Dominion  
Post and in terms of this policy it seems that the group of 63500 people and the group of 73800 people can apply well and truly in advance of anybody else. So it would seem that a person who is here as an English-language student—and one’s English is obviously not very good if that is the case—would have a head start over someone who can already speak English. 
Hon Lianne Dalziel 
: No. 
DAIL JONES 
: Well people in that situation must have a head start because they are here now. As the  
Dominion Post 
 stated: “But they could also benefit foreign tertiary students including many from China. She indicated”—referring to the Minister—“they would get priority especially if they had a job offer.” We know what some of those job offers are—we have all sorts of immigration consultants running all sorts of schemes. 
PHIL HEATLEY (NZ National—Whangarei) 
: I am thankful for the opportunity to speak on the title of this bill. I will start off by laying out an offer to listeners to Parliament and all those interested in this bill that is running roughshod over genuine immigrants wanting to come to this country. The offer is this: could someone please send the Minister another letter? Because in the 4 years that this Government has been in power she has had only one letter from one supporter which she keeps bringing to this House time and time again to justify her position. Where was that letter from? 
Hon Lianne Dalziel 
: I got it only this year. 
PHIL HEATLEY 
: The Minister tells us that she received a letter in support of her work only this year. What country was that letter from? 
Hon Lianne Dalziel 
: The guy was in New Zealand on a job-search visa. 
PHIL HEATLEY 
: From what country? 
Hon Lianne Dalziel 
: From India. 
PHIL HEATLEY 
: The Minister informs us that her cousin from India wrote her a letter. The only support she can get in 4 years is one letter from her cousin which she keeps bringing down to this House to dish out. 
Hon Lianne Dalziel 
: Stop misrepresenting me! 
PHIL HEATLEY 
: I am sorry I do not know how close the family member is who keeps writing to the Minister but I just ask someone to please send the Minister another letter of support. After 4 long years and 15 years of this policy being in place we want to know that this Minister has other supporters out there. I ask her supporters to please write to her. 
We are here under urgency to debate this bill. I want to support my colleague Pansy Wong—I support her in virtually every enterprise that she undertakes—in changing the name of this bill to the “Immigration Amendment (Rejection of Application Without Reasons) Bill” because that is what it is. I want to make the Minister painfully aware of the New Zealanders out there and of those people out there who want to come and remain in this country—those genuine potential settlers in this country. Clearly in the last couple of years since she became a Minister she has not been turning up to her electorate office to face genuine people who want to come to this country and contribute. She has not faced them or walked with them through 2 years of applications. 
My electorate office actually helps the Immigration Service process many of those applications and advises the Minister’s office of that. That Minister has not walked through the process with those people for 2 years; she has not taken them through all those hoops jumped over all those hurdles held their hands rung them back written letters and advocated for them—only to find that this Government legislates over all that work and all those genuine applications. To be blindsided through legislation introduced into the House and passed over 48 hours and to be blindsided after 2 years’ work is so very soul-destroying. Perhaps the Minister should turn up to her electorate office start working with people on the ground and experience those genuine cases. 
I know there are cases that are not genuine. I know that people want to come to this country who have nothing to offer. I know that the Minister lets those people in willy-nilly then loses track of them. I believe she has lost track of 20000 people. Why is the Minister riding roughshod over those genuine people who want to come to this country and contribute? I do not know. It is certainly turning the corner on what she has said previously. The way she has done it is highly disheartening and I do not like to question her professionalism. To say in this House amongst colleagues who previously had respect for this Minister: “I do not appreciate a Government— 
Hon Lianne Dalziel 
: Name one! 
PHIL HEATLEY 
: I can name several—those members of United Future. I have seen those members following this Minister around opening doors for her and brushing dust off her coat. They respect this Minister but no one else does. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: Lianne Dalziel is a Minister who has so little evidence to put up that she actually comes down with a letter and seeks to hide behind it—that is one letter from an Indian. She then said that 95 percent of them were in the category of being here and not being able to get jobs. I can recall a Lianne Dalziel marching up from the bottom of town with an Indian in a baseball cap who talked about stopping “ racism”. There were a handful of MPs—Chris Carter being one of them—talking about stopping racism. 
Hon Lianne Dalziel 
: Who’s this? 
Rt Hon WINSTON PETERS 
: That man from the Punjab whom the Minister was holding hands with and whom she and Chris Carter came out in sympathy with. 
Hon Lianne Dalziel 
: Excuse me I wasn’t even there. 
Rt Hon WINSTON PETERS 
: The Minister cannot make a speech from the chair. When I have finished she can get up and make her speech. 
Here she is admitting every complaint New Zealand First has ever made. In the letter she says that 95 percent of this person’s colleagues are all in the same category and they cannot get jobs. I ask the Minister what the hell were they doing here? Were they accessing free medicine? Yes! Were they on a benefit? Yes! Could they get emergency housing? Yes! Who missed out? 
Opposition Members 
: We did! 
Rt Hon WINSTON PETERS 
: Precisely! The second thing she said was that she would never see the day when Winston Peters and New Zealand First would stand up for the interests of migrants. She is so wrong. We have always believed that there should be a sound rational coherent internationally respected immigration policy but that is not 72000 migrants a year. That is probably between 10000 and 15000 a year. Who said that? Annette King said that when she was the spokesperson for Labour back in 1996 when it was polling 16 percent and we were polling 32 percent. Labour members decided to adopt our policy. They said that between 10000 and 15000 immigrants should be coming here and in their time they brought in over 72000 per year. 
A little while ago the Minister said that this global prioritisation programme was an excellent idea. On  
Morning Report 
 this morning she was asked: “Who’s going to administer the global prioritisation programme on the ground?”. She did not know. Her answer was: “We’ll do it through trade fairs.” Here is the great spin-doctor of Helen Clark’s office at work! The whole thing is to get rid of doctors driving taxis. We have to ask ourselves this question—and it is a very simple one—how many doctors are driving taxis? Are 72000 doctors driving taxis? No! Are 1000 doctors driving taxis? No! Are some hundreds driving taxis? Yes but to get rid of the syndrome of overqualified people driving taxis we are to take 72000 alongside them. 
United Future members then come along and say that they will support the policy because New Zealand will get rural doctors—72000 rural doctors now apparently. That is extraordinarily naive on the part of United Future members and it has no bearing whatsoever on the facts. I say to them one more time that the shape face character and future of this country is being turned upside down beyond our parents’ wildest recognition. Today one of the biggest sections of letters to that most liberal institution—namely  
Craccum 
 of Auckland University—comes from students who say: “What the hell am I doing walking around this campus when I can’t read anything in English there. It is all in Mandarin Cantonese and everything but English.” A whole lot of students who would normally be liberal-minded are saying: “I am being shut out of my own country. I’m not getting a fair go in my own land.” These are students who would normally be tolerant. 
Pita Paraone 
: What about Maori? 
Rt Hon WINSTON PETERS 
: The terrible thing about the Maori people is that—apart from New Zealand First—they have no voice at all in this Parliament. We just heard two Maori members take a call which lasted for only 1 minute in total. 
Hon CHRIS CARTER (Minister of Conservation) 
: I move  
That the question be now put 
. 
Dr WAYNE MAPP (NZ National—North Shore) 
: I draw to the attention of the Committee although I am sure it has been drawn before to the fact that we have a Minister in the chair who is a lawyer—a paragon of constitutionalism. That is what she would say—a paragon of constitutionalism. I have read a document—which I heard her say earlier today that she did not resile from—in which she said she did not appreciate a Government using urgency provisions in Parliament to avoid due process. That was said on 15 June 1999. [ 
Interruption 
] Mr Clayton Cosgrove might say that the Minister should be spared the embarrassment of having that read out in this Committee. I have read about this Minister in the newspapers and she has said to journalists that she takes the rule of law and her ministerial responsibilities very seriously. So what does she do in her first serious legislative action as a Minister? She breaches one of the most basic constitutional concepts—that is she takes people’s rights away misleads them and deals cavalierly with 20000 applicants. 
There was another way here. The Minister could have dealt with those 20000 applicants fairly and reasonably. She could have put some extra staff into the department and processed those applications. On this side of the House we recognise that the old system of immigration did not quite work. My colleagues—Murray McCully Pansy Wong and others—have talked about the need to change the policy. It should be forward-looking. Another bill is now before the select committee that will deal with this issue but that is no excuse whatsoever to run roughshod over the rights—and they are rights—of 20000 people. It is no excuse to run roughshod over the courts the judgment of Randerson J and just say to 20000 people: “You’re out. Apply again and we might think about it’’—notwithstanding that they have paid hundreds if not thousands of dollars for the application fee and also fees to consultants. 
Hon Lianne Dalziel 
: That they don’t need to spend. 
Dr WAYNE MAPP 
: That they have to spend to get fair consideration by the deprtment. That is the truth and everyone in this Committee knows it. Who could possibly believe that the Immigration Service is so competent that it does not need to use immigration consultants? This morning on radio I heard that the Minister had engaged Malcolm Pacific to process some applications for Southland—and here is the Minister saying that immigration consultants are not needed. What absolute nonsense! At least she could tell the truth in this Committee today. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
Dr WAYNE MAPP 
: Well I am sure the Minister does tell the truth in this Chamber. She could at least acknowledge what she said on radio this morning. That at least is what I want to hear. 
The Government cannot have it both ways. It cannot claim to be the paragon of constitutionalism then run roughshod over judgments of the courts and over the rights of 20000 people when there is another way to deal with the matter. If those 20000 applicants were processed under the old rules some would get in and some would not. The new rules could then be applied in the future. That at least would have been a reasonable constitutional approach to this issue. 
I have quoted the statements made by the Minister in this Chamber 4 years ago and I took those statements at face value. I have understood that she is a person learned in law. She talks about the conventions of the United Nations which are the Holy Grail for this Government. United Nations conventions must rule on all occasions. 
Hon Georgina te Heuheu 
: When it suits. 
Dr WAYNE MAPP 
: When it suits as my colleague Georgina te Heuheu says. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put.  
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 46 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 55 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Clause 1 agreed to. 
Clause 2 Commencement  
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: Clause 2 is an important clause in the bill before the Committee today because taken in context it gives effect to the retrospective nature of the legislation. For the benefit of those members who have not read it carefully and understood that context—because we are here today under urgency taking this bill through all its stages—there will be no opportunity for members of the public for those who made their applications in good faith or for any other party with a view on this matter to make a submission. The Government intends not only to go through this Committee stage but also to go through the third reading. On the conclusion of the third reading this bill will receive the royal assent—no doubt as early as tomorrow. Clause 2 gives effect to this retrospective legislation being passed under urgency immediately upon the receipt of the royal assent. It is important that we as a Committee understand the significance of this clause. 
Some important issues flow from that. The first is that from the time the bill is assented to the Government will effectively have disengaged from a legal process that it made an in-good-faith commitment to initially but instead decided to abandon in favour of a legislative process under urgency. The prime purpose of this bill—the driver of the so-called immigration policy changes announced by the Minister at the last minute yesterday to avoid scrutiny—is to cover up for the Minister’s misdemeanour in failing to make the policy changes that would have given due and proper notice to those seeking to become resident in New Zealand. A prudent and sensible Minister would have taken those policy changes to Cabinet so that we would see progressive process of analysis by officials and recommendations from Ministers to the Cabinet committee and Cabinet. 
Because she did not engage in that proper process of analysis in making those recommendations the Minister finally woke up one morning and found a massive mess on her hands and her reaction compounded that mess. She decided to promulgate changes that the High Court of this country ultimately found in part to be unlawful. Justice Randerson found that in part the legislative panic responses made by this Minister were unlawful. On 17 June only 2 weeks ago the Minister made a solemn commitment to pursue the matter by way of appeal to the High Court. I say to her that she will have to take a call on clause 2 and tell us how it can be that on 17 June just 2 weeks ago she told members of Parliament members of the public and representatives of the news media that she strongly refuted the decision made by Justice Randerson. She was convinced that it would be open to successful appeal and that she and the Government would so appeal. That is what she told us just 2 weeks ago. 
I say to her today that she needs to take a call and explain. When she told the public of New Zealand that she was going to lodge that appeal did she know that she was embarking instead by subterfuge on this legislative initiative? If so she is guilty of a gross act of bad faith towards the news media and the public of this country. I find it unbelievable that she could not have known 2 weeks ago that she was going to bring this bill before the House and seek urgency today. I find it difficult to believe because first of all I know how long it takes to draft a bill. Secondly I know how long it takes United Future to dither away and make up its mind about whether it will support the Government on a bill like this. The Minister needs to take a call. 
DAIL JONES (NZ First) 
: Clause 2 sets out the day on which the bill receives the royal assent. It sets out the day on which this Government finally admits that its immigration policies are an absolute disaster that it does not know what it is doing and that what it said on 17 June does not appear to have been correct. The Government said it would go to the Court of Appeal but somehow in the meantime it has changed its mind and now it will repeal the legislation altogether. Well we have got legislation at various stages. We have known for years that this Government does not know what it is doing about immigration. New Zealand First has made that point clear. Now we have an admission that all the work that the Government was doing on the job-search visa and such like was something that it did not fully comprehend. When the court case was taken presumably the Government expected to win it and of course the Government failed and lost it. 
Even prior to the court case it was clear that when the Minister was undertaking her policy she did not appreciate she had requirements that needed to be fulfilled in the way in which the policy should be carried out and the court has made it clear that this Government has not carried out its policy properly. It has been a saga of failures on the part of this Government and now here we are in Parliament under urgency being asked to rubber-stamp this Government’s failure. To be perfectly frank no one is absolutely sure—including the Minister and that is not unusual—just what the Minister will be doing as far as this legislation is concerned. Are we being asked to implement legislation that will be given effect to by way of stands at trade fairs in New Delhi Lahore Beijing Taiwan Frankfurt and such like? The commencement date will give effect to something that no one quite knows anything about including the Minister as was clear from  
Morning Report 
 this morning. We in New Zealand First take the view that this bill should not come into force when it receives the royal assent. In fact the bill should not be before the House at all in this way. Clearly it should not come into force until after there has been select committee deliberation until Government members themselves know what it is all about and until United Future gets to know what it is all about. It should not come into effect until those two parties at least know what is going on. 
All we have heard from United Future so far is a speech that was prepared by the Government. United Future has repeated it word for word. The United Future members do not quite understand what the speech says but they repeated it anyway. United Future members like being in this House. They do not like the possibility of going to a general election and losing the position they have in this House. As good Christians United Future members believe that they may as well hang in there for another 2 years and take whatever they might be able to get in the meantime instead of standing up for their Christian values and their policies and saying the bill should not come into effect on the day it receives the royal assent—which is likely to be tomorrow or the next day—but rather after it has been to a select committee and people have made submissions. For example the bill should not come into effect until we in this House know the outcome of the discussions with “the Ministries of Economic Development Foreign Affairs and Trade Justice and Social Development; the Department of Internal Affairs (Ethnic Affairs); Treasury; and the Department of Prime Minister and Cabinet.” as set out on page 6 of the commentary on the bill. 
The bill should not come into effect until the Opposition parties know what those discussions were and whether they were lengthy or short. That would give us the opportunity to understand what is in the legislation. We do not know what is in there. We have not been told. I am sure that United Future has not been told but that does not stop it from supporting the Government. We have a constitutional right to ask that this bill should not come into effect until all the agencies are consulted; including for example Te Puni Kokiri—I would like to know what Te Puni Kokiri has to say about the bill—the New Zealand Qualifications Authority and the Department of the Prime Minister— 
Hon Murray McCully 
: Te Mangai Paho. 
DAIL JONES 
: New Zealand First has not taken much interest in those affairs. I will leave that to Rodney Hide and Murray McCully. I am still struggling to get around the name of the department let alone what it says it does or does not do. 
This bill should not come into effect later this week as is envisaged by this Government. Clearly it is a breach of all constitutional process. 
PHIL HEATLEY (NZ National—Whangarei) 
: I am thankful for an opportunity to point out to members of the Committee—clearly many members such as the Greens have not read the bill and kept up with progress—the specific significance of clause 2 “Commencement” which states: “This Act comes into force on the day on which it receives the Royal assent.” As they say the devil is in the detail. It is certainly not written in that clause but everyone should be well aware that that clause is in fact the clause that rides roughshod over due process in New Zealand. It rides roughshod over the fact that the bill should be considered by a select committee. New Zealanders from across the country should have the opportunity to make submissions to this Government and to Opposition members and we should see good law being passed in the proper manner. 
I was interested to hear members read out what the Minister said back in 1999. She said: “I do not appreciate a Government using the urgency provisions of Parliament in order to avoid due process. Due process would require the matter to be referred to a select committee for members to be properly briefed by officials and for us to be able to canvass issues as to whether the court would be likely to use the United Nations convention to override the provisions of the statute.” I support that statement from the Minister in the chair Lianne Dalziel. The difficulty is that I supported the Minister back in 1999 when she said that but I certainly do not support her today as she puts this bill through under urgency and asks that the commencement date occur when it receives the royal assent which could be any day now. 
I would like that Minister to know that members of Parliament throughout the country—certainly National members of Parliament—are dealing with immigration cases all the time. Certainly when people walk into my electorate office and into National Party electorate offices throughout the country we go through due process. We do not like the idea of this commencement date effectively wiping out 2 years worth of applications—in fact in some cases people lodged applications to come to this country and work here 2 years ago. We have opened the door to those people. I certainly have in Whangarei. We have worked with genuine people over a period of 2 years and that Minister with this commencement clause will effectively nullify all the work that has been done. It is a very sad issue I believe and the Minister should take that into account. We look at issues—I certainly do in my electorate office—on a case-by-case basis. But that Minister is going to legislate over all cases for no reason and will reject applications for 2 years for no reason at all except of course to avoid her conflict with what the court has stated. 
The major point I want to make about this particular commencement clause is that it simply provides a vehicle for rejecting a whole lot of applications that have been lodged before this Minister. Whenever she does that she will retrospectively exclude potentially very good New Zealanders from working and raising their families in our country. I am disappointed by that because I have worked with people coming to Whangarei on a case-by-case basis as do other National MPs throughout the country. We have taken their issues in hand helped them where we could appealed to the Minister where we could not then we turn round and find out that effectively all that work will be nullified. It does not matter to the Minister whether one person has applied over the 2 years or whether thousands—which is in fact the case—have applied; she is going to make their applications lapse. I wish she would front up to those many many people throughout this country who will be in tears because of all the hurdles they have jumped in the last 2 years. 
Hon GEORGINA TE HEUHEU (NZ National) 
: Clause 2 provides that the bill will come into force on the day on which it receives the royal assent. On its face that clause looks innocuous enough but in the context of what it is about to achieve it is a very serious matter indeed. I hope that the members of the public who might be listening are appreciating very clearly the serious nature of this clause. First of all as my colleagues have pointed out we are dealing with this matter under urgency. This bill was introduced just yesterday afternoon. It is proposed that the bill go through all its stages today—it will probably become law by 1 o’clock this afternoon. Once it has received the royal assent which will be over the next 1 or 2 days the rights of a whole lot of legitimate migrant applicants will have been ridden roughshod over by this Minister. 
Just 2 years ago this Minister made some very fine statements—statements that I agree with—and although they have been read out already I want to read them out again. I want the Minister to explain to members here in the Chamber—and to those people who are listening and to members of the public who value due process of law value the rights of citizens visitors migrants and value following due process and who hopefully will be as appalled as we are—that people’s rights are now being ridden roughshod over by this Minister. This is what she said in 1999 which is just like yesterday: “I do not appreciate a Government using the urgency provisions of Parliament in order to avoid due process. Due process would require the matter to be referred to a select committee for members to be properly briefed by officials and for us to be able to canvass issues as to whether the court would be likely to use the United Nations convention to override the provisions of the statute.” 
I want the Minister to take a call and explain to us how she can reconcile the fact that a bill that is to pass into law today—it commences its legitimacy today almost—with the statements she made only 4 years ago. I ask the Minister to get to her feet and answer that matter. It is all very well to sit in the chair and sneer and laugh but this is a very serious thing that she does today. Not only are we are dealing with a bill under urgency in order for it to pass through all stages in a very short space of time but we are dealing with a bill that has a retrospective impact. The Minister will shut out and ride roughshod over the rights of a number of migrants who have made legitimate applications just 2 weeks after she cunningly probably put people’s minds at rest—and I do think it was a cunning thing that she did. She indicated that she would appeal the decision of the High Court thereby I would say giving applicants a bit of respite and a reason to think: “Well we’re still in the game. We still have a chance.” But at that point as my colleague Murray McCully says a Minister would already have been drafting legislation for it to be introduced into the House yesterday—or at least had to have had the decision made in Cabinet. So that was a very cunning ploy that she used. I agree with Murray McCully when he suggests that this bill is a breach of good faith. I am waiting for the Minister to stand and justify this bill being brought in under urgency justify its passage into law within a space of 24 hours and justify why she thinks it proper to do this to legitimate applicants. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: I want to speak on the commencement clause because issues concerning the reputation of our country and the reputation of this Parliament are at stake. When people want to migrate to this country they are quite entitled to know whether dirty tricks of this sort will be pulled on them. When this Minister of Immigration pulls the sort of trick that she has pulled over the last 2 days—with a commencement clause that rides roughshod over the rights of others—this country’s reputation is damaged and we look like a Mickey Mouse outfit. I accept that it is absolutely the right of the Government of New Zealand to set the immigration policy of this country. But what is not right is for the Minister to do that in such a way that it rides roughshod over the life plans that are made by thousands of people. If we have laws of that sort people will look to New Zealand and say we are a Mickey Mouse banana-type State. It will mean that the words of Ministers of the Crown of New Zealand cannot be trusted. 
I too want to speak to what the Minister said in 1999 about these issues. The Minister can laugh about it— 
Hon Lianne Dalziel 
: It’s not relevant. 
The CHAIRPERSON (H V Ross Robertson) 
: I am the judge of whether it is relevant. 
Hon Dr NICK SMITH 
: The Minister says it is not relevant. It is relevant because on 15 June 1999 the Minister then in Opposition said things about the Immigration Amendment Bill (No 2). Well this is an Immigration Amendment Bill (No 2). On that occasion she made great importance of parliamentary process and it comes directly to the commencement issues because this bill comes into effect long before what she said was “due process” long before people have had an opportunity to have a say and long before a select committee has had an opportunity to look at the bill. She also said it was wrong to override the provisions of an existing statute. The Minister cannot just laugh about it. Every member of the House wants the trade of politics to be held with respect. When she says things in this Parliament then as Minister does the exact opposite she brings the reputation of every single parliamentarian and every single Minister into disrepute—because she is overriding what she said. I say to the Minister in the chair Lianne Dalziel that she brings New Zealand’s good name into disrepute she brings parliamentarians into disrepute and she brings Ministers’ words into disrepute. I say that is wrong. The Minister cannot just laugh it off. She needs to get to her feet and give the Committee an explanation. Why is it that the words she said in 1999 when she was in Opposition do not apply now that she is in Government? What has changed? Is it the “Maharey principle”—the Labour standard? What has changed? 
Hon David Cunliffe 
: The Government changed! 
Hon Dr NICK SMITH 
: Mr Cunliffe said the Government has changed. Well is that not a great standard of integrity from this Government! It says: “We’ll tell you one spin when we’re on the Opposition benches and we’ll tell you a completely different line when we’re in Government.” Is that the Labour Party’s policy? Why did Labour not tell the public about that when it went to the electorate in 1999? 
Hon Rick Barker 
: He can’t even turn up to court on time. 
Hon Dr NICK SMITH 
: Mr Barker goes around saying that Labour honours its word. I say: “Bedevilled you honour your word!” Labour is doing exactly the opposite of what it said prior to the last election and that cannot be laughed off. I challenge Mr Barker to get to his feet and say what is different. 
Hon Rick Barker 
: At least I can get to court on time. 
Hon Dr NICK SMITH 
: Oh well! He does not want to answer the question. Why did Labour say in 1999 that these sorts of bills should go to a select committee? 
Hon Rick Barker 
: Get your hands out of your pockets. You can’t speak properly. 
Hon Dr NICK SMITH 
: He wants to talk about the fact that I have my hand in my pocket. He wants to talk about every possible irrelevant thing. He does not want to talk about telling the truth. He does not want to talk about New Zealand’s reputation. He does not want to talk about whether we can rely on the word of this Minister. He does not want to talk about the rights of people who come to this country in good faith. He just wants to talk about whether my hand is in my pocket. Well I have to say to the Minister—and that Minister—that reputation counts and this Minister and this Government are muddying it. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: This clause is particularly important in the context of the previous speeches made to this Parliament by the Minister who is now in the chair Lianne Dalziel. But it is even more important in the context of what should underpin immigration policy. Undoubtedly immigration policy needs to be predictable transparent certain and fair and on every one of those counts this bill before the Committee today brought in under urgency is neither predictable nor transparent nor certain nor fair. I certainly hope that the Minister in the chair will take a call on the words that she gave to this House back on 15 June 1999 particularly when regarding the process she said— 
The CHAIRPERSON (H V Ross Robertson) 
: The member should be speaking to the commencement date. 
Dr PAUL HUTCHISON 
: Yes and this is absolutely relevant to the commencement date in that this bill was brought in under urgency and comes into force on the day on which it receives the royal assent—which unfortunately is likely to be today because there will be no select committee deliberation although that is one of the criteria that the Minister in the chair said was absolutely essential to it. After all the Minister in the chair— 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the member but there is a cellphone going off in this House. That is out of order. There is a Speaker’s ruling about the use of cellphones in the House. They are not permitted. The member will withdraw and apologise for that breach. 
Dr PAUL HUTCHISON 
: I certainly withdraw and apologise. I had turned it off but mysteriously it came on again—maybe because of the concern I have about this Minister! 
This Minister had 9 years in Opposition complaining about process and has had 47 months in Government giving her a reasonable opportunity to organise the Immigration Service but we have a shambles. There are 20000 applicants at stake here—46000 people who have had their lives absolutely turned upside down by this Minister who is bringing in under urgency this untimely bill. What an absolutely hopeless Minister she is to bring about this situation after all that time! It reflects her inability to manage an immigration process. It is absolutely a shambles. I hear time and time again from my constituents in Port Waikato about how absolutely difficult and hopeless it is to get an immigration application through in a manner anywhere near timely or consistent or even to be able to speak to immigration consultants or to communicate with the Immigration Service because of the absolute backlog and the unwillingness of the staff to answer calls emails and letters. That is the shambles that this Minister has brought about. 
Hence this commencement clause—which has been brought in under urgency—is a reflection of this Minister’s inability to handle a very sensitive portfolio that reflects on the lives of not just thousands of people but tens of thousands of people. She has brought about a shambles. She said she does not appreciate a Government using the urgency provisions of Parliament in order to avoid due process. I do hope that the Minister in the chair will reflect on her words and take a call and tell Parliament why she said those things. 
Hon DAVID CUNLIFFE (Minister of State) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Clause 2 agreed to. 
Part 1 Principal Act amended 
Hon LIANNE DALZIEL (Minister of Immigration) 
: A number of comments have been made in this debate in respect of a position that was adopted in 1999 in respect of another Immigration Amendment Bill (No 2). I remind the Committee that the legislation itself had already been passed by the House and in fact the particular provisions in the No. 2 bill had been supported by the Labour Opposition at that earlier stage. We had supported the writing in of the United Nations Convention Relating to the Status of Refugees and we had supported all the changes that were made in respect of asylum seekers. The No. 2 bill to which members have referred brought into effect those provisions relating to asylum seekers—specifically those relating to mass arrivals—because there was allegedly a boat on the way. That boat still has not arrived today—and that was in 1999. 
The only briefing the only meeting that I asked for in this House was a brief calling together in the lunch break while the bill was going through the House so that officials could provide a briefing to Opposition members. 
I provided a briefing to Opposition members yesterday through the offices of the Associate Minister of Immigration and all the Opposition parties were invited to participate in it. I think it was perfectly reasonably to offer members an advance opportunity to ask questions about the content of legislation that was to be introduced under urgency. So there is absolutely no contradiction in the position I have adopted in this Chamber whatsoever. 
This part of the bill deals with the Government residence policy. Assertions have been made in this House that I must have arranged for the particular provisions in clause 3 to go through Cabinet and be drafted in a bill before I put out my statement saying that we intended to appeal the decision relating to the New Zealand Association for Migration and Investment case. I can tell this Committee categorically that the date that I asked officials to draft a Cabinet paper seeking permission for this clause to go into the legislation and be drafted was 23 June. Prior to that it had not been proposed that clause 3 be included in this bill. It was only 2 weeks ago that I asked officials to do this work. 
I make the point that clause 3 is not retrospective. Clause 3 clarifies the situation in respect of temporary entry to New Zealand which is not governed by Government residence policy. If members of the National Party want to have temporary entry policy under the same rules as Government residence policy then God help New Zealand! That would be an absolute disaster. We make decisions every day of the week as to whether people will comply with the provisions of temporary entry policy to this country. Every day of the week we get applications from people from different countries in the world and we have to try to decide whether they will comply with the provisions of their visa if we grant them that visa. National Party members had to do exactly the same thing when they were in Government. It is a bit rich for Opposition members now to come to this House and say that they accept that a job-search visa is part of Government residence policy. It was not intended to be part of Government residence policy when the National Party Cabinet considered the Cabinet paper back in 1999 and it certainly was not in my mind when I confirmed the introduction of that policy early in 2000 when I became the Minister. That is the bottom line in respect of clause 3. It clarifies very specifically that temporary entry visas and permits and limited-purpose visas and permits are not in any circumstances part of Government residence policy. 
The second element of this part is the global prioritisation—something we have already introduced. It enables us to prioritise the applications of particular individuals who already have skilled-job offers. That will be good for business good for the migrant and very good for New Zealand. 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: The Minister of Immigration who has just taken a call needs to do some listening. If she does not do some listening she will never get the point that members on this side have been expressing concerns about. 
The Minister makes a point of Part 1 and in particular clause 3 not being retrospective in its impact. Well it does not need to be retrospective in its impact because the rest of the bill has the retrospective impact in it. The Minister is being entirely cute with the Committee and frankly is being less than forthright with the Committee if she thinks she can get away with an explanation like that. 
Part 1 changes the judgment that was brought down by the High Court. I notice that the Minister avoided any reference to that. Part 1 does what the Minister now knows the Court of Appeal was not going to do which was to agree with her interpretation of the Act. The Minister can wax eloquent as much as she likes about whether this was the intention of the Government in passing that bill or whether it was the intention of Parliament in passing the legislation in the first place; she may well be right but that is not the point. The point is that earlier this year the High Court of New Zealand brought down a judgment dated 16 May in which it found that some actions taken by the Minister were unlawful. 
At that point—16 May—the Minister had several choices open to her. One of those choices was to say she did not think that is what Parliament intended and she did not think that was what the previous Government intended in passing that bill so she would go and see her very fine colleague on the other side the Opposition spokesperson on immigration and ask him whether he would see reason and support the Government rectifying something that Parliament had not intended to do. But the Minister did not do that. The Minister was much more concerned about the fact that the original changes that she had made which were the subject of High Court proceedings were changes made as a result of her losing some political arguments. The Minister rightly or wrongly in terms of the merit of the argument had been on the losing end of some political debate. The changes that she promoted were not changes promoted in good faith after careful and serious analysis by officials; they were changes that were a panic reaction in the Cabinet room. 
So on 16 and 17 May after she had the High Court decision from Justice Randerson she did not think: “Oh that’s not what Parliament intended. I’ll have a talk to the Opposition parties and see whether we can without too much delay put matters right.” What she said was: “Oh no this was a politically driven decision made in a panic. I can’t possibly go and talk to the Opposition parties about what Parliament intended and whether we should let the judgment of Justice Randerson stand.” She decided to try her usual trick of bluster and pomposity. As a consequence now further down the track the Minister finds herself embarrassed. 
She put out a press statement. I must say her explanation to the Committee a few minutes ago of the circumstances of that were less than fulsome and I will have some further questions about that before the day is out. She says that she released a press statement on 17 June saying in good faith that she would appeal Justice Randerson’s decision. We are supposed to believe that she did not have in mind on 17 June when she released that press statement some provisions in this bill—a bill that she prepared and got ready for introduction in the House today 2 weeks later. I tell the Minister that she has some more explaining to do if she expects the Committee to believe that. I want to see those Cabinet papers. I want her to table the Cabinet papers produced before and after she came to think of introducing clause 3 as part of Part 1 of this bill. I want to see the evidence of the Cabinet papers and the officials’ advice to her. I tell the Committee that we should oppose this provision because of that background. 
DAIL JONES (NZ First) 
: Part 1 is a very serious part of this legislation and in my view is a very serious departure from the usual way in which the New Zealand Government administers its affairs. In my view Part 1 leaves us wide open to corruption at Government levels especially in our overseas offices where we know that from time to time there is corruption. New Zealand First has had evidence brought before it that if one wants a visa to come to New Zealand the best person to go and see in New Delhi is the bloke under the tree outside the front gate of the New Delhi High Commission. He will jack a visa up on the payment of cash. Surprisingly enough somehow or other the visa becomes available despite the fact that there is never any contact with the high commission. 
Section 13BA inserted by clause 4 states: “(1) The order and manner of processing any application … (2) The chief executive may from time to time give general instructions to visa officers … (3) In giving any such general instructions … (4) Unless otherwise expressed by the chief executive …” etc. So there are various ways in which administratively applications can be processed according to different priorities. 
There has always been a principle that applications are processed on a prioritised basis—first come first served. If an application has a defect then clearly it can drop to the bottom of the pile but one does not fiddle with an application’s place in the queue. To do so is the very beginning of corruption. It leaves the prospect of corruption wide open 
  
especially given that the Immigration Service is so dependent upon people in overseas countries where corruption is just a way of life. It is not unusual; it is the norm. New Zealand First is most concerned that as a result of the opportunities made available in this legislation there will be even more of the examples that have been put to this Government of corruption involving immigration in various places around the world. 
And we are being asked to rush it through Parliament. We would never agree to rush any sort of legislation through Parliament without select committee consideration but in this case we are being asked to support a Minister’s rushing legislation through Parliament when that Minister has been proven wrong in the High Court on her interpretation and administration of legislation. That is just not possible. 
I have looked at the Immigration Act—section by section in fact. In 1984 I was chairman of a select committee that reviewed the old Act and came out with new immigration legislation which was subsequently changed altered and became law in 1987. Since I became an MP again I have read every section in the Immigration Act and in terms of I think sections 13A and 13B I have two massive folders. I have been through them all and tried to ask questions on them but every time one asks a question one receives the statement: “Oh no we haven’t really given effect to that.”—especially on the health side of things. So we could not possibly accept another amendment to insert something else in section 13B without it going before a select committee to consider whether it will work. 
The new section 13B(1A) inserted by clause 3 states: “To avoid doubt any policy … is not Government residence policy regardless …”. The Government is saying that anything it does in these areas cannot be regarded as being Government residence policy and I ask whether it flows on that therefore no certificates are required under sections 13A and 13B to try to get around anyone having a look at this issue later on and deciding that as a certificate has not been issued the policy has not been complied with. The Government is saying that it is policy but it is not policy because the Government says it is not policy. Well is it policy or is it not? This legislation is saying that it is not policy even though it is policy. How can we possibly accept legislation of this kind? Just to avoid doubt carte blanche is being given to the Minister the executive and the various staff all around the world and there is no proper consideration of how it will be administered. 
This is a real recipe for disaster in the administration of our immigration system which is in some disrepair at the moment—which is why this bill is before Parliament. If everything were fine and dandy we would not be racing this bill through the House. We know that the Minister is in real trouble. 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: Focusing on Part 1 I think the Minister in whose name this bill stands made a very revealing statement before departing from the Chamber. She said that her first instruction to officials for the drafting of this bill was on 23 June. That is barely 6 days ago. If we take out the weekend we are talking about 4 working-days. So this bill has come back into Parliament under urgency. Obviously on Monday the Cabinet looked at it and decided to ram it through under urgency to deny it the scrutiny of a select committee and to have no consultation whatsoever with the industry—where the expertise lies. In fact we heard on  
Morning Report 
 this morning that upwards of 20000 people who have made applications could be affected by this legislation. 
Pansy Wong 
: Twenty thousand applications. 
Hon KEN SHIRLEY 
: Twenty thousand applications. That is possibly 60000 or 72000 people. That involves 20000 applications but then the industry made the point that the Government does not really know. It was reckoned that that figure was the industry’s guesstimate and the industry’s guess has become the Government’s research in this matter. That is very worrying indeed. 
We have not had a satisfactory explanation from the Ministers in the chair or from any Government speaker of the reason for urgency. We have not heard that at all. We do know that Justice Randerson’s decision went against the Minister. The Government was taken to court and it lost. The Government was wrong and the court told it so. The Government then decided that it would appeal and then thought: “Oh no there is a short cut to that. We’ll change the law. We’ll use the brute force of the State—change the law deny people their rights trample over their rights.” In fact it smacks a bit of the foreshore and seabed situation when we think about it does it not? The Government will end up in a similar sort of pickle because it panicked in that situation. 
Such knee-jerk reactions on the part of the Government never work. We saw it with the booze tax that it slapped on us under urgency. I think it was in the last urgency period we had. Jim Anderton said that there was a crisis and that if the Government did not move straight away there would be all sorts of problems—and now everyone is laughing. That legislation is a nonsense and is actually counter-productive. I predict that this bill will also be counter-productive. 
I listened to the Minister’s explanation of clause 3 and I support that explanation. I think there is some rationale in the argument she put forward with regard to temporary entry. But as Dail Jones expressed in his speech I get very nervous when I see legislation that leads off with the expression “to avoid doubt”. Whenever we see “to avoid doubt” we know we are making muddied waters worse-confounded. It seems to be inevitable. When we have to say in legislation “to avoid doubt” trouble is on its way. 
But then turning to clause 4 which is the other part of this Part 1 I become really really worried. In her explanation the Minister used only about two sentences and explained this provision as part of a global prioritisation. The words just sort of flowed over and that was all she addressed. But when we actually read the words in the clause—and this is why I would have liked the bill to go to a select committee and be scrutinised—the point has been made that the provision is giving awesome discretionary powers to bureaucrats and is raising the fear of rorts and corruption. We have had cases and claims and allegations—substantiated allegations—of rorts and corruption in the processing of visas and associated with immigration. 
We see some very worrying text in that clause. Subsection (1) of section 13BA inserted by clause 4 states: “The order and manner of processing any application for a visa or permit is a matter for the discretion of a visa officer or immigration officer.” Subsection (2) states: “The chief executive may … give general instructions … as to the order and manner of processing any application for a visa or permit.” but the order is solely at the discretion of the immigration officer on the ground. So the various regions around the country or around the world where visas might be processed could have amazing inconsistencies and irregularities associated with them. Then in subsection (3) we see that “In giving any such general instructions the chief executive may have regard to such matters as the chief executive thinks fit.” 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: I move  
That the question be now put 
. 
Hon GEORGINA TE HEUHEU (NZ National) 
: I want to take a call on clause 3 and if I have time possibly to make some comments on clause 4 as well although with regard to that clause I support the sentiments expressed by the Hon Ken Shirley. Coming back to clause 3 however I note that this clause as we now know from previous contributions by members legislates to ensure that temporary or limited visas such as job-search visas cannot be classed as residence visas. That has the effect of over-riding the court case because if job-search visas are not residence visas then section 13 of the Immigration Act does not apply to those 40000 or so or is it 6000 or so— 
Dr Paul Hutchison 
: Forty-six thousand people; 20000 applications. 
Hon GEORGINA TE HEUHEU 
: —20000 applications and 46000 people. Then section 13 of the Immigration Act does not apply to those people. When the Minister took a call before she left the chair she explained the reason for clause 3. She said that it clarifies this very situation. In part the National Opposition agrees that if there is an anomaly or a situation that possibly does not fit into Government residence policy there are ways of dealing with that. There are legitimate ways of dealing with that sort of issue but this legislation is not one of them. 
Thousands of people started to wend their way through due process within our justice system to have what they saw as their legitimate rights clarified and Justice Randerson in the High Court gave a ruling that actually agreed with them in terms of the way the Government was behaving. Then as I said earlier we saw that they were fortified only temporarily when the Minister said that that was not a decision that was acceptable to this Government and that the Government would appeal it; but then within a very short space of time the Government changed its mind to take these draconian steps that we are debating today. And they are draconian. 
I felt like commenting when the Minister was on her feet: “Tell that to the 46000 people out there who for 2 years have been pursuing their applications.” They went into the court process—at great cost I might add—thinking it was fair enough that there were ways of dealing with the matter and that they would follow those processes only to find that in the end the sinister hand of the Government came in the axe came down and no matter what they were doing in any event they were ruled out. 
I wonder how this enhances the reputation of New Zealand. We are encouraging people to come here. I think members from all sides of the Chamber will agree that we need more people here. We need an immigration policy as my colleague said before that is transparent fair— 
Dr Paul Hutchison 
: Predictable. 
Hon GEORGINA TE HEUHEU 
: —predictable and consistent. We can certainly agree with that. But when we get the kind of shambolic management of this very important portfolio that the Minister has been guilty of what sort of reputation are we developing? It is a reputation that says we will ride roughshod over the legitimate rights of 46000 people. As Bill Milnes of the New Zealand Association for Migration and Investment said “The Minister is playing football with people’s lives.” Mind you I do not know whether the Minister can play football but that was his view. In other words she does not care really. She does not care that these people in good faith have made application for visas to New Zealand in the way they saw fit. 
Hon TAITO PHILLIP FIELD (Associate Minister for Social Development and Employment) 
: I move  
That the question be now put 
. 
PANSY WONG (NZ National) 
: I would plead with you Mr Chairman that this part is very significant and I do not think the Labour Government should rush through this part without giving due consideration to the very serious issues that Opposition members are raising. 
I want to touch on clause 3 but I think clause 4 needs a lot more substantial debate yet. We have heard from the Minister correctly that on 17 June she issued a press statement challenging the High Court decision insisting that the judge got it wrong. On 23 June she instructed her officials to draft this legislation to avoid any doubt and she claimed that she was not even sure that it would be included in this legislation. She is trying to argue on technical grounds that it will not be retrospective. It does not have to be in clause 3 because when we start to examine clause 4 every New Zealander should be very very concerned about this. Even though we might think it will affect only non - New Zealanders—overseas potential migrants—it is giving us a taste of the way people could be treated by Labour supported by United Future. 
Let us look at clause 4. It states that the chief executive of the Immigration Service “may give general instructions as to order and manner of processing applications for visas and permits”. Anyone looking at it might say that that sounds fair enough—the chief executive of the Immigration Service should be able to give general instructions. But let us look further. We find: “(3) In giving any such general instructions the chief executive may have regard to such matters as the chief executive thinks fit.” 
What does that mean? How are we going to examine what sorts of criteria the chief executive might have to take into consideration? This allows anything a chief executive might think fit. It carries on to say that unless otherwise expressed by the chief executive any such instructions would not have to pay regard to the fact that a general instruction may be different from those existing at the time. So it could be contrary to the general instructions given at the time. 
But it gets worse and worse. If potential applicants want to challenge whether their applications have been processed in a certain way the legislation spells out very clearly that there is no ground for questioning whether an application is processed in an order and manner consistent with any general instruction given by the chief executive. Subsection (7)(a) in clause 4 states that “no appeal lies against the decision of the officer concerned whether to an Authority the Tribunal the Minister any court or otherwise;”. Subsection (7)(b) provides that no review proceedings may be brought in any court in terms of questioning any general instructions relating to the order and manner of processing. I can just imagine that from now on every application for a visa or permit will just be turned down when all the officials have to say is that it is not consistent with the “order and manner”. From now on when my hard-working colleague Phil Heatley gets all these immigration application cases and wants to question the decisions the officials and the Minister will tell him they might want to help him out but section 13BA(7)(b)(iv) in the Immigration Amendment Bill (No 2) rushed through under urgency states that no explanation needs to be given of any decision by the Minister or visa officer to process or not to process. They will say “tough luck” to Mr Heatley. Nobody neither the Government nor the officials needs to give any explanation for refusing to process a visa or permit or decline a visa or permit. Nobody would ever know the rules. 
RUSSELL FAIRBROTHER (NZ Labour—Napier) 
: I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: The question is that the question be now put. As many as are of that opinion will say “Aye”; to the contrary “No”. The Ayes have it? 
DAIL JONES (NZ First) 
: I raise a point of order Mr Chairperson. This matter is at the core of New Zealand First’s policies relating to immigration. We have had only one call on this clause and I was going to bring in new material. You have cut the debate short. You indicated at the beginning that it was a wide-ranging debate and we have had five calls on this matter with only one New Zealand First call. I respectfully ask that we get a second call at least. 
The CHAIRPERSON (H V Ross Robertson) 
: I refer the member to Standing Order 139 “Acceptance of closure motion” and Speaker’s ruling 54/2. I am the sole judge of the debate. Nothing new was coming forward. I have already put the question and the vote has been taken. 
A party vote was called for on the question  
That the question be now put. 
Ayes 60 
Labour 52; United Future 8. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Motion agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Part 1 agreed to. 
Part 2 Validation of processing and lapsing of applications 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: I raise a point of order Mr Chairperson. I raise a point of order at the outset in relation to your decision on the matter of closure—not the closure you have just taken but the closure on the part that is now before the Committee. I do so because I want to avoid an untimely mess of the sort that will I assure you ensue if we have the exercise of the Chair’s judgment in the same way as was the case in relation to the part that has just been the subject of a vote. I am fully aware of the provisions of Standing Order 138 to which you referred the Committee in a brief way. I refer to Standing Order 138(3) in particular which states: “The Speaker may accept a closure motion if in the Speaker’s opinion it is reasonable to do so.” I will not dispute the fact that the judgment is one for discretion on your part but I think it is open to members to seek to persuade you as to a course that is reasonable in the circumstances. I raise that at the outset in relation to Part 2. 
Both Part 1 and Part 2 are important provisions in this legislation. In addition to the fact that this is a bill that deals with applications that have been made in good faith some of which are being rendered null and void as a consequence of this amending legislation and in addition to the fact that this matter is being dealt with under urgency there is also the consideration that the bill has the effect of overriding a High Court decision that is currently the subject of an appeal to the Court of Appeal. In addition— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
Hon MURRAY McCULLY 
: I will get the Speaker back if you want me to. 
The CHAIRPERSON (H V Ross Robertson) 
: I am just referring the member to the fact that a point of order is to be terse and to the point. 
Hon MURRAY McCULLY 
: Yes I am making detailed submissions to you because I do not want to see you make the same mistake you did in the first part. 
The CHAIRPERSON (H V Ross Robertson) 
: I am listening to the member and I am mindful of what he is saying but I would like him to come to the point. 
Hon MURRAY McCULLY 
: I would like you to turn your mind to this. In relation to a bill that is going through the House under urgency which changes a High Court decision that is currently the subject of an appeal and which will wipe out the applications of over 10000 applicants to use the Minister’s own figures I suggest to you that it is very far from reasonable for the presiding officer to decide that one speech each from New Zealand First and ACT—particularly as Mr Jones has said New Zealand First has a special interest in this matter—and three speeches from the National Party is adequate. That is very far from reasonable. Unless we can get some indication from you that Part 2 will be dealt with in a way that the Committee can be persuaded meets the reasonableness test of Standing Order 138(3) we will have to go to a higher authority to get some direction on this matter. 
DAIL JONES (NZ First) 
: I raise a point of order Mr Chairperson. I am concerned in regard to any ruling on this type of bill where there is a proposal that a court’s decision be overturned—in this case a High Court decision only—that the standard accepted in this type of case might be the standard that is accepted say in a case in which the House might be faced with a Court of Appeal decision that it wishes to overturn. I would not like it to be accepted in any way that New Zealand First would accept that type of situation because we do not want this Parliament to be able to say at some later stage in Committee that when we overturned that High Court decision we had five speeches only and New Zealand First got only one call and now that we are overturning a Court of Appeal decision the same rules apply. When we are overturning a court decision I would expect that—in or out of urgency—we should get more calls than would normally be the case because we are overturning a very considered decision to which the Government has been part and on which the Government has made detailed and lengthy submissions being a party to that court case and perhaps in any other case that might be before the Court of Appeal. You have made your decision on the first part but I would respectfully ask that more time be given on Part 2 to avoid precedents being set for future cases. 
The CHAIRPERSON (H V Ross Robertson) 
: I do not need any help Mr Shirley. I accept and I acknowledge the contributions that have been made both by the Hon Murray McCully and by the honourable member Dail Jones and I will certainly take those matters into consideration on the second part because the second part deals with the validation and processing of applications. I also refer members to Speakers’ rulings 54/2 and 63/2 which detail that I am the sole judge of relevancy. I adjudged that speeches were becoming very similar. The point was made that the debate was wide-ranging only on the title debate. I refer members to that. I acknowledge that I have listened to their representations and I will certainly take note of them during the debate on Part 2. 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: I raise a point of order Mr Chairperson. I would have preferred to raise this matter in speaking to the previous point of order because it would have related directly to that but you denied me that right. Let me be quite clear at the outset. I am not relitigating your decision. You are the sole judge although I note that Speaker’s ruling 54/2 states: “I can only express the hope that it will not be applied too harshly.” Those were the words of Mr Speaker Statham in 1931 which have stood the test of time. My point is this which I wanted to add: the Business Committee had a situation in which the proposal was that we could perhaps consider a question time with a guaranteed fixed time for finishing—a 6 o’clock Friday sort of an arrangement. The ACT party did not support that because we recognise that these matters need to be debated and that the Government when the House goes into urgency should not be able to get off the hook and run to an agreed time where the presiding officer in the Chair gives a token hour here and a token hour there then closes it down. These are very serious matters for the reasons that have been very eloquently outlined by Mr Jones and the National Party and I can only say in regard to the denial of question time that these matters are important they are overriding court decisions and I urge you in considering Part 2 to not in the words of Mr Statham apply it too harshly. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you Mr Shirley. As I said to both the Hon Murray McCully and the honourable member Dail Jones it will certainly be taken into consideration. I thank members for their contributions. 
PHIL HEATLEY (NZ National—Whangarei) 
: I would like to express a view on Part 2 of this bill and I know that Dail Jones certainly wants to too. I hope he is able to give us at least a titbit of what he was going to present in terms of new information from the previous one and that he will be allowed the flexibility to do that. 
I would like to focus on clause 6 “Lapsing of certain applications made before 20 November 2002” because that particular clause speaks directly to those people who are directly affected by the rash move of this Labour Government to introduce and pass in urgency this bill that is riding roughshod over people’s rights; and certainly it rides roughshod over us parliamentarians in that it denies us the ability to have our say. Clause 6 is one of the key clauses in this bill that affects those people who have been sidelined. 
We understand from the Government that there are 20000 general skills category applications awaiting decisions. I want to know why we have to pass legislation that forces the lapsing of those applications made before 20 November 2002 just because the Minister Lianne Dalziel and her department have been dragging the chain in allowing those applications to go through or to have some sort of scrutiny—to a greater or lesser degree. I know that many hard-working members will be well aware that applications made under those categories have often been submitted 6 months ago 1 year ago 18 months ago or 2 years ago that it takes an awfully long time for them to go through the process and that it is very rarely the fault of the applicant or the MP supporting them in that or even the fault of the consultant in those cases that it has taken so long. So why are they the ones who are penalised through this legislation? 
I will read clause 6(1): “All applications for residence visas or residence permits made before 20 November 2002 under the general skills category”—and we understand there are 20000 of those—“of Government residence policy that have not been decided as at the commencement of this Act”—and that could happen any day now—“are treated as lapsed except where as at the beginning of 1 July 2003” and then it lists exceptions to that first rule. 
I want to know why they are treated as lapsed when certainly the person to whom the application relates has been working hell for leather to provide all the information required to prove that he or she is a genuine case. Such people often work side by side with their member of Parliament they will have got the paperwork from overseas and internally within New Zealand they will have seen employers met all the requirements and jumped through every hoop and over every hurdle and I want to know why those people through blood sweat and tears with all the help they have employed—paid or otherwise—are treated as lapsed. 
I can tell members now that those 20000 people do not consider their work to have lapsed. Not a day has gone by when they have not either worried or actively involved themselves in the application process and they certainly do not consider themselves lapsed. That is why we have pointed out to Minister Dalziel time and time again that she should not be riding roughshod over due process. 
The Government tells us that there are actually 14669 applications lodged prior to 20 November 2002. The Minister might have a number of 14669 but National members of Parliament know some of those people as individuals and they do not like being just one number among 15000. 
DAIL JONES (NZ First) 
: I am looking at clause 5 and I will try to concentrate on that in this call. I will look to make a speech on clause 6 later. We have a situation here where the heading to clause 5 is “Past order and manner of processing applications deemed valid”. I have gone to the clause to try to understand what it means—bearing in mind that it has not been to a select committee where members would get a considerable amount of time to look at a bill; instead here we are with barely 5 minutes to come to grips with it and to ask questions on it. 
Subclause 5(1) states: “Any—(a) failure by a visa officer or an immigration officer or the Minister to process an application for a visa or permit …; or (b) decision by a visa officer or an immigration officer … to process or not to process an application … occurring or made before the commencement of this Act is deemed to have been validly done”. So the Government is saying that any mistakes that we make—and which we will continue to make—before this legislation comes into force which could be tomorrow 3 July are valid. It does not matter what the mistake is and it does not matter what has been done because the decision is still valid—even if we do not know a mistake was made. We may not have the faintest idea of what we are doing in our department but regardless of the fact that we do not know what the decision is even if it is the wrong decision it is deemed to be the right decision. 
The Government is saying that all wrong decisions are right decisions. All the applications that have been moved along by a visa officer for people who may be criminals from overseas or who may be involved in some type of fraud scam or the like have been validly processed. At the same time all the applications that should have gone ahead and been properly considered but that have been rejected have also been validly processed even though the rejection of those applications did not comply with any Government policy. What a load of nonsense that is! 
Subclause 5(2) states that “No appeal lies against any decision to process or not to process an application” whether or not the appeal is made by an authority or even by the Minister. So a visa officer in New Delhi could continue to process the application of a known terrorist from say Kashmir or Afghanistan and that process and suchlike could be accepted—whatever “process” actually means and I will look at clause 5(4) later. This bill validates all sorts of processes no matter how ineffectual wrong or contrary to policy they may be. The Minister the authority the tribunal or a court cannot object to what an official has done. What preposterous legislation this is! Someone has dreamt it up in a hurry without any great concern. I accept the Minister’s word but in the four working days or so when this bill was being assessed which was somewhere between 23 June and when this bill was introduced yesterday afternoon—we have not even had the chance to look at it for 24 hours—legislation has been rushed in that will allow an official to let a terrorist from Afghanistan or possibly Iraq into the country. For all that we know Osama bin Laden could be approved under this legislation and the Minister could not object to the way in which his application had been processed. 
Hon Ken Shirley 
: He might already be here. 
DAIL JONES 
: That is right—goodness only knows. This Government is verifying that kind of mistake in this legislation. 
One tries to work out the meaning of “to process”—or not to process. It is very Hamlet-esque; it is very Shakespearean. 
Hon Ken Shirley 
: That is the question. 
DAIL JONES 
: It is the question and I am asking it. What does it mean to process an application or not to process it? Clause 5(4)(a) confuses the issue even more. It states: “a reference to a failure to process an application includes a reference to a failure to continue to process an application”. Then clause 5(4)(c) goes on to state: “a reference to a decision not to process an application includes a reference to a decision not to continue to process an application.” What is meant by processing an application? Does that include completing the application? I ask that question. How far does the term “process” go? It could mean an application is stamped done and delivered. 
Hon Ken Shirley 
: It’s absolute. 
DAIL JONES 
: It is absolute. That could mean the process is completed and Osama bin Laden is welcome to New Zealand because the New Zealand Labour Party and United Future would welcome him in terms of clause 5 of this bill. 
Hon LIANNE DALZIEL (Minister of Immigration) 
: I thank the Committee for the opportunity to respond to the member who has just resumed his seat. I should make the point because he clearly did not hear what I said earlier on that clause 3 was added to the bill as a result of the decision that was taken on 23 June. This bill was already in the process of being finalised prior to that date. So the lapsing provisions were already being addressed at that point. I asked the officials to again look at including clause 3 in the legislation to cover the lapsing provisions and the global prioritisation. So I want to clarify for the member that that was not something that was written. Those particular provisions were not written at that late stage. 
I thought I would share with the Committee the newsroom agency story that has come in over the wires in respect of the response to this particular part. I will just quote from the document itself. It states: “An immigration consultant Ted Legget says the Government’s move to actively recruit skilled migrants will ensure immigrants can put their skills to use as soon as they arrive in the country. He says immigrants who cannot settle into a suitable job are not happy and the changes will address this. Mr Legget says it is unfortunate for those who have already lodged applications for non-relevant job offers and may now be rejected but there was no alternative.” That is an immigration consultant who has made that particular point. 
Pansy Wong 
: That’s a good one! 
Hon LIANNE DALZIEL 
: I find it very interesting to hear Pansy Wong interjecting particularly given associations with certain immigration consultants who may be of interest to that member. I will be in a position to identify the main players in the money-go-round that that member is fully aware of very very soon. 
The point that I have made about the difference between good and not-so-good immigration consultants is simply this: the good immigration consultants welcome the Government’s changes in this bill. The reason that they welcome these changes is that they already operate on a recruitment model. They already know about jobs that people can be brought into New Zealand to do. They care about the settlement outcomes for the people whom they bring here. I went to one immigration consultancy company’s launch of its Hunters Club—a club actually set aside for new migrants to New Zealand who are the company’s clients in respect of immigration applications. The interesting thing is that that is not something that the consultancy firm has to do. It does not have to do that but it cares about the outcomes. That is the immigration consultancy that welcomes this bill. It is speaking to the media today and it is saying that the Government is on the right track. 
The reason that the firm accepts we are on the right track is that it wants what the Government wants. I thought I heard Dail Jones interject to say that that is what New Zealand First wants. That firm wants migrants to hit the ground running and to use their skills and their talent when they get here. Nobody in this Committee could justify for one minute having skilled and professional migrants coming to this country and taking up jobs as cleaners cooks and taxi-drivers. New Zealanders have had a guts full of that sort of treatment. New Zealanders are fair and decent-minded people who ask why we waste the talent and skills of the people whom we bring here. This policy will make sure that we do not continue to bring to New Zealand people who will not make it here and who have little to offer New Zealand—and to be blunt New Zealand has little to offer them. This turn-round in policy is good for migrants and good for New Zealand. 
DAIL JONES (NZ First) 
: I raise a point of order Madam Chairperson. Can I now assume in view of the wide-ranging speech made by the Minister that this is now a wide-ranging debate? We welcome the Minister’s speech and we look forward to responding to it in detail. 
PANSY WONG (NZ National) 
: A very serious accusation was made during the Minister’s speech. If she ever suggests that I may have something to do with scams involving immigration consultants I invite her to make that accusation outside the House and I will see her all the way to the court. She would not be able to legislate away the fruits of my victory. That is totally irresponsible— 
Hon Lianne Dalziel 
: You just wait! 
PANSY WONG 
: I find that offensive. She is smiling away. 
Lindsay Tisch 
: I raise a point of order Madam Chairperson. In response to what Pansy Wong said the comment the Minister has made “You just wait!” is unparliamentary and threatening. It is out of character in this Committee. I ask that the Minister apologise for that comment. 
The CHAIRPERSON (Ann Hartley) 
: I ask the Minister to withdraw and apologise. 
Hon Lianne Dalziel 
: I withdraw and apologise. 
PANSY WONG 
: That is why this Minister will never get the immigration portfolio into shape. A Minister should be fair objective and accept valid criticism as being nothing personal. I find it very offensive to suggest anything about my conduct that relates to any immigration consultant. I would hastily point out that the Minister used to trumpet—and continues to do so—the New Zealand Association for Migration and Investment as one that the Government was happy to work in partnership with. It is now obvious that unless people totally toe the line and agree with the Minister then she will somehow threaten them with regard to whatever action she may have in mind. 
Part 2 is worth taking a close look at. I want to go to clause 6 where applications for residence visas or residence permits made before 20 November 2002 under the general skills category of the Government residence policy that have not been decided are treated as lapsed. One might argue that there are some exceptions and some of them may not be lapsed. The specific ones are listed under subclause (1)(a) and the first is where “the principal applicant—(i) had claimed points for an offer of employment classed as ‘relevant’ under the Government residence policy applying to that application;”. I invite the Minister to take another call to clarify that word “relevant”. Does it apply simply to people’s qualifications or to the jobs that they already have? What is this relevancy in relation to a particular application? That is not clear. I do not think that a lot of the applicants will feel very relieved to listen to those criteria when they do not understand how the officials will interpret the word “relevant”. 
 The other exception is where the principal applicant had claimed 28 points or more under the Government residence policy applying to that application. I find that very very unfair. Basically it changes the rules after people have already entered the race. As I pointed out at the beginning it was announced that the number of points required had been reduced from 30 to 27. If the Immigration Service and the Minister of Immigration had been doing their job they would have said that people who scored below 28 points would not settle well in New Zealand. Why offer the possibility to them? Why put the number of points at below 28 points? People have in good faith put in their applications after looking at the immigration website. They ticked the boxes and found they had 27 points which was the number required by the policy to qualify and then they suddenly found out yesterday or today that their applications would be considered further only if they had 28 or more points. 
I say that changing the rules is not fair. This legislation is retrospective. The Minister has just said that it will not be retrospective and that clause 3 was introduced only to clarify the legislation. I think that with this particular measure one can definitely say it is retrospective. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: The Minister of Immigration sought to clarify New Zealand First’s policy and she did a thoroughly bad job of it because she does not support our policy and we do not support hers. She sought to paint a picture of having done something when she has done nothing. In fact I have just looked at my colleague Dail Jones’ questioning of her at the select committee at the time the immigration issue came before the select committee. 
Darren Hughes 
: Why wasn’t the member there? 
Rt Hon WINSTON PETERS 
: I had unfortunately been expelled from the House—quite wrongfully in my view. As a consequence I could not attend. Nevertheless Dail Jones did a very fine job. He established that Lianne Dalziel in all her time as the Minister had got two Cabinet papers ready. She claimed that the idea of registering consultants was a good one but all she had done was to look at the office in Sydney—the Migration Agents Registration Authority. She said she thought it might have a solution and that now it looked like a real possibility. In the meantime of course every sort of fraud lie and cheating activity has gone on in the Immigration Service in this country amongst a whole lot of consultants. There has been deception here there and everywhere. Chinese have been openly advertising— 
Clayton Cosgrove 
: What about Mr Delamere? 
Rt Hon WINSTON PETERS 
: Mr Delamere was fired from New Zealand First. He was never a Minister of Immigration under us so that member should not look at me. But my point is this: how come he has been operating for 3½ years under Lianne Dalziel? 
The reality is that there are all sorts of people out there who are openly advertising fraudulent activities in Chinese. The Minister was on the  
Assignment 
 programme and was asked whether she was aware of any forgeries and frauds. Her answer was “No”. What a joke! Talk about deer in the headlights! That is this Minister. 
I have just been on a radio programme with the Minister and she embarrassed herself again. She thinks that because she can swim under water without breathing for 3 or 4 minutes that that will do in politics but it will not work. One actually has to be able to say something sensible. The reality is that this Minister is dead scared of getting things wrong. That is why she says in Part 2 that clarification is required so that the New Zealand Immigration Service can regulate and order the manner of processing these applications according to agreed Government departmental policies and priorities. Why would she say that were it not that she was too scared of making any of those attempts and finding she had again breached the law? That is why she says it. She goes on to say: “Clause 5 ensures that past prioritisation of the processing of applications for visas and permits cannot be challenged in the courts.” This is a member who is meant to be a lawyer. She wants her actions inactions and mistakes to be above any legal reproach. I know Labour MPs over there and I know politicians like that. Mind one would not call them politicians; one would call them despots or autocrats. 
The Minister wants to be above the law and I will give an example. She now wants immigration officers to be above the law. If they screw up there is to be no right of appeal. We can have the biggest bunch of crooks coming into the country as a result of their mistakes and no one can appeal it. I suppose that is the reason there are so many businesses in Auckland that are run by the triads. Members should go to the bottom of town and find out what is going on down there—the abuse of women cycled into here for 3 months then off to Australia because they now have a half-way respectable tourism visa off to UK for 3 months and then back home a total waste. All that is happening under the name of that Minister of Immigration. She laughs and smiles. I know how people like her think. As long as they have the baubles of office showing some integrity and merit to be in that job has no bearing on them. She might think it is funny but after September 11 where on earth would there be any civilized country that would leave such a decision up to an immigration officer? After September 11 and Bali which fool would leave that decision up to an immigration officer? That fool over there would! 
Other countries—including the United States for example—are reviewing all past applications for the last 6 years to ensure they do not have terrorists and here is our Minister happy for foreign immigration officials to bring in a foreigner and his mistake wanton or otherwise is beyond reproach. Which fool after September 11 and Bali would allow that to happen to his or her country? It would be one that does not care. The Government does not care. It is caught out now by a policy that 82 percent of New Zealanders are opposed to and they are opposed to the Minister and her numbers. 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: In initiating this particular debate the Minister in the chair the Hon Lianne Dalziel made a very provocative speech and the member who has just resumed his seat made some reference to that. But the key point was her explanation to the Committee that we need this legislation because of all the shams the crooks and all the bad dealings that are going on out there. Yet the point has been made that on the  
Assignment 
 programme she was asked the hard question straight yes or no whether she knew of any fraudulent bad practices and her answer was that no she did not. She says one thing on television when she is under scrutiny by the nation yet she comes to the Chamber and says that we need this legislation because of all the sham deals and all the crook situations that exist. 
When we analyse this bill we find it does nothing to assuage our concerns because of clause 5 which relates to validation of process. What on earth does that mean? In other words however bad something may have been however wrong however unjust by a stroke of a pen the bureaucrats can declare it to be right. Under common law we had such things as writ mandamuses. In other words if bureaucrats failed to act or failed to follow due process we could go to the courts with a writ mandamus. But the effect of this clause is that no writ mandamus could possibly succeed against it. It states that failure by a visa officer or an immigration officer or the Minister—even the Minister—to process an application for a visa or permit including a residence visa or anything else is just declared to be all right no matter what mistake has been made. That is totally unsatisfactory. Then we think that perhaps there is some sort of appeal process. But no we turn over the page and lo and behold all rights of appeal have been expunged. 
Clause 5(2) states: “No appeal lies against any decision …” Then subclause (3) states that there is no review processing. So whatever one has done wrong whatever mistakes whatever injustices they will retrospectively be declared to be right and there are no rights of review and no rights of appeal. That cannot be good legislation. It is totally bad legislation. 
The Minister initially said in her speech that she first issued drafting instructions for this bill on 23 June. We made the point that that was only 6 working-days ago. She must have been up in her office listening to a wireless. She heard us challenge her came rushing down here and said: “Oh no that was just part of the bill. The rest of it was under draft long before that.” I tell the Minister that that is not the impression she clearly gave the Chamber when she initially spoke about it. It seems that this Minister is prepared to say anything if she thinks she can get away with it. 
 I would like to take up the terrible slur the Minister made against Pansy Wong. Even after being forced by the Chair to withdraw and apologise she kept grinning like some inane canary and giggling to her colleagues on the Labour benches. The Minister is constantly slurring taxi-drivers. Taxi-driving is a very necessary profession. We want good taxi-drivers. They are part of our tourist industry. We want a good class of taxi-driver. However at every turn that Minister is slamming taxi-drivers and constantly slamming cooks who are also a critical part of our tourist industry. We need good cooks. The Minister calls them hamburger flippers. She is constantly beating up on cooks and taxi-drivers. 
Rt Hon Winston Peters 
: Arrogant socialists. 
Hon KEN SHIRLEY 
: One of my colleagues has made an observation about arrogant socialists and we see that so often. So often in our Parliament legislation is slammed through under urgency. It seems to be the trademark of the arrogant socialists. 
Clauses 5 and 6 require a lot of scrutiny. They are fundamental and tramp on the rights of people for review of process and for appeal about bad decisions. There are three measures that totally abrogate those rights. Firstly any mistakes declared to be valid are dealt with under clause 5(1)(a) and (b). Under clause 5(2) there are no rights of appeal; and under clause 5(3) there are no rights of review. I do not recall there ever being such bad legislation. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: In context Part 2 has huge importance in terms of issues of reputation for New Zealand the Parliament and the Minister. In speaking on clause 5 I can only but agree with Dail Jones that there are some very great worries about it. That is the provision where validation of processing and lapsing of applications is dealt with. It does seem absolutely extraordinary that it states: “Past order and manner of processing applications deemed valid (1) Any—(a) failure by a visa officer or an immigration officer or the Minister to process an application for a visa or permit. …; or (b) decision by a visa officer or an immigration officer or the Minister to process or not to process an application for a visa or permit … occurring or made before the commencement of this Act is deemed to have been validly done in accordance with the discretion of a visa officer or immigration officer to determine the order and manner of processing an application.” 
In other words any mistakes that may have been made are valid. It is absolutely unbelievable. If we are to go to first principles in terms of immigration policy we want to make sure that that immigration policy is predictable transparent certain and fair. We have a situation whereby a lawyer has written into legislation: “Any mistakes that have been made are valid.” It is absolutely unbelievable. All wrong decisions are right decisions. This lawyer is putting that into legislation under urgency. 
Hon Ken Shirley 
: A trade-union lawyer. 
Dr PAUL HUTCHISON 
: That is right. We have to make the description very clear. Subclauses (2) and (3) in clause 5 provide for no appeal. They state that no appeal lies against any decision to process or not to process an application for a visa or permit and that no proceedings may be brought in any court in respect of any failure to process or any decisions to process. 
As a former gynaecologist if I mucked up I would expect my patients to be able to go through a process of appeal. Here the Minister has mucked up really badly—20000 applicants 46000 people and it does not matter. They have no right of appeal and no day in court. As Winston Peters said that touches on the bounds of autocracy and it touches on the bounds of despotism. One wonders whether the true instincts of the Labour Government are really coming to the fore because it is saying in law that any mistakes that have been made are valid all wrong decisions are right and one has no appeal process through the courts. It is absolutely incredible that a union lawyer wants to put this sort of legislation through the New Zealand Parliament under urgency. 
Clause 6 suggests that the cost for application fees that are to be refunded will be about $10.5 million. 
Hon GEORGINA TE HEUHEU (NZ National) 
: Part 2 is symptomatic of a Government that when it makes a major muck-up sees its role as bringing down the swift axe of Parliament. It uses Parliament to ride roughshod over people’s rights to ride roughshod over people who have entered a process in good faith. My colleague Paul Hutchison made reference to clause 5 which makes right any decisions that the bureaucrats have made up to this point—whether or not they were right—and makes valid any mistakes that have been made. That sort of management of a portfolio and that sort of policy are to be absolutely rejected in this Parliament. 
I shall focus on clause 6 which deals with the lapsing of certain applications made before 20 November 2002. Lapsing the applications of people who came into the process in good faith is no way to manage an immigration policy and is no way to manage that portfolio. Again that sort of draconian action is symptomatic of a Government that when it comes to the crunch when it has to try to make up for its muck-ups acts in this arbitrary manner. 
I would like the Minister of Immigration to explain part of clause 6 for my benefit and hopefully for the benefit of others both inside and outside this House. It provides that applications for residence visas or permits that were made before 20 November 2002 and that have not been decided as at the date of the commencement of this legislation which will come into play today tomorrow or certainly within the next 2 or 3 days are deemed to lapse unless the applicants satisfy one of the four categories listed—if they wish to stay in the process. One is that the applicant “had claimed points for an offer of employment classed as ‘relevant’ under the Government residence policy applying to that application;”. What is the meaning of the word “relevant” in this context? I would appreciate the Minister taking a call to give us some detail around that. For an officer administering the policy the word “relevant” can be taken to mean anything that the officer wants it to mean. That is not acceptable in this sort of area. I would like an explanation because clause 6 does not define what “relevant” means in this area. 
There is the issue of applicants who had claimed 28 or more points under the Government residence policy applying for the application. That points system of course is a huge issue in itself. Some applicants may have thought just before the commencement of this bill: “I’m OK. I’m in.” but there is now a change in the points system. The limit goes up from 27 to 28 points so they are out in the cold. 
I turn to paragraph (iv) of clause (6)(1)(a) which deals with applicants who “had been invited in writing by a visa officer or an immigration officer to apply for a work visa …”. I would like an explanation of that provision. Has it been the policy for some time that visa officers can give invitations as this suggests or is it something new? Was it actually invented yesterday which means these applicants will be cut out any way? Nobody will be able to satisfy that condition. 
In terms of lapsing applications particularly in the context of the way that this Minister has brought this bill into the House and is rushing it through under urgency those provisions require explanation. 
Hon MARK GOSCHE (Maungakiekie) 
: I move  
That the question be now put 
. 
DAIL JONES (NZ First) 
: My call on this occasion might be brief because I want to limit it to just a couple of issues. First of all I want to get some clarification from the Minister of Immigration as to when she gave the instructions and why the instructions were given with regard to the court decision. From my understanding on reading this bill it is clause 6 in Part 2 that refers to the court decision— 
Hon Lianne Dalziel 
: Clause 3. 
DAIL JONES 
: Is the Minister saying that clause 6 does not refer to the court decision? I would have thought that clause 6 was the court decision. She is saying that clause 6 is not the court decision with regard to points and suchlike! 
Hon Lianne Dalziel 
: Clause 3. 
DAIL JONES 
: She is saying that only clause 3 refers to it. As I read it clause 6 is the one that must relate to the court decision. Is she saying that the instructions with regard to clause 6 were given a long time ago? Well before the court decision instructions were given to draft clause 6(1): “All applications for residence visas or residence permits made before 20 November 2002 …”—which is the date as I recall that was constantly mentioned in the court case. Was not 20 November 2002 a feature of the court case? So she is telling the Committee and all the other people involved in this area that the Government had made up its mind probably during the process of the court case before the decision was made that it was going to do the things set out in clause 6. That is how I understand it. So that point has been cleared up and it is an interesting point because that is not the way I had understood it to be. Perhaps those people who are very closely associated with clause 6 will take that into account. 
The only other brief point I will make is about the Minister’s reference to Mr Legget and his desire to bring skilled people to New Zealand. Well that is a New Zealand First policy. The only question is we do not want to see 190000 people coming into this country of whom barely 10000 have any skills which is what happened in the year ended December 2002. Our policy is skilled people for skilled work not 190000 people 65000 of whom are here on a temporary basis and about 75000 of whom also are not here on a skills basis. 
CLAYTON COSGROVE (NZ Labour—Waimakariri) 
: I move  
That the question be now put 
. 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: Part 2 is a substantial part and I am disappointed to see Government members taking calls purely to seek closure on a matter that deserves sensible consideration by the Committee. 
Clayton Cosgrove 
: How sanctimonious! 
Hon MURRAY McCULLY 
: Mr Cosgrove may think that we should expunge the rights of over 10000 individual applicants—maybe over 25000 individual applicants—under the system without even giving the matter a second thought without even having a select committee discussion without even giving it any consideration in the Committee of the whole House. That is what he wants to shut down. We are not going to have a select committee or give any of the people whose rights are affected by this measure the opportunity to make a submission in the normal way. But Mr Cosgrove thinks it is OK to make only one contribution to this discussion in the Committee stage—that is to try to stop it. He has not uttered a word of debate not a word of support for the measure and has not given an explanation to any of the questions raised by members of three parties opposed to the bill. They are questions that the Minister will not answer because she does not know the answer. Maybe Mr Cosgrove knows the answers but he will not take a call and tell us the answers. I want to say that is thuggery; that is not good enough and that member had better recall that if that is going to be the approach of the Government on matters that affect people’s rights so seriously then he is in for a very rough ride. 
I want to talk about clause 6 because— 
Clayton Cosgrove 
: Oh come on! 
Hon MURRAY McCULLY 
: Why does the member not take a call? [ 
Interruption 
] 
The CHAIRPERSON (Ann Hartley) 
: Order! [ 
Interruption 
] 
Hon MURRAY McCULLY 
: I raise a point of order Madam Chairperson. As you were making an intervention the chief Government whip offered an insulting reference which I took to be a reference to the Chair. I think you are entitled to take exception to it. 
The CHAIRPERSON (Ann Hartley) 
: Did the member make a comment? I did not catch what was said. 
David Benson-Pope 
: My exception was to the member calling my colleague Mr Cosgrove a thug which is neither parliamentary nor acceptable. 
Hon MURRAY McCULLY 
: Madam Chairperson I was just trying to look after your interests in this matter but if you want to overlook that kind of intervention on my part I will move on to my scrutiny of clause 6. 
What happens with clause 6 is that a large majority of the 46000 applications—which the explanatory note tells us are valid applications before the Minister at the moment—are expunged. Those applications are wiped out. If we are going to pass this bill I think there are some questions the Minister should answer. The first question is why it is that no significant changes were made during the last 4 years which would have changed the number of people who made applications. The Government has been in office for 4 years; it has had 4 years of officials reports statistics and 4 years of opportunity to change the basis on which these people were invited to apply. These are people who have applied in the last 2 years. This Government has been in office for 4 years and the Minister has done nothing but she comes along now and says she wants this legislation passed under urgency with over half of these people having their rights expunged. I want the Minister to say why the Government has done nothing for the 4 years before she came along with this measure. 
Why has the Minister not made any changes to the wider programme that is spelt out? Of the percentage of people identified in various categories 60 percent still are in the skills and business category. In the spirit of the changes contained in clause 6 I would have thought that there would be changes also to the wider framework of the Government’s immigration programme. I think the Minister herself conceded in the earlier debate that there are some valid points to be made. I want to know how it is that we have a bill that expunges people’s rights particularly in relation to clause 6 but there is no wider indication of a change in policy or strategic thinking that would provide some guidance in this respect. 
I also want to go back to clause 5 and ask the Minister whether she will tell us precisely what sort of discretions are envisaged by that part. I read in the explanatory note that priorities will be given to various applicants whose rights are not expunged by clause 5 and those priorities will be identified according to high contribution and settlement potential—that is those who can make a greater and more immediate contribution to New Zealand’s immigration policy objectives and are themselves likely to obtain the greater benefit from the decision to migrate. I want to know what that means. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: I move  
That the question be now put 
. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: What sort of a jackboot Government do we have when we have closure motions on a part with a despotic clause that says that officials can do no wrong? That is what we are expected to pass in this Parliament today—a sort of Roman-type provision that says Caesar can do— 
Hon Ken Shirley 
: Caesar didn’t wear jackboots. 
Hon Dr NICK SMITH 
: He did not wear jackboots but he certainly would have said: “ I can do no wrong”. 
What we have in clause 5 is a provision to the effect that it does not matter whether the officials got it all wrong; it does not matter whether they failed; it does not matter whether they made mistakes because they are deemed to have been right. That is an extraordinary provision for Parliament to pass at any time let alone under urgency and with no select committee process. I want to know from the Minister how clause 5 matches up with her promise that Labour would allow for an open Government approach with proper consultative processes and the real involvement of members of Parliament. If that is not a contradiction I do not know what is. 
I come now to clause 6. This is the provision that expunges thousands and thousands of people’s applications. What sort of Mickey Mouse operation is the New Zealand Government running if it is just going to wipe out thousands and thousands of applications? I have this question for the Minister: according to her own notes why is it that 14669 applications lodged prior to 20 November 2002 have not yet been processed? That is 8 months ago. What sort of outfit is this Minister of Immigration running? [ 
Interruption 
] That is out of 20000 so it means that three-quarters of the applications lodged prior to 20 November last year have not been processed. Is that the sort of “efficient” Government department we would expect to have operating in this nation? It is an embarrassment and I want to know why. 
I also want to know from the Minister how many people are being ripped off by this provision. The papers say she does not know. We do not even know from the Government under urgency yet we are being asked to write off all of those people’s rights. We know it is something less than 14669 but no member opposite is able to tell this Committee just how many people are being done over by this provision. I ask Mr Benson-Pope and Mr Cosgrove why this Parliament should pass a law that will expunge people’s rights when we do not even know how many there are. How many of those people have acted in good faith? How many of those people would make good migrants for this country? How many of those people might want to have some right of appeal? We know none of that yet not one Government member has been prepared to get to their feet and defend the sort of jackboot legislation that is being passed under urgency by this Parliament. The bill is being passed through all stages yet it was introduced at only 4 o’clock yesterday. 
Again I put this to the Minister: this Government has been in office for 4 years. Government members have been defending the immigration policy for all that period. Yet suddenly—overnight—the penny drops and they have suddenly decided that the policy is all wrong and that under urgency they will change it. I see that the Associate Minister of Immigration Mr O’Connor has come into the Chamber. The Minister has not been able to answer the questions so I wonder whether that member is able to tell the Committee why he believes that Government officials should be deemed by law to have done everything right even when they have erred and made mistakes. Can some member opposite please explain why we should pass a provision that says that even when officials make mistakes they have got it right? I also want to know from someone opposite how many people are affected. This Parliament deserves to know. 
Hon HARRY DUYNHOVEN (Minister of State) 
: I move  
That the question be now put 
. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: I remind members that in the last 24 hours one Lianne Dalziel has been out telling everybody that her department will be able to process a new regime whereby all applicants will be in receipt of an answer within 3 months. 
Hon Dr Nick Smith 
: Yeah right! 
Rt Hon WINSTON PETERS 
: Yes that is right. She was asked this morning how she was going to implement on the ground the globalisation priority programme she has and she said “at trade fairs.” If we look at some facts we see for example that 75 percent of the applicants before 20 November 2002 have not been processed. Some would suggest that given the demands before it the department is incapable of doing its job. Why would a Minister make those sorts of claims then try to underpin the whole thing with the slogan: “We’re going to have no more doctors driving taxis.” How many doctors are driving taxis? Two hundred? Four hundred? But it ain’t 72000. 
Hon Dr Nick Smith 
: That was said 10 years ago. 
Rt Hon WINSTON PETERS 
: That is right. It was an issue 10 years ago; that is a fact. And do members know how those members got here? They were got into New Zealand by the Labour Party late in 1988-89 and 1990. Most of them got here then—and it was an issue in the 1999 election campaign. I can remember people coming to us and saying: “Why can’t we get ourselves qualifications in New Zealand?” The answer is that they had such an appalling policy back then that one group was approving qualifications and another group the Medical Association was saying it would not register them. It is that simple. But here is my point: the Minister like her colleagues thinks that everything can be handled by spin. But she will not get past this part and that is her inability—and the inability of any of her colleagues—to tell us why one would repose in a civil servant or bureaucrat and in many cases a foreigner the capacity to make a decision and for there to be no rights of appeal against it. 
I ask the Minister to tell us how many frauds she has found within her department in the last 12 months. There is a stack of them. 
Hon Dr Nick Smith 
: She probably doesn’t know. 
Rt Hon WINSTON PETERS 
: Her department head knew. There is a stack of them. One guy was guilty of 12 that her department knew about. In short there was a guy sitting outside the High Commission in New Delhi selling visas—not inside; outside. 
Hon Ken Shirley 
: At a discount? 
Rt Hon WINSTON PETERS 
: Yes—out under the trees. He was successfully selling visas for this country. The reason was that those who would normally go to the High Commission said: “We get a far better deal with this guy outside and he has been licensed from inside.” 
Dail Jones 
: That’s a trade fair. 
Rt Hon WINSTON PETERS 
: Yes it is. 
Dail Jones 
: Fair trade! 
Rt Hon WINSTON PETERS 
: Whether they were getting a fair trade I do not know but given the number of frauds within the department it is ridiculous to say that fraud or otherwise encouraged or otherwise this country will stand by that person’s decision and no one will have the right of appeal. One would think that the Minister would get up and above all provide some satisfactory explanation as to why she would do that. But more important we cannot deny the facts when she lapses about 43000 people though I am not too sure how many fit that category. What we are certain of is that when the Minister says those people do not live in New Zealand she does not know what she is talking about. Every year 190000 are coming in in all sorts of categories such as students. It is all in this document. The Minister should try to get herself some education. 
Hon Lianne Dalziel 
: I’ve read it. 
Rt Hon WINSTON PETERS 
: Well she will know that what I say is true. In total 190000 people including international students are being approved for permanent and temporary residence. How does she know what is going on? She does not know what is going on and she never will. Her department’s inability to handle the problem is evidenced by the fact that it has a huge backlog. There she was last night looking so forlorn and saying: “Oh it’s been ongoing for 2 years.” Well nobody is paying the Minister for being useless—she should resign. If she cannot do her job she should go because she has long outserved her usefulness. 
Hon Lianne Dalziel 
: A cracked record! 
Rt Hon WINSTON PETERS 
: No it is not a cracked record. This CD will get more parts to it than one has ever heard. That is a fact because every day now telephone books of scandals are being sent to our office and I have all sorts of people who want to see me in Auckland and tell me about their latest story—Chinese people Indian and Bangladeshi people. 
Hon ANNETTE KING (Minister of Health) 
: I move  
That the question be now put 
. 
LINDSAY TISCH (NZ National—Piako) 
: This has been an interesting debate. It is a debate under urgency and Government members have not been prepared to stand up take calls and articulate and support legislation that will infringe the rights of so many people. Not one of them has stood up and taken a call the whole of this morning when we have been here pointing out that this legislation will affect 46000 people whose applications will be expunged at the stroke of a pen after the third reading today. That is what will happen. There is no opportunity for anybody to attend a select committee; there are no submissions no transparency and no consultation. Yet this is a Government that has said in the past that consultation and open government is what it stands for. 
Today the Minister of Immigration is denying those people the opportunity to come to New Zealand in good faith and add value to our community and society as a whole. Today the Government will expunge their rights and those people will be out. Everything has been overridden. Where is the natural justice when with a stroke of a pen today the Government says: “You’re not wanted here; get on your bike you’re out?” What about all the people who have come from areas like Zimbabwe? Every week in my electorate of Piako I am getting numerous requests from people from Zimbabwe who have come to New Zealand. They have no certainty that they can stay here. What have they got if they go home? They have actually got nothing. Those people are absolutely stateless. They have nothing to go back to. This Government has had an opportunity over the last 4 years to make those people welcome here. They are the kinds of people we want; they can add value. But no they are down and out on their luck and this Government today is saying: “We don’t want you. You can’t add any value to what we are doing. You’re down and out.” 
If I look at how this department will operate in the future under Part 2 I see that any mistakes that have been made by officers will be deemed to be valid. The slate will be clean. It is like the Clean Slate Bill that the Justice and Electoral Committee is talking about. This is what will happen here; there will be a clean slate because mistakes misdemeanours or whatever will be deemed to be valid. I do not know of anybody or any organisation that does not have to account for its actions. But clause 5 of this bill is headed: “Past order and manner of processing applications deemed valid”. Where is the accountability? Where is the transparency that one would expect? If I am employing somebody then I would expect him or her to front up and to rectify anything that is not up to par. But under clause 5 that has been wiped. 
Clause 5 goes on to say in subclause (2) that there will be no appeals against any decision to process or not to process an application for a visa or a permit. There is actually no appeal process. What about those 46000 people whom I mentioned before? There is no appeal process. They cannot appeal. Subclause (3) states that no review proceedings may be brought in court in respect of any failure in the process. Once again there are no opportunities for those people. People want their day in court but that is being denied by this clause. They are being denied their day in court. As I asked earlier: where is the natural justice? This measure is going to affect 20000 applications or 46000 people whose livelihood is at stake. This Government is absolutely insensitive to what is required. 
Clause 6 is headed: “Lapsing of certain applications made before 20 November 2002”. This Government has been in power now for 4 years. Why is the Government doing this under urgency today? We are opposed to this. 
MARK PECK (NZ Labour—Invercargill) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 60 
Labour 52; United Future 8. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Part 2 agreed to. 
Third Reading 
Hon LIANNE DALZIEL (Minister of Immigration) 
: I move  
That the Immigration Amendment Bill (No 2) be now read a third time 
. This bill does three things. It provides for global prioritisation. We believe that we have the power currently to do this because we are able to manage the way that we address those applications that come in but we are not taking any risks. This measure enables the best applications to be dealt with first. I quite frankly have been absolutely amazed at the support for the “first come first served” principle which would not serve New Zealand well. I want every member in this House to realise that the global prioritisation principle is about ensuring that those who have job offers who are already needed in New Zealand have access to residence first. 
The second thing that the bill does is that it introduces the lapsing provisions. I am aware that there will be people who are disappointed as a result of that. It was made very clear in the debate that it does not apply to applications lodged after 20 November last year; it does not apply to applicants who have lodged more than 28 points; it does not apply where there is a relevant job offer; it does not apply where the applicants have already been invited to apply for a job-search visa or one has been granted to them; and it does not apply where all the criteria have been met for approval in principle. So only one component of the group of people who currently have applications in the pipeline will have those applications lapsed. The application fees for those lapsed applications will be refunded in full. 
It is no wonder National Party members have got up in this House to defend rights. Actually it is the first time that I have heard National Party members get up in this Parliament and do that. In the 13 years that I have been here I have never heard a National Party member get up to defend someone’s rights. What the National Party members are really defending is the fact that they got it wrong. In 1991 the policy got it wrong. The 1998 adjustment which allowed migrants to get full points for a job offer that was not relevant to their qualifications or experience was an unmitigated disaster for this country. The National Party in essence is defending the National Government’s policy errors; this policy puts them right. 
The skilled immigration policy is surely designed to meet the needs of New Zealand. If other parties are willing to sit back and wait for people to apply to come to New Zealand—bringing skills that New Zealand may or may not need—and then to forget about them the moment that they arrive in this country then so be it. That is not what this Government stands for. This Government is pro-immigration pro-migrant pro-settlement and pro - New Zealand and that approach produces the best of all worlds. All will benefit from the approach that we have adopted. 
National Party members have asked what I have done in the last 3½ years. To quote one of my very good colleagues on this side of the House I have done “heaps” in the immigration portfolio. I have an entire page of delivery in terms of our policy that I could go through but I just want to mention two points. I said when I became the Minister that there were people in the country with residence who could not get work and there were people in the country with work who could not get residence. I have done everything within my power to address that issue. I have said that the settlement focus has to be the key approach to immigration. That is why we established pilot schemes—to make sure that skilled migrants were matched with skilled opportunities in New Zealand. We brought in the work-to-residence policy and the talent visa has been hugely successful. This bill is not a knee-jerk reaction; it has been a very long time in the planning. 
In the Committee stage I read out the public comments of immigration consultants who do not accept the position of the New Zealand Association for Migration and Investment and I want to close with some comments from business other than Business New Zealand. This is a statement from the Employers and Manufacturers Association (Northern) Inc: “Business has forever said the best way of selecting immigrants suited to New Zealand was for them to show they had a genuine offer of a job from a New Zealand enterprise. The changes announced yesterday move a long way towards delivering this approach and the Employers and Manufacturers Association (Northern) endorses it with enthusiasm. ‘Immigration Minister Lianne Dalziel’s approach is fundamentally the right one for business particularly for manufacturing businesses.’ says Alisdair Thompson EMA’s Chief Executive. ‘A labour department survey last year showed many of our enterprises are not growing as fast as they could because of a lack of suitable skills especially people with trades and vocational skills. Skill shortages were found to be holding back growth for 42 percent of smaller businesses but the door must be kept open for immigrants bringing capital with them. In addressing the issues Minister Dalziel has made more progress with the portfolio than any Minister I can remember. While some people may be disadvantaged the change needed was bound to cause some disruption.’ ” 
My point is that there would be more disruption if we do not do this if we do not get it right for New Zealand. 
PANSY WONG (NZ National) 
: The Minister of Immigration got only one thing right. This legislation cannot be a knee-jerk reaction; there have been 4 years of incompetent management by that Minister of the immigration portfolio. That is why it has ended up with a backlog that will take 2½ years to process. That is why we have ended up having to rush legislation through Parliament to lapse people who have had their applications in the pool for 2 years and who are now being told: “Tough luck!”. They will just get their fees refunded; they will not even be compensated for interest lost during that time. That does nothing for the international reputation of New Zealand. 
But today has been an eye-opener. It confirms the arrogant approach of the Labour Government. When it makes mistakes it never apologises. I just make that observation. When the Labour Government makes mistakes it adopts the following actions: it never apologises it blames everyone in sight and it rushes legislation through under urgency. It is quite frightening. Even today I personally have felt the anger of the Minister. If anyone dares to question her actions she says something like: “Well Pansy Wong you just wait and see.” I think wow it must be quite frightening for all those immigration consultants and business organisations. Who would dare to write any letters to that Minister of Immigration that point out her faults or mistakes? I presume she treats everybody equally so she would tell them: “You just wait and see.” She reads out letters of endorsement only. I think the scenario is quite clear: one should never question the Labour Government or cross it; otherwise one shall pay the price. A very very threatening environment is created and it is reinforced by the provisions in this legislation. 
Today the legislation is being challenged by the Opposition parties only. I doubt very much whether United Future members have actually read the bill or whether Labour back-bench members understand what it is all about. The environment that has been created and that now extends to the Immigration Service gives absolute power to the chief executive the Minister and the visa officers to make rulings. This legislation states that if they get those rulings wrong they will be treated as correct. I think that in future members on this side of the House will have a real problem because most of us will have a lot of constituents who want to question immigration rulings. We will have to tell them “Tough luck!” because the legislation was rushed through Parliament and in effect a ruling on the so-called “order and manner of processing” cannot be questioned. Lots of people will have no recourse from that. What has happened to the open and transparent governance that this Labour Government has always claimed to have? 
The other eye-opener for me anyway is to know—Labour and United Future would not admit it but it is true—that the Government has started to study New Zealand First’s immigration policy. Its members have continued to ask New Zealand First members why they do not vote for the legislation as it is that party’s immigration policy. I find the double standard very confusing. New Zealand First wants to restrict immigration and this is anti-migrant. Labour and United Future are rushing through this legislation to legislate away the rights of 20000 people for proper assessment and to bring down the number of migrants and they claim that is pro-migrant. What is the difference? Nobody seems to want to take a call and explain. Why do Labour and United Future not stand up and say they have adopted New Zealand First’s immigration policy and will continue to study its immigration policy? The public in future should be very aware of that. 
Sitting suspended from 1 p.m. to 2 p.m. 
PANSY WONG 
: The passage of this bill further cements a Labour governance style of being heavy-handed; Labour can do no wrong and the critics had better watch out. Minister Lianne Dalziel demonstrated that by accusing me of somehow being involved with money-laundering immigration scams. The only crime I am guilty of is to question her legislation. It is a day of shame in Parliament when a Minister fails to acknowledge that she is not on top of her portfolio and resorts to threats to her fellow MPs. 
Did she not promise to bring in legislation to regulate immigration consultants who are not behaving according to the way that the law was drafted? Did she not promise to do that? She has failed to do it and as a result some potential migrants have had a raw deal. She did not bring legislation to the House to deal to those immigration consultants. Instead she is rushing legislation through under urgency to deal to over 20000 innocent migrant applicants who responded to her promotion in various places in October 2001 I think it was to encourage people to apply to come to New Zealand. The points required at that stage were 24 or 25; now she is saying that all those applications should lapse. 
Global prioritisation—another Labour spin—really means that Chinese Indians and Koreans need not apply. Labour is in a glass house and should not throw stones at New Zealand First because Labour really agrees with that party’s immigration policy. This global prioritisation means less transparent and objective criteria will apply. It is a recipe for corruption. Immigration consultants and organisations that have the ear of the politicians and officials can in future expect favourable treatment. Under the provisions of this bill the public and Opposition MPs cannot question appeal or seek review. United Future’s part in opening the door to corruption in our country’s immigration system will not be forgotten. “United” they might be but there will not be much of a “Future”. 
The Minister says the New Zealand Immigration Service has the capacity to implement this global prioritisation. Why should we have confidence in that when it is clear that in the House today under urgency provisions are being introduced to clear a backlog of applications that would take the service 2½ years to assess? Under the Labour Government’s so-called new skilled migrants policy there is provision for the service simply to lapse applications when it thinks fit or to decide without having to explain why or not to issue a letter of invitation. That provision was introduced just to avoid the Government having to put more resources into making sure the Immigration Service is doing its job properly. This Minister who has spent 4 years in her portfolio adopts a defensive mentality. She oversees a backlog of applications made in the past 2 years then passes legislation under urgency to lapse those innocent people who responded in good faith to the invitation to apply to come to New Zealand. 
PAUL ADAMS (United Future) 
: United Future is pleased to support the Immigration Amendment Bill (No 2). I take issue with Pansy Wong’s comments that United Future would support things that lead to corruption. That would be totally incorrect. 
Dear old Winston has his three policies to fix but now he is going to have to have— 
Mr SPEAKER 
: Order! The member will be referred to by his full name. 
PAUL ADAMS 
: I apologise. The Rt Hon Winston Peters with his three things to fix will have to place a bandage on one of his fingers because he obviously hit the finger instead of using this opportunity to bring his policy in and achieve what he had stated. 
This bill that we have been dealing with covers two groups of migrants. To start with the bill aims to prioritise those general skills category applications currently in the system of which we have heard there are 20000 representing 46000 people. As soon as this bill is passed which will be very shortly—thanks to United Future—those with a job offer relevant to their skills or with high points will be prioritised in the immigration queue. The Hon Richard Prebble tried to say that this legislation was introduced because the points system does not work. This bill is not saying the points system does not work and in fact the new policy will make better use of the points system by providing bonus points for applicants with relevant job offers particularly in regions with skills shortages. 
United Future is free to choose which legislation it supports in this House and we chose to support this legislation because it is good legislation because it is good for New Zealand and because it has been welcomed by New Zealand business which United Future will always support. Yes applications currently in the system from those who do not have a relevant job offer or sufficient points will lapse and their fees will be refunded. This will not affect those who already have a job-search visa or those whose residency decision is imminent although the Immigration Service will no longer invite people to apply for a job-search visa in order to get a relevant offer of employment in New Zealand. 
The current backlog represents almost 2 years of potential approvals under the general skills category and although many of these applicants meet the minimum points requirement only 57 percent in the last year had relevant job offers. Many of those who have applied are already in New Zealand on work permits or came here to look before they applied. I want again to underline the point that these people will still be free to do this. In fact their experience in New Zealand would count in their favour should they subsequently receive a job offer and apply for residency. Of the principal applicants approved for residence in 2002-03 62 percent had previously had a student work or visitor permit at some stage. 
From 1 July principal applicants must have a job offer relevant to their skills or qualifications. This is entirely consistent with the intent of the Immigration Amendment Bill debated earlier and ensures that everyone will be treated in the same way. It is also the reason that this bill must go through all stages today—to stop one group of applicants from using the window of opportunity presented by the normal legislative process to get their applications in under the old rules. 
Many speakers have already argued about the rapid nature of this change and the introduction of these bills under urgency. But it must be remembered that the Immigration Amendment Bill has had only its first reading. It will go through the normal select committee process and there will be further opportunities to debate it in this House. As for the interim bill we are currently debating given its alignment with the primary bill United Future believes that the experience over the next few months will greatly inform the select committee about how this shift in policy will work in practice. For example the committee may want to look at whether the idea of lapsing unsuccessful applicants after 3 months is workable and fair. 
Another point to reiterate is that there will be no significant change in the number of people who gain residence here. There is essentially a new filter in the application process because the Government is inviting people to apply but only the number of applications provided for in the New Zealand immigration programme will be considered. The number remains at 45000 with 60 percent set aside for skilled immigrants and this will continue for the next 3 years. If anything the approvals process will be much faster than it is now but the total number will remain stable and predictable. This is totally consistent with United Future’s immigration policy. 
To conclude this bill prioritises those currently on the list who already have job offers rather than those who do not have a job and could end up on the dole. United Future is very pleased to support this legislation. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: The problem with the previous speaker and his party and the Government that they support is that they do not understand that the quota numbers of those who come in are to be more liberal from today than they were 2 years ago. Two years ago the Government announced the same figures at 45000 and it had a plus or a minus alongside them. Today there are no minuses; the same criteria are all pluses. The suggestion that things will be tighter is a total misnomer. 
The second mistake they make is that they confuse immigration policy with a policy on immigrants. The first one is wise economic and social policy; the second one is how we treat foreigners who come to our country and there is a world of difference. 
The third thing is this. Recently a very very august group called the National Academy of Sciences / National Research Council in the United States did a study of immigration into the melting pot called the United States. We have all heard those stories about how good immigration has been for the United States. Who are these people? They are economists demographers and sociologists. They are all leading people in their field and hardly anti-immigration. What did they find? On immigration’s effects on wages the study found that immigration was responsible for 44 percent of the decline in wages that high school dropouts had experienced between 1980 and 1994 in the United States. On immigration’s fiscal impact it found: “Immigration not only affects natives by their presence in the workforce but also affects natives through their consumption of public services. Based on census and other Government survey data the NRC study concluded that at the present time immigrant-headed households consume more in public services than they pay in taxes.” 
Those are facts not stupid blind creeping ideology from a Government that cannot run a sound economy and so it brings in artificial consumer demand then boasts how it is bringing in 1.3 percent of our gross domestic product in terms of growth. According to the Government if it were not for immigrants we would be going through a serious depression at the moment! I can see why the Minister is saying that but there never was a Labour Party in the past that would have supported that sort of nonsense. 
On cost versus benefits the study stated—these are not my words—“We can now say with some confidence that immigration is not the benefit to the economy that it was once thought to be. While the overall economic impact of immigration is modest the effect on the unskilled and on taxpayers in high immigration states is substantial. We should therefore change our immigration policy not because the negative effects are so large for the country as a whole but because they are so concentrated.” For that read New Zealand. Members should go to Auckland and look at the huge demand on health services alone in just one segment. Ten years ago there were 10 interpreters working for the Auckland health service. Today there are not 10 but 285. Once 10 years ago we had a road service in Auckland that could see a person get from the airport to the centre of town in 20 minutes. Now it takes an hour at the worst times of the day and it is getting worse by the hour. 
Members should look at legal aid services and accident compensation costs. Over there sit the Minister of Immigration and the Minister of Finance and they cannot quantify anything but their feel-good feeling. All of a sudden because the polls say that less than 16 percent support them on this issue and a massive 82-plus percent do not but support New Zealand First on the issue they are panicking and have this knee-jerk reaction. What did Gareth Morgan say? He is hardly a supporter of Winston Peters or New Zealand First. He said in November 2002 that if these trends are maintained—and the policy we have been debating yesterday and today will maintain them—it could take as few as 60 years before the population is effectively totally renewed. 
Those who thought they were coming to a country with a British-Maori background with shared cultures and traditions that we have built up for the last 140 years should forget it. These people are about colonising New Zealand from without with in the main people who do not want to speak the language do not share our system of laws and do not share our cultures. Today there are 300000 people in New Zealand who cannot speak English. 
Edwin Perry 
: Labour voters. 
Rt Hon WINSTON PETERS 
: Yes. It is about social engineering. Mr Morgan went on to say: “Mr Peters is quite justified to point out New Zealand is looking at a social and demographic revolution.” Who gave Labour the mandate? No one. Who supports Lianne Dalziel? Nobody. Who supports the policy? 
Government Members 
: Everyone. 
Rt Hon WINSTON PETERS 
: I am talking about sane rational people I say to Mr Swain. I have not included him in it. What sane rational informed person supports this policy? Nobody but the “United League of Joyboys” who have no idea how to exercise power and a gentleman over there from Dunedin who has been promoted way above his station. 
When the Minister of Immigration Lianne Dalziel was before the Finance and Expenditure Committee this year she was asked by my colleague whether she was aware of a study prepared by Waikato University. It is fascinating stuff: “Jones: Do you accept that in total 190000 including international students were approved for permanent and temporary residence for the year ended 30 June 2002? Dalziel: How much? Jones: 190000. Dalziel: No.” There is an old saying that the malady of the ignorant is to be ignorant without knowing it. She starts not even knowing the basic figures. He says again: “Do you accept that 73800 of that figure were covered by student visas and work permits?” She says—pretty typically I might add—“I have no idea what you’re talking about.” Mr Jones says: “Can I draw your attention to a well-established report?” and she says that she does not know about it. He refers to Dr Richard Bedford Professor of Geography and Deputy Vice-Chancellor (Research) of Waikato University and Dalziel says by way of a question: “And he says they were granted permanent residence?”. Members should remember what she was asked. She began by saying that she was not aware of that study but pages later we finally get to it. She is asked again: “Are you now aware of it? Dalziel: Permanent residence and temporary entry? Yes.” 
This is no small matter. They are cancelling the applications of tens of thousands of people. There has been no consultation with anybody no select committee hearing. This is to be rammed through Parliament in the space of under 24 hours. I say to the people up in the gallery that this was once a country with a grand tradition for honouring the law and for respecting people’s rights. It distinguished us from those dictatorships and autocracies that the world once passed away from but today here is the Labour Party denying people fundamental rights denying them the fruits of a court case by retrospectively changing the law. 
I want to say one last thing on this bill. They laugh now but we have seen the first of three things that we will fix up. It will take us all the way to the next election and on election night 2005 we will have fixed up them and the issue as well. 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: Let me first of all deal with one simple issue. Mr Peters now defines as temporary residents of New Zealand everybody who comes here as a tourist everybody who comes here as a short-term— 
Rt Hon Winston Peters 
: No no. 
Hon Dr MICHAEL CULLEN 
: Oh yes yes. The figure of 190000 actually includes all those people. It is not the number of people coming into New Zealand for permanent residency. He has everybody frightened about all these numbers of people who happen to be employing large numbers of New Zealanders in hotels and goodness knows what else up and down the country. 
But let us deal with his basic approach. If the rules that he would love to see had applied in this country for the last 160 years he would not be half the man he is now. Of course he is only half the man of anyone else in this Parliament except his own members anyway. 
Mr SPEAKER 
: The member will withdraw that comment. 
Hon Dr MICHAEL CULLEN 
: I withdraw the second part. The first part is undeniably true. If those rules had applied since 1840 he would be half the man he is now. If the original inhabitants of this country had decided that nobody of a different colour ethnicity or culture from those already here was going to come into the country he would not be trying to pretend he can put on a kilt on occasions during the year and be half-Scottish. And he would finally have to teach himself Maori for the first time in his life. 
Of course if those rules had been applied by whoever was not here in the first place before Maori arrived there would be nobody here. By the logic he has just applied this economy would be booming without a single person in the country. And if no Europeans had ever been let in we would have the highest non-literate non - wheel using economy in the world because that is the economy that existed before Europeans arrived in New Zealand. And if migrants had never been allowed into the United States the various Amerindians the early first peoples of the United States would presumably now be an even more dominant economy in the world than the United States is at the present time. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I seek clarification on this matter. 
Mr SPEAKER 
: No that is not a point of order. 
Rt Hon Winston Peters 
: I am getting to it. 
Mr SPEAKER 
: What is the point of order? 
Rt Hon Winston Peters 
: First of all there was the repeated allegation which I did not take umbrage at about someone who was only half a man. The member then depicted Maori society as non-literate and non - wheel using. I want to make this point: when the member was crawling around the slums of Liverpool we had a degree of civilisation beyond his wildest dreams. 
Mr SPEAKER 
: The member knows that is out of order and he will cease immediately. 
Hon Dr MICHAEL CULLEN 
: If I had been crawling around the slums of Liverpool I would have a far better football team to support than the one I do happen to support which is a North London football team. 
I repeat: if he really believes that a society of our sort would have been better off without immigration what on earth is he trying to argue? Who seriously believes that in New Zealand these days? What he tells us is that migrants change the nature of a country. Well that is a real piece of news to discover in the 21st century! Is that a rule we could apply to England in 1066? He would not have tried to fight at the Battle of Hastings; instead he would have said: “Sorry you are prohibited immigrants. We don’t want to change our society. Throw away your bows and arrows boys; you’re banned from coming in.” That would be the kind of approach Mr Peters would have taken. 
Looking around at the motley mob that makes up New Zealand First I say it is about time that we started celebrating diversity in this society and treasuring even those who do not contribute. I mean who has ever heard a member of New Zealand First other than Mr Mark add anything to Parliament since those members got in here? I assume they are representing the entire population that cannot speak and cannot hear within this particular Parliament. 
I want to come to the issue of the rule of law. Every party over there has been pouring sweat for the last week saying this Government should legislate yesterday—not even tomorrow—to overturn a unanimous Court of Appeal decision to remove property rights. There is a sudden silence now. They are thinking: “When did we say that? What were we talking about?”. Recently there was a unanimous Court of Appeal decision that said that the indigenous people of this country can apply for recognition of their property rights and those parties said we should legislate to remove those property rights and overturn a unanimous Court of Appeal decision. Yes those parties did say that including those members over on that side who might potentially be beneficiaries of that decision if I recognise ethnicity correctly. That degree of self-hatred is remarkable. 
Of course what we say is that we should legislate to recognise the rights of the rest of us as well which is slightly different so that half of Mr Peters can go to the beach and half of Mr Peters can have some customary rights derived from his ancestry. He can get on to the beach probably at about 3 a.m. because I understand that is his normal beach-visiting time and go fly-fishing—if he can work out by then in his usual state at 3 a.m. which way round the sea is and which direction to point in. 
Let us come back to this issue. Faced with a decision by one judge that says the current law is not sufficient to implement the Government’s policy—and that is the implication of the decision—Parliament as the sovereign body as the highest court in the land has the right which it has asserted time after time and every tax Act is littered with legislation of this sort to say: “No we will stick to the policy and change the law to fit the policy.” Mr Peters suddenly decides he wants to oppose a bill that does that and that would actually help his general approach in life; he would rather oppose that policy in order that he can grandstand and say that everybody who is an immigrant is sucking off the body politic of New Zealand and is contributing nothing to this country—nothing like as much as Mr Paraone who has been silent on the foreshore and seabed issue; nothing like as much as Mr Perry who has been silent on the foreshore and seabed issue; and nothing like as much as Mr Gudgeon who has been silent on the foreshore and seabed issue. 
Mr SPEAKER 
: The member will now come back to the bill. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. He has been allowed to carry on about a whole lot of extraneous matters that are on the parliamentary Order Paper but do not relate to this bill and he should be told to get back to it or shut up. 
Mr SPEAKER 
: Let me just say to the member that I have been listening to a large number of comments about a bill that we have already passed and sent off to a select committee. This bill is a relatively narrow bill and some members like his bench mate have been sticking closely to it and do know how to do that. A lot of other people in this debate have not and the member knows that. 
Hon Dr MICHAEL CULLEN 
: This bill should be passed for one clear reason now established in this debate and that is to assert clearly that this Parliament is sovereign and judges do not make the law. This Parliament makes the law not one judge. I say to some members opposite who are rather new and naive in these matters that if we allow every time a judge makes a decision that the law is not adequate to implement policy then we will quickly find not a great deal of policy remaining in place. Secondly this bill is necessary to avoid administrative confusion and chaos while the first bill goes through the select committee. Finally this bill helps establish that people will get priority access into New Zealand on the basis of the skills that we want in New Zealand and nobody opposite seems able to find anything wrong with that particular position. Even Mr Simon Carlaw who is paid to whinge—that is what he draws his salary to do—has actually said this legislation is good. 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: That was a very revealing speech in many aspects and I will come to some of those. ACT New Zealand certainly supports planned orderly migration and we celebrate diversity in this country—that is basic ACT policy. We do not share the somewhat xenophobic views of the Rt Hon Winston Peters. I think the comments that the Leader of the House has just made really highlight a number of issues. He made the comment that half of Mr Peters can enjoy his customary rights while the other half can eat his haggis and blow his bagpipes. But that really hits the very nerve of the foreshore and seabed debate which the Leader of the House introduced. We recognise diversity but say there should be one law for all. We are all New Zealanders and there should be a single sovereignty. 
No other Government in history has talked about dual sovereignty to the extent that this Government has running the notion that we will somehow have separate and different rights according to the particular date when one of our ancestors may have arrived here. The reality is that every person in this country is either a migrant or a descendant of a migrant. We can argue about how many generations one might have to go back but one would only have to go back 30 generations to reach the first settlers in this country and that is nothing in global terms. We are all migrants or descendants of migrants and there should therefore be one law for all. We should not have the race-based laws that this Government is constantly bringing to this Parliament. The Leader of the House tripped himself up in quite an extraordinary way in the speech he just gave. 
However the real concern with regard to this bill is with the process that has been adopted. This is a panic bill that has been brought to the House as a knee-jerk reaction under urgency something that has become the trademark of this Government. Every time that this Government thinks it has a little problem in the wee small hours of the evening it has a panic situation quickly drafts out legislation brings it to the House and tries to rush it through under urgency with no select committee consideration no submissions and not even any consultation. The Minister sat in the chair during the Committee stage and was proud of the fact that there was no consultation with those who understand this issue best. That is a very arrogant way to bring about legislative change. It always ends in tears because inevitably people get it wrong. 
We know—the Minister admitted this—that the Minister first gave drafting instructions for this bill on 23 June. That was only 6 working days ago which emphasises what a rushed job and knee-jerk reaction this bill is. 
Hon Lianne Dalziel 
: Stop misleading the House. 
Hon KEN SHIRLEY 
: I am just repeating to the House what she told us in the Committee stage. It is in  
Hansard  
and we can go back to  
Hansard 
. The Minister came scurrying back down to the House when we challenged her and said that only part of it was drafted post-23 June trying to cover herself. However that was what she told us in the Committee stage. 
There are real concerns here with regard to the retrospective consequences of this legislation. We know what drove the Minister: the immigration consultants took legal action against her. They went to court and won. When she lost she put out an announcement that she would appeal. She then thought that rather than go through the courts she would use her power to legislate and close down the options. In doing so there is a retrospective impact on some 20000 applicants which we are led to believe affects some 46000 people all of whom had legitimate expectations. Their expectations are being dashed by this Minister in her hasty knee-jerk reaction to this issue. 
We do want orderly migration. I would not suggest for a moment that the law as it stands is perfect. It is not. The law is in dire need of some reform but I am not satisfied that the Minister is going about it in the right way. Amending the law in indecent haste as she is is certainly not the way to attack that issue. 
I am also very concerned about the so-called loading for regional locality. People will somehow be given a special priority if they are prepared to live in Invercargill Gore Timaru or somewhere other than Auckland. We know those sorts of policies do not work; they never work. Families might start off in those places but if it is their wont within 3 or 6 months they will be in Auckland. Do members remember the very large numbers of Vietnamese refugees who came to this country— 
Mr SPEAKER 
: As the Rt Hon Winston Peters pointed out this debate has been too wide. It must come back to this particular bill. I know that reference can be made to the bill that we have already sent off to the Foreign Affairs Defence and Trade Committee but only reference to it. The member cannot make most of his speech on it. 
Hon KEN SHIRLEY 
: The point I was making was that the core part of this bill gives a loading according to the proposed location of a potential migrant. 
Darren Hughes 
: The other bill did that! 
Hon KEN SHIRLEY 
: There is an implication of that in this bill and that is my point. The effect of that will the same in terms of what it is replacing as the effect of the old points system. Be that as it may the point I make is that most of the Vietnamese and Cambodian migrants who came to this country have since moved on to Sydney or Melbourne. That is the reality and that is why the earlier bill that this Government brought in today was as equally bad and faulty as this bill. 
Part 2 is the real concern. That concerns the validation of the processing of applications. We see there that any past mistakes order or processing of an application that has been messed up done wrong or lacks justice is deemed to be valid. Just with the stroke of a pen clause 5(1)(a) deems it to be valid. However the situation becomes worse than that because in clause 5(b) no appeal rights are granted. People cannot appeal and there is no review process. Any mistakes that the bureaucrats make are deemed to be valid. That is not good legislation. This Minister comes here to the House puffing herself up crowing what a wonderful job she is doing and singing her own praises. She has a standard letter that she always brings to the House and reads out to us time and time again. 
Ron Mark 
: She told us we were wrong in the election. 
Hon KEN SHIRLEY 
: That is right. She always gets it wrong. Those provisions are of deep concern as well as the first part of the bill. In common law people can bring a writ of mandamus. Where bureaucrats are not following due process or doing their job and are sitting on their hands or dragging their feet citizens have the right to bring to the courts a writ of mandamus. 
Hon Lianne Dalziel 
: They’re not citizens; they’re not even in the country. 
Hon KEN SHIRLEY 
: Not the way this bill reads! It states that any past mistakes or inactions are deemed to be valid—no appeal and no right of review. 
Hon Maurice Williamson 
: There will be one day. 
Hon KEN SHIRLEY 
: There will be one day. When there is a change of Government there will be and that is not too far away. I would be prepared to place a bet with any member on the Government side of the House on that one. There are no takers on that at all. 
This is bad legislation. ACT along with other Opposition parties will oppose it. 
Hon Lianne Dalziel 
: Good news! 
Hon KEN SHIRLEY 
: The Minister thinks that it is good news? 
Hon Lianne Dalziel 
: I think it is good news that the member has just shown how ridiculous the position of the ACT party is. 
Hon KEN SHIRLEY 
: Not at all! We support good immigration policy. I said at the outset that we support that. This is not good immigration policy. This is a knee-jerk reaction. The Minister panicked 6 days ago fired out instructions to the bureaucrats to prepare a draft bill and brought it to the House under urgency with no select committee consideration and no public submissions. If she truly has confidence in this legislation why did she not invite public submissions? Why did she not let it go to a select committee? She has not answered those questions. The bill stands condemned by the Minister’s own actions. 
DARREN HUGHES (NZ Labour—Otaki) 
: That was a most extraordinary speech from the low-polling ACT party. First of all we found out that the ACT party research unit must be down Lambton Quay somewhere sipping latte away from the Pipitea Street electorate office. Mr Shirley the deputy leader of the ACT party spoke to the wrong bill. At the beginning of the debate on the two immigration bills he said that the ACT party supported the policy intent. During that speech he said that if ACT got into Government it would reverse the bill. That shows why that member went from being No. 2 on the ACT list to No. 6 and he is falling so fast that he will be applying for immigration status for another country after the next election. 
The contribution made by Mr Shirley summed up exactly the Opposition’s approach to this bill. It has not spoken to the issues that have been addressed by the Minister of Immigration the Hon Lianne Dalziel. We are desperate to make sure that when migrants come to our country they settle well. We are desperate to make sure that we can match up the skills people have with the needs that we have in our country so that we make a contribution for the migrant and for New Zealanders. This bill is about making sure that we get proper robust immigration policy. I congratulate the Hon Lianne Dalziel on her leadership with regard to this bill. It shows why she is right and the Opposition is wrong. 
METIRIA TUREI (Green) 
: The Greens are completely opposed to this bill. None of our concerns have been dealt with at all in the explanations from the Minister or the Government members. We have two main issues: firstly the extraordinary level of discretionary power given to immigration officials and secondly the retrospective stripping of a just process from the applicants. 
This bill gives the Immigration Service an extraordinary level of discretion which is way beyond what is needed to fulfil its requirements. The Immigration Service has total discretion over the order and manner of processing applications. That process can change at any time by general instructions given by the chief executive and in addition immigration officials are entitled to follow those instructions but cannot be held to account if they do not follow them. It is entirely inappropriate for a level of discretion such as that to reside in an officer and for the criteria that govern how applications are to be dealt with to be determined entirely in-house with no oversight or review by the public. Such a level of individual control over the application of the criteria is unjustifiable and there has been no explanation at all as to why Immigration Service officers should have such a level of discretion. 
I have been told previously by officials that the reason that much of the immigration process and policy is done through departmental policy rather than through legislation or regulation is that it has always been done that way. That is not an acceptable process in a democratic society such as ours. That is not the way that such a serious and important question as immigration should be determined. Immigration has an enormous impact first on the tangata whenua of this country and second on the whole of the New Zealand public. It should not be determined outside of public scrutiny and with no consultation or public discussion. 
To compound the problem of the extraordinary level of discretion is the fact that there is absolutely no opportunity to appeal the use of that power. No applicant is able to hold an immigration officer to account for failing to apply the criteria as he or she had been instructed to do. Officers are not legally required to process applications in any particular manner or order whether or not that process is consistent with the general instructions given by the chief executive. That means an officer can process an application in accordance with the general instructions or not do so entirely at his or her own discretion and there is no means to object to that. There is no control at all in the legislation on the potential use or abuse of those powers. 
By their very nature immigration applicants are in a very vulnerable position especially if they are from developing countries where English is not necessarily the first language or are in circumstances that create an environment of urgency for them. In the light of the imbalance in the power relationship between applicants and immigration officers respectively it is only just that applicants should not be subjected to an unfettered individual discretion over the application of rules that can change mid-application and without notice. Those circumstances open up the service to very real allegations of corrupt and discriminatory actions. We would have thought that there would at least be protections in the bill to avoid the possibility of such allegations if only to protect the immigration officials themselves. But there is no such protection either for the department or for the applicants. That is untenable and unjust. 
We also object to the automatic lapsing of existing applications notwithstanding the option for applicants to reapply. That is not the way to deal with the backlog of applications or more importantly with the people and the families who are applicants. Those people have in good faith met the obligations of the Government immigration policy paid their money and are now arbitrarily deprived of a due process. That provision is not necessary. Those people should not be punished for mistakes made by the Government in the allocation of resources to the Immigration Service. We support the principle that applications should be dealt with under the provisions that applied at the time an application was made. In order to prevent the huge rush of applications that occurs when any new policy on immigration is announced the legislation should have simply stated that the new process applied to any application lodged as of 1 July 2003. That would have ensured that those already in the system were dealt with fairly while being clear and fair to those who lodge new applications. The Minister intends to refund application fees of about $9 million. That money would be much better spent on dealing with the backlog of applications in a fair and just way. 
It is with a great deal of frustration and exasperation that we remind the Government once again that it has made a very significant decision without any consultation or discussion with Maori over the issue. Immigration is a fundamental issue of sovereignty and decision making. The Government asserts its right to determine immigration issues as part of the sovereignty it claims through the Treaty of Waitangi and the establishment of the Government. But the treaty was between two parties and immigration is and remains a treaty issue. It may even be described as the first treaty issue being the process by which new people come to this country. But again the interests of Maori have been ignored and undermined. I note also that the whole of the New Zealand public Maori and non-Maori have been excluded from the process. I want simply to bring to the attention of the public that Maori have suffered such a level of disregard at all levels in virtually all matters in the legislative process. 
Immigration policies should be based on the Government’s obligations under Te Tiriti o Waitangi and on the social and economic needs of the country addressed in such a way as not to compromise ecological sustainability and the protection of our natural heritage. Such a policy must also be just and transparent and not merely a means by which to select the elite from other countries. If the Government truly had confidence in this new policy and process it would not be using the urgency process to push it through. Also the details of the process would be clear and transparent in the legislation the powers of officers would be explicitly prescribed and there would be a right of appeal in order to protect the human rights of those in the process. Clearly the Government does not have confidence in this legislation and neither should the New Zealand public. 
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: I am very pleased to have the opportunity to rise in support of this legislation and I would like to compliment my colleague Lianne Dalziel for the effort and the vision that goes into such a necessary policy change. I think most New Zealanders welcome the sensible prioritisation in relation to the needs of this country of the many thousands of people who are keen to come to it. It is a sad comment also on the attitudes and the personnel involved in the tired old Opposition parties that debates like this become yet another excuse to scratch the sore of bigotry and prejudice. I cannot imagine a better illustration of that than the comments the leader of the New Zealand First Party made just recently. 
Like a lot of New Zealanders I watched a rugby match on Saturday evening. I was substantially moved by the incredible image of Deborah Wai Kapohe singing first “La Marseillaise” followed by the New Zealand national song. I cannot imagine a better statement of what this country stands for than that which the NZRFU provided us with on Saturday night. I regret that so many members of this House cannot take the opportunity to celebrate what this country represents in terms of its ethnic diversity. They should get on with the job and leave their tired old bigotry and prejudice at home. 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: The Minister would have us believe that this is a relatively minor bill that is being passed under urgency to facilitate a wider package of immigration changes that for some unknown reason were announced late yesterday afternoon. Significant changes are contained in the other bill which I make only passing reference to as I know the Standing Orders permit but the relationship between these two bills is important and there has been some dispute it is fair to say about that matter. 
The Government says it is moving away from a system that is based on points solely to one that will see New Zealand’s labour market needs met by way of immigration. That is a significant shift. It takes us back to a policy that we have seen before in this country which relies heavily on the ability of Ministers and officials to understand what is happening in the marketplace. I have grave concerns although I will approach that matter which is now before a select committee with an open mind. 
In relation to this measure I say that it has been completely misrepresented to the House by the Minister who has presented it. This bill has nothing to do with a meaningful reform of the immigration system in this country. It has everything to do with saving the political backside of a Minister and some officials who did not see some inevitable consequences who did not make some decisions that they should have made and who are finally now asking this Parliament under cover of urgency to tidy up what they know they can tidy up no other way. 
To recount the history of this matter—and it has been adverted to on more than one occasion in the Committee stage—this bill really has its origins in the fact that the Minister of Immigration and the Government that has been in place for 4 long years did nothing to confront significant changes in relation to the immigration market. They did nothing to fine-tune by way of the annual plan or any other measure the points system in a significant way or make any other significant adjustments that would have avoided some of the problems that have now occurred. Because the problem became large and because the number of applications was substantial and because the political heat came on to the Minister the Government decided to do something and it panicked. In a sheer act of panic we saw some changes made that touched the implementation of the English language test. 
Those changes were challenged by a group in the High Court of New Zealand. The High Court in the form of Justice Randerson found in a judgment issued on 16 May this year that the Minister had no lawful base for making some of the decisions she encouraged the Government to make. That was a pivotal time for the Minister. Dr Cullen made a fair point when he said that this Parliament should not surrender to the courts the ability to make policy decisions. So when faced with that decision by the High Court the Minister had an opportunity to come back to the Parliament and say: “Look this Act of Parliament which was promoted by the previous Government and supported by most major parties in this Government does not do what the legislature thought it was doing when it passed the bill. I am asking the political parties assembled here to give some thought to putting in place in black and white the law as we thought the law to be at the time.” 
Hon Lianne Dalziel 
: And you would have agreed. 
Hon MURRAY McCULLY 
: I would have given that very serious consideration. Quite frankly I accept Dr Cullen’s point. This Parliament should not surrender to the courts the ability effectively to make the law. 
Hon Lianne Dalziel 
: You don’t even know what the decision says. 
Hon MURRAY McCULLY 
: I have read the decision. I have it right here. The Minister should know that my reading of the decision was completely different from hers. I never thought that she had a hope in hell of getting the Court of Appeal to turn over that judgment. I never thought for a minute that she would succeed in the Court of Appeal so it was with some surprise that I saw the press release dated 17 June in which the Minister of Immigration said that she was off to the Court of Appeal. Having had the judgment of Justice Randerson from 16 May to 17 June the Minister did not approach the Opposition parties to say: “Hey let’s make the law do what we all thought the law was going to do when we passed it.” No she said that the High Court was wrong that she was off to the Court of Appeal and here is the press release dated 17 June. I thought that the Minister was wrong then. The Minister now thinks the Minister was wrong. Barely 2 weeks later the Minister is in this Parliament promoting a bill through all its stages under urgency asking us to do what the High Court would not do on 16 May and what she now knows the Court of Appeal would not do after she had taken the appeal that she said on 17 June she was going to take to the Court of Appeal. 
I want the Minister to answer a question that I have asked numerous times and that she should have answered. What did she think was happening in relation to this bill when she put out that press release and gave media briefings on 17 June? To any reasonable observer that press release and the media comments she provided would suggest that the Government was fully confident that the law stated what the Minister thought it stated and she was very happy to go down the appeal process. I find it difficult to accept that on 17 June the Minister had not turned her mind to the very real probability that she would have this No. 2 bill come to the House and go through all stages and that she had not turned her mind to the possibility that this bill might contain the provisions that effectively override Justice Randerson’s decision. If the Minister did have those matters in her mind anybody who believed what she said in that press release or in her media briefing would be entitled to feel totally misled. 
I simply say that this bill is all about saving the Minister’s backside. In the course of doing so it is prejudicing the interests of a large number of people who will now feel that they have been dealt with dishonourably by the New Zealand Government. The issue is not whether they are all people who should have residence in New Zealand the question is whether those people who are entitled to deal with the New Zealand Government and make such an application can expect to be dealt with in a reasonable predictable and fair manner. I am concerned that the more widespread signal sent by the way in which the Government has dealt with this legislation is that the best migrants in the world who have a full menu of choices available will say that New Zealand is just too hard and too complicated and that one might apply on one basis and be dealt with under some completely different basis. 
In conclusion I am pleased that those matters have moved not just the National Party but the ACT party the New Zealand First Party and the Greens in a united way. They have kicked the tyres on the detail of the bill asked the questions and having found the Minister’s explanations thoroughly unconvincing I hope that they will all decide to oppose it at this third reading stage. I also have to say that the United Future party which seems happy to do any old deal any old day to keep the Government happy promised fairness in its policy and preached the need for consistency in dealing with those matters. United Future members should now hang their heads in shame because they have participated in a truly shabby exercise in this Parliament. This bill deserves to be tested by the Parliament properly on the way through. I thank all the Opposition parties for the way in which they have gone about that process. 
GEORGINA BEYER (NZ Labour—Wairarapa) 
: It is a pleasure to take a call on the third reading of the Immigration Amendment Bill (No 2). I begin by acknowledging the Hon Lianne Dalziel for the courage and commitment it has taken for this particular Minister to step up to the mark and deal with the vexed issues of immigration in this country. What she has put out there for us to consider and which has been debated over the past hours has been controversial in the arguments that have been put from across the House. Suffice to say that this bill will bring greater clarity and certainty I might add to migrants coming to New Zealand hoping that their skills and the intelligence that they bring to share with this nation are matched more certainly towards job opportunities in skills shortage areas we have in this country. That is at least one provision in this particular legislation that is good for New Zealanders and good for migrants who are coming here. I conclude by saying again that compliments and credit should be given to this Minister for facing the tough issues. 
DAIL JONES (NZ First) 
: It is very evident that the preceding Labour member has not read this bill because the very point she referred to is not contained in this bill. It may be contained in the bill that has been referred to the select committee but it is not in this bill. New Zealand First as the party that has long supported the immigration to New Zealand of skilled immigrants will be looking closely at that bill. However the question of skilled immigrants coming to New Zealand is not the issue in this bill. This bill contains other issues altogether. It seems to me very clear that most Labour members have not understood this bill. There is some spin in the explanatory note that confused me for some considerable time until I went through this bill line by line. The statement there is and I quote: “Global prioritisation will enable residence applicants with for example high contribution and settlement potential to be given early consideration.” etc. etc. Really nothing in this bill talks about that. That might be in the bill that has gone to the select committee but I suggest that it is not in this bill and New Zealand First will be looking very closely at that other one. 
Part 1 of this particular bill has an extraordinary clause that is almost meaningless; it is so wide and so broad that it shows how the Minister has failed in her job in 4 years or so as Minister of Immigration. Imagine any other Minister in any other Government coming to this Parliament and admitting that after all the time she had been in office her decisions had been overturned by the High Court and then having the temerity to bring a bill into this Parliament to overturn that decision in less than 24 hours! We have been debating this bill for less than 24 hours now and in less than 24 hours this minority Labour Government will overturn a High Court decision that one would assume the Government was willing to abide by in the first place which is why it went there; but the Government having—not surprisingly—lost the case we now hear from the Minister in the Committee stage that clause 3 seems to be the clause that will overturn the legislation. 
 When one reads section 13B(1A) inserted by clause 3 it states: “To avoid doubt any policy of the Government that relates to the issuing of any type of temporary visa or limited purpose visa or the granting of any type of temporary permit or limited purpose permit is not Government residence policy regardless of whether the issuing of the visa or the granting of the permit may affect eligibility for or otherwise relate to the issuing of a residence visa or the granting of a residence permit.” What is meant by—“To avoid doubt any policy of the Government” etc? What the Government is virtually trying to say is that anything it has said that is Government policy is Government policy even though it may be wrong even though it may not have the support of the court. It seems to me that to give effect to this clause the Government will have to take one more step somewhere in the executive area to say just what is meant by new subsection (1A) in clause 3 otherwise we will be back to court again to find out just what that amendment to section 13B of the Act actually means. 
Essentially it means that the rule of law does not apply for this minority Labour Government. It will arbitrarily overturn the decision of a court. That is what the rule of law is all about—for Governments not to act arbitrarily. There could be nothing more arbitrary than the way in which this Government has acted in this legislation. It should be ashamed of itself. 
I turn to clause 4 about the chief executive giving general instructions as to the order and manner of processing applications for visas and permits—nothing to do with globalisation that I can fully understand. Clause 4 will allow the order and manner to be determined at the direction of a visa officer or immigration officer. So our office in Delhi can decide. Some official there—a visa officer or an immigration officer in Delhi—can decide who on its priority list comes to New Zealand. If it has 5000 applications in Delhi applications going back for 12 months that visa officer could decide to put the one that has just been received to the top of the pile or the one that was received a month ago to the top of the pile. Do members not think that that would be a bit suspicious? Do they not think that in a place like Delhi suspicion will be cast on the way in which a visa got to the top of the pile or moved its way up the ladder? We all know how corrupt that part of the world is. 
What about Teheran? What would happen there in moving a visa application up to the top of the pile? We know for example and New Zealand First has made this point time and time again that the best way to get a visa in New Delhi is to see the chap under the tree outside the New Zealand High Commission—a few appropriate rupees and the visa is yours. We have given many examples of that to the Government as to how in New Delhi that is the best way the quickest way to get a visa to come to New Zealand. 
This Government is going to allow immigration officials all around the Pacific the Philippines and suchlike—offices where we have had problems in the past—to be encouraged to adopt this process. 
I move on in a complementary sort of way to clause 5 “Past order and manner of processing applications deemed valid”. It states that any failure by a visa officer or an immigration officer is deemed to have been validly done. Even if the officer issues a visa that is contrary to all Government policy even if the process is finalised and the person comes to New Zealand under that sort of basis it is deemed to be validly done. The Minister cannot overturn it the authority cannot overturn it the tribunal cannot overturn it the court cannot overturn it. In fact by looking at this one could say that any terrorist who wanted to come to New Zealand from Afghanistan or from Iraq could if the person could get the cooperation of the visa clerk at Delhi or Teheran get into New Zealand and be here validly as a result of this legislation. 
I suspect that Government members do not understand this legislation. The last time we had a case like this was with the port and sherry tax and when that bill was introduced into the House we were told that that tax was aimed at the young drinker—the person who drinks all these fancy drinks. We were told they were 15-plus percent and suchlike. It turned out that the young drinker drank alcohol that was closer to 5 percent and was not affected by the tax which is for fortified drinks over 14 percent. In fact the elderly drinker who has the occasional port and sherry was hit by that tax. It was only after we had spent a considerable— 
Mr SPEAKER 
: Come back to the bill. 
DAIL JONES 
: —amount of time deliberating on it that we discovered that mistake. That is just a comparison. Just as the Government was totally at sea on that one so on this issue the Government is totally at sea. It does not seem to realise what it is it has done under this bill. It is leaving it wide open for people to come into New Zealand under this sort of regime whereby the local visa officer the local immigration officer can make the permit available and there is no appeal from that decision because this legislation says so. I suspect that it will not be terribly long before this legislation is back before the House again to be amended. 
I will not say much about clause 6; that has been covered a lot with regard to speeches from other members of the House and the Court of Appeal decision. But as far as New Zealand First is concerned this bill does nothing to bring skilled immigrants into this country. All this bill does as I have said is overturn a court decision and somehow give visa officers extraordinary powers—powers that are then validated by this legislation itself. 
There is the issue of for example the matter raised in the  
Dominion Post  
today about people being able to come into New Zealand based on changes of policy and suchlike. The article stated that the changes could also benefit foreign tertiary students including many from China and the Minister had indicated they would get priority especially if they had a job offer. As I see it that applies to the other bill that is before the select committee; and obviously Parliament will see how that works. 
This is a very very sad day for parliamentary democracy in New Zealand. It is a day on which the Minister of Immigration has been shown up as an absolute failure. In any reasonable Government in any British Westminster system she would have resigned. We are seeing a situation whereby in less than 24 hours the “fastest legislator in the West” once again—that is the title of this Parliament—is trying to rectify the failure of the Government the failure of the Minister and is leaving the door wide open in my view to corruption and also to allowing terrorists and other undesirable people to come to New Zealand. 
A party vote was called for on the question  
That the Immigration Amendment Bill (No 2) be now read a third time 
. 
Ayes 60 
Labour 52; United Future 8. 
Noes 55 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Bill read a third time. 
Border Security Bill 
First Reading 
Hon RICK BARKER (Minister of Customs) 
: I move  
That the Border Security Bill be now read a first time.  
At the appropriate time I intend to move that this bill be referred to the Government Administration Committee for consideration. To consider this bill one has to go back to a long day 21 months ago. We in New Zealand woke to the news of September 11 2001 seeing images of hijacked passenger planes crashing into the twin towers of the World Trade Center in New York the Pentagon and into a field in Pennsylvania. More than 3000 people lost their lives. On that tumultuous day we all knew that something fundamental had changed in our world. We knew there would be fall-out from these acts of terrorism. We did not know the nature or shape of this changed new world but we knew we would come to understand it. 
The recent bombings in Bali also brought terrorism home to our region. Terrorism is no longer remote; it is in our neighbourhood. Within the last month we have seen renewed terrorist activity in Saudi Arabia and Morocco both linked to international terrorist organisations. Here in New Zealand we cannot continue to believe that the world’s largest moat will protect us nor can we ignore our responsibilities as good international citizens. We too must respond to this changing world to ensure our own safety to ensure the safety of our fellow citizens around the world and to ensure the continued flow of trade—the future of our economy depends on it. 
 That brings me to the detail of the Border Security Bill which will enhance our border security against terrorism. This bill sits alongside the Counter-Terrorism Bill in strengthening the legislation protecting New Zealanders and New Zealand’s interests. The Counter-Terrorism Bill is already before a select committee. Since September 11 2001 international bodies have been advocating tighter border control measures and agreed standards. A key aspect of these standards is early and timely access to information for the purposes of managing the risk that people planes ships boats and goods may pose as a terrorist risk. Early access to information is critical. We are now focused on preventing risk and to do that we need to do our homework. That means we need good information in advance about people craft and goods that are heading our way. We need enough time to analyse this information and if need be determine an appropriate response. Currently this information is either not supplied or is supplied manually which does not allow for adequate checking in a timely manner. 
The Border Security Bill amends the Customs and Excise Act and the Immigration Act as they affect border security. In summary the changes will improve the security of global travel and trading environments enhance closer security relationships within the trade supply chain and travel network strengthen the gathering of and sharing of intelligence and ensure better use of information to assess risk. 
I will now detail how this new security enhancement will affect travellers. There are two elements to the travel information sharing provided for in this legislation. Firstly airlines and cruise ship operators will be required to use electronic means to submit passport details for passengers in-transit passengers and crews in advance of their arrival or departure from New Zealand. Many are already providing much of this information voluntarily. The full implementation of the legislation will mean that passport and visa details will be checked automatically against electronic records held by the New Zealand Immigration Service. Any matches will trigger an advisory back to the airline about whether a person should be allowed to embark for New Zealand. This form of data screening is the best way to reduce New Zealand’s exposure to risk from people travelling here while at the same time maintaining the high flows of arrivals into New Zealand at any one time. 
The number still staggers me—almost 1.9 million people visited New Zealand in 2001-02 and the number is still increasing. The vast majority of those people are genuine travellers who deserve a warm welcome and speedy processing. However we must be able to identify those who are not welcome. Waiting until those travellers actually arrive here to check them out is just not good enough. It is better to deal with the problem before it gets here. 
The second and equally important aspect of travel - information gathering analysis in this legislation is the provision for the Customs Service to electronically access the computerised passenger booking systems of travel operators and their agents. These provisions have been carefully developed to enable the New Zealand authorities to have access to information that gives us vital clues to identifying those persons who pose a risk without jeopardising the privacy of legitimate travellers. These measures will affect some 20 international airlines all cruise ship operators providing services into and out of New Zealand and other travel operators. 
This bill is not a bolt out of the blue for those it will affect as there has been considerable consultation. Airlines around the world are responding to similar legislation from other countries. Here in New Zealand Air New Zealand has led the voluntary compliance and all the airlines are now providing the information voluntarily. I want to put on record my appreciation to the airlines for their excellent cooperation in protecting New Zealand. 
I now refer to security as it affects cargo. It is vital to New Zealand’s economy to keep trade flowing smoothly and in the new international environment our trading partners expect New Zealand exports to be not only of high quality and on time but also safe from terrorist infiltration. Again information is key to achieving this. The legislation enables the Customs Service to electronically access the computerised cargo management systems of operators in the supply chain such as freight forwarders and consolidators. The bill also establishes a legislative environment for an innovative new partnership approach to providing assurance over export security. 
The Customs Service is developing a secure export partnership scheme whereby the Government and business work together to protect New Zealand’s interests. This will enable the Customs Service to assure trading partners that goods exported under the scheme are packed securely and with no other goods. The goods will then be placed without interference under a customs security seal and conveyed to a customs-controlled area for export. The intention is that the goods with the New Zealand Customs Service security seal will then be regarded by overseas customs administrations as low-risk therefore minimising inspection disruption or delay. Central to the scheme is the authority to allow an exporter to apply a customs-approved seal to that company’s shipping container. 
There is also a separate provision for an approved person such as a customs officer to apply a seal in circumstances where the goods have been packed under supervision or inspected by the officer. It will also show that when the cargo is sealed it is secure—that is the cargo contains only what is declared and secured in an approved way. It will also assist in identifying any interference or tampering with secured cargo. Goods shipped with these seals will be legally regarded as being under customs control therefore making it an offence to tamper with them. It would be up to individual exporters as to whether they participate in the secure exports partnership and I know that many would find it in their best interests to do so. 
There are other issues at risk for us as well. In this legislation the Customs Service is looking to have increased powers to detain people at remote locations. There have been a number of occasions when customs officers and others have come across situations in which these powers are appropriate and indeed highly desirable. New Zealand wants to be sure that the people entering New Zealand are doing so entirely legitimately. 
The bill also has provisions that will give the Customs Service the lawful right to detain and hold cash or other funds that would be crossing the border for what appears to be no immediate legitimate purpose. Criminals and terrorists need to fund their activities with money and we have adequate checks in the banking system but we have inadequate checks at this time about money coming across the border. Under this legislation customs officers will be able to detain people or the cash for a period of up to 12 hours or longer where it is warranted to ensure that there is no security risk. 
In conclusion I note that currently with the United States one of our major trading partners we have $4 billion of exports. For the United States it is now important for us to make sure that we meet its security requirements and that the US feels comfortable about those security requirements. The Customs Service is moving rapidly to meet those demands. It is worth noting that Auckland is our largest port with the US—it is No. 78 on its list—and we have many other smaller ports. So if we are to be able to ensure that trade flows easily from all our ports in New Zealand to the United States we need to have this legislation to ensure that we are able to give to the US customs service the sorts of guarantees and notices of comfort that it needs to enable our goods to travel across the border unimpeded. 
New Zealanders living overseas have come home to New Zealand in great numbers because they feel safe and secure in New Zealand and this legislation will help underline that secure feeling that New Zealanders have when they live here in this country. 
Hon MURRAY McCULLY (NZ National—East Coast Bays) 
: I signal at the outset the intention of National members to vote for this bill so that it is read a first time and referred to a select committee for further consideration. I also thank the Minister for providing me with some detailed briefing material and also for giving me a personal briefing this morning. 
Hon Tony Ryall 
: That’s the way it should be. 
Hon MURRAY McCULLY 
: I think as Mr Ryall observes that perhaps the Minister’s colleague the Minister of Immigration would benefit from some tutoring by the Minister of Customs Mr Barker who does understand that Opposition parties here on matters of national importance are happy to provide their cooperation and support. I appreciated the written briefing and the courteous personal briefing the Minister provided to me about the contents of the legislation. 
The Border Security Bill makes significant amendments to the Customs and Excise Act. That is legislation that I have had some passing association with. I was for 5 years the Minister of Customs and indeed the Minister when a major revamp of that bill was passed. I can say from my own background understanding of this matter that this bill will benefit from some select committee study. The amendments to the Customs Act contained in the bill are indeed in parts quite complex and I would be surprised if on close scrutiny there were not some improvements made. That is not a criticism of the bill it is simply an observation about the huge complexity of the parent Act and the great difficulty and sensitivity of dealing with some of the matters that this bill purports to address. 
I want to turn to the various component parts of the legislation before making some more general observations. The travel security provisions of the bill are indeed significant because they put in place a mandatory provision of advanced electronic information. Some members of the public who are listening in and certainly some members of the House will be asking themselves just what the “API”—the advanced passenger information system—is all about. It is in fact not a new feature of the Customs Service at all. This is a regime that has operated on a voluntary basis now for some years. It involves the airlines cooperating fully with the Customs Service giving the ability for pre-clearance and giving the ability to identify areas of risk and in that way ensuring that there is minimal disruption to the travel plans of law-abiding members of the public. It is a very important tool for avoiding major queues at airport gateways like Auckland. 
The New Zealand Customs Service to my knowledge has been a very efficient promoter of this type of facility in the past and will be well placed to deal with the mandatory regime that is proposed in this bill. I say to members here that I personally can see no reason that the requirement for a mandatory advanced passenger information system would cause offence to anyone. I am sure the airlines are well equipped to deal with it and have as much to gain as the members of the travelling public and the agencies of the New Zealand Government. 
There will be some provisions that relate to accessing the databases of travel operators and airlines that will no doubt raise important issues of privacy and sensitivity. I sense from some of the briefing material that there have been some New Zealand Bill of Rights Act discussions potentially some of the fairly vigorous kind around the preparation of this bill and I particularly draw the attention of the select committee to those areas. Again it is a consequence of dealing with legislation of this sort that those kinds of issues arise—initially in the officials interaction and then in the Cabinet committee process. It is important that the Parliament separately in the select committee and then in the Committee of the whole House tests that sort of area because there are conflicting rights at issue and at play in that regard. Although we might benefit from the view of the Ministry of Justice and Crown Law Office officials it is important that Parliament makes its own call about the extent to which the rights of individuals or organisations to privacy need to be balanced against the greater need for security purposes for agencies of the Crown to have access to certain information. 
I offer no steer to the House or to the select committee on that matter today. I simply say that this smells to me very much of there having been some interaction between officials on New Zealand Bill of Rights Act issues and I simply hope that parliamentarians will separately give their attention to this important area of scrutiny. 
The supply chain security provisions which the Minister referred to are critical. I would go so far as to say that if these provisions were not to be passed with some expedition then New Zealand exporters to the United States market would pay a heavy price indeed. Again the select committee I am sure will want to give some thought to the detail contained in the bill. But here we are driven by the expectations and indeed requirements of the American authorities that in the post - September 11 environment which the Minister referred to require those who want to do business with the United States to jump a pretty high security hurdle. I for one do not blame them for that. It will no doubt cause New Zealand exporters and others who trade or deal with the United States some ongoing inconvenience. But the United States has good reason for making these requirements of us and I think that the initiative contained in this part of the bill is a good attempt to put in place something that the United States authorities should find very reassuring indeed. 
I observe in passing at this point that members of the New Zealand public would probably have little understanding to the extent to which the Customs Service has over the years invested massively in the construction of close working relationships with its partner organisations in other jurisdictions. I venture to suggest that at a time like this in a climate of suspicion and in a climate of high security fear the New Zealand Customs Service relationships with many of those services in other jurisdictions will leave New Zealand significantly better placed to deal with those challenges than most other nations. So I suggest that the provisions in that part of the bill are very important to New Zealand as a trading nation and I suspect that it will benefit from the close working relationships that the Customs Service has built up over the years. 
I turn finally to enforcement provisions. These do give some new powers to customs officers. Again I hope that the select committee will look carefully at these areas. They are areas in which Parliament should extend the powers made available to Crown agencies only with great care and after very serious consideration. I am bound to say in principle that I think these extensions are required. I guess as a simple example I look at the programme run around the New Zealand coastline by the New Zealand Customs vessel  
The Hawk 
 which ventures very far from the shore and very far from other law enforcement authorities. There will increasingly be times when encountering terrorists contraband smugglers or others who are seeking to breach the law customs officers will find themselves having to deal with this threat alone. The current law simply makes no provision for them to be able to deal with some of the threat in this area by detaining individuals. They can merely deal with goods. The proposals that the Minister has put before this House in this bill should be looked at carefully and considered carefully but on balance I think they are needed. It is unrealistic to see customs officers doing the job that we ask of them in this environment without providing some additional legal support for them in carrying out that work. So we will be supporting this bill to the select committee. I think there are important features of it and I hope that much good will come from it. 
GORDON COPELAND (United Future) 
: I am pleased on behalf of United Future to speak to this first reading of the Border Security Bill. Sadly since 11 September 2001 we live in a world that overall is less secure than at any time since World War II between 1939 and 1945. The shock and horror of the twin towers collapsing in New York an aeroplane crashing into the Pentagon in Washington and a fourth plane brought to ground before it could reach its intended destination the White House represented the greatest breach of border security in the history of the United States. We watched with a mixture of awe and horror as the massive towers of the World Trade Center collapsed and in the memorable words of Mayor Guiliani of New York “the losses were more than we can bear.” 
 Sadly however these acts of international terrorism have proved not to be isolated events. In October 2002 they also arrived in our hemisphere via the tragic bombing in Bali. In the months and years since the nations of the world and in particular the nations of Europe and the Americas—particularly the USA—have expended literally billions of dollars in an effort to tighten their border security. It has been necessary for New Zealand to follow suit; hence this Border Security Bill. 
I would like to compliment the Minister the Hon Rick Barker and his officials on the thorough common-sense and relatively low-cost solutions they have come up with in relation to the export of goods from New Zealand to the USA and other countries. The cost for example of x-raying the more than one million containers that leave our shores each year would be a massive and further blow to our international competitiveness. After all with perhaps the exception of Australia we already face the greatest average distance of any nation in delivering to our many overseas markets. If we are to maintain and enhance our market share continuing efforts must always be made to reduce costs whenever we can. Accordingly the certification of supply-chain security for low-risk exports by an approved customs seal provides a workable and cost-efficient answer to the new requirements placed upon New Zealand and all other nations as a result of the increased terrorism security risk which is now unfortunately part of our world. 
Exporters and transport operators may nevertheless chafe and grizzle a bit about the new requirements. That is only human but the reality is that from now on it will be a case of either complying with these arrangements or risking kissing goodbye to the exports themselves. As time goes on we may find some advantages in the new supply-chain security certification process because right now we very often have no idea of what is in containers. I can see a lot of advantages flowing to society in general when it becomes known—and we have a system in place that ensures that we actually do know—what is in each and every individual container shipped throughout our country and through our wharves to overseas destinations. 
The enhanced border-secured immigration risk measures contained in this bill are also timely. New programmes have been written and electronic records developed that will enable customs and immigration officials to gain advance information on people intending to fly to New Zealand whether they are coming as immigrants or as visitors. Of course the way in which terrorists and other undesirables would normally reach our shores would be precisely as visitors. 
I have some small concerns about the possible costs involved in providing that information. For example the cost of that new technology could be up to $80000 for airlines and up to $1 million for customs. For pre-boarding checks airlines are looking at a bill of up to $100000 and for customs the cost is estimated to be $21 million over a 5-year period of which about half will be recouped from immigration fees. In that connection I would like to ask the select committee that considers the bill to look carefully at whether the mix is right between costs lying where they fall and assistance through Vote Customs to ensure that those security measures are put in place. 
I have no doubt that we must put these new measures in place. It is sobering to recall that all of the terrorists who participated in the atrocities of September 11 were legally in the USA. The reality is that New Zealand has no choice but to utilise all of the new information technologies with the goal of preserving and enhancing the security of our borders. We can make no other choice if we claim to be delivering responsible Government to the people of New Zealand. One of the highest and first obligations of Government after all is the security of its own citizens. 
Normally people come to New Zealand on regularly scheduled commercial flights or ocean-going ships. Since we are an island nation however we are also at risk of people arriving here on small craft fishing boats and the like. Indeed it is interesting to recall that the only terrorism to occur within New Zealand in recent times which was related to the sinking of the   
Rainbow Warrior 
 involved the use of yachts and other small vessels. For small craft and other means of non-scheduled transport the bill therefore moves towards tightening up current procedures and practices. 
The United Future caucus had just one reservation about this bill. It was referred to also by the Hon Murray McCully and it concerns the sections relating to the detention of suspected persons by customs for up to 12 hours. In that connection I note also that the  
Bills Digest 
 issued by the Parliament Library expresses similar reservations. Accordingly we would specifically request that the select committee give careful consideration to those provisions balancing the need for stronger border security on the one hand with the civil liberties of individuals on the other. 
United Future is happy to support this bill at its first reading and its referral to a select committee for further examination. 
BRENT CATCHPOLE (NZ First) 
: The intent of this bill has merits and New Zealand First will support this legislation going to the select committee. Our border security is very important and any effort to strengthen that security will gain our support. The purpose of this bill is to amend the Customs and Excise Act and the Immigration Act in order to enhance border security and improve the information processes of the New Zealand Customs Service and the New Zealand Immigration Service. The improvement of information available for tracking the movement of people prior to their arrival using advanced electronic information about arrival and departure passengers craft and crew—provided that it is used correctly—will surely provide an additional screen against those posing a threat to our people. 
New Zealand First’s major concern is that there is no record of many of the people who have already arrived in New Zealand. The Minister of Immigration has no idea how many people have arrived in the last 12 months. I refer to the previous bill just debated in this House—the Immigration Amendment Bill (No 2) and its big sister the Immigration Amendment Bill. The immigration figures used by the Minister Lianne Dalziel in support of those bills bear no resemblance to the figures she has used previously to deflect New Zealand First’s argument for a reduction in the number of immigrants coming into this country. The select committee must examine the contents of all three of these bills to ensure that they are completely compatible and to take into account the continued failure of the Minister of Immigration to account for current immigration and the real purpose of a number of the people coming into this country. New Zealand First has serious concerns with regard to the immigration aspect of this bill and asks that the select committee examine it very carefully. 
Enabling Customs to access databases held by travel operators in order to search for information about travel additional to that provided under advanced passenger information might well contravene the New Zealand Bill of Rights Act but it might also result in members of the public refusing to provide operators with travel information. I refer particularly to the information provided to the travel industry and travel agents. The select committee should also look at those processes to make sure they are compatible with existing law. 
I would now like to look at the amendments relating to the Customs and Excise Act—in particular at those dealing with the security-of-supply chain. The Government’s briefing paper indicated that a key driver to this section is the ability of New Zealand to respond effectively to the United States container-security initiatives. Exporters may consent to the application of a Customs seal to export packages including containers or enter a Secure Exports Partnership scheme with Customs. Both of these mechanisms are voluntary on the part of the exporter with benefits accruing such as improved protection from pillaging. 
This information is in the papers we received from the Government just prior to this reading of the bill. 
The system and this bill as it stands do not take into account the new bioterrorism import rules of the United States. Under that country’s Public Health Security and Bioterrorism Preparedness and Response Act of 2002 the US Food and Drug Administration (FDA) requires the owner the operator or the agent in charge of foreign facilities to submit a registration with the FDA including the name and address of each facility at which and the trading name under which the registrant conducts business and the categories of foods handled by those facilities. This means that each New Zealand packer will have to register separately for each exporter and supplier obtaining a unique registration number for each individually. In other words all packing houses will have to register with the Food and Drug Administration all the growers and suppliers they receive goods from and they will be required to provide this information prior to shipping to the USA. They will have to have a separate registration for every exporter they use. All trucking operators carrying export goods will have to register. Customers clearing product in the USA will incur extra costs and this can only affect growers’ returns. 
The preamble to this bill already acknowledges that it will increase compliance costs for businesses but I am certain that the Government has not considered the additional compliance cost overall and the ultimate effect it will have on our exports as a whole. The select committee must consider the additional requirements of our trading partners ensure that we minimise the overall effect on our exports and work with the industries to ensure that New Zealand exports are not adversely disadvantaged. To allow our exports to be disadvantaged will result in us being uncompetitive in the marketplace and if we are not very careful and if this bill does not get it right New Zealand may find itself shut out of many markets. Earlier this year we were shut out of markets because of our actions. Let us not add to that by adding problems within this bill. I ask whoever is going to handle it in the select committee to make sure they examine these aspects and the aspects of all our trading partners to make sure we do have it right. 
HELEN DUNCAN (NZ Labour) 
: I am pleased to speak to the Border Security Bill which is part of the whole-of-Government approach towards strengthening New Zealand’s national security and maintaining our good reputation as clean green safe and secure. This bill addresses global concerns about security and introduces four major sets of provisions addressing travel security supply-chain security law enforcement and immigration matters. This bill will be good for New Zealand and I recommend it to the House. 
GERRARD ECKHOFF (ACT NZ) 
: I am delighted to have the opportunity to speak—rather unexpectedly I might add—on this bill. As one of the few members from an agrarian background in this House I believe no other issue affects this country and its farmers—the productive sector as I will call it—as much as border security in terms of both coming into and going out of the country. We need to ensure that our product which is the best in the world is not contaminated by a terrorist activity or even by an inadvertent activity and of course we need to inspect the product coming into this country in order to make as certain as we possibly can that we have ensured it is safe. That is though a major problem to the Customs Service and I am delighted to see that this real problem that the service faces is being addressed and will hopefully be addressed in the select committee process. 
I draw the House’s attention to a television programme that I think has captured the imagination of many people in this country. It screens on a Monday evening. Regrettably I am on a plane at the same time but I refer to   
Border Patrol 
. People sit and watch that documentary which is real-life stuff not a soap opera. 
Hon Tony Ryall 
: I thought you meant   
The Bachelorette 
. 
GERRARD ECKHOFF 
: That is the one.  
Border Patrol 
 contains real-life examples of our border security actually working. 
I would also add that border security is the ultimate public good as distinct from a private good. I do not know whether too much money could be spent on ensuring the security of our country and our people. It is as much a trade issue as a personal security issue. Personal security and terrorism came to this country as some of us with slightly longer memories will recall with the   
Rainbow Warrior 
. That came as a huge shock to New Zealanders at a time when that type of terrorism was not even dreamt of and gracious me what was the source of that terrorism? It was a country that we now seem to be snuggling up to. France is one of the old-timers shall we say in Europe. It is a much-respected country. But it was a huge shock to New Zealanders to see an act of terrorism take place within our coastal waters and in our terrestrial areas as well. So if ever there was an understanding of just how important border security is it should have come at the time of the   
Rainbow Warrior 
 bombing. But the reality is simply that it has taken the appalling events that occurred more recently in America to make people realise that even in this faraway country of New Zealand we are under a threat equal to that facing other countries. 
I suspect the real threat comes not from planes crashing into buildings or from bombs but in the form of bioterrorism. In this country the impact of foot-and-mouth bluetongue or another exotic disease on our economy our people and our well-being would be far greater than bombs or any amount of TNT dynamite or whatever those appalling people who detonate bombs use these days. We are delighted to see that the Government is recognising that border security is and should be right up at the top of the list. I sincerely hope the select committee in considering this bill will ensure that every resource that is needed is available and will make certain that the Minister in charge of the bill recognises the importance that all New Zealanders place on this legislation. 
I see in the preamble to the bill the words “voluntary agreements”. I think that really sums up how we can achieve first-rate results. If by imposing requirements we create resentment in exporters then we will have real problems. But I do not know of any meat or dairy company for example or any other company in the agricultural sector that would not agree that voluntary agreements with the Customs Service and the officials who guarantee—and who effectively do have to guarantee—the security of our product are the appropriate way to go forward. We need to ensure of course that customs officers are able to exercise their authority from time to time when that is needed. 
I return to the problem of bioterrorism and the potential impact of the introduction of viruses such as foot-and-mouth into this country as I mentioned earlier. We saw the devastating effect on the British economy of that disease. It has had an absolutely huge impact. I am not altogether certain after looking through this bill whether enough emphasis is being placed on the detection of those viruses—knowing of course that that is an extraordinarily difficult thing to do. We have to look then at the individuals coming into this country at where they are from and at their reasons for coming here. I am also delighted to be able to say that I fully support individuals’ electronic records being made freely and instantly available to the authorities concerned with this very very vital part of our existence in this little country of ours. 
Another thing that does again concern me enormously is the fact that I do not see very much about extra staffing training and resourcing going in to ensure that the outcomes that we require from our border security are obtainable. It is no good just to have a piece of paper or a bill stating the requirements and the sorts of outcomes that we would really like to achieve and then to say we are sorry but we do not have the resources to put into that ultimate public good. Therefore it is essential that the Minister and the Minister of Finance understand that whatever is required must be made available. If one goes through the rural sector as I have done in recent times—and continue to do—and asks farmers and the rural community what the most important aspect of our life in New Zealand is they will say that security and our border controls are the single most important aspect without question. 
The aspect that makes life very very difficult for our customs people is the fact that we have a huge coastline. It is one of the biggest in the world as I understand it. The opportunity for small craft to come in to one of the outlying islands or other places and conduct illicit acts is obviously quite substantial. I wonder whether aerial surveillance should not be part of our border security. Do we have the capacity in terms of our Air Force to be able to ensure that if any ships—whether they be major tankers or just fishing trawlers—come in laden with illegal immigrants or whatever else they can be detected appropriately? Therefore border security is not just about the Customs Service but also about the Air Force and about having an adequate Navy. All those aspects are totally interrelated so we cannot just look at upping the number of customs officers in order to ensure that our security is adequate. We also have to address the ongoing problem of the resourcing of our armed forces—our Navy our Air Force and our Army—if necessary. Of course recent events to ensure border security in places like the Solomons also highlight the need to upskill and increase the availability of our armed forces. 
LYNNE PILLAY (NZ Labour—Waitakere) 
: I have been waiting in anticipation to speak in support of this bill. It provides the New Zealand Customs Service with greater powers over people and their property who cross our borders illegally and undeclared. It also allows early and timely access to information for managing the risk that people planes ships boats and goods may pose as a terrorist threat. I commend Rick Barker for this bill. It comes from a Minister who cares and a Government that cares about the security of our country. 
KEITH LOCKE (Green) 
: This bill causes the Greens serious concern but we will support its referral to the select committee. For a start we should be upfront about why this bill is before us. It is because the United States has demanded that we pass such legislation. The United States Customs and Border Protection Commissioner Robert Bonner was in New Zealand recently and was quoted in the June issue of the New Zealand Customs Service magazine   
Contraband 
 as stating that progress on security arrangements with the US in the customs area relied on two things: “Part is contingent on legislation”—the Border Security Bill—“and part is making sure that there is participation on a whole-of-Government basis.” The problem that New Zealand and other countries face is that the United States is so powerful as a trading partner and politically that countries are being blackmailed into abiding by American-dictated freight security and immigration systems. For example the measures laid down in this bill are dictated by the US Container Security Initiative launched in January 2002 as a response to September 11. The Container Security Initiative allows for US customs personnel to be stationed in foreign ports to ensure compliance with US dictates. 
The US-driven container monitoring measures in this bill do have certain advantages in terms of monitoring for safety purposes including monitoring for biosecurity internationally. The Greens are very keen on biosecurity and say we have to follow that up as a nation with a better monitoring system and by searching any containers arriving here that are identified as presenting a biosecurity threat. In the freight area there is also a potential human rights problem with the bill’s provisions for security checks on people who work in the areas of packing containers trucking them and loading them on to ships. It would be worrying if that led to subtle discrimination in a way that would be hard to prove. For example employers in companies subject to security checks may start to act on the safe side when hiring people so that people from say Islamic countries do not get to the top of the queue. 
The greatest concern for the Greens is in the area of the civil liberties implications of the immigration provisions in this bill. Stopping potential terrorists from getting on and off planes flying in and out of New Zealand can all sound very nice but how many innocent people will be caught up and prevented from travelling without any right of appeal? The fact is that the United States whose databases will be used to identify many of the people to be stopped has a very broad definition of who constitutes a risk. After September 11 for example the United States detained up to 2000 people and held them for long periods on the basis that they may have something to do with terrorism. In fact virtually none of them had and only one court case has ensued. 
It is in the spirit of international human rights conventions for the right of travel to be governed by the rule of law but the provisions in this bill undermine that. There is no effective legal redress if a person is prevented from getting on a plane. Under the provisions of the bill people will be notified about a decision against their travel but that notification can be “in any form he or she”—that is the Immigration Service officer—“thinks appropriate”. There is no requirement to give a reason nor is there any right of appeal to “any court the Tribunal the Minister or any other body or person” if the Immigration Service prevents anyone from hopping on a plane to New Zealand. Of course there is the added practical barrier to trying to address one’s effective exclusion from New Zealand if one is sitting in an airport thousands of miles away from New Zealand—or vice versa if one is a New Zealander who is waiting in a New Zealand airport after having been stopped from getting on a plane to the United States. 
Members should make no mistake about this: the international systems that are being set up here and elsewhere under US auspices will affect New Zealanders. Even if one was say in Los Angeles and phoned up a lawyer in New Zealand and asked him or her to get to the bottom of one’s exclusion from a plane that lawyer would be handicapped by a provision inserted by clause 8 stating that the evidence can be kept secret by the Immigration Service under broad provisions such as that it might “prejudice the security or defence of New Zealand.” Evidence from overseas agencies like the Central Intelligence Agency will almost always be kept confidential because of a clause allowing those agencies to determine its confidentiality. Under the provisions inserted by clause 8 the information is secret if the overseas agency “will not consent to the disclosure”. 
Evidence from such overseas agencies is the very information that the Greens would be most suspicious about on two grounds. One is its accuracy—and we know clearly from the current debate over the failure to discover weapons of mass destruction in Iraq that we cannot rely on the information provided by the US intelligence agencies. It is often inaccurate and manipulated by politicians. The second and associated reason for being suspicious is that the American intelligence and police agencies often serve agendas that are different to ours here in New Zealand. The US agencies would be prejudiced against anti-nuclear anti-war anti - genetic engineering or anti - corporate globalisation activists travelling into and out of the United States or moving around the world in general. The US agencies could be inclined to provide damaging information on such individuals to New Zealand immigration or customs services under the exchange arrangements. It is a very easy way for such agencies to harass such political activists because if the activists have a tight travel schedule then stopping them from getting on a plane for a day or two can make a speaking trip or a trip to an anti-globalisation protest unviable. 
I am are not talking hypothetically here; I have an example of that from my own family. My late mother Elsie Locke was travelling as the official New Zealand representative to a children’s literature conference in Vancouver when she was hauled  off the plane at Honolulu by the US authorities and was not allowed to continue on the plane to Vancouver purely and simply because they disliked her radical activist political background. In that case she did eventually get to the conference but she was not able to come back to New Zealand from Vancouver on her scheduled route via Honolulu. 
The Greens also have considerable privacy concerns about the information that the airlines are supposed to give to the customs and immigration services the information that the customs and immigration services will share with agencies overseas and the possible misuse of that information. Under the bill virtually anything can be asked for. The non-exclusive list of information to be given to the Customs Service includes such things as one’s email address and the information can include all sorts of details about one’s travel history. There has been a debate in Europe over the details that European-based airlines are providing US authorities with which include credit card numbers if the ticket is purchased with a credit card particularly as there are inadequate privacy protections in American law about the subsequent use of credit card numbers by the US agencies. 
We do know that under the homeland security system that is being built up by the Bush administration information is freely shared across Government agencies and there has been considerable public outrage about intrusions on privacy. For example American librarians are currently up in arms about requirements that they hand over to the police the borrowing records of their library users. There are very few real controls on the information that New Zealand’s immigration and customs services may provide to homeland security agencies in the United States. There is provision in this bill for written agreements between New Zealand and overseas agencies about the information that we give them but there is also a provision for the Customs Service to provide information without a written agreement as long as a record is kept of the information that has been passed on. 
Finally the New Zealand Customs Service’s power to detain is expanded in this bill with little legal constraint on the abuse of that provision. For example under new section 148A(5) inserted by clause 16 a customs officer “may continue to detain a person” if the officer “is not satisfied that the person has correctly answered a question asked”. That is a pretty arbitrary and open-ended power to give to an officer. Of course the Green Party does want the customs and immigration services to have the ability to detect serious criminals and to stop the smuggling of arms through New Zealand. We are in favour of improving the systems in order to achieve that but we are far from satisfied that the bill as it is now drafted really controls the possible abuses of power and that it does not catch up innocent parties both by the customs and immigration services in New Zealand and by the overseas agencies that we may share information with. 
DARREN HUGHES (NZ Labour—Otaki) 
: I am pleased to speak in support of the first reading of this bill which has been introduced by my colleague the Hon Rick Barker. Other Labour colleagues have spoken about aspects of the bill and the one thing I am pleased to see is that it provides a legal base for the Customs Service’s innovative secure export partnership scheme which sees the Government and industry working together to secure goods from the point of loading to the point of export. I think that the Customs Service has taken a very innovative approach and it deserves our congratulations. I am glad to see that this bill formalises that approach. 
RICHARD WORTH (NZ National—Epsom) 
: On behalf of the National Party I would like to join previous members in congratulating the Minister of Customs on the work he has done to see this bill introduced to Parliament. It is no mean feat for a Minister without any legal training at all to put together a bill of this complexity and to do such a good job. I do not doubt that along the way it will be discovered that the Minister has made a number of major blunders but certainly in the superficial examination that we give to bills at the time of their first reading I have only praise for the work he has done. I believe that much of that work has been done on an unaided basis to the extent that if the Minister has made slips then he alone will be accountable for the errors that have occurred. 
There are three areas that I would like to cover in the short time that is available to me in this second reading. First I will talk very generally about the bill. Second I will offer some reservations in respect of a particular aspect and I am glad the Attorney-General is here to perhaps contemplate the issues that I will seek to raise. Third I will make some comments in conclusion. 
First of all the bill forms part of a Government package strengthening New Zealand’s anti-terrorist legal framework in the wake of September 11. It accompanies the Counter-Terrorism Bill and the Maritime Security Bill which is yet to be introduced. The bill has three key features. They are first that airlines are required to send to customs electronic information on arriving and departing passengers craft and crew; second that exporters are encouraged to enter voluntary arrangements with customs whereby their goods are made secure and are subject to customs control from the time of packing to the point of loading on to a ship; and third there are a number of other amendments increasing customs’ search and seizure powers. 
I will start by speaking about supply chain security because the Government is currently negotiating a nation-to-nation security deal with the US for container freight. The Americans now apparently want containers to be sealed at their point of origin and the contents detailed in order for the containers to be passed speedily across US ports. That is clearly an advantage in a setting where an alternative possibility might be port-to-port deals between New Zealand ports and US ports. So this bill establishes a voluntary system whereby customs or Ministry of Foreign Affairs and Trade officials check containers as they are packed and seal them with tamper-proof markers. Customs obviously hope that system will satisfy the US so that it allows a nation-to-nation security deal. The US has many individual port agreements and New Zealand clearly felt that because many of our ports are small it would be better to have one agreement for the whole country. If exporters choose not to participate in the system then their goods will be subject to much more stringent inspection on arrival in the US and will thus take longer to clear the wharf. 
The second aspect which members and the Minister have spoken about is in connection with the travel security provisions and the fact that international carriers will now be required to electronically lodge advance information on passengers and crew with customs which in turn will link electronically with travel operators’ and cargo managers’ databases. 
I would now like just to talk about some of the implications of this legislation which I believe will need to be carefully considered by the select committee. What I am talking about is the oblique or indirect use of administrative power which may well be misused. It is the sort of situation that currently confronts immigration officials at the border. A person boards a flight to come to New Zealand. He or she produces appropriate travel documentation that satisfies the authorities of the sending State. In the course of carriage to New Zealand the person destroys his or her passport and other relevant travel materials. The person arrives at the New Zealand border and announces that he or she is seeking refugee status. That then becomes a problem for the refugee status branch of the New Zealand Immigration Service and the case may well end up before the Refugee Status Appeals Authority for determination as to whether the claimant is properly making a claim for asylum. As I see it the legislation which does not really have this intended purpose can be misused in the sense that data can be accessed on the true nature of the claimant’s origin and identity. One may say that that is a good thing but it potentially represents an abuse of administrative power. The committee should closely look at that issue. 
The second issue that I seek to deal with relates to concerns that have been expressed by the outgoing Privacy Commissioner to a number of select committees of Parliament as we have looked at a number of pieces of legislation that are security related. Whether they are bills such as the Crimes Amendment Bill (No 6) which deals with computer crime or bills that relate to the setting up of the Government Communications Security Bureau and the vesting of powers in that entity or bills that are concerned with terrorism in its asymmetric aspects there is little doubt that Parliament is hugely ready to give to the security forces in this country significantly increased powers. The Privacy Commissioner makes the point quite justifiably I would assert that some of these powers may not truly be required. The officials asked for them and Parliament generally grants those wishes. But we in this Parliament should be constant in our vigilance that more is not given than is sought—proposition one—and proposition two that where something is sought it is not automatically given. I have some reservations as to whether in respect of this legislation the powers need to be as broad as Parliament is currently minded to confer. 
I spoke about the travel security provisions and of course they are more complex than I have indicated. It is clear that the amendments proposed for example will allow customs officers to carry out automated pre-boarding checks of passengers and crew intending to travel to New Zealand. The plan is for electronic alerts to be recorded against a passenger or a crew member in the event that either a discrepancy or a security concern arises. Customs officials will be able to prevent passengers from boarding a plane or ship for intended passage to New Zealand. 
There are significant costs associated with this process. The Government estimates the cost of installing such an electronic system would be $21 million over 5 years. The airlines have indicated that they will incur additional costs of between $50000 and $100000 to implement this system for New Zealand. That said of course a number of countries have these same systems and Australia is one illustration of that. 
Let me conclude on the issue of increased customs search and seizure powers. I do so in the context of the comments I have made that it may be the case that we are giving too much power to the bureaucracy and to the administration. Under this legislation customs will be able to detain for investigation suspicious cash and what is called tainted property. Those issues all require the close consideration of the select committee to which this bill is referred. 
Hon DAVID CUNLIFFE (Minister of State) 
: It is a pleasure to follow the former National defence spokesperson who as referred to in his speech is nicknamed “Major Blunder” and to join him in praising the foresight in this bill. We do not have to go far outside New Zealand’s borders to recognise that the world is a dangerous and unstable place at the moment and that worldwide the requirements for security at borders are increasing. It is a particular pleasure to note that this bill brings in a mandatory requirement for advanced electronic information on arriving and departing passengers which quite simply allows our border protection personnel to know the details of people arriving before they do so so that the officials indeed can interdict people before they get on an incoming flight to New Zealand. It is one example of many of how New Zealand is joining the international mainstream by tightening up its border protection in keeping with the enhanced security needs of the world in which we live. I compliment the Minister of Customs on this fine bill. 
JOHN KEY (NZ National—Helensville) 
: I am pleased to join in the debate on this bill which as members will know is part of a trifecta of legislation that the Government is looking to bring in including the Counter-Terrorism Bill and the Maritime Security Bill. I have no doubt that the Minister of Customs the Hon Rick Barker will be pleased to have the support of the National Party. I say that because in the   
New Zealand Herald  
of 23 June of this year he said: “It should have been done a long time ago.” The Minister will be relieved to have our support and he will no doubt have our wise counsel and wisdom when the bill is referred to the select committee in some days’ time. 
National supports this legislation because it seeks to preserve our national security and it seeks to preserve our $4 billion of exports to the United States. Most New Zealanders would know why this legislation has been recommended to the House—that is because of the activities post - 11 September 2001. I want to take a moment to digress from the bill and to reflect on 11 September 2001 in a personal capacity. I spent 6 years from 1995 to 2001 living in the United Kingdom but spending every second week in New York. In that time I spent every second week living in the hotel that was destroyed on 11 September. That is not the reason that I raise that matter at this important time in the House; I raise it because on that day my boss Michael Packer died. He was giving a speech on the 108th floor at Windows on the World. He perished with another two employees from Merrill Lynch both of whom worked for me and whom I had recruited from the private sector. So that occasion was one of great sadness for me. The world has come to learn that terrorism has taken on a whole new face. We in New Zealand are not immune from such activities. 
I want to make specific reference to the $21 million the Government has foreshadowed will be the cost of this legislation over 5 years. I want simply to make this point. Not only has the world changed in the last 2 years but also the cost of what happened on 11 September has been incredible and monumental. I say that because just 2 weeks ago the US Senate approved the Homeland Security Bill creating the department under Tom Ridge. It approved the spending for the Homeland Security Bill and the sum that the Senate approved was US$29.4 billion. That is the expected cost of homeland security for the United States of America. I simply suggest that the select committee spend some time analysing whether the realistic cost of this legislation will be $21 million over 5 years. I suggest that the cost will be a great deal more. This issue is a significant one. We have seen from the terrorism activity that has taken place post - September 11 that this kind of activity will be with the world in my opinion for decades to come. 
I want to speak for a moment on the travel security provisions. My colleague the Hon Murray McCully spoke for a moment about the issues that may arise from the provisions in the legislation that relate to the New Zealand Bill of Rights Act and privacy. In particular it is worth noting that a great amount of the cost the $21 million is the cost of the pre-border electronic checking process that will take place not only for individual passengers but for people associated with individuals checking in. Those provisions will be very powerful and very useful if they are implemented properly. We simply have to have accurate information on who is coming to New Zealand and whether they are appropriately entering our country. 
But we should not fool ourselves and the select committee will need to spend a bit of time examining the impact that this measure will have on passengers when they go to the airport when they go to our borders. I suspect the delays will be pretty significant. Some months back I travelled to Los Angeles en route to Canada and I managed to experience at first hand what this is like—my not having been back to the United States for a little bit of time. 
Hon David Cunliffe 
: A body search? 
JOHN KEY 
: The body search unfortunately did not take place. I am sure it would be a very pleasurable experience in the right circumstances. It would have been a lot more exciting than what did take place which was a 3-hour wait. It was like having to read a Labour Party manifesto—I was asleep by the time I got to the first paragraph. A 3-hour wait pained me. I said to myself that there has to be a better way—US$29.4 billion worth of homeland security! 
To my right I noticed something that I had seen in place many times as I had gone into New York and that was the latest scanning equipment for thumbprints or fingerprints. I thought to myself that certain parties in this House would not like the concept of retina scanning or fingerprints but I suggest that that will be absolutely necessary in the years ahead. I do not think passports which can be forged in all sorts of dodgy countries in the world will cut it. I think the real cost of this legislation when it is finally put in place will be considerably more than $21 million but if it means that I do not have to spend 3 hours in a queue in Los Angeles then I look forward to it. 
I note the supply chain security which comes to the issue of our preserving our $4 billion of exports to the United States. I have a little message to pass on to Labour Government members just while they are thinking about this and are alert and all ears. I recognise that this has been a rather slow and dull debate to this point. If they want to preserve our exports to the United States of America here is a little tip: sign a free-trade arrangement with the US. The only way we will get one of those in place is when we have a real alliance with the US. From the way that the Government has been interacting with our great counterparts the Americans we will not get one. A free-trade arrangement would preserve our $4 billion—in fact grow our $4 billion—a great deal more than tamper-proofing a few canisters before they go to the US. 
I would like to touch on some of the customs’ search and seizure powers because they are quite detailed in this legislation and quite important. Under this legislation customs will be able to detain for investigation for up to 7 days suspicious cash and tainted property. I wonder what “suspicious cash” actually looks like. Is it slightly different in colour or slightly larger in denomination or packaged in brown envelopes? I am not really sure of the definition of “suspicious”. It is something that will have to be spelt out. It may simply mean lots of cash—but plenty of people travel with lots of cash. “Tainted property”—I wonder how the Minister will define that. For instance the Labour credit card said Labour would not put up taxes. I see that in my personal opinion as tainted property. We all know that the Minister of Finance has declared a jihad on the taxpayers of New Zealand by raising taxes 15 times since he promised on his credit card that he would not do that. I suggest that it is tainted property. Others may find a use for it but we in the National Party do not. 
We will be supporting this legislation going to the select committee. I look forward as the committee will to the great input that will come from the National members who are well travelled and well versed in world events. We look forward to making our sparkling contribution as we always do in this great House. 
Bill read a first time and referred to the Government Administration Committee. referred to the Government Administration Committee 
Consumer Protection (Definitions of Goods and Services) Bill 
Instruction to CommitteeCWH 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: I move  
That it be an instruction to the Committee of the whole House on the Consumer Protection (Definitions of Goods and Services) Bill that it take the bill part by part and consider any schedules as one question. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 46 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
Fair Trading Amendment Bill (No 3) 
In Committee 
Clause 1Title 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: In speaking to the title clause of this bill I would like first to cover the fact that the National Party wants to raise with the Minister a number of concerns about this bill. In particular there are four areas of concern that we will be debating during the Committee stage. My colleagues and I will be seeking several calls on each. We are concerned about increasing the level of fines in an ad hoc and non-comparative way. It is clear that the Government has been doubling the fines involved in this legislation with no reference to any of the increases or lack thereof of similar fines in other commercial legislation. 
We are concerned about the criminal limitation period—that it may inadvertently lead to greater contingencies for business. We do not support exempting the Commerce Commission from the consequences of over-zealous actions by its officers in applying for interim injunctions and we are concerned about the increased compliance costs from demanding certain information and documents from those people that the Commerce Commission or the appropriate authority is investigating. We want to say to the Minister that there is no regulatory impact or compliance cost statement attached to the bill and that is a breach of the Government’s own guidelines. 
We have moved a number of amendments to the title of the bill. We do not think the title is a fair reflection of what is contained in the bill. Our amendments include incorporating the fact that some action will be taken on pyramid selling through some subtle word changes that will widen the ambit of the bill. However we do think that it fails to recognise some quite considerable additional changes that are being proposed in the bill. 
This Parliament needs to realise that this is not just an inconsequential Fair Trading Amendment Bill; this bill proposes to change the limitation period from 3 years after a breach or otherwise may have happened to 3 years from when it was discovered or ought to have been discovered. We think that that has some risks. For example if someone advertised a product in an inadvertent way or in a way that had since been corrected then an aggrieved consumer could raise a number of issues through the judicial process that could lead to significant costs for business but also because business will not know when its limitation period has expired it will be required to carry considerable contingent liabilities resulting from any warranties or any advertising that may have occurred. We think that this has not been thought through by the committee. We think that the title of the bill should be amended to reflect more correctly the fact that a number of enforcement and procedural provisions are incorporated in the bill. For example the bill will require companies to provide documents and information— 
The CHAIRPERSON (Ann Hartley) 
: I remind the member to keep to the title debate. 
Hon TONY RYALL 
: Madam Chair I am sure you were listening to my speech because what I actually said was that the title of this bill does not fairly reflect. It is very easy for people to jump in and say to speak to the bill but if people were listening to the debate they would know that I have been speaking to it. The point I was making before I was interrupted was that this bill requires companies to provide information and documents that do not exist. That is why the title should be amended to include the fact that enforcement and procedural provisions that are quite draconian in nature are included in the bill. I draw the Committee’s attention to the amendment to clause 1 in the name of Lindsay Tisch that covers that very point. 
The concern is that if the commission requires a company to provide documents or information that do not exist then that is a considerable expense to business. There is no ability for those businesses to recover the cost of generating documents and information that do not exist. In other procedures in the bill the Commerce Commission will be excused from having to reimburse or carry the cost for some of their decisions. That is why we are proposing amendments to the title of the bill. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: I would like to pick up from where my colleague left off. The title of the bill “Fair Trading Amendment Bill (No 3)” is fairly innocuous. It is important that the title of a bill—and I think it is recognised these days—should accurately reflect as far as is possible the content of a bill. For example with income tax amendment bills we do not just have Income Tax Amendment Bill (No 1) Income Tax Amendment Bill (No 2) (No 3) and (No 4). Let us go broader than income tax—if it is a taxation amendment bill we are referring to we try to build into the title what is covered in the bill. For example we might have a “Taxation (Annual Rates GST Provision something else and something else) Amendment Bill”. The beauty of that kind of title is that it gives the public a reasonable guide as to what is contained in an amendment bill. 
The problem with this bill is that the title gives no guidance as to a couple of very significant items in it. The Opposition is not opposed to this bill—in fact we are totally supportive of the part of the bill that clamps down on pyramid schemes. It would be quite useful if the title indicated that it is this bill amending the Fair Trading Act that actually does deal with pyramid schemes. It would help people using our statutes were the name to incorporate things like that. That is the first issue in respect of the title. 
The second issue and my colleague the Hon Tony Ryall has mentioned this is that clause 8(3) contains a very significant issue relating to what is commonly called the statute of limitations or the period of limitation. A very major change has been made in shifting from a period where action can be taken 3 years after an event to 3 years after an event was discovered. That is a huge difference because an event may not be discovered for a period of 5 6 7 8 or 10 years. So that is a huge difference. When we do get to debate Part 2 there will be some issues that I hope the Minister in the chair can really cover in respect of that. 
Again I come back to the title. An issue as significant as changing the period of limitation during which action can be taken is a significant change. If it were just being altered from 3 years to 4 years after an event occurred that is not a huge change. Maybe one would not need to argue that the title should cover that but this issue is big. This could change the period of liability from 3 years to 13 years. To have a change as big as that contained in a bill with such a bland title is not satisfactory. That is why I would argue that the title of the bill should really give greater guidance as to the key changes that are contained in the bill. 
There are two of them—the pyramid-selling schemes and the changes to the limitation period after which action cannot be taken. It is not good enough for the Government to get titles right in some areas of legislative activity like in taxation. It is getting titles better in that area but in this area I do not think enough thought has been given to the title. The title of the bill the “Fair Trading Amendment Bill (No 3)” could mean absolutely anything yet the bill has some very very significant things in it. 
Another area that is obviously very significant for business is the doubling of penalties. Again the title gives no guide that this bill doubles the penalties for certain breaches of the law. Again it would be useful if the title were to indicate that that is another major element contained in the bill. So there are a number of key issues. If the bill goes through the way it is the Commerce Commission may not be accountable for certain actions it takes. Again that is a hugely significant issue that we will be asking a number of questions about when we get on to the particular clause—is it clause 10—that covers that. Again in Part 2 I shall be asking about a number of issues around that. The title is really pretty unsatisfactory. 
LINDSAY TISCH (NZ National—Piako) 
: As my colleagues have mentioned we will be supporting this bill. However some provisions need to be looked at more closely and during the Committee stage we will ask the Minister to answer these questions. First the bill stands in the name of the Hon Judith Tizard and is titled the “Fair Trading Amendment Bill (No 3). We always believe that the title of a bill should fairly reflect what the bill states. Nothing in this title articulates the very important changes that the bill purports to make. As I said we will be supporting those changes. My colleague the Hon Tony Ryall has mentioned that this bill allows that there will be documents that do not actually exist and sets out the power that the Commerce Commission will have. Nowhere in the title do we see anything that relates to that. If we go back to the first and second readings there was much debate about pyramid-selling schemes and they are covered in clause 5. One of the amendments that the Hon Tony Ryall has tabled which is a very good amendment to the title would delete all the words after “the” and insert “Fair Trading (Pyramid Selling Schemes and Additional Powers) Amendment Bill”. This is significant. There is a change here although it is only a minor change. If we were to go back to the principal Act—and we will be talking about that later on when we get to clause 5 in Part 2 at some length—if the title were to reflect what is actually in the bill then there is an opportunity to be able to look at that amendment. 
The Hon Tony Ryall has another amendment to the title to delete all the words after “the” and insert “Fair Trading (Miscellaneous Provisions) Amendment Bill”. That probably more reflects that there are some miscellaneous changes that we believe are important. I have gone one step further in my amendment to the title—that we delete all the words after “the” and insert “Fair Trading (Enforcement and Procedural Provisions) Amendment Bill”. Of course this does allow for enforcement proceedings and in clause 8(2) there is the liability that every person who contravenes section 24 commits an offence and is liable on summary conviction to a fine not exceeding $200000. So there is a provision that I have put in my amendment that talks about the enforcement side of this bill. 
Dr the Hon Lockwood Smith made a very important point about clause 8(3) which provides that proceedings under section 40 “may be commenced at any time within 3 years after the matter giving rise to the contravention was discovered or ought reasonably to have been discovered.” That is opened-ended and that is one of the real concerns we have about this bill. Although we are supporting it we really have a concern about that subclause and we will be looking at that one far more closely when we are debating Part 2 and clause 8(3) in particular. 
There are a number of other provisions but I come back to the point I made about making sure that the title which we are supporting fairly reflects what the bill is about. I have mentioned the amendment I have put forward and the two amendments that the Hon Tony Ryall has put forward. 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
: I move  
That the question be now put 
. 
STEPHEN FRANKS (ACT NZ) 
: I am not at all surprised that the Hon John Tamihere tried to close this debate down. He knows all about scams if anyone does. When this bill came in it was described as being about fair trading. It was described as a bill to amend the Fair Trading Act and it was described in extremely flowery language. I would like to read here from the Government Minister Rick Barker who described the issues involved but first perhaps I will have a look at what Mr John Tamihere who is here in the House said: “The true issue in the Fair Trading Act is the clause defining misleading or deceptive conduct which states: ‘No person shall in trade engage in conduct that is misleading or deceptive’ ”— 
The CHAIRPERSON (Ann Hartley) 
: I am sorry but I need to bring the member back to the title. The bill has been to the select committee. It is a narrow debate. 
STEPHEN FRANKS 
: I am discussing the title. I believe that this is a misleading title. There was a claim that it was about fair trading. There was a claim that it was about pyramid selling. There is an amendment before the Committee that suggests that the title refer in particular to pyramid selling. I am concerned that that amendment might be adopted and I want to argue that in fact the bill’s title should remain as it is because it is innocuous. It does not tell us anything and it does match in effect what the bill does. This bill was introduced as part of a Labour Party scheme to throw mud. This was part of an attempt to legitimise to use the time of the House to legitimise an attempt to go behind the Standing Orders and throw mud. 
The person doing it Mr John Tamihere made a great point of integrity. He spoke on 2 May 2002 about the integrity credibility and ethics to stand up and publicise scams. This bill was promoted. It involved officials it took the time of the Ministry of Economic Development people it took the time of Securities Commission people and they came along to speak to a bill called the Fair Trading Amendment Bill (No 3) when in fact the whole discussion they had to endure was about a non-existent pyramid-selling scheme. The National Party’s amendment to change the title so that it refers specifically to pyramid selling would play into its hands. Because the bill actually has next to nothing to do with pyramid selling. Even the clause that refers to pyramid selling does not deal with pyramid selling. 
The true effort that went into this bill was disclosed in the report of the select committee in the very last two sentences when we see that hearing evidence took 30 minutes and consideration took 55 minutes. So hearing evidence took 30 minutes and consideration took 55 minutes. This is a committee that according to Rick Barker was “going to make many investigations of the issues it raises and the issues concerning fair trading. I want to see a very rigorous investigation of those issues and I am absolutely confident that the Labour members on the committee will dig deep on that investigation. They will drill all over the place and many things will be flushed out for the benefit of the whole community.” 
I do ask the National Party to consider when it votes on the title and on its own amendments not to be taken in by the references that were made to pyramid selling. There was absolutely no intention ever to look into pyramid selling. There was in fact no looking into pyramid selling. One of the National Party amendments urges the change to refer to pyramid selling. I suggest that there is a far better amendment in the name of the National Party that one could easily vote for—that is that the title simply read “Fair Trading (Miscellaneous Provisions) Amendment Bill”. Certainly ACT will support the National Party’s motion in that regard but should not support the earlier one because this bill I will go so far as to say is a fraudulent waste of Parliament’s time. 
MAHARA OKEROA (NZ Labour—Te Tai Tonga) 
: I move  
That the question be now put 
. 
JOHN KEY (NZ National—Helensville) 
: I am delighted to take part in the title debate of the Fair Trading Amendment Bill (No 3) which is as members know a bill that refers primarily to pyramid schemes. I am not surprised the Labour Government has introduced this bill because it knows lots about pyramids—people being at the top and everybody else flows down. It knows a lot about those schemes. I am not surprised that the Labour Government has introduced this legislation. 
Hon Rick Barker 
: “John Pharaoh Key”. 
JOHN KEY 
: Let us face it: I certainly like riding around on camels and humps deserts and things like that. I do not mind hot weather. 
 I have never actually been to Egypt though I might add. I have been to a number of other countries but I have never single-handedly seen the pyramids and I would like to go. 
It is not too late to change the title of this bill. Labour members could get the caucus in there have a little chinwag about it and come out and say that this title is not the right one. The title “Fair Trading Amendment Bill (No 3)” is far too vague. Do members of the New Zealand public up and down the country know what the Fair Trading Amendment Bill (No 3) is? Do they even know what the No. 1 bill or the No. 2 bill is? No they do not. Government members looking at me at the moment are terribly confused about the title. They are saying to me: “Thank goodness that National member is on his feet with some sound suggestions.” 
The Minister for Small Business could well put this on his website while he is out there slashing costs for small businesses—despite the fact that the other 19 members of Cabinet are increasing compliance costs. It is like Team New Zealand bailing water out of the boat—it did not matter. There he is trying to chuck off a few compliance costs. He has the bucket and he is pouring the water out but it did not do Team New Zealand any good—it nearly sank—and it will not do any good for small-business costs in New Zealand. 
Hon Judith Tizard 
: What about the title? 
JOHN KEY 
: But we are not here to talk about the costs that are drowning New Zealand’s small businesses. We are not here to talk about the failure of the website that the Minister for Small Business has. He is embarrassed by it but we are not here to talk about that. We are here to talk about the title which is the “Fair Trading Amendment Bill (No 3)” and why the bill is so shamefully titled. What a disgrace this title is! I am on my feet and at no charge I will come up with a far better title. I would not be surprised if during the dinner break—or even before—all 120 members of this House come down here and argue vigorously in support of my new title. 
So what is my new title going to be? It is like the Oscars is it not? They rip open the envelope and read out the title—but they do not want to say it upfront and straight away because no one is there for the punchline. One has to get suspense going and say: “What is the title?” 
Pansy Wong 
: What is the title? 
JOHN KEY 
: That is a very good question. It is the “Stop Pyramid Selling in New Zealand Bill”. There is no point in being ambiguous or beating about the bush. The Minister for Small Business does not beat about the bush on his website. He says: “These are ways to cut compliance costs in New Zealand” even if his colleagues are adding compliance costs. It does not matter—he is not ambiguous in what he is says and we should not be ambiguous with this legislation. 
The Fair Trading Amendment Bill (No 3) which in large part covers the closing down of pyramid schemes in New Zealand should be up in lights so that when people are considering ripping off harmless and law-abiding New Zealanders with despicable pyramid-selling schemes they should be able to flick through the website. Using their Yahoo search engine with “l” for legislation and “p” for pyramid they would come straight up with my wonderful title the “No Pyramid Selling Schemes Bill” or the “Anti-Pyramid Selling Schemes Bill” or the “Stop Pyramid Selling in New Zealand Bill”. I think that last one was the one I thought of but I have so many good ideas that I should not be restricted to one. 
If people read the title “Stop Pyramid Selling in New Zealand Bill” they would see that yes it is illegal in New Zealand. They would see that the Labour Government had finally done something of use and stopped pyramid-selling schemes. With a great deal of relief people would say: “I will not go out there and rip off poor New Zealanders.” They would understand that but will they ever find out with a title like the “Fair Trading Amendment Bill (No 3)”? No of course not. They will go to the No. 1 bill and that will put them to sleep. When they wake up they will have a look at No. 2 and that will be a huge yawn. Then they will finally come to the No. 3 bill—the Fair Trading Amendment Bill (No 3). 
DARREN HUGHES (NZ Labour—Otaki) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 45 
New Zealand National 25; New Zealand First 13; ACT New Zealand 7. 
Motion agreed to. 
The question was put that the following amendment in the name the of Hon Tony Ryall to clause 1 be agreed to: 
to omit the words “Fair Trading Amendment Bill (No 3) and substitute the words “Fair Trading (Pyramid Selling Schemes and Additional Powers) Amendment Bill”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 25 
New Zealand National 25. 
Noes 89 
Labour 52; New Zealand First 13; ACT New Zealand 7; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 1 be agreed to: 
to omit the words “Fair Trading Amendment Bill (No 3)” and substitute the words “Fair Trading (Miscellaneous Provisions) Amendment Bill”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 32 
New Zealand National 25; ACT New Zealand 7. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Lindsay Tisch to clause 1 be agreed to: 
to omit the words “Fair Trading Amendment Bill (No 3)” and substitute the words “Fair Trading (Miscellaneous Provisions) Amendment Bill”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 32 
New Zealand National 25; ACT New Zealand 7. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to 
Part 1 Preliminary provision 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: There are a significant number of amendments to the commencement date of this bill and although I know Madam Chairperson that you are very quick to try to keep National and other Opposition members to the title I indulge your patience so that you can see the thread of my argument about why we need to change the dates. 
There are a number of amendments but I want to talk in particular about the amendment in the name of Lindsay Tisch. It says that the bill should not come into force in toto until section 81 comes into force on a date to be appointed by Order in Council. If we look at section 81 we see that it is the section covering fines. I would like to explain to members why there needs to be a delay in the commencement date to allow for a review of the fines. These fines have not been amended since 1986 and during that time the cost of living has risen 54 percent. The Government proposes to adjust those fines by 100 percent. 
 Now one can make an argument that the Government wants to send a signal to the judiciary that the fines currently being applied are inadequate. The Government proposes that the mechanism for that should be a doubling of the fines. I would draw the Minister’s attention to my amendment to insert new section 40A in a new clause 8A which would provide a principle in the bill that duplicates the principle in the Sentencing Act that says to judges that they must impose a penalty near the maximum prescribed for the offending that is near the most serious. That means that the current penalties could be sufficiently adequate but judges would be encouraged to use the full range of the penalties. 
The second argument I would make about why we need to defer implementation of the penalties is that there has not been a comprehensive review of the penalties regime applying to commercial law in this country for about 12 years. There are now several pieces of commercial legislation that have different levels of fines with no correlation to each other. So there are some bills where the maximum fine is $10000 for quite serious commercial breaches and now there is another bill where the maximum fine may be up to $200000 for comparatively less serious offences. 
Hon Judith Tizard 
: It is $100000 now. 
Hon TONY RYALL 
: Well it is $200000. 
Hon Judith Tizard 
: Yes but it is $100000 now. 
Hon TONY RYALL 
: That is right but I am telling the member that her proposal is $200000. I am saying that we should delay that until this Government has undertaken a full review of the various commercial legislation penalties regimes. In that way we would be saying to the commercial community that there is a consistency across the penalties regime. It is ridiculous that in some pieces of legislation quite serious criminal behaviour solicits a $10000 maximum fine but under this Government’s proposal one could get a $200000 fine for something that could be comparatively much less offensive. So we say let us defer the commencement date of this bill to provide for a review of the regime of penalties across commercial legislation. It is currently quite ad hoc and we think that we should provide for a review. I draw the Minister’s attention to my other amendment to clause 8 that would require her as Minister to provide for a review of the level of financial penalties in comparison with penalties included in other commercial legislation within 6 months of the assent of this bill so that we could do something about that. 
A further reason that we have other amendments to defer the commencement date is that we believe business needs to take legal advice on how to deal with the removal of the 3-year limitation period—because as Dr the Hon Lockwood Smith said 10 years down the track businesses might now find that they are subject to a fair trading action in respect of something that happened 10 years ago that they have no contingent liability in their system for. We think the dates should be deferred for that reason—to allow business to get appropriate legal advice on how they can deal with the removal of the 3-year limitation period from date of action. We do not support this amendment that says that it should be 3 years from discovery. 
BRENT CATCHPOLE (NZ First) 
: New Zealand First agrees with the bill targeting pyramid selling and with it broadening the target to incorporate the new forms of pyramid selling schemes that have developed since the Fair Trading Act was implemented. Such schemes include those whereby participants buy or sell an investment opportunity and use agents provided by the scheme’s operator to recruit other participants on their behalf instead of having to recruit new participants themselves. We also welcome the updates to the penalties. New Zealand First however has already expressed its concern about clause 14 in earlier speeches— 
The CHAIRPERSON (Ann Hartley) 
: I draw the member’s attention to the fact that we are debating Part 1 which is fairly narrow. 
BRENT CATCHPOLE 
: Are we on Part 1? 
The CHAIRPERSON (Ann Hartley) 
: Yes and it is the preliminary provision for the commencement. 
BRENT CATCHPOLE 
: I beg your pardon. I will take a call on the other part. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: In speaking to clause 2 “Commencement” I would like to draw the attention of the Minister in the chair to a serious matter. It has become clear in recent years—and when I say “recent years” I mean a period covering probably the last 20 years—as we have made changes to our commercial law in this country that there have been serious issues around commencement dates and transitions. I am sure the Minister in the chair is aware of some quite serious problems that have resulted from the transition from the Commerce Act of 1975 to the Commerce Act of 1986. 
It is quite clear from the commentary that the bill has not been taken very seriously by the Commerce Committee and that worries me. I think it was my colleague from ACT who pointed out that the hearing of evidence took 30 minutes and consideration took 55 minutes. What worries me about the commencement is the issue around the change to the period during which a business may be liable—in other words the provisions of new section 40(3) inserted by clause 8. I would like the Minister in the chair to explain to the Committee how this will work under the commencement arrangement. For example will the new provision in new subsection (3) work if a business sells a service or an item or does anything under the Fair Trading Act as it now is—will it apply to some action taken after the commencement? For argument’s sake let us say that this bill goes through tonight and gets the royal assent tomorrow. After the bill receives the royal assent will new subsection (3) apply to an action that happens from then or could it apply to something that happened say 4 years ago but is not discovered until after this bill receives the royal assent? I think that is quite a serious issue in respect of transition because there are clearly two different circumstances. I do not see how this legislation makes clear which would apply. I hope the Minister in the chair is hearing what I am saying as the question I have is to me quite an important one. Will new subsection (3)—that is the change to 3 years after discovery as distinct from 3 years from the action—apply to actions that happen after the royal assent or will it apply to discoveries that happened after the royal assent? There is a big difference there and it could have a very significant impact on business. 
The bill should make it clear what the Government intends. The Government may say that it is not sure what it intends and that the courts will sort it out. The courts could read the law as I have read this amendment bill as meaning that anything that is discovered after this legislation receives the royal assent would be caught up in the new provision in new subsection (3). The dilemma for those involved under the Fair Trading Act is that without knowing it they could face a greater liability than they did under the previous Act. That is because the action may have taken place 2 years previously when they were operating under the existing Fair Trading Act. Yet with this amendment they could be caught by this changed provision. 
For people selling a service or a good or taking action under this Fair Trading Amendment Bill (No 3) from here on there is no problem because they will know that it will apply to actions that take place after the bill receives the royal assent. They would know the law they were operating under. But I am not sure that this bill makes clear which way it works for events that have already taken place and I would appreciate the Minister taking a call to clarify for the Committee the way it works. It may be that we should amend the provision to make the intention of the transition arrangements more specific on the face of the legislation. 
LINDSAY TISCH (NZ National—Piako) 
: The points that Dr Lockwood Smith and the Hon Tony Ryall have brought up concerning the commencement date are very important ones. We are trying to add value to the bill. We are supporting the bill and we think we can improve it significantly by allowing the amendment in my name to go ahead. For the notice of the Committee I want to make very clear what I am talking about. My amendment inserts after the word “assent” the words “except section 8 (1) which will come into force on a date to be appointed by Order in Council.” What is significant there is that as the bill stands at the moment the royal assent could in fact take place on Friday because the bill will pass through all its stages today. We will have the third reading later on and the bill will come into effect. But there is absolutely no provision that takes account of clause 8—and new subsection (3) in particular—because the point that has been made in new subsection (3) is that the provision there now is that: “proceedings under this section may be commenced at any time within 3 years after the matter giving rise to the contravention was discovered or ought reasonably to have been discovered.” 
So if this provision were to come in in its current form—and it is absolutely retrospective—we do not know the impact that that would have on business. There could well be a contingent liability and a business would be faced with something that might have happened a couple of years or 3 years ago that it knows nothing about today. We are saying that that is unfair. There could be huge compliant costs associated with an action of 2 or 3 years ago because of this clause—[ 
Interruption 
] Well the member over there says that they are taking care of business compliance costs with the ministerial panel. We have a Minister for Small Business who I would like to think might take a call on this matter because I do not know that the ministerial panel on compliance costs has considered the impact of a contingent liability under new subsection (3) inserted by clause 8. As I said National is supporting this bill and trying to make it user-friendly. We want a win-win situation that does not put business in a conflict situation—because this bill could well do that. We want to know whether the provision is about action or discovery. It is our view that if a contravention was discovered it means we could be dealing with something retrospective that business does not know about today. 
As the Hon Tony Ryall has mentioned there are so many different penalty regimes in place out there at the moment and in this case the fines are increasing from $10000 to $200000. That is a huge increase in fines—100 percent. The question would be: “Why have they doubled?”. If we looked at the consumer price index since December 1986 we would see that the increase on that index is only 54 percent. Yet in this case these fines are being doubled—from $100000 to $200000. There are so many penalty regimes out there at the moment and we are asking for an account and review of what they are. We could do that if we were to make sure that when this legislation came into force it would be on a date appointed by Order of Council not on a date—as it says in the bill at the moment—that could be early as Friday. We say that that is unfair. 
We say that from a business perspective there needs to be some transparency. There needs to be some consultancy over this. We need to know whether these businesses will have a liability because of new subsection (3). That is the real concern we have about that provision which states: “proceedings commencing within 3 years after the matter giving rise to the contravention was discovered.” That is the issue and we say that that needs to be reflected in the commencement date. As I have said and I will repeat it we are supporting this bill. 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
: I move  
That the question be now put 
. 
STEPHEN FRANKS (ACT NZ) 
: I rise to support the National Party’s amendments to the commencement clause. This bill has been sitting around for more than a year and it has been given virtually no attention at all. The Commerce Committee record is 30 minutes’ hearing of evidence and 55 minutes’ consideration which was probably mainly consumed in considering the spelling and typos in its report. 
Hon Tony Ryall 
: And here we are in urgency. 
STEPHEN FRANKS 
: And here we are in urgency trying to pass a bill that will take effect the moment it gets the royal assent and it is a bill that takes away existing rights. It is a bill that extends the power of the State. It is a bill that has some vagueness in it which the committee blithely told us would not matter because most people would not be affected by the odd definition of pyramid-selling schemes as most franchise schemes are not unfair to many participants. So we have a bill that will actually require franchise organisations to go out and advise their agents. 
There is a principle of law that says that nobody should be convicted on the basis of law that they have not had an opportunity to know about. There is a principle of course that one is deemed to know the law but how will people who are subject to this legislation know the law when it becomes effective the moment it has royal assent and when this Government has allowed the system for publishing bills to fall into such disarray that no one will be able to get this law until well after the time it has had the royal assent? Of course they could be like us and beg. The very helpful staff of this institution give us a green assent copy so that we can know what the law is. But how many citizens out there will be able to find out exactly what the law is the moment the royal assent is given? Therefore it is high-handed legislation. It set out mainly to be cosmetic in an attempt to attack the ACT party and others. Of course it backfired and we are hearing silence. 
There is no commentary coming from the other side during the Committee stage despite this commencement clause which states: “This Act will come into force on the day after the date on which it receives the Royal assent.” We do not hear anyone from the other side trying to explain this bill now. The noisiest member when the thing was introduced the Hon John Tamihere does not really want to talk about scams these days. He does not want to get back into the rhetoric he recorded in May last year. So the Government wants to rush this bill through and bring it into force before anyone has had much of a chance to know about it because what was supposed to be a triumph has become an embarrassment. 
The amendment proposed by the National Party is perfectly reasonable. It defers commencement by only a couple of months but that couple of months is vital in terms of principle. No law should tell people from now on that the Commerce Commission can seek injunction proceedings against them and be totally unreasonable and not have any sanction by way of compensating the person if the commission were wrong. No such law should come into force on the day that the royal assent is given. This is a law that purports to be tough on offenders but in fact will quite possibly be tough on ordinary business people and ordinary franchise operators because it has been so badly drafted. 
This law had only 30 minutes’ consideration of the evidence that people had laboured long and hard to bring forward. This law had a lot of technical evidence in writing despite the cursory 30 minutes that the Commerce Committee—I think chaired by Mr Mark Peck—gave it. [ 
Interruption 
] He was obviously under instructions but he lost the role of course. Perhaps it was some kind of judgment on not having used this bill as the opportunity it was supposed to be to drag people out and investigate pyramid selling. But we do have a very sensible deferral of some 2 months until 1 August brought forward by the National Party which for reasons I cannot fathom says that it will in the end vote the bill. Nevertheless that party has brought forward a sensible amendment and it would be proper for all parties in this Parliament to support a change of that kind in the interests of fairness and in the interests of standing up for the principle that people should not be adversely affected by law that they can have no chance of knowing about. 
PANSY WONG (NZ National) 
: Some good questions have been raised. Even though the National Party supports this bill we do want to make sure it is being implemented properly. One does have to question why the bill has to be passed urgently right now and take effect maybe in a few days’ time. Has some news come to the attention of the Government that there are some rampant pyramid schemes or other mischievous schemes out there that need to be unravelled as soon as this bill is passed? I call for the Minister to reconsider the decision not to be receptive to the suggested amendment to the implementation date. My colleague Lindsay Tisch has made some good suggestions about having a fixed date such as August or September for implementation. I am quite sure that the business community particularly or people who will be affected by this legislation have not become aware that the legislation has come before the House will be passed under urgency and will take effect immediately. How are they going to learn about the impact of this legislation? 
If I might just take an example let us say clause 3 in Part 2 where we see that instead of the wording Falsely represent” the amendment bill will substitute the words “make a false or misleading representation”. We all know what lawyers are like. They know how to interpret words that seem clear to a layperson like me. They seem to be able to read a lot more into those words. I think the business community will need time to understand the difference between the expression “falsely represent” and “make a false representation”. Sometimes it seems to us that expressions mean just the same but in my past experience in this Parliament what we thought were obvious clear precise English words might actually mean something quite different just through the order they present or the context. So people who are likely to be affected by this legislation need to have a very precise time frame as to when it is going to come into effect. Then they could approach Business New Zealand or the Auckland Chamber of Commerce to conduct seminars so they can fully understand whether very minor changes on the surface of a particular clause will affect them. 
But of course there are some major concerns that have been very capably raised by my colleague Dr the Hon Lockwood Smith about how to interpret this limitation period. When is the 3-year period going to start from? Is it after this bill has been passed or is it on the original date the particular action was taken? These are important and serious questions. This Labour Government is well known to be hostile to the business community and it would show a lot of grace and goodwill by accepting an amendment to have a fixed date so that the business community would have some certainty rather than not knowing how those two changes I have just raised would impact on businesses. 
Some members may not remember—or perhaps they were not in the House because I am sure it was in the last term—when the Labour Government was caught out very badly by refusing to accept the National Party’s suggestion on the Commerce Committee of providing for a transitional period during the passage of the Commerce Amendment Bill which led to a court case that the Government subsequently lost. 
DARREN HUGHES (NZ Labour—Otaki) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 46 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 2 be agreed to: 
to omit the words “day after the date on which it receives the Royal assent” and substitute the words “1 August 2003”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 46 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Lindsay Tisch to clause 2 be agreed to: 
to omit the words “day after the date on which it receives the Royal assent “ and substitute the words “1 September 2003”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 46 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Lindsay Tisch to clause 2 be agreed to: 
to add the words “except section 8(1) which will come into force on a date to be appointed by Order in Council”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 46 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
Part 2 Amendments to principal Act and miscellaneous provision 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: National Party Opposition members have proposed a number of amendments to the Fair Trading Amendment Bill (No 3) which will improve it. I make it very clear that the Opposition has quite a number of points it wants to cover on this debate and I am sure that you Madam Chairperson provided that Opposition members are addressing the issue will ensure that the Opposition has an opportunity to debate its proposed amendments sufficiently. [ 
Interruption 
] 
The CHAIRPERSON (Ann Hartley) 
: That comment was completely unnecessary. Mr Benson-Pope will stand withdraw and apologise. 
David Benson-Pope 
: I withdraw and apologise. 
Hon TONY RYALL 
: We have proposed a number of amendments to this part to deal with a number of issues that the National Party has raised. We have an amendment to make it clear that franchise schemes should not be considered pyramid schemes. ACT National and New Zealand First speakers have made the point that there may be confusion about whether franchise schemes are involved and that it could lead to a significant compliance cost as they seek to redefine the terms of their operations and the conditions of their agreements and we think Parliament should move to make it clear that franchise schemes are not pyramid schemes. 
We have a number of amendments to address the issue of fines and we would like to take different calls to explain those amendments in detail. We will move an amendment that will require the Minister of Consumer Affairs to undertake a review of the various penalties that apply across commercial law to offending. We will also move an amendment that seeks a principle that would guide courts in their application of the Fair Trading Act. That is an amendment based on the wording in the Sentencing Act principles which states: “In sentencing or otherwise dealing with an offender the court—(d) must impose a penalty near the maximum prescribed for the offence if the offending is near to the most serious cases for which that penalty is prescribed unless circumstances relating to the offender makes that inappropriate;”. 
We seek the Government’s support for that because the Government has voted for that wording previously. The Commerce Committee made it clear that the Government wanted to double the fines because the courts were not imposing fines at a sufficient level. We think a more appropriate remedy would be to provide a guidance to the courts that they should be more willing to use the full range of the penalties that are currently available within the law and we seek the Government’s support to deal with that. 
We are also concerned about the removal of the right of parties to seek compensation from the Commerce Commission if it takes an interim injunction against a party. If someone is going lawfully about his or her business the Commerce Commission gets a complaint and the commission then seeks an interim injunction of the court to stop that action there are surely consequences. The Commerce Commission thinks that any alleged offending might stop but it also has an impact on the commercial operation its profitability and the reputation of the people the injunction has been taken out against. 
We say that the Commerce Commission should have to carry the cost of that if it has got it wrong. If the Commerce Commission takes an injunction against a perfectly law-abiding business in the belief that there has been a breach of the law and it then takes no action because it cannot find a breach there will have been a negative effect on the business—it might affect the reputation or the profits—the Commerce Commission should pay. It should compensate for the disruption to the business and reputation that taking that interim injunction would have cost. 
If I took an interim injunction against a company I would have to pay if I took it wrongly and so should the Commerce Commission. Why should businesses have to suffer because Commerce Commission staff have been over-zealous? It should be a basic right as Business New Zealand told the select committee to seek redress for suffering damages as a result of another person’s actions and we will move an amendment to withdraw the exemption the Commerce Commission will have from having to pay for any costs. I will touch on another amendment briefly. How long have I got? 
The CHAIRPERSON (Ann Hartley) 
: Thirty seconds. 
Hon TONY RYALL 
: I may have to take another call to explain it. The amendment is in respect of what happens when the Commerce Commission comes into someone’s business and says it wants a particular document but that document does not exist. Recently there was a case in which the Commerce Commission went into a company under investigation and said that it wanted a document. But that document did not exist and the company had to change its computer programs and write new ones in order to generate that document. The Commerce Commission did not pay. 
BRENT CATCHPOLE (NZ First) 
: New Zealand First agrees with the targeting of pyramid selling in the Fair Trading Amendment Bill (No 3) and broadening the target to incorporate newer forms of pyramid selling that have developed since the Fair Trading Act was originally implemented. Such schemes include those where the participants buy or sell an investment opportunity and use agents provided by the scheme’s operators to recruit others to participate on their behalf instead of having to recruit the new participants themselves. 
We also welcome the updates of the penalties. However as mentioned earlier New Zealand First has difficulty with clause 14 “Power to search”. The current wording of section 47 of the Fair Trading Act provides that the Commerce Commission can search to ascertain whether a person has contravened the Act. Clause 14 of this amending legislation extends the commission’s powers under section 47 of the principal Act so that the commission may obtain warrants to search for evidence to demonstrate the nature and extent of the breach of the Act. That is to assist the commission in gathering evidence for the courts. They “may” search. 
The wording of the subparagraphs of new subsection (2) in clause 14 refers to any conduct that “constitutes or may constitute” a contravention of the Act. It is the “may constitute” the contravention of the Act that we have difficulty with because it is very vague and not specific enough to allow the Act to operate properly. New Zealand First does not support that provision which gives vague extensions to the power to search because it gives the commission unfettered powers to undertake “fishing expeditions” in the search to endeavour to find evidence of the conduct that “may” constitute a contravention of the Act. In other words it is undertaking a search on a hunch. We feel that that is not good enough and we have put a Supplementary Order Paper forward that removes the word “may” and replaces it with the word “will”. 
People undertaking legitimate activities such as for example stamp collecting may trade a particularly valuable stamp sell it and use those proceeds to buy a car that is way beyond the means of their income. On the grounds of the wording of that provision it could be considered that that stamp collector’s activities “may constitute” a contravention of the Act and therefore would be subject to a search. That goes against the whole principle of this bill because it takes in too wide a scope and leaves room for abuse. 
We would like to see that clause given a tighter wording as in section 312 of the Crimes Act which deals with applications for interception warrants. That section sets out extensive and definite parameters for the search warrant rather than leaving the parameters vague and easily misinterpreted—or worse abused. The amendment on our Supplementary Order Paper tightens that up. We would prefer it tightened up more along the lines of the Crimes Act but we will be content to see the wording changed from “may” to “will”. 
SUE KEDGLEY (Green) 
: I would just like to make a few comments on Part 2 of the Fair Trading Amendment Bill (No 3). First I will make a few general remarks because the Green Party has not spoken at all on this bill to say that we will be supporting it slightly half-heartedly because we believe that it is so narrow in its purpose and there are so many serious issues relating to the Fair Trading Act that would be of great benefit to consumers if the law were strengthened. But this bill focuses on a couple of issues that really I believe miss the main concerns that consumers might have about the Fair Trading Act. 
 So in other words we see it as rather limited in its purpose. We certainly support the idea of strengthening the powers in respect of pyramid selling. The member from ACT argues that the powers already exist and that it is rather pointless but we will take it at its face value and say that this certainly spells it out. So we support that and some of the other provisions in this bill. 
We are deeply disappointed that the bill has not dealt with fundamental issues. For example the bill does not even establish a consumer’s right to know what is in a product that he or she purchases. There are all sorts of other flaws in the legislation that need strengthening and we are concerned with clause 14. The member from New Zealand First has pointed out the very wide broad—and some would say sweeping—powers that that provision gives such as the power to search given to the Commerce Commission and we are extremely concerned about the very far-reaching and unfettered nature of those search powers. So we will definitely be supporting the amendment from New Zealand First to tighten that amendment and to define precisely what we mean. 
As the previous speaker said under the Crimes Act one has to have very specific and serious reason to believe there is some infringement or whatever to get a search warrant. It is quite specifically spelt out whereas here it is extremely loose. It is all about saying that one must have reasonable grounds to believe that a search is necessary for the purpose of something that “may” constitute etc. 
The member from New Zealand First is moving an amendment that we support but one could drive a bus through this. I may be a little paranoid but I sometimes worry that with a small bill like this some technical amendments are slipped into a technical bill with the thought that some of us may not be paying a lot of attention to it then one finds that something is slipped in that significantly extends the search warrant provisions. They are then slipped through and we are told: “There’s a precedent for this.” If we suddenly find those provisions being slipped into other bills we may then be told “Well the precedent exists in the Fair Trading Amendment Bill (No 3).” so we worry. 
It may be that there is some other good reason for this very very loose wording but that has certainly never been spelt out to us. Whatever the reason may be the fact is that the unintended consequence of this very loose wording will be that the search warrant provisions are widened to the point where people could be going on a fishing expedition as the previous speaker said. Basically as it is at the moment the bill is giving unfettered search powers and I am not aware of any other search powers in any other legislation that give the same broad unfettered search powers—whether to the Commerce Commission or whatever. 
So I am delighted that the member for New Zealand First has drawn our attention to that defect in the legislation. We are grateful to him for drawing it to our attention and for coming up with a tightened wording. The Green Party will certainly be supporting the amendment and we hope that all other members in the House will also support it. As I say we will be supporting the bill—narrow though it is in its scope—but we bitterly regret that it does not deal with some of the more fundamental problems with the Fair Trading Act from a consumer’s point of view. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: In speaking to Part 2 of this bill there are three clauses that I would particularly like to focus on. The first one is clause 8. During the debate on Part 1 I raised the issue of the transition in the new arrangements in respect of the limitation on liability. I note that in the commentary on this bill the Commerce Committee makes the comment that “This will not operate retrospectively.” It worries me that when one reads the bill one finds there is nothing to make that clear. 
Hon Judith Tizard 
: Clause 16. 
Dr the Hon LOCKWOOD SMITH 
: The Minister calls out “clause 16”. That clause entitled “Provisions as to proceedings already barred and pending proceedings” states: “Nothing in this Act—(a) enables any proceedings to be brought that were barred before the commencement of this Act;”. But I think the problem remains because within the last 3 years a person involved in a business knew that there was a 3-year limitation on the time in which an action could be taken if something had gone wrong. This bill will change that even though the event may have occurred before this legislation takes effect. I do not believe that clause 16 covers that and that is what worries me. As I read the bill including clause 16 I do not think that on the face of it the bill is clear on that transition. That just worries me because we have seen so many things go wrong with transitional arrangements in commercial law. 
Proceedings in respect of an event that has occurred within the last 3 years and that has not yet been found to be faulty are not barred by clause 16. The time period is extended by this legislation for something that may have occurred prior to the commencement of this legislation and that is retrospective. It has a retrospective impact on the person conducting the business. I would appreciate it if the Minister could take some advice on that. It should be made absolutely clear that the provisions of new subsection (3) inserted by clause 8 do not catch an event that occurred prior to the commencement date of this legislation even if the event occurred within 3 years of that date or otherwise the effect of this legislation will be retrospective. That is the first issue that I think the Minister should take a call on. 
The second issue I would like to comment on is clause 10. As a member of Parliament my experience of the Commerce Commission goes back many years and I believe it should not be exempt from the requirement to give undertakings as to damages. The Commerce Commission can have a profound impact on businesses. The actions of the Commerce Commission resulted in a certain business in my electorate going out of business—that is what that business believes and that is what a select committee minority report argues. Admittedly the bill is not about exactly that kind of situation but the Commerce Commission can have a profound impact on businesses in this country—it can put them out of business. An injunction taken out under clause 10 could result in a business going out of business. The Commerce Commission must not be exempt from undertakings as to damages when that is the possible consequence of its actions. I think we should hear an explanation from the Minister as to why the Government is taking that quite extraordinary step in this legislation when it is so clear that the actions of the Commerce Commission under clause 10 could put a business out of business. Once that has occurred that business has no come-back against the Commerce Commission. The situation is already hard enough. It is hugely difficult to take action against the Commerce Commission. The resources of small businesses are not remotely the same as those of the Commerce Commission and to make the Commerce Commission exempt from giving any undertakings as to damages tilts the balance in a most unfair manner in favour of it. 
Finally in respect of new section 47(2) inserted by clause 14 and the issue of the new powers to search I say that even the Inland Revenue Department does not have the same powers. As I read paragraph (b) of that section the Commerce Commission could have the power to take a computer from a business for the purpose of gathering or recovering evidence which is a power that even the Inland Revenue Department does not have. In recent legislation that has gone through this House under this Government a lot of care has been given by select committees to make sure that computer hard drives cannot be taken from businesses because some businesses could not operate if that was done. I do not see in this provision the protection that is provided in most recent legislation for other important bodies even in relation to provisions to combat terrorism. Other important bodies cannot take a computer without restraints around that yet I do not see here anything to constrain the Commerce Commission from taking a computer from a business as it seeks to recover evidence from the business. Why should the Commerce Commission have more powers to remove a computer from a business person than the Inland Revenue Department? That shows the hasty way that this bill has been drafted and it shows that the select committee has not adequately aligned this provision with those in other legislation recently passed by this Parliament. 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
: I move  
That the question be now put 
. 
Dr MURIEL NEWMAN (ACT NZ) 
: I am pleased to take a call on this bill on behalf of the ACT party. The ACT party will vote against this bill and when members look at Part 2 they will see why we will vote against it. The drafting of this legislation is fuzzy. We know for sure that it will have to be tested in the courts and the people who will have to pay for that of course will be small businesses. This is basically a bill that increases yet again the compliance costs on small business. This anti-business Government just wants to penalise small business as much as it possibly can and now it is doing so through the Fair Trading Act. 
When the Government is hostile to business we end up with law that is not good law. Referring to clause 5 in particular I very much support the amendment put forward by the National Party to make sure that that clause does not disadvantage franchise owners. I worry that new section 24(2)(a)(ii) inserted by clause 5 reads: “that to many participants in the scheme constitutes primarily an opportunity to buy or sell an investment opportunity whether personally or through an agent rather than an opportunity to buy or supply goods or services;”. So it refers to an investment opportunity rather than to goods and services. 
I would like the Minister in the chair the Hon Judith Tizard just to reassure members of the Committee on the question of whether that clause will trap people for example who sell Amway products. No I suppose it will not because that is actually a good or service. But Amway of New Zealand recruits other people into the business. What happens when it recruits people into the business and things do not work out as well as they thought they would? Will this bill disadvantage those people? Should the people who are in that Amway of New Zealand business be worried about that? What about timeshares? When people buy into timeshares they are actually buying into an opportunity to have a nice holiday and so on and sometimes they have to try to sell those off. But investments in timeshares are not actually a good or a service. It is sort of like a holiday or a dream. 
Can the Minister take a call just to reassure us that legitimate business will not be trapped by the provisions of clause 5? The point is that when one reads that clause one does not know what it means and that means a poor unsuspecting person who is involved in investment opportunities will find himself or herself caught by it. Labour as the prime party in the Government has a responsibility to make sure that the law is clear: that the law means what it states and that when lay people read it they can understand whether they could be caught by it. I would like to make mention of the fact that—because this bill is a bit fuzzy—what will happen is that an unsuspecting small business will get caught by the Commerce Commission taking a case against it. 
I worked in a company a number of years ago when the Fair Trading Act was first passed through Parliament. The Commerce Commission decided to pick on the company I worked for as a test case. I can tell the Minister in the chair that an enormous amount of stress and pressure was caused for that small business because the Commerce Commission itself did not understand the law. It was using that company in order to have the law interpreted for it. That was a huge burden of stress worry and cost for the small business that I worked for. At the end of the day it turned out that the Commerce Commission was totally wrong. It had got the wrong end of the stick altogether but we were the poor victims who had to help to have the law clarified. 
Because this bill is so badly drafted I know that in the future many small businesses in New Zealand will suffer because of the law that this Labour Government has forced on them. What is even worse is that new section 41(6) inserted by clause 10 states that the Commerce Commission does not have to pay damages if it has got things wrong. I can tell the Minister that many members of this Parliament know what happened to a poor couple when the Occupational Safety and Health Service decided to take a case against them—the Berrymans. Some members will have had the Berrymans attend their select committee to ask for compensation. What happened there was that the Occupational Safety and Health Service was taking a case against them to test the law and that just about destroyed their lives. The Labour Government should not be responsible for that. 
MAHARA OKEROA (NZ Labour—Te Tai Tonga) 
: I move  
That the question be now put 
. 
PANSY WONG (NZ National) 
: This is a substantial part of the bill and the Minister in the chair the Hon Judith Tizard should take a call on it. Many very worthwhile amendments have been put up and not just by National or ACT. The various political parties have put up a range of good amendments and most of those political parties including the National Party support the bill. Obviously when we support a bill and put forward amendments our only intention is to make sure the bill is more effective when it is implemented. The Minister should take a moment to reflect on the obvious good intention on the part of the Opposition parties and assess the need to amend the bill. 
First of all I would like to come back to clause 10 with regard to the Commerce Commission. The ACT party has put in an amendment to remove the word “not” which would make sure that in determining the Commerce Commission’s application for the granting of an interim injunction the court would take into account the fact that the commission is not required to give an undertaking as to damages. This is important. My good colleague Dr the Hon Lockwood Smith raised the point that unless there is a more level playing field any business organisation or anybody else can be required by the Commerce Commission to do all sorts of things and when the Commerce Commission take out an interim injunction if that is incorrectly done there will be no damages awarded for that. So this is not a level playing field. 
Of course my expectation that the Labour Government would take that into account has diminished somewhat. I am not as positive as my colleagues that the Minister or the Government will take into account such a sensible and correct amendment in the light of what occurred this morning when we saw the immigration bill being rushed through which gives total power to the Immigration Service’s chief executive officer and other officers to carry out all sorts of functions without having to explain or to justify that. But that does not make this measure correct. The Commerce Commission should be totally accountable for its actions so that if it has issued an interim instruction and happens to be incorrect then it should pay damages. That would serve as a reminder to Government organisations like the Commerce Commission to be very careful and really vigilant in making sure they have got everything correct before they issue an interim injunction. 
The other issues I want to raise are about the authority provided in clause 15 for the Commerce Commission to require a person to supply information or documents. 
Sitting suspended from 6 p.m. to 7.00 p.m. 
DARREN HUGHES (NZ Labour—Otaki) 
: I move  
That the question be now put 
. 
LINDSAY TISCH (NZ National—Piako) 
:  
Before the dinner break my colleagues Tony Ryall Dr the Hon Lockwood Smith and Pansy Wong were going through Part 2 and speaking about its importance. In essence this part is the most important part in the bill. In it we find all the nitty-gritty of what this bill is about. We agree with some of the clauses. Clause 4 “Trading stamp schemes prohibited” is one that makes sense and we have no difficulty with it. 
However we certainly have some difficulty—and I have mentioned this in previous contributions—with what is happening in new section 40(3) inserted by clause 8(3) which states that “proceedings under this section may be commenced at any time within 3 years after the matter giving rise to the contravention was discovered or ought reasonably to have been discovered.” That is open-ended which concerns us. What happens in a business environment if something is found to have been in contravention of the legislation a couple of years ago? There is and can be a contingent liability on that business. Who is to say at this stage that there is a liability? This clause makes the situation open-ended because as I said there will be or could be a liability on a business. We are concerned about that and have discussed it at some length. 
We are also concerned about clause 10 “Injunctions may be granted by Court for contravention of Part 1 Part II Part III and Part IV”. That clause gives huge powers to the Commerce Commission—powers that we think could be abused. Previous speakers have said that the impact of those powers could mean that businesses will close down. That is our major concern about clause 10. 
Clause 14 “Power to search” gives huge powers of access. In fact the powers of access under that clause are powers that even the Inland Revenue Department does not have and that is not right. There needs to be some conformity between this legislation and what other departments are involved in. Certainly in the case of the Commerce Commission huge powers are given in new section 47(1) which states: “The Commission may from time to time authorise an employee of the Commission to search under a warrant issued under subsection (2) any place named in the warrant for any of the purposes set out in that subsection.” We regard that as being open to abuse. We do not think such huge powers are acceptable. Although we have said all along that we will support this bill because it moves in the right direction I make those points very clearly. 
Clause 8 doubles the fines that can be imposed. New section 40(1A) in subclause (2) states: “Every person who contravenes section 24 commits an offence and is liable on summary conviction to a fine not exceeding $200000.” The current fine is $100000. Why are we talking about a doubling of a fine to $200000? The fines regimes for many businesses vary and we have argued as we did in the debate on the commencement date that we should have a review of all of the fines regimes. Some people would be paying $10000 and other figures for other offences but more important in relation to this bill we see there is a doubling of the fines from $100000 to $200000. As I quoted earlier the consumer price index has only gone up by 54 percent since 1986. So why are we talking about a doubling of the fines? 
TIM BARNETT (NZ Labour—Christchurch Central) 
: I move  
That the question be now put 
. 
STEPHEN FRANKS (ACT NZ) 
: Part 2 contains nearly all the substance of the bill—there is nothing else in the bill that contains any substance. There are three clauses that I believe the Committee must debate. I had to leave the Chamber briefly before 6 p.m. so I am not sure whether the Minister in the chair the Hon Judith Tizard has taken a call to explain those provisions. I imagine she will because this is the bill that her colleague Minister Rick Barker described as being “fantastic”. He told us that the Commerce Committee would make many investigations into the issues it raises stating: “I want to see a very rigorous investigation of those issues and I am absolutely confident that the Labour members on the committee will dig deep on that investigation. They will drill all over the place and many things will be flushed out for the benefit of the whole community.” I imagine that those Labour members are very well equipped to answer those serious questions. 
The first asks why the definition of pyramid selling schemes catches a good deal of the ordinary franchise work that this Government has said is a large part of the future. Branding and the ability to take advantage of locally produced or international brands is a major part of any modern industry. For some reason this bill seems to want to catch franchise agencies and franchise selling and the only explanation for that from the select committee was that other provisions will mean that we do not have to worry about bad words here because most franchise schemes are fair. Of course almost any scheme can be found to be unfair in hindsight but commercial certainty or indeed the rule of law depends on knowing what the law means in advance not after one has worked out that it did not turn out the way one expected. 
The second question is the one on which I have an amendment covering what I am sure must be a manifest error. Clause 10 contains a provision stating that the court may not require an undertaking as to damages—in other words on seeking an injunction. For hundreds of years the courts have made sure that people cannot abuse power by coming and getting an urgent remedy that could cause enormous damage to the other side unless they are prepared to say that if they are wrong they will compensate for any damage. The Government has now decided that the Commerce Commission will be exempt from that. It can use injunctions for harassment or it can kill someone’s business and it does not require the commission to give an undertaking as to damages. 
Then there is the provision in the clause that I believe must be an error and I certainly ask the Minister to check with her advisers whether it is. It states that: “the Court must not take into account”—in granting an injunction—“that the Commission is not required to give an undertaking as to damages.” It is inconceivable that the Government could mean what it is saying. Surely it should be taking into account that the other side could be utterly destroyed and that the Commerce Commission will be completely free from having to compensate when the court decides whether it is in the interest of justice to give an injunction. The word “not” in that provision must be an error. I say to the Minister that I believe that not only the House but also the people who believe in the rule of law and justice would expect some sort of answer if my amendment to remove the word “not” is not accepted. 
Thirdly there is another little drafting point that I suspect is a little less obvious. It is in new section 40A to be inserted by clause 9. Subsection (1) states that the court may order a wrongdoer to pay an amount not exceeding the value of any commercial gain resulting from the contravention—that is ordinary common sense; one can work that out. The problem is that the provision does not stop there. The next subsection states that the court should work out what the gain is but the first one goes on to say: “if the court is satisfied that the contravention occurred in the course of producing a commercial gain.” As I read them those words are entirely redundant. If they are not redundant the court will have to give them some meaning. How can a contravention not occur in the course of producing a commercial gain if in fact the commercial gain results from it? 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: No I will take one more. There are a lot of amendments in the name of the Hon Tony Ryall and I am prepared to listen to him. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: Thank you Mr Chairperson. It is good that you have done that because Part 2 includes the substance of the bill and if we are to try to provide positive suggestions to the Government we need some opportunities to talk about them. We have a number of amendments to the bill that I would like to talk about. 
The first is that we want to limit the ability of the Commerce Commission to require companies to provide documents that do not exist. The law gives the Commerce Commission substantial powers to enter seize and demand information and documents. That will extend to requiring information and documents that do not exist within accounting systems or cannot be readily produced. There will be a significant compliance cost for business. Business New Zealand told the Commerce Committee of a recent case where a company had to produce reports that were not in its accounting system nor in its records. It did comply at a considerable cost of time and money and then the commission found that there was no case to answer. There is no compensation for that private business which had to spend thousands of its own dollars in doing that. 
Secondly we have put an amendment to stop the Commerce Commission and this Government from removing the basic right of New Zealanders to seek redress for suffering damages as a result of another person’s actions. This bill will allow the Commerce Commission to seek an injunction with no cognisance of the cost that the business may incur. The commission can go to court and require a business to stop trading but the commission does not have to compensate the business if it finds that there was no illegal activity. That is anti-business and just does not make sense. The Minister of Consumer Affairs should explain. 
We have also put amendments to the limitation period to try to improve the bill. The bill proposes that in relation to for example claims made in advertising companies are liable 3 years after a breach is discovered rather than when it actually happened. The commercial consequence of that— 
Hon Harry Duynhoven 
: That’ll scare the hell out of used-car dealers. 
Hon TONY RYALL 
: Mr Duynhoven said that will scare them. The commercial consequence of that is a number of businesses will have to carry quite significant contingent liabilities because businesses cannot be sure that the claims will come to an end. Dr the Hon Lockwood Smith made the point that this legislation is quite unclear whether that provision will apply retrospectively. The Government states in the commentary on the bill that it will not but if one reads the bill one sees that it is quite unclear how it will be prevented. So we have put amendments and we ask the Government to consider those. 
We are also concerned about the 100 percent increase in the fines. There is no justification of why that level of fine should happen. The Government says that the courts are not fining enough. Its response is to double the fines— 
Stephen Franks 
: Then not collect them. 
Hon TONY RYALL 
: Then not collect them! Its response is to double the fines and hope the judges will lift the amounts they are fining. I have proposed an amendment that uses the Government’s own words in the sentencing guideline in the Sentencing Act. My amendment suggests to judges that in the worst cases they use the full range of the penalty that can be applied. Those are the Government’s own words and I am asking the Minister to consider supporting those amendments. 
The National Party has been prepared to support this bill up until now because we thought that the Government would look upon our amendments as providing positive solutions to concerns that have been raised. But the Government has not even given us the courtesy of a response. The Minister said earlier on in the debate that she would respond at the appropriate time. This could very well be— 
Hon Judith Tizard 
: The third reading is the appropriate time. 
Hon TONY RYALL 
: Rubbish! If that Minister wants to continue having multiparty support for this bill she should take a call. When one goes through the weaknesses in this bill one becomes quite convinced that this bill should not go any further. 
Hon RUTH DYSON (Minister for ACC) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 46 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to insert new clause 5A be agreed to: 
to insert after clause 5 the following clause: 
5A 
Section 24 of the principal Act is amended by adding the following subsection: 
(3)Notwithstanding anything else in this section for the avoidance of doubt franchise schemes which are not manifestly unfair on account that these schemes do not rely on recruitment of additional participants to enable financial rewards are not considered pyramid selling schemes. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 46 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 8 be agreed to: 
to omit subclause (3). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 46 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 8 be agreed to: 
to amend subclause (3) by adding to new subsection (3) of section 40 the words “For the avoidance of doubt this subsection will not apply retrospectively to matters which occurred 3 years before the commencement of this Act.” 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 8 be agreed to: 
to add the following new subclause: 
(4)The Minister shall present a report to the House within 6 months of Royal assent of this bill reviewing the level of financial penalties in comparison with penalties included in other commercial legislation. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to insert new clause 8A be agreed to: 
to insert after clause 8 the following new clause: 
8ANew section 40A inserted 
The principal Act is amended by inserting after section 40 the following section: 
40A 
Principles of dealing with offenders 
In fining or otherwise dealing with an offender the Court must impose a penalty near the maximum prescribed for the offence if the offending is near the most serious cases for which the penalty is prescribed unless circumstances relating to the offender make that inappropriate. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 10 be agreed to: 
to omit clause 10. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 10 be agreed to: 
to add to new subsection (5) of section 41 the words “unless the Court deems it appropriate”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 10 be agreed to: 
to omit from new subsection (5) of section 41 the word “must” and substitute the word “may”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 10 be agreed to: 
to omit new subsection (6) of section 41. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Stephen Franks to clause 10 be agreed to: 
to omit from new subsection (6) of section 41 the word “not” where it first occurs. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Brent Catchpole to clause 14 be agreed to: 
toomitfromnewsubsection(2)(a)(b)and(c) of section 47 thewords“constitutesormayconstituteacontraventionof” and substitute the words “contravenes or will contravene”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Noes 60 
Labour 52; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 15 be agreed to: 
to omit clause 15. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 15 be agreed to: 
to add to new section 47G the following subsection: 
(3)In the event that no action is taken against any party the investigation of which the Commission required the supply of information or documents under this section then the Commission will reimburse the supplier of the information or documents for the reasonable costs of providing the required information or documentation. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
Consumer Protection (Definitions of Goods and Services) Bill 
In Committee 
Clause 1 Title 
GERRY BROWNLEE (NZ National—Ilam) 
: This title is completely inadequate for this bill. 
Government Members 
: Ha ha! 
GERRY BROWNLEE 
: Labour members immediately start thinking: “My gosh the member is on to something!”. We see them—the few there are here—suddenly sticking their heads up and thinking: “Heck maybe our Minister has made a mistake.” I have to say the Minister of Consumer of Affairs has made a terrible mistake in suggesting that this is a consumer protection bill. It is not about consumer protection. This bill seriously disadvantages consumers in New Zealand by containing a number of provisions that define certain goods and services as being covered by the relevant principal Act. It should be called the “Consumer Opportunity Denied Bill”. That would be a far better way to describe what is inside it. Over the next few hours as we discuss the various parts and clauses it will become evident to anyone who wants to listen that this bill is not good for New Zealanders. 
 The first point I want to make is about computer software being included as a good. I think that is the right way to go. When consumers buy software of course they should be able to expect that it will work. Of course they should be able to expect that that software will do the job that it is claimed to do. But in the same bill we see that telecommunications of any form are removed. I do not know how much members on the other side of the Chamber know about modern technology but let me make it very clear to them that unless there is good telecommunications access a large amount of the software that those consumers buy will be absolutely useless because it will not work without the telecommunication connection. So the poor old software manufacturers are being beaten about the head and told they have to meet the onerous requirements being put upon them by this bill but the people who actually deliver their service are not included. 
Similarly I note that water is now included in the bill as a good. 
John Carter 
: Water? 
GERRY BROWNLEE 
: Water. A lot of people will say that that is a good idea and that of course water that is delivered to people’s homes and residential areas should be of a particular standard. But I come from Christchurch and we have some of the best water in the world. Guess what? Our water will not comply with the requirements of this bill. 
John Carter 
: Why not? 
GERRY BROWNLEE 
: Because we do not have all sorts of purification chemicals tipped into it. We do not turn on taps in Christchurch and smell chorine. This bill will require that the Christchurch City Council tip buckets of chlorine into our drinking water in order that it comply with the water standards—that it get to the so-called A level—and therefore comply with the bill. I want to know whether Tim Barnett is going to vote for the Consumer Protection (Definitions of Goods and Services) Bill which in this particular instance is a clear attack upon the water that we in Christchurch drink daily weekly or as often as we can whenever we are there. He and I know— 
Clayton Cosgrove 
: It’s not often for that member. 
GERRY BROWNLEE 
: Clayton Cosgrove also knows—no he probably does not—that when we go to other parts of the country and taste the water which probably has an A standard we find that it is full of chemicals full of all sorts of junk that has been tipped into it. Because in Christchurch we have nothing other than pure water that comes straight out of our beautifully clean aquifers— 
The CHAIRPERSON (H V Ross Robertson) 
: This is a narrow debate. 
GERRY BROWNLEE 
: —our water will not comply with the Consumer Protection (Definitions of Goods and Services) Bill. So I cannot vote for it. This bill also includes a whole lot of electricity services. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition will be strongly opposing not only the title of this bill but the content. During the Committee stage when we hope the Minister of Consumer Affairs will take a call we are going to bring to the attention of the Committee a number of examples of the increased cost to consumers that this bill will provide. This bill will increase the cost of services to all New Zealanders and that is why it would be better described as the “Consumer Protection (Increase in Costs) Bill”. That is exactly what this bill is going to do. 
During the debate on the other parts of this bill we are going to outline the cost to various local authorities in New Zealand of the foolish decision of this Government to include water and waste water as goods under the definitions of goods and services in the various pieces of legislation involved. The consequence of that is to say to the local authorities that supply water to New Zealand consumers that it must be of merchantable quality and for it to be of such a quality will require a number of local authorities— 
David Benson-Pope 
: What authorities? 
Hon TONY RYALL 
: —including that member’s local authority—to lift the standard of their water at a considerable cost. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
Hon TONY RYALL 
: I am prepared to table a document which relates to the title of this bill that shows that local government bodies may be faced with a bill of $400 million to lift the level of their water supply so that it meets what is required in this bill. I bet Judith Tizard did not tell the Labour caucus that when she was briefing it on this bill. 
The CHAIRPERSON (H V Ross Robertson) 
: We are debating the title. 
Hon TONY RYALL 
: This bill will mean extra costs of $400 million over the next 5 years and that is why this bill should be called the “Consumer Protection (Rark up the Rates) Bill”. The sum of $400 million—that is what local government says—will be spent on upgrading water supplies in the next 5 years in order to meet the standards required by this bill. 
Georgina Beyer 
: That’s right! 
Hon TONY RYALL 
: Georgina Beyer from the Wairarapa is absolutely right. The sum of $400 million will be spent over the next 4 years and that will rark up the rates. 
This title does not reflect what is being proposed in this bill. This bill is about so much more than just adding items to the definitions of goods and services; it is all about gold-plating electricity gold-plating water and gold-plating gas and consumers will pay the cost. I have not met a consumer who has raised with me as an issue the quality of the gas he or she receives. I have not met a consumer who has raised with me as an issue the fact that he or she wants to pay a lot more to get a higher quality of water. I have met very few consumers who are in favour of paying higher electricity prices but that is what this bill will require. 
It is wrong for the Government to bring in a bill that does not correctly describe what is being proposed. The bill is complex and the Opposition requires the opportunity to take multiple calls in order to seek comment from the Minister because there are many many New Zealanders who want to know what is going on. Later I will table documents that show that local authorities that are found to be in breach of the guarantees of acceptable water quality standards may even though they have told their consumers about the problems with their standards still be found to be in breach of the quality standards and subject to considerable liability under these Acts. As a result they will be forced to spend substantial amounts of ratepayers’ money in order to meet drinking water standards. The Government has not thought through the consequences of this bill. I will also table documents from a gas company in a Labour member’s electorate that argue lucidly why the extension of this bill to gas is unnecessary has not been thought through and will cost consumers. 
The CHAIRPERSON (H V Ross Robertson) 
: Before I call the next member I point out that I have tried to indicate to members the narrowness of the debate on the title. I draw to members’ attention Speaker’s ruling 90/1 which states: “... when a bill has been considered by a select committee the debate on the title clause in committee is limited strictly to the elements of that clause and any amendments proposed to it.” That ruling was made by Mr Speaker Gray and also by Chairman Braybrooke. I am going to watch that very carefully. 
JOHN CARTER (NZ National—Northland) 
: Mr Chairman if you want to keep within the Standing Orders listen to this for the next 5 minutes. Here we go! We are debating the Consumer Protection (Definitions of Goods and Services) Bill. Is that OK so far? Very good—I have had the sign-off from the Chairman so I must be right. 
Hon Judith Tizard 
: You have used 15 seconds. 
JOHN CARTER 
: That is OK; it is not a problem. I have had a read of this bill and I worry about the way in which it is titled. In fact if we think about the words “consumer protection”— 
Stephen Franks 
: What about your mother? 
JOHN CARTER 
: No we will not worry about my mother at the moment. We will worry about protecting my mother a little later on in the debate. 
The problem with this bill is that in itself it cannot actually work. It cannot protect the consumer. Let me tell members why. This bill talks for example about the fact that one of the things the Government wants to do—if members look at the commentary—is class electricity as a good. So the intent of the bill is to ensure that consumers are protected and to make sure that they get the supply they need. So far so good—that is the purpose of the bill. The problem is that that means if one is to protect consumers to make sure they get the supply someone has to make the supply. If that provider of the service does not make the supply—if there is a default—the provider then is liable because it has not supplied the service. That is what the bill says. It is called a “consumer protection” bill. 
I put it to the Committee that at the end of the day someone will be fined. The authority will say to the electricity supplier: “You haven’t supplied the service to John Carter. He needs the service. You’ve failed; you get fined.” I ask members who will pay. The authority will write a cheque out for $100000 or whatever it might be—I think we just heard in the Fair Trading Amendment Bill (No 3) debate an amount of $200000—but who will pay? John Carter will ultimately pay because John Carter will have that amount spread on to his bill and I myself will pay for a service I did not receive. 
Now I ask the Committee: how can that be called protection? It is not protection. As a consumer of power I do not feel that under this bill I will be protected at all. Of course I want the supply but I do not want it to cost me any more. I do not want some legislation in this Committee consumer protection legislation that would add a cost to my bill just because the lights went out at some stage when someone said I had to have them on for 24 hours and therefore the supply authority was fined under the Fair Trading Act. How can that be protection? The authority gets fined—and I pay! I do not think that that is that funny. It is like saying to the neighbour: “You shoot down to the nearest shop and have a good time and I’ll pay.” I do not think that that is very much of a protection. [ 
Interruption 
] Well I was not going to quite go there but one can jump to the conclusion. What sort of protection is that? Here I am without a condom and I send a neighbour down the street. I mean that is not much protection. I tell members to follow the logic. This cannot be a “consumer protection” bill. It cannot be. 
By its very principle the legislation might intend to protect the supply. In the case of water it might intend to protect the quality of the supply. It might well intend to protect the discharge of waste water but ultimately it does not protect me from anything at all. I say to the Committee that the Minister has got the title of this bill wrong. If one wanted to call it the “Consumer Continuity of Supply Bill” one might well have a valid argument. But if the Government calls this measure “protection” the bill should be called the “Consumer Protection of Goods Bill”—or of supply or whatever—not the Consumer Protection (Definition of Goods and Services) Bill. To suggest that the consumer is being protected which is what this bill suggests is not right. As a consequence I want to move an amendment to omit the words after “Protection” and substitute the words “(Extension of Provisions) Bill” or omit the words after “Consumer” and substitute the words “(Miscellaneous Consumer Law Amendment) Bill” or omit the words after “Consumer” and substitute the words “(Extension of Definition of Goods and Services) Bill” because there is no consumer protection in this legislation at all. That is the problem. That is when we run into trouble. We do not have a proper definition of the bill and it needs to be defined. 
STEPHEN FRANKS (ACT NZ) 
: Mr Chairman I will maintain the tightness you asked for. This bill’s title is seriously deceptive. As one goes through each provision one finds it has exactly the effect that Mr Carter for the National Party just contended and ACT New Zealand opposes slogan law. This bill talks of protection without doing anything to deal with the matters raised in the first reading debate in the second reading debate and obviously by the Commerce Committee and some of the submitters to that select committee. 
If we look at the select committee’s report we see that it acknowledges the submissions that concern gold-plating mentioned by Mr Tony Ryall from National. It simply states blandly: “We do not consider the guarantee of acceptable quality amounts to a guarantee of ‘gold plated’ supply.” That goes to the core of whether this is an appropriate title for this bill because it states that the bill is for consumer protection. In fact the outcome has to be the prevention of consumers choosing what standard of service they want or what price they pay. If we take the example of electricity supply the supplier under this bill will be required to deliver a standard of service that will satisfy the hindsight judgment of any disappointed consumer claiming to be reasonable. We do not know what that level of reasonability is. 
Manufacturers will be responsible according to the select committee for failures that result from the acts of third parties or for events beyond human control. What was the classification of the near brownout conditions we had a month ago? Were they beyond human control or were they a product of the Government deciding to let one of its generators not generate over summer and wait for 600000 tonnes of Indonesian coal to arrive? Were they the product of factors outside human control when we know that if coalmines had been allowed to open—instead of being blocked by the Resource Management Act or having the Hon Chris Carter and his Department of Conservation stop access—there could have been more coal and there could have been more generation capacity? Is that within human control or outside human control? Certainly our near electricity shortage was very much within political control and ultimately when we imported all those shameful thousands of tonnes of Indonesian coal and started moving them up through the country from Tauranga it was quite plain that it was within human control to increase the output of power stations south of Auckland. 
So what is it that suppliers will have to consider when they look at this provision? Is a drought a matter that they will be liable for or is a drought a matter that the courts will hold is within human control? Why is it not left to consumers as it is now to contract with the supplier and for the supplier to set a price based on the effect that poor service would have on its reputation? Here is a Government that beefed up its Commerce Act as “consumer protection”. David Cunliffe even stuck a bizarre clause about consumer protection into the Commerce Act which no one can understand and then the Government having passed it it has suddenly decided that that will not be enough: “We know that was just a slogan; we know that was nonsense so we will stick in another piece of nonsense slogan. We will call a bill the Consumer Protection (Definitions of Goods and Services) Bill and we will persuade consumers that by passing laws we are protecting them.” 
There are no free lunches and this bill shows a classic case of what happens when politicians decide not to protect consumers but to befuddle them. This bill should have been called the “Consumer Deception Bill”. Consumer deception is what happens when people are told that a one-size-fits-all formula will be put across the legislation and then both consumers and producers are handed over to the mercies of lawyers and their hindsight judgment. When lawyers are the ones who decide what consumers ought to have wanted then in hindsight no one wins. The title we have here in fact—because the “Consumer Deception Bill” is possibly slightly wrong—should be the “Consumer Confusion Bill”. 
SANDRA GOUDIE (NZ National—Coromandel) 
: I was thinking about the title “Consumer Increased Costs Bill” but I concur with my colleague Stephen Franks that “Consumer Deception Bill” is a very appropriate title for this bill. I recall one of Stephen Franks’ comments in an earlier speech he made to the Parliament when he called the legislation the “Law of Unintended Consequences”. I think that is quite appropriate. So in referring to this bill as the “Consumer Deception Bill” I bring members’ attention to the submission from Local Government New Zealand which asks for the references to water and waste water to be removed from the bill. 
It did that specifically for a number of reasons and I want to draw to members’ attention some of those reasons. We will look first at section 11 of the Consumer Guarantees Act which is about “Guarantee as to price”. Local Government New Zealand wants to bring to our attention the fact that the setting of councils’ water standards prices etc. is determined by their communities of interest. That is particularly important for rural suppliers because often the rural supply is for their stock as well as for domestic purposes and they accept a standard that is below the norm. If someone decides that he or she does not like that standard and wants to make a claim against a council what is the council’s position? It concerns one consumer that the council does not deal with on an individual basis. Councils deal with consumers as a whole. The decision with regard to water supply standards for any given area is based on the majority of that community making that decision. Therefore the contract is entered into by a majority of the community and not by an individual consumer. The local government authority questioned how that would be dealt with and felt that the provisions about water and waste water had a cost. If a consumer can challenge a local authority based on that supply provision under section 11 there is a cost to the community if the community is then required to pay for it—if the council is deemed to be liable. There is an added cost because the local authority will then have to expend inordinate amounts of money to bring that water supply up to standard. So those are all costs that come about from one consumer’s ability to make a claim against a local authority. 
The CHAIRPERSON (H V Ross Robertson) 
: This is a very narrow debate. 
SANDRA GOUDIE 
: OK. I turn to some of the other aspects that Local Government New Zealand raised. Of course my learned colleague has already mentioned the $400 million bill that Local Government New Zealand has recognised as being a part of this cost. Those are all costs that will go on to consumers as a consequence of this bill. 
The CHAIRPERSON (H V Ross Robertson) 
: The member must talk about the elements of the clause. 
SANDRA GOUDIE 
: This is the “Consumer Deception Bill” because consumers are not aware of the costs that will be imposed on them through local authorities as a by-product of this bill. It is a deception. It is a deception on all those consumers. It will be a by-product of this bill but they are unaware of it. They are unaware of all its inherent costs which come through because there is uncertainty about how those matters raised by Local Government New Zealand will be dealt with. Section 11 is a prime example of that in relation to price. 
Some other matters are also of concern. One is the fitness for a particular purpose contained in sections 6 and 7 particularly section 7. Local authorities are to be subjected to all of those provisions and will have to meet all those standards for one consumer when the majority of the consumers have made the decision. It comes back to the “Consumer Deception Bill” that Stephen Franks was talking about. What happens if the local authority is supplying water to a particular consumer there is a force majeure—weather conditions cause the water to be of a standard below that guaranteed—and one consumer holds the rest of the consumers to ransom? It is a deception. 
GEORGINA BEYER (NZ Labour—Wairarapa) 
: I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: In the faint hope that someone will speak to the title I will give the call to the honourable member John Key. 
STEPHEN FRANKS (ACT NZ) 
: I raise a point of order Mr Chairperson. I took from that an inference that no member had yet spoken to the title. 
The CHAIRPERSON (H V Ross Robertson) 
: No that is not a point of order and that is not the insinuation that was meant. 
JOHN KEY (NZ National—Helensville) 
: As the Chairperson quite correctly pointed out I rise to take part in the title debate on the Consumer Protection (Definitions of Goods and Services) Bill. If I reflect on that title I can see quite a bit of merit in it. I do not like to agree with the Government and praise it and I certainly would not do that in normal circumstances but I can see some logic in the title. 
Hon Member  
: The member has been lobbied. 
JOHN KEY 
: I have been lobbied from time to time. I can certainly see that there is an attempt in this bill to make the definitions of goods and services clearer and that some quite interesting goods will be defined as a result of this bill. 
A lot of discussion has taken place tonight about electricity. Electricity has been defined as a good but equally defined under the legislation with its wonderful title are gas telecommunication services water and also—most importantly indeed—computer software. Far be it from me to say that the definition of goods and services is not at least discussed in the bill and it is in some way fitting that those words should be in the title. Like other speakers tonight where I would express some concern about the title is in respect of the use of the words “consumer protection”. One has to ask oneself whether consumers are truly being protected. There is certainly an attempt to protect them through continuity of supply although as we have heard from various speakers it is very unlikely that that would take place. [ 
Interruption 
] The Labour senior whip needs protection and I can understand that. However I am not sure that he is defined as either a good or a service. I am sure he needs protection but let me not detract from this wonderful dissertation. 
Hon Judith Tizard 
: He provides great services of very high quality. 
JOHN KEY 
: Does he? I was not aware that he provided services of great quality. I do not know whether consumers are protected by him but I will take it that they are. Consumer protection conjures up in my mind the concept of someone with a shield a weapon—some sort of a white knight riding out into the sunset to protect the poor and lonely consumers as they huddle around the fires that are not going the computer software that has blown up in their faces the water that is undrinkable or the gas supply that has been turned off. Will that happen as a result of this bill? I think not. At the end of the day no one can absolutely guarantee that the lights will be on. The lights are on in the Labour Party but is anybody home? That is the obvious question but the answer is not obvious. They have some wonderful members who from time to time make a stunning contribution on the odd bill but generally speaking the lights are on but no one is home. 
That has to be very much the same situation under the Consumer Protection (Definitions of Goods and Services) Bill. Where is the discussion about insurance companies and the role they could have played if they had the opportunity to protect consumers? That is what insurance companies do; they offer protection. They do not offer the faint hope that the lights will never go out that computer software will never go down that the gas will not work or that the water will not be of wonderful quality. Insurance companies are there to protect consumers when things go wrong. For the poor consumer who is at the moment huddled around his or her computer looking to log on; the poor consumer who has turned on the gas fire but it is not working; the poor consumer who is wanting to turn on his or her stove as we speak the Consumer Protection (Definitions of Goods and Services) Bill is not providing them with that protection because it cannot if the power is not on. Consumers must therefore look to an alternative source. 
I am not sure that this bill does absolute justice to what could take place. I can see that many consumers at the moment are feeling a sense of security but they have been wronged by this legislation. They will not have continuity of electricity supply or the quality of water that they require. There is nothing nicer than going home on a cold night and having a glass of water. 
TIM BARNETT (NZ Labour—Christchurch Central) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 1 be agreed to: 
to omit the words “(Definitions of Goods and Services)” and substitute the words “(Extension of Provisions)”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 1 be agreed to: 
to omit the words after the word “Consumer” and substitute the words “Miscellaneous Consumer Law Amendments”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 1 be agreed to: 
to omit the words after the word “Consumer” and substitute the words “Extension of Definitions of Goods and Services”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 56 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8; Green Party 9. 
Noes 60 
Labour 52; United Future 8. 
Amendment not agreed to. 
Clause 2 Commencement 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition has moved a number of amendments on the commencement date of this bill and I would like to explain each of those amendments which are in the name of the honourable John Carter. 
One of the points that we intend to make during the process of this bill is that there is quite considerable concern in local government about the inclusion of water and waste-water provisions in it. Those concerns stem from a number of situations. Possibly the most important of them is that councils feel that they have not had sufficient time to prepare their operations for the passing of this bill. As officials advised the Commerce Committee many councils supply water that is not of a saleable quality. The document I have here gives the exact phrase: “water has to be supplied of an acceptable quality”. We believe it is appropriate to give councils an opportunity to come to terms with the full ramifications of this legislation and we have an amendment that proposes that. While the Government can get its way with the rest of the extension of goods and services we would pull out water and waste water and allow those to be brought into the bill at a later date by way of Order in Council. That would provide that Government and local government—in the sort of love-in partnership that they like to talk about—could equate this bill with the reality of the challenges that face councils that supply water. It would allow them sufficient time to do so before that “acceptable quality” issue really raises concerns for them. 
We also have another couple of amendments that would move the start-date of this bill beyond the next election because I am quite confident that the next National-led Government which will be returned to office in 2005 will— 
David Benson-Pope 
: Even the  
Herald 
 says you haven’t got a chance. 
Hon TONY RYALL 
: I do not take my directions from the New Zealand Labour Party  
Herald 
 thank you very much or from the Television New Zealand Labour Party. But I know that when the National-led Government is back in power in 2005 we will have to remove those definitions that include water and waste water because we think they are wrong. We have put forward these amendments for a number of reasons. We want to defer the start-date so that the next Government can remove the ridiculous parts of this bill in time to avoid a huge consequence for consumers. We have put forward another amendment that would exclude water and waste water from the requirements of the Consumer Guarantees Act the Commerce Act and the Fair Trading Act. 
While it is not particularly relevant to this debate on the commencement there is a considerable concern amongst members on this side of the Chamber about the proposition that amendments are being made to these bills for the avoidance of doubt. Frankly there is doubt and the only way that the Government can claim that those matters are already covered by the bill is through the opinion of officials. That is not good enough and we will be talking about that later on. 
When we look at the costs to local government we need to remember that we have an official document here that says that local government will have to spend $400 million over the next 5 years on water and waste-water services. That is an incredible cost per ratepayer. We are seeking information to try to equate that for each district in New Zealand so that members opposite can be aware of what that cost will mean. Because of the confusion about what the cost will be for the Christchurch Dunedin and Palmerston North city councils and other authorities to bring their water up to an acceptable standard as required by the Consumer Guarantees Act the Fair Trading Act and the Commerce Act we should defer the start of those provisions in this bill. 
I urge the Committee to support the amendment in the name of Mr John Carter because it just makes sense. There is considerable confusion. Even the Minister cannot take a call to explain what will happen with water and that is why this action should be taken. 
JOHN CARTER (NZ National—Northland) 
: 
 I want to take an opportunity to speak to this part because as my friend and colleague the Hon Tony Ryall said there are three amendments in my name. The first is to ask for the bill not to come into force until 1 January 2006. I ask the Minister to give this amendment serious consideration because there are some issues of major concern in the bill and those who are likely to be affected do need time to get a better understanding of it. It seems reasonable that the Minister could give some time for those people to get an understanding of and therefore a feel for where this bill will go and what impact it will have. So I say that the date the bill should come into force is 1 January 2006 and that means that when the Government changes at the next election we will be able to repeal this bill so that it will not have any impact at all. That seems to make a whole lot of sense to me. 
In the event that I just cannot persuade the Minister to accept that date I have a fallback date of 1 July 2004. One should always have a back-up. The reason for that is that I know that the Minister in the chair Judith Tizard is a reasonable person. She considers very sensible— 
Hon Mark Burton 
: Can you write that one down? 
JOHN CARTER 
: Now I did not say that—it was not me who said that! This Minister considers serious amendments and I am absolutely certain she will very likely allow this one to be accepted. Changing the date by 12 months to 1 July 2004 will not make a significant difference. It is a genuine amendment to allow people at least 12 months to get their heads around what this measure means and what impact it will have. 
As the Hon Tony Ryall has already told the Committee there is the issue around the matter of water and waste water and the very genuine concern that has been put forward by Local Government New Zealand. I wonder whether the Minister could take a call. In the last few minutes of my speech she may get some advice from the officials as to what communication they had with Local Government New Zealand on this matter. Did the officials fully understand the impact this would have on ratepayers across the country? I am not certain that that has been understood. 
Hon Tony Ryall 
: It could be $30 million in Dunedin alone. 
JOHN CARTER 
: Good grief my colleague the Hon Tony Ryall is now telling me it could be as much as $30 million in Dunedin! Bless my soul—$30 million! I wonder what the member for Dunedin South David Benson-Pope thinks of imposing $30 million on the Dunedin City Council as a consequence of this bill. That is just the Dunedin City Council—just one city. I wonder whether the Minister in the chair has told that member that this bill could have an impact as great as $30 million on Dunedin City. 
Hon Tony Ryall 
: And $7 million in Southland district. 
JOHN CARTER 
: Well let us just focus on Dunedin City. If it is going to be $30 million in one city alone over a 3-year period— 
Hon Tony Ryall 
: Until 2005. 
JOHN CARTER 
: So it is basically 2 years. That is $15 million extra a year that the ratepayers will have to meet. This is to upgrade the water supply one assumes to meet the standards set in this legislation. We have to ask ourselves what is wrong with the water. How many people in Dunedin are dying every day because they drink Dunedin water? I know it does strange things to one or two people who live down there if we have a look at the member but the point is that if this bill imposes that sort of cost on the people of Dunedin they have a right to know. 
If this bill is passed tonight at least it is not unreasonable to allow my amendment. At least the people of Dunedin can then be advised of it plan for it and put it into their accounts because this bill will have a significant impact on each of them individually as ratepayers. Maybe the Minister will take a call and explain to me why it is not going to happen like that. I would be pleased to hear. We would probably think it was OK if there were a rational reason for it. If I have it wrong I would like the Minister to take a call and tell me I am wrong. 
Hon JUDITH TIZARD (Associate Minister of Commerce) 
: I thank members for their intense interest in this bill. It is interesting that the Commerce Committee received 22 submissions on it. I understand that 10 requested to be heard. These matters—particularly the one raised by John Carter—were dealt with at some length in the select committee. I think most New Zealanders have got to the point where we are all a bit impatient about local authorities and private water suppliers who are not meeting reasonable standards. I think many have been dragging their heels for many years. I personally remember  
Consumer 
 magazine many years ago pointing out that local authorities around New Zealand had very variable standards. New Zealanders are entitled to see the intent of the Consumer Guarantees Act that was passed in 1993. That Act was intended to cover all goods and services ordinarily supplied in trade to domestic consumers in New Zealand. A number of areas have been disputed through the courts. 
The effect of this bill is to clarify those definitions of goods and services that are covered by the Consumer Guarantees Act the Fair Trading Act the Commerce Act and in one or two cases the Sale of Goods Act. I think it is very important that water and waste water are included. I understand that one of the very good reports the select committee heard was from the Ministry of Health. That report informed the committee that the ministry was preparing a Health (Drinking Water) Amendment Bill for introduction to the House. The ministry saw the bill that is before us today as compatible with that bill. That bill would provide a 5-year phase-in period for suppliers to comply with the requirements to introduce public health risk management plans and to take all practicable steps to comply with the drinking water standards. I do not think that is an unreasonable requirement. I think that New Zealanders are sick of the fact that a few local authorities have failed to take good steps. All reasonable people understand that acts of God accidents or incidents will happen that will affect the quality of drinking water. The courts have indeed found that the demands of one or two for a particular standard of drinking water for a particular purpose will not be enforceable. It is an obligation on those people to do their own water treatment. 
So I am very happy with the work of the select committee. It was thorough and it looked at all the issues in the bill before us the Consumer Protection (Definitions of Goods and Services) Bill. It is a good bill that amends four Acts to make them work alongside each other. It clarifies issues that a variety of court cases have raised. Some of them excluded some goods and services and others included some of them. This will be an excellent consumer protection measure. It is a well-named bill and it is a well-examined bill. It should be passed promptly. 
SANDRA GOUDIE (NZ National—Coromandel) 
: I concur with my colleagues: we do need to delay the commencement date of this bill. There are some serious questions that need to be answered here. 
One of the glaring omissions in this bill is a compliance cost report—there is not one. Absolutely no assessment has been done of what this will mean to the average ratepayer let alone the consumer. When there is a substantial submission from a body like Local Government New Zealand we do need to take some heed of that. That body is majorly concerned about the impact and this bill should be delayed until all the questions asked by Local Government New Zealand have been answered. It has asked a huge number of questions and it has not had an answer. How could it possibly get an answer when the Government cannot even include a compliance cost report in its presentation of a bill? I thought that was mandatory; maybe I am wrong. 
This is not necessarily about standards but the question of water standards has failed to be defined. A local authority has a range of different standards going from (a) to (e). In a rural area it is possible to accept a rural water supply that does not actually meet a potable water standard. The local body does not have to meet a particular standard. However if the community accepts a rural water supply for animal consumption and one consumer says “I’m sorry that is not acceptable” then that one consumer gets the opportunity to hold the rest of that community to ransom. Not only that but section 11 of the Consumer Guarantees Act states that if a consumer deems the cost of that water to be unreasonable he or she can refuse to pay. Where will that leave a local authority when it has a responsibility to the community as a whole? Its contract is with the community as a whole. The question has not been answered about which Act will prevail in that situation—the Rating Powers Act or the Consumer Guarantees Act. That question has not been answered by the Minister in the chair Judith Tizard and I think it would be good for her to answer some of the questions that have been raised by Local Government New Zealand. It is majorly concerned and that is not the only question it has raised. 
It has also looked at the costs that will be incurred as a result of this bill. I have here a paper provided by my learned colleague the Hon Tony Ryall which states: “The cost of upgrading all of the water supplies in the country has been estimated at about $750 million.” We have gone from the $400 million identified in the Local Government submission—recognising that it was $30 million for the Dunedin water supply alone—and now we are looking at an estimated cost of $750 million. Upgrading a small water supply can cost upwards of $2 million if the supply is to meet the upper range of the standards and depending on how a local authority is structured that can be a huge burden on a small community with the ones that suffer being those that are on a fixed rate. 
Those are the very reasons that it should have been explored and a compliance cost report carried out. If a report was done it should have assessed all those impacts and worked in conjunction with local government. That is one of the key reasons that the commencement date should be set way out into the future. A compliance cost report needs to be done. The Government should be working in tandem with Local Government New Zealand in assessing what this will mean to ratepayers which Act will prevail—the Rating Powers Act or the Consumer Guarantees Act—and why the water and waste-water provision is not incorporated into the Local Government Act of 2002 which has recently been passed. In my view it has been a failure on the part of the Government to adequately consult Local Government New Zealand on all those aspects and to answer its questions. 
National initially supported this bill to go to the select committee— 
Hon Judith Tizard 
: National sneers and derides at local government. 
SANDRA GOUDIE 
: We hold local government in high regard and one of the reasons— 
Hon Judith Tizard 
: Ha! 
SANDRA GOUDIE 
: Yes we do. Absolutely. [ 
Interruption 
] 
GERRY BROWNLEE (NZ National—Ilam) 
: I raise a point of order Mr Chairperson. Will it be your practice to allow Ministers in the chair to use the microphone to make derogatory comments about members on their feet and to question their intention and their integrity in the Committee? 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member. I had my hand on the microphone button. 
GERRY BROWNLEE (NZ National—Ilam) 
: I raise a point of order Mr Chairperson. What about getting your hand off the button and on the pulse because the Minister was extremely insulting to the National Party and we would like a withdrawal and an apology. 
The CHAIRPERSON (H V Ross Robertson) 
: As far as I am concerned there was an exchange between the two members and it was robust debate. I did not take any offence at it. 
GERRY BROWNLEE (NZ National—Ilam) 
: I raise a point of order Mr Chairperson. With all due respect to the Chair it is the National Party that has taken offence. If members take offence members’ words must be accepted and I believe it is incumbent upon you as the Chairperson of the Committee to require the Minister to stand withdraw and apologise. Otherwise where does decorum go? 
The CHAIRPERSON (H V Ross Robertson) 
: If the member has taken personal offence I ask the member to withdraw. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: I withdraw. 
SANDRA GOUDIE (NZ National—Coromandel) 
: I raise a point of order Mr Chairperson. I do take offence because I hold local government in great regard and— 
The CHAIRPERSON (H V Ross Robertson) 
: I say to the member that under  
Speakers’ Rulings 
 offence must be taken at once not later. 
STEPHEN FRANKS (ACT NZ) 
: I rise on behalf of the ACT party to consider the commencement date of the Consumer Protection (Definitions of Goods and Services) Bill. This is the bill that does what the drafters of the Consumer Guarantees Act deliberately decided not to do back in 1993: it overextends what might have been a good idea for a standard form of contract for consumer services whereby consumers would have been able to shop around into areas where in effect the service has to be universal. The introduction of this bill should be deferred because it will have so many unintended effects. 
Although the Minister in the chair the Hon Judith Tizard may not be knitting today I am quite sure that she cannot have paid much attention to this bill. She cannot have considered that there will be a host of unintended consequences when the bill commences like that faced by the “People’s Republic of Christchurch” in its recycling scheme under the Consumer Guarantees Act. The Christchurch worthies set up a recycling scheme which was running in very good order until someone found that with the whiteware and other products that were being recycled with volunteer labour—and indeed the volunteers were eventually being paid for their labour—they fell foul of the so-called consumer protection laws. They could not satisfy the after-sales service requirement they could not give a warranty as to merchantable quality and even though people were perfectly prepared to take the risk of low quality in return for low price they were not allowed under that so-called consumer protection law to contract out of the obligations that simply could not be satisfied by a recycling scheme. 
I urge the Minister to take the National Party amendments seriously. She may consider that they are just intended to harass or to reduce or defer the inevitable but the inevitable might mean for example that the Minister could get a chance for local authorities to look at whether their ratepayers really do want to have a one-size-fits-all warranty slapped across the supply of water. Local authorities should have an opportunity to deal with what this bill requires—to go out to the consumers and to give them a full description of the risks they face so that the reasonable consumer will not be fronting up and claiming a guarantee or an obligation on the part of the local authority the electricity supplier or the gas supplier that is far more expensive to everyone than they would ever have dreamt of. 
If this bill’s commencement were to be deferred it would allow the principal Act the Consumer Guarantees Act to operate in the way that has been contemplated which would mean that the suppliers could go out and use some of the exceptions in the Act. For example they could make a statement about the goods on any packaging or labelling or a representation about the goods that would notify the consumer of any defects that may have been specifically drawn to their attention by the manufacturer. Is the Minister comfortable that local authorities and the other suppliers of those services have had an opportunity to consider those exceptions given that this bill was introduced back in 2001 that it sat waiting as a slogan all that time that it had a pathetic consideration by a very weak select committee to which the smartest and brightest members were too busy to turn up and that there is no urgency— 
Hon Harry Duynhoven 
: Who are the smartest and brightest? 
STEPHEN FRANKS 
: Obviously the Hon Richard Prebble. He was too busy to turn up. 
The select committee has not properly grappled with the issues that were raised in submissions. If this bill were to be deferred long enough for the people who will become subject to it—and for those who in turn will get the cost of an overreach in the guarantee—to go through and make sure that all their standard-form contracts labelling warnings and defect descriptions were in order there would be advantage to everyone. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: I move  
That the question be now put 
. 
GERRY BROWNLEE (NZ National—Ilam) 
: Although I would like to say that this bill should never commence that it should have no commencement date I accept that the Government is hell-bent on driving it through this Committee. I want to know why Tim Barnett Ruth Dyson Lianne Dalziel and Clayton Cosgrove are going to vote for such a patently anti-Christchurch bill. 
Hon Judith Tizard 
: Oh! 
GERRY BROWNLEE 
: The Minister shrugs her Auckland shoulders in a sort of mock profanity but the truth is that coming from Auckland she has no idea what exists south of Wellington. She is a unique Aucklander because she gets down to Wellington on a regular basis although it is not as regular as some might expect. As the previous speaker pointed out we have a bill here that will absolutely destroy the recycling programme in Christchurch. Countries all over the world have problems with the disposal of whiteware. A programme was put together in Christchurch that will enable those who are less well off to have a fridge that might last an extra 6 8 12 or maybe even 24 months but no that programme has been scuttled sent off to the landfill because of a bill like this. 
As I said before there is also the issue of water. This bill will cost the Christchurch City Council—and at the end of the day that is every ratepayer in Christchurch—$5.241 million to comply. What does the council have to do to comply? It has to supply to the community water that meets or surpasses New Zealand drinking-water standards. On the face of it everyone would say that is a good idea a wonderful idea but in order to meet New Zealand drinking-water standards the Christchurch City Council would need to tip into the water supply large quantities of chemicals designed to take out all sorts of nasties that do not exist in Christchurch water. That is why I will not support this commencement date. A group of Auckland MPs have decided that they want to lower Christchurch drinking-water standards to the same level as their own. 
Stephen Franks 
: They wouldn’t even drink tap water. 
GERRY BROWNLEE 
: There we are! My colleague Stephen Franks has announced that Aucklanders do not drink tap water. 
Hon Judith Tizard 
: They do; all the time. I do. 
GERRY BROWNLEE 
: That may explain a lot. The Minister says she drinks Auckland tap water—there is a perfect out. I do not want to get into slagging off various other communities but I do want to make the point that Christchurch has the best drinking water of any city or any province in the country. Marc Alexander the United Future member nods to that but he will vote for this bill which requires the Christchurch City Council at an expense of some $5.241 million to tip additional chemicals into our water. Why should anybody who comes from the city of Christchurch be expected to support this commencement date? I do not think there is any reason whatsoever to do that. 
I am happy about the waste-water provisions in this bill and I am happy about a number of the other consumer protections that exist in this bill. But it is the stupidity of including something like water; the stupidity of excluding State generators as manufacturers of electricity from any scrutiny; and the idiocy of taking out of the bill the telecommunications broadband around the country that also make it totally unacceptable to support the bill’s introduction on the date proposed. I would like the Minister to stand up and tell us whether the officials did any sort of analysis of water quality throughout the country. Were those New Zealand standards—which incidentally give Christchurch water a rating of B—well considered at any time by the officials? 
Hon GEORGINA TE HEUHEU (NZ National) 
: I am very pleased to take a call on this bill. Although I was not here to take a call on the title I will say that there could not be a title that was more in opposition to what this bill proposes to do. However we are now debating the commencement date and as my colleague said previously National does not support the commencement date and there are a number of reasons for that. 
We supported the bill in its first and second reading and we did so because we thought that the underlying intention of the bill was right. But now we have it here for its Committee stage and presently for its third reading and we have come to the conclusion that if the bill were to pass there would be too many unfavourable repercussions. The bill has a reasonable intention but National thinks that the unintended consequences will be substantial and we do not support the commencement date for that reason. 
I make reference to the amendment that has been proposed by my colleague John Carter. There are three parts to it. The first puts the commencement date out to 1 January 2006 and the reason is that first of all—[ 
Interruption 
] Well of course we will be the Government by then and we will repeal it. Underlying this debate is the concern that this bill does not protect the consumer at all. Indeed it will lead to increased compliance costs for the electricity and gas suppliers. Let us be honest—they are not going to absorb those costs. They will pass them on to the consumer and that is why I said at the beginning of my speech that the title of this bill is so wrongly stated. There is no protection at all for the consumer. 
My colleague John Carter has proposed that we change the commencement date to 1 January 2006. 
Hon Tony Ryall 
: That makes sense. 
Hon GEORGINA TE HEUHEU 
: Of course it does. My colleague John Carter would not have proposed it if it did not make sense. It makes absolute sense. We have a situation where Dunedin is budgeting $30 million to upgrade its water to meet the quality required by this bill and that is a huge amount of money. 
David Benson-Pope 
: It has been doing it for years. 
Hon GEORGINA TE HEUHEU 
: It is a huge amount of money—and why should Dunedin be forced to do that when we could come up with a better result if we thought about what we are doing here a lot more carefully? 
David Benson-Pope 
: Dunedin wouldn’t have to do that if it hadn’t been made to sell its dam by the National Government. 
Hon GEORGINA TE HEUHEU 
: Mr Chairman is that member going to take a call or is he just trying to close this debate down? 
The CHAIRPERSON (H V Ross Robertson) 
: He may do. 
Hon GEORGINA TE HEUHEU 
: He may do but my experience is that he never does so I would appreciate it if he would let me have the rest of my say in peace. In any event as I say that is what Dunedin is budgeting for. Goodness knows what all the other local authorities will have to budget for this but suffice it to say that if Dunedin is budgeting $30 million then the major metropolitan areas will have to budget that same amount if not more and I do not think that is at all fair when ultimately the cost of that will be passed on to the consumer. There was an issue about the Rotorua eastern suburbs— 
Hon Tony Ryall 
: It gets an “E” for water quality. 
Hon GEORGINA TE HEUHEU 
: It gets an “E” for water quality. How much will that cost Rotorua? Perhaps the member for Rotorua will be able to take a call and enlighten us on that because that is a real concern. Smaller places like Rotorua cannot afford those sorts of costs. Rotorua might look like a wealthy place but it is not. There is a lot of unemployment there and this Government has not done anything much about that since it has come in. I come back to my original point which is that National thinks that the commencement date should be delayed. If the Parliament is not in agreement with a delay to 1 January 2006 then it should be delayed until 1 July 2004. 
STEVE CHADWICK (NZ Labour—Rotorua) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of John Carter to clause 2 be agreed to: 
to omit the words “the day after the date on which it receives the Royal assent” and substitute the words “1 January 2006”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 34 
New Zealand National 26; ACT New Zealand 8. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of John Carter to clause 2 be agreed to: 
to omit the words “the day after the date on which it receives the Royal assent” and substitute the words “1 January 2004”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 8. 
Noes 69 
Labour 52; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of John Carter to clause 2 be agreed to: 
to add the words “ except for provisions affecting water and wastewater which will come into effect by Order in Council”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 34 
New Zealand National 26; ACT New Zealand 8. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Clause 2 agreed to. 
Part 1 Commerce Act 1986 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition is strongly opposed to Part 1. We do not support the incorporation of gas electricity water and software in the Commerce Act nor do we support the inclusion of those items as services for the purposes of the Commerce Act. 
We have very real concerns for example about including electricity in the legislation. As I think the New Zealand Law Society pointed out to the select committee of its nature electricity is not the tangible sort of good that the Commerce Commission should be dealing with. The Minister will require such a high standard of electricity delivery that companies will not be able to meet it. Electricity is a good in a less than perfect way. For example if a lines company fails and one gets an unplanned outage how can that be deemed to be of an acceptable quality? Yet there will be a liability there for the electricity company. There might be a planned interruption to supply for which notice has been given to allow for maintenance work to be carried out. That is not the sort of thing that happens with any other goods. 
If members look at what this bill is proposing they will see that it states that those goods will be fit for the purposes for which they are supplied acceptable in appearance and finish free from minor defects and safe and durable. None of those things can be applied to electricity. Electricity is not “acceptable in appearance and finish”. Can it be free of minor defects safe durable and fit for the purpose for which it is supplied? Maybe but because of its unique features electricity cannot be geared to the specific needs of consumers. Electricity is inherently unsafe and can only be made safe by infrastructure and equipment which are safe services in themselves. It is inappropriate to try to include intangible items like electricity and gas in this legislation. The Government has agreed that telecommunications is an intangible that should not be included under the definition of a good. We say that the same should apply to electricity and gas. 
I stand with the New Zealand Law Society which told the select committee that the provisions in this bill are unlikely to provide any real advantages to consumers. As Mrs te Heuheu said the extra costs that will be put on electricity companies will be passed on to consumers. When there is an outage and people’s computers lose information fridges blow or microwaves fail consumers and shareholders will pay because of this legislation. It means that prices will rise. Not only will the price of electricity rise because of the special tax that the Government is putting on—that is one of the 15 new taxes or levies that the Government has applied since it came to power—but there will also be an indirect form of tax from this bill in the sense that prices will go up. 
The concerns we have made known in respect of electricity can also apply to water. In order to get its water quality up to the level required by this bill the Dunedin City Council is budgeting $30 million in the next 2 years. In Motueka the council is budgeting $6 million—that is $100 a ratepayer—to get its water up to the sort of quality that this bill requires. We know that Banks Peninsula is bracing itself for a $4.5 million drinking water upgrade under the proposed new laws—Banks Peninsula $4.5 million; Motueka $6 million; Dunedin $30 million. That is what this bill is doing—so much so that Mrs te Heuheu will table a document that estimates that it could cost $750 million for local authorities to bring their water supplies up to the level that will be required by these bills—that is the Fair Trading Act the Commerce Act and the Consumer Guarantees Act. This Government does not realise what it is doing with this bill. 
BRENT CATCHPOLE (NZ First) 
: I am rising to speak to Part 1 because I have just listened to National’s Tony Ryall speak about how unstable unsafe and unreliable electricity is. Sure it is dangerous but I have to remind Mr Ryall and the National Party that Auckland suffered huge blackouts during the 1990s. It was not as a direct result of the weather or of anything other than poor management and poor supply. The poor supply was a case of the companies holding back on their upgrades of the lines because they wanted to retain all their profits and they failed to see a catastrophe coming. All of a sudden one line blew. That put extra pressure on other lines and they blew. As a result Auckland was without power. Generators from outside Auckland and from overseas had to be brought in. A ship was even docked in the port to supply power to Auckland. 
If that is the direct result of bad weather and bad supply then I really have to question Mr Ryall’s intentions. We all accept that electricity is unstable but it also relies on the good management of the supply companies. In that case New Zealand First supports this part. We see it as providing much-needed security for electricity supply as a good and a service. We therefore support this bill. 
GERRY BROWNLEE (NZ National—Ilam) 
: In speaking to Part 1 I want to pick up on a couple of comments made by my colleague Brent Catchpole who was on the Commerce Committee right through the process of the bill. 
Brent Catchpole 
: Only the latter part. 
GERRY BROWNLEE 
: Perhaps that explains some of the member’s contribution tonight. One of the interesting things about this bill is that the term “manufacturer of electricity” is not in the bill. “Supplier” is there as is “provider” so that captures the lines companies and local energy companies. But the manufacturer—the State generator—is out of it. The reason is that this Government knows that the whole infrastructure of electricity in this country has turned into custard in the last 4 years and we have seen no new investment in generation. For each of those 4 years we have needed some 150 megawatts of new generation about 450 megawatts in total and what have we had? We have had about 100 megawatts. If this bill had been effective on the manufacturers the generators from the start of this winter then the Government would have faced a very huge bill indeed as consumers decided to exercise their protection under this legislation against the manufacturers. 
So I think we are seeing here another one of the Labour Party’s “dress it up and hope it looks good” types of bills. As our colleague Tony Ryall has pointed out—that is the Hon Tony Ryall the last great Minister of Commerce that this country has had— 
Hon Tony Ryall 
: I was never Minister of Commerce; I was the Minister of Justice. 
GERRY BROWNLEE 
: He was the Minister of Justice but as such he knew more about commerce than the present Minister knows about her own city. It is unbelievable. 
The real point here is that in a few minutes Georgina te Heuheu will table a document that outlines the extraordinary costs that this legislation will put upon South Island councils in places where there is no worry about water quality—although they most definitely have a worry about water quantity. We will see Marc Alexander Clayton Cosgrove Tim Barnett Ruth Dyson Lianne Dalziel and quite probably Damien O’Connor all voting for this huge impost upon South Island ratepayers. 
Hon Member 
: How much? 
GERRY BROWNLEE 
: The best I can estimate is that their vote tonight will cost their constituents and mine some $70 million. [ 
Interruption 
] Clayton Cosgrove sits over there and says his constituents can afford it. The good citizens of Waimakariri can dive into their pockets and pull out $70 million and he says that it does not matter. Well it does matter because Canterbury has some of the best-quality water in the world and I will keep saying that right throughout the debate on this bill. By the end of it some Labour members may understand the point that by saying the whole country has to have the same water standard as Auckland’s some of us will get done. That is just unacceptable. 
I return for a moment to the issue I spoke of earlier in the day—telecommunications. Telecommunications is not included in the bill. This Government touts constantly the opportunities that this country will have from the knowledge wave—from the great technological advance that this country is likely to experience at some point. But this bill does not cover broadband Internet access. If we happen to live in the right part of the country we will receive whatever the provider of the service gives us and we will have no right to question the quality of that. Worse than that the people who live in some parts of the country particularly in rural New Zealand will be out of luck totally. 
STEPHEN FRANKS (ACT NZ) 
: I rise for the ACT party to address Part 1 which in clause 4 amends the Commerce Act by including in the definition of goods “gas and electricity” and “to avoid doubt the supply of electricity gas telecommunications or water” in the definition of services in that Act. I would be very interested to know the effect of putting those terms into that Act. That seems to me to be a fair question to ask of the Minister in the chair the Hon Judith Tizard. The Minister has a whole raft of officials who have been patiently waiting with very little prospect of being required to give advice throughout this debate. Given that Labour is classically and typically uninterested in the welfare of workers it does not mind wasting the officials’ time. It knows that they do not have to be paid. They are on a salary and probably do not get either overtime or holidays in lieu so the Government is therefore quite happy to have them sitting here doing nothing while the Minister does not ever bother to answer questions or to participate in this debate. 
Hon Judith Tizard 
: I have. 
STEPHEN FRANKS 
: Not in this debate. 
In this debate a series of questions has been asked about just how it can be described as protection to add into the various Acts provisions that will require one-size-fits-all liability for standardised services where there are standard form contracts already in use and where usually if there is a failure the loss will simply be spread back across the community. How can that advantage the community? 
Mr Catchpole mentioned for example the power outages in Auckland. If the bill had been in force and it had been held that there was a breach of one of the warranties or that in some way liability should flow from the failures he mentioned in Auckland what would have happened? That is very instructive. The Minister should consider that and explain to us just how the position would have differed if this part of the bill had been in force during the failure of supply in the electricity industry in Auckland 5 years ago. That would probably help everyone in this Chamber to understand better why we are ramming this bill through under urgency. After all it was introduced in 2001 referred to the Commerce Committee in October 2001 sat with nothing being done about it right through the election in June-July 2002 and has finally come back to this Parliament to be shoved through under urgency by a Minister who does not think that it needs to be explained to anyone—not to this House and not to New Zealanders. 
All that the Government thinks it needs to do is to put a slogan in the title of the bill and then to go ahead with steps that were taken or were avoided for very good reason when the Commerce Act the Fair Trading Act and the Consumer Guarantees Act were drafted. The amendment of those three Acts by the insertion of these services most of which are still publicly owned does nothing except to give an opportunity to shift loss usually from those who can best afford to bear it to those who cannot. If the insertion of these clauses into the Commerce Act is intended to mean there will be new remedies that are not presently available for anti-competitive conduct surely someone at some stage could have explained that. Nothing in the select committee’s commentary on the bill even attempts to explain why these provisions are to amend the Commerce Act. The Minister has had officials sitting there all evening who could easily have been called upon to advise—it may be that only a few words from the Minister could explain to the Committee what this bill is about. But certainly from my knowledge of the Commerce Act—which at this distance is not as fresh as it once was but I suspect I certainly have more familiarity with that Act than most members do—I cannot fathom any advantage that Part 2 gives to anyone. I certainly cannot work out from the commentary of the select committee what advantage it gives to anyone. 
Brent Catchpole 
: Part 1. 
STEPHEN FRANKS 
: I thank the member. I could probably say the same thing when we get to Part 2; it will be just as true. 
But certainly it does absolutely baffle me as to just what Part 1 will achieve other than adding to the advantage of a political slogan that makes it possible for the Government to say it has amended X number of Acts and has added consumer protection Y number of times. The Minister in the chair may well have an easy answer. It may be that I have overlooked something that I should have known. But certainly after coming to this bill without having sat on the committee it is completely baffling as to what will be achieved by sticking these provisions into the Commerce Act. 
I also say that the drafting is a little bit of a puzzle. 
STEVE CHADWICK (NZ Labour—Rotorua) 
: I move  
That the question be now put 
. 
Hon GEORGINA TE HEUHEU (NZ National) 
: Two of my colleagues have already signalled that I will seek leave to table some papers so I shall do that at the beginning of my contribution. First I seek leave to table a report from the  
Southland Times 
 of 30 October 2002 headed “Water standards low” part of which refers to a report that the cost of upgrading all the water supplies in this country has been estimated at about $750 million. The second one is an extract of figures from the Rotorua area that refer to— 
Documents by leave laid on the Table of the House. 
Clause 4 “Interpretation” is where a lot of the trouble starts. For the first time water is included as a good. As I said that is where local authorities see enormous difficulties for themselves and that is exactly where the National Opposition sees negative spin-offs to consumers right across the country. Clause 4(1)(b)(vi) states: “to avoid doubt water and computer software”. So they are included and one knows straight away that that provision is to be regarded with some suspicion. Actually no suspicion is required because it signals immediately to water suppliers just exactly what they are in for. 
The Southland District Council’s group asset manager one Dave Adamson said that the proposed legislation makes the current guidelines become standards thereby putting an onus on the council to take all reasonable steps to supply wholesome water and all practicable steps to comply with the guidelines. That implies a duty to undertake risk management plans of course—because that is what it does—and liability for relative penalties should anyone get sick or die as a result of drinking contaminated water. It is clear that countrywide the water standards are low. That is why we proposed to have the commencement date of this legislation put out to 2006—to give councils a reasonable time to get themselves organised for it. But that is not to be because this Government is doing what it is good at under urgency which is bringing in legislation for which nobody is really prepared and for which the overall impacts are not at all clear. 
The Southland District Council had planned to have all 13 of its water schemes upgraded by 2009 at an estimated cost of more than $2 million. Two have been done but the council’s guess is that this legislation will probably require the completion of all 13 schemes by 2006 or 2007. That is a very tight time frame. As I say the council had estimated it could do that work by 2009. So clearly this legislation will result in huge quite substantial additional costs. Who will carry that cost? The consumers will carry it. That is what this issue all boils down to. As I say the local authorities have not even estimated what some of their schemes will cost to upgrade. That is a problem. 
As I said earlier and as the paper that I have tabled shows the situation in Rotorua is not good. It is not a wealthy area by any means. A number of suburbs register very low on the scale of water quality—at grade D. That standard is deemed to be low quality. So somebody has to pay for that. 
Sandra Goudie 
: Grade E is the lowest. 
Hon GEORGINA TE HEUHEU 
: I am informed by my colleague Sandra Goudie that grade E is the lowest. So grade D is almost up there. Somebody has to pay for this work and we know who that will be: the poor old consumer. The bill does not give protection to consumers at all. It will lead to increased compliance costs for electricity and gas suppliers. Once again the consumer will pay. To include water in this way when we all know that water standards across the nation are relatively low is not fair. It is not right and it does not give councils time to upgrade their schemes. 
DAVID PARKER (NZ Labour—Otago) 
: I move  
That the question be now put 
. 
Hon Dr NICK SMITH (NZ National—Nelson) 
:  
I find it extraordinary that as we debate Part 1 extending the Consumer Guarantees Act to new services this is occurring on the same day that the Government is passing a law stating that anything that a group of officials within the Immigration Service do that was wrong erroneous or mistaken is now to be all OK but when that situation applies to somebody else the Government wants to have a different set of rules. I simply ask the Government this evening to show some consistency. It seems to me that it is highly duplicitous to say on the one hand that a council when providing water services has to meet these additional burdens about quality and all those things and on the other hand when it comes to a service that is provided by the Government itself like immigration to say it does not want that to come into the consumer protection and other areas covered by this bill. Not on your life! This is an example of the double standards that we see over and over again from this Government. 
That is also interesting to me because I sat on the Local Government and Environment Committee when it dealt with the new local government legislation around water supplies. We were told water was an essential service and we should not have any damn private enterprise providing water in New Zealand. It was only late last year that we passed ridiculous laws to restrict the private sector from being able to participate in the provision of water services even in rural communities. I think we showed at the time that half a million New Zealanders receive such water supplies. But the Government’s ideological view was that water was a public service that could only be provided by councils and must be governed under the Local Government Act. Then we come to this bill and notably to Part 1 where it shows the Government has changed its mind. Water is to be just another tradable service. I tell the Minister in the chair the Hon Judith Tizard that she should get her head clear. Either it is one thing or the other. Water supply is either a monopoly service to be provided through democratically elected local councils or it is a service to be traded. It seems to me that in this part we have a serious contradiction with the very provisions that were argued with such passion but with such ideological stupidity by Labour as recently as late last year. 
I also want to know just how much this legislation will cost. My colleagues Georgina te Heuheu and Tony Ryall have been asking questions about the cost—the bill—for this. We have not heard an answer on that. 
Hon Tony Ryall 
: It could be up to $750 million. 
Hon Dr NICK SMITH 
: My colleague Tony Ryall tells me that the cost New Zealand – wide of this provision is $750 million. 
Hon Judith Tizard 
: He just made it up. 
Hon Tony Ryall 
: Don’t say that. A report was tabled. 
Hon Dr NICK SMITH 
: The member says that. What does the Minister think the cost is? Can the Minister answer the question of what the cost of Part 1 will be for the water supplies around New Zealand? 
Hon Tony Ryall 
: It’s been reported at $750 million. 
Hon Dr NICK SMITH 
: My colleague Tony Ryall without any of the resources that the Minister has and without the hundreds of bureaucrats— 
Hon Tony Ryall 
: Just the Parliamentary Library. 
Hon Dr NICK SMITH 
: He has had the Parliamentary Library find out that the figure is $750 million. If the Minister wants to say that figure is not correct we are prepared to consider and contest it. What is her figure? The silence is deafening; the Minister has no idea! She is proposing that this Parliament passes laws that will impose significant costs on New Zealanders without having any idea even faintly of what it will cost them. 
I say to the Minister that is not good enough. Where is the cost compliance report? When will New Zealanders find out the cost—the bill—for this part? I ask the Minister to perhaps seek some advice from the officials who are kindly in the Chamber this evening and to ask that question of them. Or is she another one of those arrogant Labour Ministers who come down to this Chamber and do not think they have to answer the real questions to which New Zealanders deserve answers? 
Hon Tony Ryall 
: She’s a mini-Minister. 
Hon Dr NICK SMITH 
: I am told she is a mini-Minister. I am prepared to give her the benefit of the doubt and to listen to the answer to that question. I say the public of New Zealand deserves to know just what costs this Minister is imposing on them. 
Hon RICK BARKER (Minister for Courts) 
: I move  
That the question be now put 
. 
SANDRA GOUDIE (NZ National—Coromandel) 
: I greatly appreciate the opportunity to be able to speak to Part 1 because I too have some further concerns to raise about local government. I acknowledge the fine contribution made by the Hon Nick Smith. He raised a really important point about this bill treating water as a tradable commodity. I understood that this Government did not seek to do that with water supplied by local authorities; that it wanted the ownership to remain with local authorities for communities. But I do not see that intention being signalled in the tenor of this bill. 
In Part 1 we see water described as a good. Local government is concerned about water being identified as a good particularly with regard to sections 6 and 7 of the Consumer Guarantees Act and the guarantees that are to be provided in relation to goods. Local Government New Zealand outlined in particular the guarantees dealing with goods—for instance those relating to titles descriptions and samples. I guess local government could give the worst water samples in the world yet its water would be considered safe. As for guarantees as to repairs and spare parts I do not know where spare parts enter into it and clearly Local Government New Zealand did not know that either. It was concerned that water that was identified as a good was not excluded from those guarantees identified in sections 6 and 7. Perhaps the Minister in the chair would like to take a call to explain why there was no identification of how water was going to be addressed with regard to those guarantees or indeed why water could not have been excluded from those guarantees. Of course we have no idea of what is specifically meant by “water” itself and there is no splitting out of what is provided in terms of an urban water supply and a rural water supply. 
In considering these guarantees we do have a concern about them. For example we have a concern about the guarantee as to acceptable quality and ask whether water will comply with that guarantee if it complies with the yet-to-be-promulgated drinking water standards that it is intended will raise the threshold. 
 The standards are meant to detail how to assess the quality and safety of drinking water and thereby reduce the risk. The standards are also intended to define drinking water that is intended to be for human consumption. However there was a court case in which the court observed that those with special needs for water of greater purity than that required by the wider community—of course we are talking about an agreement entered into by the wider community and the local authority and that is decided by a majority not by an individual consumer—can actually put in their own facilities to purify the water to a greater degree. Here we have water being identified as a good and subject to those guarantees under the consumer guarantees legislation. 
Similarly will the guarantee of fitness for a particular purpose be appropriate? We query what the particular purpose would be when water is actually used for many purposes such as drinking home appliances gardening washing the car and washing the boat. Some recognition needs to be given to the effect of the guarantees with regard to water. 
In cases where there is a failure to comply with a guarantee the consumer’s right of redress is to refuse to pay more than a reasonable price. I referred to that before. The Minister did not respond to the challenge that she actually answer which provision would prevail: the ratings legislation or the Consumer Guarantees Act. So I challenge the Minister to take a call to give us some indication as to where local government actually stands and which legislative provisions are actually going to prevail because there definitely is some confusion. 
DARREN HUGHES (NZ Labour—Otaki) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Labour 52; Green Party 9; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 4(1) be agreed to: 
to omit paragraph (b)(iv) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 4(1) be agreed to: 
to omit paragraph (b)(vi) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 4(2) be agreed to: 
to omit subparagraph (iv) of section 2(1)(a). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 82 
Labour 52; New Zealand First 13; Green Party 9; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Part 1 agreed to. 
Part 2 Consumer Guarantees Act 1993 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition is opposed to the extension of the Consumer Guarantees Act to water gas and electricity. I shall refresh members’ minds about what guarantees will be provided in respect of water for example. There will be a guarantee as to title a guarantee of acceptable quality a guarantee that reasonable skill and care are employed a guarantee of fitness for purpose a guarantee that the goods comply with their description a guarantee that the goods “comply with sample” a guarantee as to price and—wait for it—a guarantee as to repairs and spare parts! Those are some of the guarantees that under this part will apply to water. 
One of the provisions in the bill that is of concern is paragraph (b)(vii) of section 2(1) in clause 6(1). That paragraph states that to avoid doubt water and computer software are going to be considered goods. So there is obviously some precedent that says that water comes under the Consumer Guarantees Act. I looked for the precedent and I discovered a document dated 30 September 2002 that explains why the Government says that water already comes under the Consumer Guarantees Act and that its inclusion in the bill is only to avoid doubt. It is because of the case of  
Hamilton 
 v  
Papakura District Council 
 in 2000 where the plaintiff’s claim that water was not of merchantable quality failed under the Act. 
Although there has not been a court decision as to whether water is a good under the Consumer Guarantees Act officials consider that it is very likely that water is currently a good under the Act. Officials have decided that water is covered by the original Act. Some official called Mr Bowie the Ministry of Consumer Affairs’ Chief Advisor Policy Projects has decided that. That is an august position to decide that water is covered by the original Consumer Guarantees Act! It is completely wrong that based on an opinion from some public servant a bill has come to this House that states to avoid doubt that water is covered by the Consumer Guarantees Act. 
Because the Government takes the advice of Mr Robert D Bowie the ministry’s chief adviser on policy projects as seminal I ask the Minister to look at another memo written by that public servant on 8 October 2002. The Government is prepared to take his advice in one memo but not his advice in the next memo. In the next memo this commentator on the law said: “The only remedy available to a consumer under the Consumer Guarantees Act that water is not of an acceptable quality is to sue for damages for the breach of the Act. However the practical effect” —according to Mr Bowie—“of a successful claim by a consumer under the Act may be if the fault is one that has a general application that a council feels compelled to upgrade its water in order to avoid future claims by other consumers.” So the Government’s official adviser on whose advice it is prepared to base legislative drafting propositions is telling it that people will be able to sue the councils. 
And what happens if a council that is supplying water is told that its water is of unmerchantable quality and that it is liable to be fined? What does the council do? Well the advice goes further: “Yes a council could decide not to supply.” Rotorua’s eastern suburbs’ water supply is rated D and is not up to merchantable or acceptable quality. What will happen? The Government is saying that no the councils are not going to spend a fortune upgrading water supplies. The officials say that they do not need to do that that they can just turn the water off. Well that is not going to happen. 
That is why we are making the point that to have the Consumer Guarantees Act apply to water is wrong. As I said in that Act there is a guarantee about spare parts and there is a guarantee about durability. We are saying that applying those guarantees to water is ridiculous unnecessary and costly. I have asked the Parliamentary Library to find out how much is being spent to upgrade water quality. 
JOHN CARTER (NZ National—Northland) 
: I am sorry; I should have allowed my colleague Tony Ryall to continue. I want to make a contribution on Part 2 because I am concerned about some parts of it. The Hon Tony Ryall has made a number of points and has given me a number of papers about the issue of water supply; I am sure he will want to come back and comment about those parts but I want to talk about the issue of telecommunications signals. 
Darren Hughes 
: They are included. 
JOHN CARTER 
: No they are excluded. That is the fascinating part. I ask the Minister of Consumer Affairs why they are excluded. I find it quite remarkable. The bill includes computer software as a good and the definition of “services” in section 2(1) in clause 6 includes telecommunications. It talks about “a contract for or in relation to the supply of electricity gas and telecommunications”. But telecommunications signals are not included as a good. I find that fascinating. Perhaps the Minister will take a call to give an explanation as to why the signals are not included. I cannot understand that. 
Darren Hughes 
: It’s in the select committee report. 
JOHN CARTER 
: It is mentioned in the commentary? Well it fascinates me. 
Stephen Franks 
: They cannot guarantee the quality of the porn sites. They dropped signals because they can’t guarantee they can live up to it. 
JOHN CARTER 
: That is the problem is it not? I thought this bill was about consumer protection and about guarantees. If the Government is saying that we have to legislate to guarantee supplies then why does it pick out the easy bits and not the tough bits? I assume that the need for the consumer to be protected is the principle behind the bill. I do not necessarily agree with that; I think that far too often now in this Parliament in this country we pass unnecessary legislation. 
Let me digress for a minute. Here we are talking about water supplies. I would like someone to stand up and tell me how many people over the last year 2 years or 10 years have died because of contaminated water. I do not know of any; I have not heard of any but there may have been one. We are going to have up to $750 million of ratepayers’ money spent on protecting people against something that they do not need to be protected against because it has not happened! Well that is part of what is happening in this country. We are so hell-bent on passing legislation to protect everybody from anything that we will end up putting people in cotton wool. 
I go back to the issue of telecommunications signals. Because it is too hard because the Government cannot guarantee the quality of them it is leaving them out of the bill. What sort of consistency is that? If that is what is actually happening if that is the reason behind excluding them what in the world are we talking about? If we are saying that electricity companies have to guarantee a consistent supply and that water companies have to guarantee not just a supply of water but a supply of water of a certain quality and standard why are we not saying that telecommunications suppliers have to supply signals? In this world today we survive on telecommunications signals. We are saying that if a telecommunications signal affects an aeroplane that is trying to land and it fails to land that is all right; it does not matter if 300 people on board are killed because the Government is not able to protect them. But for everything else it is easy to provide guarantees. There might be some cost to it; it might cost $750 million of ratepayers’ money. But that is all right; that is OK. We can do that but we will not try to do the hard stuff. 
Well I say to the Government that that is not good enough if it is going to legislate. I say to it seriously that it should not legislate because we in this country are so legislated for now that it is crazy. When we become the Government after the next election the whole lot of this garbage will go. If I have my way the Human Rights Commission the Privacy Act and the whole damn lot will go in the bucket. However I do not think we will go as far as that. 
Hon Judith Tizard 
: Excuse me have you forgotten who brought in the Privacy Act? 
JOHN CARTER 
: Yes I would chuck the whole bloody lot out! Most of the country would not even notice quite honestly—but that is just me. 
I seriously say to the Minister that if she is going to legislate then she should do it properly. She should not sit there and not even take a call and leave out the tough stuff. I want to know when I am in the middle of doing something on my computer and I am connected into telecommunications that the signal will be OK. 
BRENT CATCHPOLE (NZ First) 
: I would like to speak on Part 2 of this bill which is the consumer guarantees part of it. I have listened to a number of speakers here tonight and water quality is one of the issues that has been raised on numerous occasions. I have to sympathise with Gerry Brownlee when he spoke of Christchurch water being far superior to any other in the country and he was concerned that Christchurch might end up with water quality like that of Auckland because Auckland might be the one that dictates the quality. 
Hon Judith Tizard 
: That’s not in the bill. 
BRENT CATCHPOLE 
: Well there is nothing in this bill that actually says that Auckland has to be the benchmark. Christchurch water might be the benchmark and I would certainly be happy to have Auckland’s water quality brought up to the same quality as Christchurch water. Because after all we are having to put up with the water coming directly from the Waikato River which has gone via Kinleith and of course Hamilton and whatever Hamilton throws into it. I know they appreciate our desire to have good-quality water. 
Apart from a comment from Gerry Brownlee about being in favour of waste water I heard a number of National MPs talking against the inclusion of waste water in this bill. I am rather concerned about that and disappointed that they have overlooked a very important issue about waste water in particular in Kawakawa Bay in the Clevedon electorate where I do a lot of work. They were promised by the Mayor of Manukau City that they would have a waste-water reticulation in place by the end of this year. They have subsequently been told that that will not now happen for another 3 years. The people out there are desperate. During the winter their septic tanks overflow and during the summer they are not allowed to swim at the beaches because the waste water flows into the water at their beaches. 
If this bill will give them some respite then I am very much in favour of it. Those people are desperate to have their waste-water system put into place by Manukau City and they need it done now. If this bill will help to do that then New Zealand First will support it because the people in Kawakawa Bay desperately need that service. We should put this bill into place and make sure it provides that service for the people of Kawakawa Bay in the Clevedon electorate. 
It is important to them and it is important to other areas. Beachlands desperately tried for years and years to get its waste-water service and it was continually put off. It has it now but Kawakawa Bay is now suffering the same fate as Beachlands did. It has been put off continually. The people out there are desperate. They cannot swim at their beaches because the beaches are contaminated. If they go swimming they will be in trouble. They will become sick. 
Hon Tony Ryall 
: They’re not going to be able to go to the beach with this Government. 
BRENT CATCHPOLE 
: Of course they are not going to be able to go to the beaches. They will be taxed on it. I come back to the bill. This bill will help the people of Kawakawa Bay and the Clevedon electorate so New Zealand First will support it. 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: I am certainly pleased to see the inclusion of water within the definition of goods and services which it clearly is and other Opposition speakers have made that point. I listened to the speech from the member who has resumed his seat who talked about the Clevedon area. When we look at Watercare Services in Auckland that really goes to the hub of this dispute. On the one hand we have the socialist model that water is under the control of each individual authority and on the other hand we have seen the spectacular success of Watercare Services which is supplying the bulk water as well as picking up the trade waste. 
Members may not be aware that Watercare Services harvests the water from the Hunua dams and others in the Waitakeres. It also brings water from the Waikato treats it stores it and reticulates it for under 50c a cubic metre. What do the councils of Auckland do? Manukau City Council retails it for about $1.10; Metro Water Auckland City does it for about $1.25; and out west the hub of the Labour Party where Bob Harvey is the mayor—he was the former president of the Labour Party—he retails it at $1.53. The water that Bob Harvey gets wholesale at less than 50c a cubic metre he retails out west at $1.53. 
It is meant to be the green city but it has the highest per capita usage of the five Auckland authorities. Is that not extraordinary? It is little wonder that Bob Harvey does not want anything to do with Watercare Services. In Manukau Watercare Services very sensibly is going to take over the whole kit and caboodle. It is part of the hydro cycle. The rain falls we catch it store it supply the treated water turn on the tap and then the water goes to waste. We then have to treat that waste and discharge it back to water. It is sensible that it comes under the one jurisdiction. Of course water comes within goods and services. It is absolute folly to suggest that somehow water is special. Just like any other goods or services it should be subject to the forces of supply and demand and pricing. Too often people refuse to apply proper pricing to water. 
John Key 
: You are opposing the bill. 
Hon KEN SHIRLEY 
: Not at all. 
John Key 
: Yes you are. 
Hon KEN SHIRLEY 
: No I am confining this speech to the water issue and the nonsense that we have had in Auckland City. Many of the local authorities are trying to obstruct Watercare Services. I believe that it is doing a very good job by applying pricing mechanisms to water and it will continue to do so. Bob Harvey and some of his Labour Party supporters are doing all they can to unhinge Watercare Services and disrupt that sensible supply. We certainly support that aspect of the bill but it is a very narrow aspect; I appreciate that. When we come to some of the other aspects that is when we will really start to worry. There are real concerns when we start looking at some of the other aspects. I joined this debate on the water issue and that was the key contribution I wanted to make as it relates particularly to the Auckland region. 
Hon Dr NICK SMITH (NZ National—Nelson) 
: What I find extraordinary about Part 2 is the classic Labour Party “do as we say not as we do” provisions. What we are proposing to do in this part is to put obligations on a whole number of providers of services to provide guarantees when they are not prepared to guarantee anything. Remember the old Labour Party credit card? Why do we not have the Consumer Guarantees Act stretched into the Labour Party credit card? It would be a dodgy deal. The member Ken Shirley has a copy of the credit card. 
My comment to the Minister given that she wants to extend these provisions is let us extend them to Labour Party promises. For instance there was the promise of no new taxes. How would that go? Have the cockies been told that with their flatulence tax? Have the road users been told that with the 5c increase in petrol tax? Have the 16-year-old sherry drinkers been told that? This Government is “do as we say not as we do”. I take objection to that sort of approach to government. 
Then there is the logical inconsistency. Why is it that this bill does not include telecommunications but includes water electricity and gas? I would love to know from one of the Labour members how that differentiation is made. It seems to me that a logical approach would be to say that where Parliament has designed specific legislation—as we debated for nights in the local government legislation over water or the specific electricity law or the specific gas law—then that would do the job. But this legislation was designed for specific goods. As my colleague Tony Ryall says how are we going to provide repairs and get spare parts for electricity? I do not claim to be an electrical engineer but I am not sure how we can get a spare part for an amp. It is rather tricky. When I get my kilowatt-hour and it does not arrive can I have the spare part please? What about water? Can I have a spare part for a litre of water? 
I say to the Minister that that is what she is putting into the law. That is the sort of nonsense—[ 
Interruption 
] Well it does. An official document provided by consumers’ officials states that if we put water electricity and gas under the Consumer Guarantees Act we have to be able to provide repairs and spare parts. We have to be able to provide a sample. I have to say that it will be a bit interesting— 
John Carter 
: A sample of electricity. 
Hon Dr NICK SMITH 
: A sample of electricity and we will put it in a bottle for the member! I know there have been some extraordinary developments in electrical engineering and modern physics but I do not think we have yet worked out how to bottle electricity. I know that this Minister is capable of some extraordinary things and I look forward to this technical innovation that allows us to bottle electricity! 
Then we have to have this guarantee for title. I refer to the member for Rotorua. I do not know whether members know her latest nickname. It is “Snowflake”. She melts the moment she puts the heat on. She will giggle on but I would like her to explain how one might be able to guarantee certificate of title for some gas. Perhaps that is part of this new flatulence tax that the Government is delivering for the people of New Zealand! I know that it is coming up to 10 o’clock and we have urgency for some days but the Minister needs to answer how one can have a guarantee of title for water for gas and for a number of amps. 
Darren Hughes 
: Why didn’t the National members on the select committee ask those questions? 
Hon Dr NICK SMITH 
: Well I hope the bright spark from Kapiti might tell me how we might be able to provide a guaranteed sample of electricity. 
Darren Hughes 
: Mr Brownlee never raised those questions on the select committee. 
Hon Dr NICK SMITH 
: I have to ask the member; I have a simple question for him: how do we provide a certificate of title for a kilowatt-hour or repairs and spare parts for a kilowatt-hour or for that matter water? The provision is a nonsense and the Government has not thought this through. 
STEVE CHADWICK (NZ Labour—Rotorua) 
: I move  
That the question be now put 
. 
JOHN KEY (NZ National—Helensville) 
: It is my pleasure to stand on behalf of the National Party and oppose Part 2. As members well know this bill is looking to amend three specific Acts: the Commerce Act the Consumer Guarantees Act and the Fair Trading Act. In particular I want to make reference to the Consumer Guarantees Act to clarify the position that will be confusing a great many consumers in New Zealand. It is simply that this bill attempts to define a service or a good but it uses in the definition of a good an objective test based on a reasonable person. That is what the law states. One cannot contract out of it under the Consumer Guarantees Act. It says that it is an objective test based on a reasonable consumer. 
That means that if electricity is defined as a good then a reasonable consumer is meant to understand that it will have certain imperfections and certain specific peculiarities in the way it will act. That is what the law says. So it says for instance that electricity is subject to momentary fluctuations and prone to interference by environmental factors and actions of third parties. In other words that is the kind of understanding that a consumer is meant to have. 
Well how practical or likely is it that consumers who will be looking to the Consumer Guarantees Act that will be amended by this legislation tonight will understand uniformly an objective test? Let me put this example to the Committee tonight. There I am with my pinny on in front of the stove cooking up a lovely supper for 141 of the neighbours I have invited around from the Helensville electorate for a quick dinner. I have my 15 ovens burning away and for dinner I have decided to cook a lovely meal. I am going to start with a mulligatawny soup. I will move nicely into roast legs of lamb—beautifully done with just a little pink inside. I will have potatoes pumpkins—because those are always very good for us—a few peas some gravy and bits and pieces. I am going to make a lovely dessert. I will have pavlova a New Zealand favourite. I know that the Australians have tried to claim it and that there will be Australians listening in on their satellite dishes to this speech but I want to tell them here and now that nobody in New Zealand believes that pavlova is an Australian dish. It is a New Zealand dish and we are proud to have it. 
Hon Rick Barker 
: That’s not what we’re here to talk about. 
JOHN KEY 
: That is not what we are here to talk about; we are here to talk about the objective test of whether electricity should be a good. So here I am with 141 people for dinner from the Helensville electorate and I am serving them a beautiful three-course meal. We sit down and the power goes off. The lights are out but there are plenty of people at home because they are all National Party supporters. There are 141 of them. They do not know each other very well; they do not have neon signs. All of a sudden I come out and say: “Look a bit of bad news—“ 
David Benson-Pope 
: What do you know about Epsom? 
JOHN KEY 
: I know lots about Epsom. It is a wonderful place. There is— 
David Benson-Pope 
: You live there. 
JOHN KEY 
: I do live there from time to time and it is a wonderful part of the country—absolutely wonderful. But like all good things I like to share myself around. There is absolutely no point otherwise. I am known in places in Wellington Helensville and Epsom and wherever I go I am given a sort of coming-home greeting. People are proud to have me when I am there. But that is not what I am here to talk about; I am here to talk about this dinner for 141 people—and the power has gone off. 
Here is the rub: am I a reasonable consumer with an objective test? In other words if I cannot get an electricity supply would I be reasonable to say that it is OK to understand that the electricity may not be there? Well with 141 people for dinner and a beautiful 3-course meal when I am having pavlova for dessert with kiwifruit on top— 
Hon Tony Ryall 
: The answer is to buy your own power company. 
JOHN KEY 
: The answer is to buy one’s own generator. It is cheaper than a power company. My point is that on that particular occasion electricity supply would not meet an objective and reasonable test—and that is where this legislation will horribly fail. It is just not possible to have an objective test measured across the country because people will have different circumstances at different times. People will be looking to this fine Parliament for legislation that they will be able to rely on and they will simply not be able to rely on it because they will not understand that particular issue. 
DARREN HUGHES (NZ Labour—Otaki) 
: I move  
That the question be now put 
. 
STEPHEN FRANKS (ACT NZ) 
: We are now at the heart of the stupidity in this bill that has resulted in ACT committing to vote against it. When the services that this bill puts under the Consumer Guarantees Act are compared with that Act’s provisions we see just what happens when ideology or a political manifesto gets in the way of logic. When we put water electricity or gas supply into the Consumer Guarantees Act—a pretty suspect piece of law to start with—we end up with the rich being subsidised by the poor. Essentially this means that the people who use more of those services who use lots of them can insist on a higher standard of service. They will exercise remedies the others will not have the time to exercise and will get the benefits of inventive new ways of persecuting the supplier that the poor will not think of—and they will do all of that for no particular reason. 
Let us take water as an example. Paekakariki just to the north of Wellington has something in its water that corrodes tap washers. This may seem trifling to members on the other side. They may think it is funny that tap washers and joints get corroded quite quickly by the Paekakariki water supply but quite clearly a reasonable person coming into Paekakariki from outside would not assume a tap washer was likely to disappear within 3 years. That is in fact what happens. If the taps are used frequently the time taken for the washers to corrode is less. The effect of this requirement is that the local authority or the supplier of the water is probably going to have to guarantee that it will meet the cost of those tap washers. Who does that take money from? It takes it from the people. People make a claim and they get paid for their tap washer or the supplier upgrades the water supply to make sure it does not corrode tap washers and everyone has to pay extra. The people who pay the price of that in their water supply will be paying much more to those who have lots of taps than to those who have only a few taps. They will probably end up paying for tap washers they would never dream of using. Those who can afford to put a water softener on or to take a precaution with their tap washers will be paid for by those who cannot afford to take such precautions. 
We can see the same thing with electricity. The person who can afford to take a precaution against losing the contents of their deep freeze because there is an outage or a power unreliability will be paid for by those who do not even have deep freezes. It will be paid for in the price of electricity to those who cannot afford to take any sort of precaution. Householders who decide that an interrupted supply or a power spike in their computer is really irritating and who decide to go and harass the local power supplier because of what the spike did to their computer are going to be subsidised by people who do not even have a computer. The cost will be borne by the people who are busy using candles and hot water bottles so that they do not use up power the local authority has asked them to save. The sort of madness we had with the major industrial suppliers deciding to go uncovered on spot prices will presumably come under the Commerce Act or under one of the other parts of this bill so I will not in this part go into the subsidisation of big business that is occurring. But I will say that the prospect of business for lawyers or the prospect of the business the disputes tribunal will have is just rife in this bill. 
Let us look at some of the guarantees. Let us take water. There is a guarantee that the water is durable—durable for what purpose? There is a guarantee that it is safe if it is used in a manner that a reasonable consumer would expect to use to obtain the goods. What about when one’s swimming pool is too deep for the kids? Does the local authority have to worry about that? The local authority can of course draw attention to the defects so we will see another set of these ludicrous warnings with which New Zealand is now infested saying that if we use too much of something it might make us feel bloated. 
Hon RICK BARKER (Minister for Courts) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
Labour 52; Green Party 8; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 6(1) be agreed to: 
to omit paragraph (b)(v) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 81 
Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 6(1) be agreed to: 
to omit paragraph (b)(vii) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 81 
Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 6(1) be agreed to: 
to omit paragraph (b)(vi) of section 2(1) from the definition of  
services 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 81 
Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 81 
Labour 52; New Zealand First 13; Green Party 8; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Part 2 agreed to. 
Part 3 Fair Trading Act 1986 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition will be strongly opposing Part 3. It deals with the Fair Trading Act an amendment to which we debated in Committee prior to going into Committee on this bill. Part 3 of the Consumer Protection (Definitions of Goods and Services) Bill proposes to include gas electricity water and computer software as goods for the purposes of the Fair Trading Act. 
Just as my colleague the Hon Dr Smith was able to ridicule the inclusion of gas water and electricity in the Consumer Guarantees Act through reference to the fact that there would be guarantees of “spare parts” for water and “title” for water and electricity similarly we should raise concerns about what is being proposed in this bill. This bill proposes that the provisions of the Fair Trading Act which refer to the safety of goods simply cannot be sustained in respect of electricity and gas. Electricity and gas are inherently unsafe substances or matters and it is only through an appropriate use of the equipment delivering electricity or gas that these goods can be rendered safe. So for the Fair Trading Act to have to cover gas and electricity and the requirement therein relating to level of safety is quite ridiculous. I agree with the concerns raised with the select committee by the New Zealand Law Society with regard to this. The society raised concerns only in respect of electricity but I think it is just as relevant to gas. 
What is foolish about this bill also is the requirement relating to the quality of supply etc. We simply cannot provide the perfect electricity or the perfect gas on a continuous basis. With continuous supply as one would understand there are no interruptions and no difficulties with the voltage. But the fact is that these will be issues with electricity from time to time and to have any guarantees or warranties provided is foolish. 
 The National Party in Opposition also says to the Government that the Government does not know the cost of what it is proposing to do because this bill was presented to Parliament without a regulatory impact statement or a compliance cost statement both of which are required under Cabinet guidelines and neither of which was provided to the Commerce Committee. We raised the matter of costs on business and consumers as legitimate issues because we have been able to reveal to the Committee tonight that Local Government New Zealand says that councils are planning to spend $400 million over the next 5 years to get water quality up to a standard that is acceptable to be covered by the Consumer Guarantees Act. Earlier today we tabled a report that shows that it would cost $750 million for all councils to upgrade their water supplies. The point is that the Government did not even know. The Minister told us to prove the figures and we tabled them. The Minister did not even know. 
The previous bill the Fair Trading Amendment Bill (No 3) sat around in the select committee for years and took less than an hour of consideration. This bill which did not take much longer for consideration sat on the agenda for months and months and months. It is now being passed under urgency and the Minister in the chair Judith Tizard cannot even tell us the cost to consumers of those decisions. I alert the Labour members opposite. They should understand that the Hastings City Council is putting $16 million aside to upgrade its water. Palmerston North is putting aside a similar amount and consumers will pay for all of that. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: I am a little surprised that the member is saying that Opposition members have tabled information about the figures quoted in the Chamber because having looked at the two documents I cannot see any reference to the figure they mention. However I do have information from the officials that the $400 million mentioned is the cost over time to all local authorities to provide infrastructure to meet the proposed Health (Drinking Water) Amendment Bill over the 5-year lead-in period. So the cost of this legislation could be nothing—because it could be that local authorities are all moving towards their legal responsibility to provide residents with good quality water—or it could be quite large. But we cannot say because this is about trying to make sure that the responsibility for the standard and service provision falls where it is most sensible for it to fall—with the authority with the organisation or with the trader who can actually made a difference to the quality and can make sure that the quality of the service or good is of an appropriate standard. 
Anyone can make any legislation sound mad if one chooses to read it in a completely disjointed way as though members know no more about amendment bills than to read them entirely separately from the substantive Act. The Commerce Committee has looked at this legislation in a great deal of detail. Its members have had excellent advice from the very good public servants who provide it with support the submissions have been heard and we need to get on with this legislation. As many Opposition members have noticed it has been sitting around for a while. It is a wonderful opportunity to give better protection to consumers. 
STEPHEN FRANKS (ACT NZ) 
: I am sorry that I did not speak earlier although it would have been out of turn because we have had the benefit of one of the rare contributions from the Minister in the chair Judith Tizard and she might have been able to enlighten me as to exactly what is intended by Part 3. It seems to me that it might be one of the only parts of the bill I could favour. Part 3 of the Consumer Protection (Definitions of Goods and Services) Bill merely adds a reference to “personal property of every kind (whether tangible or intangible);” plus an avoidance of doubt provision about water and computer software to the Fair Trading Act. I am not quite sure exactly what mischief is intended to be dealt with by the reference to “personal property of every kind (whether tangible or intangible);”. Previously the definition of “goods” drew on the very long-tested usage of that term in the Sale of Goods Act. This bill amends section 2(1) of the Fair Trading Act by repealing the definition of the term “goods” and specifically including under paragraph (b) of the new definition: “(i) ships aircraft and vehicles: (ii) animals including fish: (iii) minerals trees and crops whether on under or attached to land or not:” I have to assume that each one of those additions represented some case that cast doubt on whether they would have otherwise been included in the definition of “goods”. But to then include paragraph (a) which just about covers everything that is movable and transferable: “personal property of every kind (whether tangible or intangible);”— 
Sandra Goudie 
: Intangible? Wahi tapu? 
STEPHEN FRANKS 
: It could include intellectual property. The definition includes: “(vi) to avoid doubt ... computer software”. Plainly they are intending to capture some forms of intellectual property but what is not clear is just what it is intended to act on and what the mischief is. I do not recall having seen that in the first reading copy of this bill either. The Minister still retains her three officials and she has made only two relatively mundane or straightforward contributions during the whole evening. I think it would be helpful to the Committee if she were to explain just why Part 3 is in the bill and what it adds to the Fair Trading Act. I have gone through to try to work out what we are getting by putting in the words: “personal property of every kind (whether tangible or intangible);”. There is case law that already states that shares are goods for the purposes of that Act so that “choses in action” are specifically dealt with in an earlier part of that Act. They were specifically excluded from the Consumer Guarantees Act for good sound reason but here it is obvious that they are expected to stay in. I really am at a loss to understand it. I am sure there is a simple reason but by including intangibles it does make it very hard to see how some of the assurances of the Fair Trading Act would apply. 
I take the simple example of the prohibition on being misleading or deceptive. It is very very hard not to be misleading by the test under this Act when one is selling something as complicated and as puzzling to most people as computer software. The test of course is not the reasonably expert user. The test under this Act at least for some purposes is actually a kind of fool. The Fair Trading Act does not require that it be deliberately misleading. It is quite sufficient for found liability that it be innocently misleading or unintentionally misleading. How then will a software manufacturer avoid misleading for the purposes of the Fair Trading Act when we who have had much to do with the industry know that it is almost impossible for the promise that they seem to hold out ever to be fulfilled? How many Government information technology contracts have ever been delivered in accordance with the representations made by the software manufacturer? In those circumstances a sort of disappointed common sense usually prevails and the purchaser realises that was what was to be expected. 
SANDRA GOUDIE (NZ National—Coromandel) 
: In looking at Part 3 I would like to refer to the intention of the Fair Trading Act which is to prohibit certain conduct and practices in trade to provide for the disclosure of consumer information relating to the supply of goods and services and to promote product safety and so on and so forth. It is largely related to the contractual arrangements that are entered into. 
Section 9 of the current Fair Trading Act sets out the basic concepts that underpin the Act and it states: “No person shall in trade engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” The Act specifically intends to apply to local authorities in the general provision of goods and services in trade. The bill in clause 11 proposes to amend the Fair Trading Act by substituting a new definition of “goods” and by inserting a new subparagraph into the definition of “services” so that it will include water and the removal of waste water. Under paragraph (a) in subclause (1) goods are defined as “personal property of every kind (whether tangible or intangible);” and I really wonder what the term “intangible” actually means because that is a pretty broad term to be used in legislation. One could start considering things like wahi tapu religious connotations and matters of that sort as the word “intangible” certainly covers that type of subject matter. Clause 11 also inserts subparagraph (vi): “to avoid doubt water and computer software”. 
The questions that are raised with regard to the definition of water and the proposed amendments to the Consumer Guarantees Act are applicable here and we refer members back to those comments. Section 2(1) of the Fair Trading Act will be amended by the addition of new subparagraph (iv) to paragraph (a) in the definition of services. Although the supply of water and waste-water services may be contained in the general definition of “service” it is curious that water and waste-water services have been specifically included in relation to a contract. That is one of the matters that I have raised consistently as I have spoken here tonight. 
Steve Chadwick 
: Repeatedly. 
SANDRA GOUDIE 
: Absolutely because the matters around contracts are actually quite substantial. As with the Consumer Guarantees Act we note the general unsuitability of many of the enforcement provisions and remedies available under the Fair Trading Act which are set out in Part 5 of the Act. They include the granting of injunctions restraining certain conduct ordering the disclosure of information or the publishing of correcting statements declaring that a contract is void varying a contract the refund or return of property damages repair and supply of specified services. In that regard I refer members back to section 31 of the Consumer Guarantees Act “Guarantee as to price”. I will read out subsection (1) because I think it is very important for local authorities. Subsection (1) states: “Subject to section 41 of this Act where services are supplied to a consumer there is a guarantee that the consumer is not liable to pay to the supplier more than a reasonable price for the service in any case where the price for the service is not—(a) Determined by the contract;” There is no direct contract between a local authority and consumers. Also one has to remember that if they do not deem the price to be reasonable they can refuse to pay or pay what they consider to be reasonable. When we start having the majority of local authorities charging something like $1.10 to $1.53 as in the case of Waitakere—and I would suggest that $1.53 is a hugely exorbitant price to be paying for a cubic metre of water—and when Watercare Services is charging something like 55c for a cubic metre of water what is a consumer going to say to a local authority about what is reasonable? Consumers who are getting water supplied by a local authority will be saying: “Hang on a minute.” 
NANAIA MAHUTA (NZ Labour—Tainui) 
: I move  
That the question be now put 
. 
JOHN KEY (NZ National—Helensville) 
: I rise on behalf of the National Party to address the bill’s definition of goods and services— 
David Benson-Pope 
: The National Party is in Opposition. 
JOHN KEY 
: The National Party is in Opposition at this point but that is OK. I rise on behalf of the National Party in whatever position one wants to put it to discuss this bill’s definition of goods and services—particularly Part 3 which relates to the Fair Trading Act. Students of the Fair Trading Act will know that it deals with representations made about particular goods and services as defined by the Act. In particular it looks at different definitions but it includes product safety and it deals with false representations made about a particular product. Members will know that if this legislation is passed into law it will add to the definition of goods and services as interpreted by the Fair Trading Act gas electricity water and computer software. 
I want to spend a moment talking about computer software because not many members have discussed that tonight. As we look at computer software in relation to the Fair Trading Act let us think about product safety. What aspects of product safety do members think a consumer would be looking for under the new definition of computer software? For instance if a consumer buys a software package puts that into his or her hard drive runs a system for Internet-based trading and loses money or if that package does not give the consumer the best and most information available would he or she have a claim under the Fair Trading Act? That is the international trend in financial services—people are buying financial services online through computer software packages. They are buying stocks shares bonds unit trusts and funds. They are investing worldwide with computer software packages that will now be covered under the Fair Trading Act and they will be relying on its definition. I simply put it to the Committee that that will create a great deal of ambiguity because they will be looking through to the test of reasonableness. 
Secondly I want to look at what might lead to an action of false representation under the Fair Trading Act in respect of gas and electricity. Let us take water as a good example. As water is supplied out of the consumer’s tap it may fit nicely within a reasonable definition of good usable water. It may be drinkable fine for the swimming pool or watering the garden and it might fit all the general criteria but if a consumer uses that water to irrigate high-quality tomatoes and those tomatoes do not come up to the quality standards would that be a false representation under the definition provided in the Fair Trading Act? 
John Carter 
: It would. 
JOHN KEY 
: It would. 
Dr Wayne Mapp 
: There would be only one standard. 
JOHN KEY 
: That is exactly the point—there would be only one standard of definition. So what might be deemed to be reasonable for one consumer might not be deemed to be reasonable for another consumer. My personal opinion is that there will be a great deal of litigation over the definitions of gas and electricity. Who will bear that litigation? I can see councils being brought into such litigation. 
John Carter 
: Who pays for that? 
JOHN KEY 
: Consumers pay that through their rates. 
John Carter 
: So they will pay themselves? 
JOHN KEY 
: They will be charging themselves. Thirdly I want to look at safety as it relates to electricity. What happens in the example where the 3-year-old goes and puts his or her fingers in a socket and gets an electric shock? 
John Carter 
: The 3-year-old won’t care much about it. 
JOHN KEY 
: The 3-year-old might not care about it but the parents will. What is the issue as it relates to product safety for electricity under the Fair Trading Act? 
John Carter 
: The 3-year-old will have a stiff finger. 
JOHN KEY 
: The 3-year-old will have a very sore finger. The obligation of safety is clearly covered under the Fair Trading Act. 
DAVID PARKER (NZ Labour—Otago) 
: I move  
That the question be now put 
. 
JOHN CARTER (NZ National—Northland) 
: I want to carry on with the issue of litigation. When we look at Part 3 in relation to the Fair Trading Act and the part where it brings in the Consumer Guarantees Act there are a number of things that that Act supposedly guarantees. There are for example “Guarantees as to title”. The other day a constituent up in Northland brought me a case in which somehow or other a title had someone else’s name on it. My constituent does not know how it happened the council does not know and the deeds people do not know but it happened. What happens if something is wrong? Who will guarantee that but more important who pays? 
Guarantees of acceptable quality reasonable care and skilled employment? That is a good so yes there is a guarantee under the Act. Is it a service? Yes it is guaranteed under the Act but what happens if that service is not provided? Who pays? More important who pays if there is a dispute and there will be disputes because of these sorts of definitions? Perhaps the Minister in the chair the Hon Mark Burton who will be absolutely familiar with this bill will want to take a call to explain these very searching questions. There is also the issue of litigation to see whether there is a dispute. Who pays? That is the issue. The real worry with this legislation is the cost that this Government is putting on to consumers—the people it thinks it is protecting. The Government will end up causing the people of this nation huge cost. 
“Guarantees as to fitness for particular purpose”—what does that mean? Apparently it covers a good and a service. That is fine but how will the Government guarantee fitness for purpose? What if it does not comply? Who pays? If we go back to the supply authority or the local authority and they are found not to have come up to the mark and are fined who pays? It is the consumer who pays. The same people end up paying again. What are we trying to achieve here? We are trying to achieve something for the benefit of the people but all we are actually doing is loading a lot of costs on to them. I say to the Government that we have to stop this silly nonsense. We have already seen where the Government has taxed taxed and taxed. It has got into the habit now and I suppose it cannot get out of it. 
Let us look at the next thing: “Guarantee that goods comply with sample”—what does that mean? Who will guarantee that this Act does what it supposedly does? I ask Damien O’Connor what will happen when someone says: “Hang on no it doesn’t.” He or she gets into a dispute goes to a lawyer and ends up in a court case. Finally the authority gets fined but who pays? Not the authority! Of course in the first place it does but Damien O’Connor pays through his rates or through his water supply charges. The same consumer that this bill is supposedly protecting ends up paying the bill. Where is the advantage in that? It is just a silly nonsense. Why would one do it? One goes round in that ever-diminishing circle until one ends up in that place that people should not be in. Maybe that is where this Government is trying to get everybody to end up. It is the old ostrich head-in-the-sand thing but in this case the position is different. Nevertheless that is a real worry. 
There is a “ Guarantee as to price” in the Act so apparently the goods or service we get are meant to be a particular price. [ 
Interruption 
] It might be a reasonable price as well but that is another issue. But then we find that there is a dispute and here we go again—into litigation. There is an argument the authority says something is the case and no it is not. The authority goes to court loses and gets fined and the same people pay. 
What really worries me is the principle here. Why are we litigating to put people into cotton wool? There is a real world out there and people have to live and survive in it. We are constantly trying to stop people getting on with their lives. This is just another example of a Government that somehow or other thinks that people cannot stand up for themselves. I say to this Government and to the people who may be listening at home on their crystal sets that they should ask themselves this question: at the end of the day what do we actually get out of this bill? It is not a lot. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
Labour 52; Green Party 8; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 11 be agreed to: 
to omit paragraph (b)(iv) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 80 
Labour 52; New Zealand First 13; Green Party 7; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 11 be agreed to: 
to omit paragraph (b)(vi) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 35 
New Zealand National 27; ACT New Zealand 8. 
Noes 80 
Labour 52; New Zealand First 13; Green Party 7; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 3 be agreed to. 
Ayes 80 
Labour 52; New Zealand First 13; Green Party 7; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Part 3 agreed to. 
Part 4 Sale of Goods Act 1908 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition is opposed to these amendments to the Sale of Goods Act. The principal amendment—other than the replacement of the word “things” with the word “choses”—is the addition of the words “to avoid doubt computer software” by which the Government seeks to say that computer software is a good for the purposes of the Sale of Goods Act. I think we will come across the same problem that we have identified with the other changes to legislation when trying to apply the characteristics of tangible goods to intangible items such as computer software electricity gas and telecommunications. 
I want to alert the Minister in the chair Judith Tizard to the fact that I think the Government is making a major blunder in incorporating computer software as a good under the Sale of Goods Act. The reason is that although computer software is often sold with tangible items that are goods—such as instruction books and CDs from which the programme can be transferred to one’s own computer—when it comes to software a licence is usually purchased; the software itself is not purchased. No one buys Windows 2000; one buys a licence to use it. As such it should properly be described as the grant of a licence rather than the sale of a good or a service. 
There is the potential for confusion here because it boils down to the property rights of the purchaser. The Sale of Goods Act makes it quite clear that one actually owns what one sells. But although we might say that buying a suite of Windows 2000 programmes is a good and therefore has to be treated as a good we are not buying Windows 2000; we are buying a licence to use Windows 2000. Even though we are passing an amendment that includes the words “computer software”—that is that a Microsoft program is a good which one should be able to “enjoy quiet possession of” under section 14 of the Sale of Goods Act—it is not actually a good in any sense because one cannot provide title to Windows 2000; one can only provide a licence to use Windows 2000. 
The reason I raise this issue is that it will cause confusion in the future. Parliament is saying that computer software is a good which means that one can give title to it but one simply cannot give title to Bill Gates’ property. One can give a licence to use Bill Gates’ property but that is not a good. Even though Parliament decides that it is a good it will still not be a good and that will lead to considerable confusion in respect of the rights of those who own the Windows 2000 program and those who have a right to use the licence. 
I have legal advice that suggests that the best way to cater for this problem is to use the warranties and representations provided by the Fair Trading Act when something is being sold. A person just cannot own Windows 2000 unless Bill Gates sells it to him or her. What one can own is a licence to use his program so I think that the Government is creating a rod for its own back by saying that computer software is a good because it simply is not a good. 
Gerry Brownlee 
: Where does the licence come into this? 
Hon TONY RYALL 
: Well a licence is not a good; therefore even though Parliament might say it is a good it cannot be a good. Section 14 of the Sale of Goods Act implies that if someone is selling something as a good then that person has title but if one has computer software one does not have title. 
BRENT CATCHPOLE (NZ First) 
: I have been listening to Tony Ryall talking about computer software. He referred to the 1908 Act although I am sure computer software was not around then. However he is certainly right with his description. One buys only the licence to use computer software; one does not actually buy the physical property. Computer programs are intellectual property. One never has the right to own that intellectual property; one buys the licence to use it. Under the licence to use it we are not allowed to resell that individual licence on to anybody else once it has been purchased from the supplier. So it cannot be a physical good and I believe that it does not fit into this particular part of the legislation. The officials should have considered the matter when they were looking at the whole measure. I admit that we should have spotted it in the Commerce Committee. However in summary under the Sale of Goods Act computer software is not a physical good and it cannot be passed or sold on to somebody else. One does not have the right to sell it on. So how could it possibly be a good? A good is something that one physically has. 
GERRY BROWNLEE (NZ National—Ilam) 
: The previous two speakers have raised the very interesting issue of where the licence fits in. The Minister in the chair Judith Tizard can sit there and huff and puff and yawn and carry on and act as if she is completely uninterested and as if she has no care towards consumers in New Zealand but I have two questions to ask her. Is this just another attack by the Labour Government on property rights in New Zealand? 
Government Members 
: Oh! 
GERRY BROWNLEE 
: Well that is the way it looks. Or can the Minister stand up and tell us how a licence holder is protected by this bill? Much of the question that has been raised by the Hon Tony Ryall—the country’s last decent Minister of Justice—and Mr Catchpole the New Zealand First member who spoke just a few moments ago would be solved if she simply explained where a licence fits in. I think this bill got drafted in this dreadful way because the officials who are required to draft such bills have been instructed to surreptitiously attack the property rights of New Zealanders wherever the opportunity presents itself. Day after day we come into this Chamber and see the Labour Government having a go at property rights in whatever way it possibly can. 
For example how would a New Zealand firm fare that developed a piece of software and went out to sell it—a firm that does not have the same clout as Microsoft or any of the great producers of software in the world such as Oracle or some other producer; just a small software writer selling a licence to use its programme? There appears to be no protection in this bill for either the person owning it or the person who purchases the licence. I hope I see shortly the officials sneaking up to the Minister with a bit of paper to explain that I am wrong. 
Paragraph (c) in clause 13 “Interpretation” states: “to avoid doubt computer software”. It would be a good idea if the Government itself moved an amendment to add the words “and licence to use computer software”. What does the Minister think of that proposal? She simply laughs turns her head away and I think confirms that the Government has no intention of protecting the rights of the owners of computer software or any product that is sold under licence. 
The other interesting thing about this part is that the entire bill now becomes part of the principal Act the 1908 Sale of Goods Act. I have to ask a perhaps indelicate question in this Chamber: Where does that leave the now legitimised sex industry? Where are the bounds between a good and a service? 
Hon Judith Tizard 
: You’re totally obsessed. 
GERRY BROWNLEE 
: The Minister makes a rather silly comment. Last week the same Minister voted with Helen Clark for that new legislation on the basis that it was something that New Zealanders needed. We know now from the polls that they were wrong and we were right. They will not make any progress as a result of it. However if that is going to be a legitimate activity—and apparently it is since last Monday—where does it fit into the provisions of this bill? 
I understand that a matter in here deals with client satisfaction. I do not want to go any further in discussing what that may mean for the bill. However it does show once again that the Labour Party when it comes to legislation that deals with anything relating to commerce the interests of the consumer or to small business has no idea whatsoever no care and no concern. It simply wants to put in place a number of regulations that make it feel happy about things and make it hard for small business in this country. 
Dr WAYNE MAPP (NZ National—North Shore) 
: I want to deal with the issue of computer software. When I look at this legislation it seems to me that the Government is relying entirely on judicial discretion. For instance it has not decided to define it as the Hon Tony Ryall pointed out as a licence for computer software. It has described the software itself as the good. It has ignored the submission of the Law Society that states that: “By defining software as goods”—and I am quoting directly from the submission on page 4—“there is a potential for confusion to arise regarding the property rights of the purchaser.” There was a possible solution that I thought the select committee would have taken the opportunity to apply—or at least the advisers to the Government or perhaps an alert Minister such as the one perhaps not in the chair—by referring to licences for computer software. We are now left with this only resolution to the problem. We are relying entirely on the courts to get it right and that they will interpret the words as in fact meaning a licence for software rather than the literal wording here. In the past when the Sale of Goods Act was enacted— 
Hon Judith Tizard 
: In 1908. 
Dr WAYNE MAPP 
: People tended to allow the courts to do that sort of thing. However today legislation is supposed to be specific. That is why thousands of law draftsmen are employed to achieve precisely that. Have they got that right? No they have not. Why are hard-working New Zealanders paying taxes to the Crown? Because they want good services under the charge of this Government. Yet poor legislation is presented to the House that has not been properly considered and does not take into account the submissions of the Law Society. Hence we are now thrown upon the mercy of the courts to get it right. 
They are the same courts that said that there was title to the seabed—and look at the chaos and confusion that has caused this nation and this Government. Ask Nanaia Mahuta. She and her colleagues know the chaos and confusion that it has caused and we read about it in the paper on a daily basis. Yet the Government is repeating the same error in the amendment to the Sale of Goods Act. 
One other point is the confusion about water. Part 3 refers to water being included as part of the Fair Trading Act. The select committee said that in the Sale of Goods Act it is understood that water includes potable water. Potable water is drinking water. I presume the term means essentially the same in both pieces of legislation. Is the Government now saying to New Zealanders that they will have rights for drinking water or water that is fit to drink but in respect of any other water—such as agricultural water water flowing through the proposed Project Aqua all of the irrigation projects throughout the South Island that may or may not be potable for humans depending on quality—that there are no rights other than common-law rights of course in relation to that; and that it is only the processed water through the municipal systems that has the statutory protections. 
I would have thought that in amending the Fair Trading Act to include water one would at least have defined it as a particular category of water. The select committee—and the judges will read this—is clearly of the view that water is only potable water so far as the Sale of Goods Act is concerned. That is yet another source of confusion. We on this side of the House have been saying that New Zealanders have been paying far too much in taxes for poor-quality government. 
STEPHEN FRANKS (ACT NZ) 
: The bill includes water electricity gas and a number of Acts but Part 4 has a very short and simple change to the Sale of Goods Act. I am always concerned when we fiddle with the Sale of Goods Act. It is one of the finest flowerings of the 19th century English commercial lawyers. It is a wonderful example of how to draft. It is a piece of law that does what English commercial law had a genius for doing. It does not to try to tell people how they should conduct their lives it does not try to tell people—merchants or anyone else— what contracts they ought to enter and it does not second-guess or prescribe in advance but simply writes down in elegantly simple language what the best custom of merchants was. 
So when I see the Sale of Goods Act being tinkered with by a bill that has some economic and legal nonsense in the other parts I am put on guard. I am a little bit baffled and part of it is simply the terms. There is a reference to emblements and I am not sure how one pronounces them; I never came across them in 20 years of practice. I wish we had the advantage of Mr Worth in the Chamber. I suspect that he would be able to help the Committee considerably with a word as mysterious as that. 
However I will have to commend the Minister on a feature I like to see. The definition of goods in the Sale of Goods Act will now have restored a word that I believe the original drafter probably had. Clause 13(a) restores the old legal term “choses in action” instead of “things in action”. We no longer have that discordant sort of mix of the vernacular and the technical. 
Hon Tony Ryall 
: I think it’s called the State school approach. 
STEPHEN FRANKS 
: It probably is but no longer do we have this ugliness and ignorance. We have a term that has been made elegant again however antiquated it may be. On that one feature I do commend the Minister and her officials for restoring a sort of symmetry that was once there in our law that has been so grossly attacked by the law drafters in so many other areas. It is a pleasure to see that there is still a consciousness of barbarism and that the barbarians have not completely won. I thank the Minister for that. 
 I do come back though: I am concerned that what was probably intended as the substantive change in this definition—that is sticking in computer software—was something that the Law Society was so unequivocal in recommending against. However I believe that the Sale of Goods Act is so well drafted that if we abolished consumer guarantees and fair trading and went back to the sale of goods we would be all happier wealthier and wiser. In this case the select committee has included computer software without recognising—or appearing not to recognise—that the sale as it is called is usually a sale of a licence. According to the Law Society we are putting New Zealand consumers at risk of uncertainty. Uncertainty means cost and it means business for the courts and business for the lawyers. In that respect it would be helpful if the Minister were able to elucidate as to why it chose and why the select committee chose to ignore the Law Society’s recommendation. 
I cannot imagine there was anyone with an enormous passion to see computer software put into the Sale of Goods Act particularly as the other parts of this bill had already stuck it into the Consumer Guarantees Act and into the Fair Trading Act. It would be helpful to know just why after such an admirable change to the wording of the definition of “goods” we then went ahead and did something without explaining given that a body as disinterested and presumably as expert as the Law Society recommended against it. 
DAVID BENSON-POPE (Senior Whip—NZ Labour) 
: I move  
That the question be now put 
. 
JOHN KEY (NZ National—Helensville) 
: Members will be aware that clause 13 in Part 4 tends to widen the definition of the term “goods”. It states that to avoid doubt the definition of “goods” includes computer software. The Law Society’s submission challenged that ruling on the basis that software is a licence. 
I ask the Minister in the chair the Hon Judith Tizard to clarify the issue of CDs and DVDs. I personally do not consider computer software to be a good. I agree with the Law Society’s view that there is a licence to use software. Let us expand our minds for a moment here in urgency to think about the issue of CDs. When I purchase a CD—the physical good—I want it to work in my machine. So that is a good. But if I happen to be purchasing a CD that is unknown to me—and let us imagine for a moment that I purchase a CD of Eminem I have a feeling that would offend me especially— 
Hon Judith Tizard 
: Your kids would love it though. 
JOHN KEY 
: My 8-year-old absolutely loves Eminem so I try to get him the toned-down version—the edited censored version. Under this definition would a CD like that be a good and what part of a CD is a good? Under this definition just as computer software is deemed to be a good would the music on the CD be a good? I think I am hearing the Minister say no. 
Let us think about DVDs.  
Once Were Warriors The Piano The Lion the Witch and the Wardrobe  
or  
Licence to Kill— 
there are hundreds of DVDs that we could think of. So I purchase a DVD and put it in my machine. The physical DVD is a good but would the actual contents of the DVD be deemed to be a good under the definition used in the Sale of Goods Act as amended by this legislation? I am not worried about the physical form of the CD because I can check that in the shop and there is only a limited number of things that can go wrong with it. But I am worried about what is actually on the CD or DVD. I suspect that the answer is quite correctly that CDs and DVDs are not covered by this bill. But it does cover computer software so when I go to the same store and buy my CD I am applying a different test to computer software than I am to CDs and DVDs. There is a great inconsistency here. I would not be surprised if we pushed this debate well into tomorrow in order to add this new category that I have now thrown up. This shows that the bill did not spend enough time in the Commerce Committee and why it is an absolute outrage that we are expected to rush this bill through under urgency— 
Dr Wayne Mapp 
: Why urgency? 
JOHN KEY 
: Exactly! Why are we having urgency when there is a clear loophole here for CDs and DVDs? 
I can think of another example. Would a franchise arrangement be deemed to be a good? The definition of “goods” includes “all chattels personal other than money” etc. We know the reason that money is not deemed to be a good. It is because Samuelson described money as value in exchange as the Associate Minister of Finance will know from his days in Economics 101. Money has no intrinsic value and therefore it would be ridiculous to define it as a good. In fact some people argue that money does no good and does not bring happiness. But would a franchise agreement for a KFC shop in Helensville be deemed under this definition to be a good? That is a very challenging question and while we are here in urgency I am glad we have a number of officials to advise the Minister on whether a franchise agreement for a KFC shop in Helensville would be a good. If computer software is to be caught under the definition of “goods” in the Sale of Goods Act why is a KFC shop not a good? 
DAVID PARKER (NZ Labour—Otago) 
: I move  
That the question be now put 
. 
A party vote was called for on the question  
That the motion be agreed to.  
Ayes 67 
Labour 52; Green Party 7; United Future 8. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 13 be agreed to: 
to omit paragraph (c) of section 2(1) from the definition of  
goods 
. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Noes 67 
Labour 52; Green Party 7; United Future 8. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Tony Ryall to clause 13 be agreed to: 
to insert in paragraph (c) of section 2(1) in the definition of  
goods 
 after the word “doubt” the words “a licence to use”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Noes 67 
Labour 52; Green Party 7; United Future 8. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 4 be agreed to. 
Ayes 80 
Labour 52; New Zealand First 13; Green Party 7; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Part 4 agreed to. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: I move  
That the Committee divide the bill into the Commerce Amendment Bill the Consumer Guarantees Amendment Bill the Fair Trading Amendment Bill and the Sale of Goods Amendment Bill pursuant to Supplementary Order Paper 78. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 80 
Labour 52; New Zealand First 13; Green Party 7; United Future 8. 
Noes 35 
New Zealand National 27; ACT New Zealand 8. 
Fair Trading Amendment Bill (No 3) 
Third Reading 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: I move  
That the Fair Trading Amendment Bill (No 3) be now read a third time 
. I thank the House for the support that it has given to this legislation. The main purpose of this bill is to strengthen the level of consumer protection provided by the Fair Trading Act by reducing the incentives for traders to offend and reoffend. It achieves that purpose by increasing the general penalties and creating a new penalty system for pyramid selling schemes that is designed to render those schemes profitless. The bill also extends the Commerce Commission’s search power so that it can enforce the new pyramid selling penalty and it removes procedural barriers to effective enforcement. Finally the bill updates the Act to reflect modern business practices but it will not materially alter business compliance costs. 
I thank the members of the Commerce Committee for all their work on this legislation. I particularly thank the officials who have done so much work to address the great need to protect innocent New Zealanders from unscrupulous traders in this context. 
A number of issues were raised during the Committee stage. There was concern for example that the definition of pyramid schemes should not include franchise schemes. But members had read the new provisions in isolation because there are wider definitions of pyramid schemes in the main Act. There was a question about the fines. We are bringing the fines up to date as they have not been changed since 1986. I just want to tell the House that the equivalent Australian penalties are $200000 for individuals and $1.1 million for companies. Of course the Ministry of Justice was consulted on the levels of penalties and is very happy with this progression. Given the nature of the offending that we are trying to address I do not think that the penalties are at all unreasonable. They are a sign to the courts that we expect the new range of penalties to be taken very seriously and applied in all possible cases. Some concern was expressed about the notice power for the production of information. The Commerce Commission already has a powerful search warrant power and this is actually a less intrusive power because it can be used where voluntary compliance is likely rather than going to the full extent of going to court to obtain a search warrant. So we are actually seeking a more moderate power in this legislation than the power that exists already. 
Good contributions were made on this legislation. As I said I thank the select committee for its work. I particularly thank the officials and the House for its speedy passing of this legislation through its last stages tonight. I thank the Opposition for its cooperation. 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: Mr Speaker I can report to you that the Minister spoke more words during that third reading speech than she did during the entire 2½ hours of the Committee stage on this bill. I have to admit the frustration of the Opposition given that we were supporting the Government on this bill and were seeking to make some positive improvements to it that the Minister sat there and said nothing. If the Government does want to receive some support from the Opposition to pass bills speedily then surely Ministers should do Opposition members the courtesy of responding to their legitimate concerns rather just giving a few throw-away lines in the third reading speech. 
During the Committee stage the National Party raised a number of important concerns about this bill. I will just recap those because they are issues that will have to be revisited in this House. We think that the fines have been increased in an ad hoc non-comparative way. There is some existing legislation where the maximum fine is $100000 for quite serious offending in the commercial world but for matters much less comparable with those offences the maximum fines in this bill will now be $200000. We say that the Government should undertake a review of all the penalties in the commercial area. We are opposed to removing the 3-year criminal limitation period to make it apply from the date of discovery of a breach. We have warned the Government that that will have unintended consequences and will lead to the creation of significant contingencies by various New Zealand companies. We do oppose the Commerce Commission being exempted from the consequences of its decisions in respect of seeking interim injunctions and we alert the House— 
Stephen Franks 
: Then why vote for it? 
Hon TONY RYALL 
: I say to Mr Franks that he should wait and see. We do say to this House that we are opposed to the increased compliance costs associated with the Commerce Commission demanding from companies certain information and documents that do not exist. This bill was introduced and considered by the Commerce Committee with no regulatory impact statement and no compliance cost statement even though Cabinet papers require those statements. The Government has broken its own guidelines. 
I turn to the fines. Since the 1986 Act the consumer price index has increased by 54 percent yet these fines are to be doubled—in reference to what though? That is what we ask. In reference to what has the level of the fines been set? It has been done on a completely ad hoc basis with no reference to any other penalties in the commercial law. There have been no proposals from the Government to look at alternatives to a penalties regime such as improved education programmes for businesses and consumers. The Government told Parliament that one of the reasons it wanted to double the fines was that the judges were not using the full range of current penalties. We provided the Government with the opportunity to vote for the very wording that is in the Sentencing Act designed to make judges use the full scale of available sentences and this Government voted that amendment down. 
 We are concerned about the criminal limitation period running for three years from the date a breach is discovered or ought to have been discovered during which breaches of the legislation will be subject to litigation and scrutiny by the Commerce Commission. We say that has an air of lacking an understanding of commercial reality. An aggrieved consumer could raise issues with regard to old advertising that might have been a genuine error some years after it actually happened but within the new 3-year limitation period. That means business will have to carry a significant contingent liability resulting from actions like advertising. That is a cost on business. 
There is a basic right in New Zealand that people should be able to seek redress for suffering damages as a result of somebody else’s action but not with regard to this legislation. If the Commerce Commission seeks an interim injunction to stop a business from trading and that injunction was unwarranted the commission does not need to compensate the company for any loss of reputation profit or turnover. That is unfair to business. What happens if an injunction leads to a significant commercial loss? What happens if the Commerce Commission’s staff are overzealous? What penalty or sanction is there on the Commerce Commission for its mistreatment of commercial interests in New Zealand? Not one. This Government is to wipe that sanction. It is to wipe the basic right of redress for New Zealand business that suffers damages at the hands of the Commerce Commission. 
We are also opposed to the provisions in this bill that give the Commerce Commission substantial new powers to require information and documents that do not exist. The Commerce Commission already has substantial powers to enter premises and to seize and demand information and documents. But this Government wants to give the Commerce Commission the power to require companies to provide documents and information that do not exist. Is it common sense to require companies to provide documents that do not exist? Business New Zealand advises that there was a recent case where a company had to produce reports that were not in the accounting system or in the records of the company. Although it completed those requirements at a considerable cost in terms of time and money the commission found that there was no case to answer. The company was not compensated for that. 
This is appalling legislation. Sure there is a small amendment that will widen the scope of the Commerce Commission’s ability to deal with pyramid schemes but it cannot be very urgent. This bill has been hanging around in the Commerce Committee for years so that amendment cannot be very urgent. 
Hon Member 
: The lazy Opposition would not do it. 
Hon TONY RYALL 
: Oh did members hear that? Actually Opposition members were the people who made the running on this bill in the select committee by trying to get some information. That obviously did not come from any of the Government members who did not understand in the least what was going on. This bill does propose some additional amendments to apply to companies involved in pyramid selling. Those are to be supported— 
Richard Worth 
: Commended even! 
Hon TONY RYALL 
: —and commended. But we simply cannot support a Government that is not even prepared to listen to positive suggestions that would have improved this legislation. 
The National Party in Opposition wants to make it clear that when we return to power in 2005— 
Richard Worth 
: —Or before! 
Hon TONY RYALL 
: —or before then there are significant parts of this bill that will be repealed. We will return the right to companies to seek compensation for interim injunctions taken by the Commerce Commission that were unwarranted. We will not allow the Commerce Commission to require documents that do not exist to be taken with no payment. We will not allow a criminal limitation period that allows someone to take an action or lay a complaint about an advertisement 10 years after it was printed or broadcast. We will have a significant review and make all the different fines that apply across the commercial legislation comparable with one another. That has to be done. The National Party is clear that there is some sensible stuff in this bill but there is a lot that needs to be amended. We provided the Government with an opportunity to fix it. Our team of very thoughtful speakers provided lucid arguments about why the Government should change the bill. We pleaded with the Minister and her officials to take on board those criticisms adopt those changes improve the bill and enjoy our support but the Government just decided to ignore that. I think that that is bad for lawmaking in New Zealand. 
PAUL ADAMS (United Future) 
: I rise to support this third reading of the Fair Trading Amendment Bill (No 3) which aims to strengthen the Fair Trading Act by making amendments to enforcement and procedural provisions and in particular creating a new additional penalty regime for pyramid-selling schemes based on the commercial gain from the scheme. United Future sees this legislation as technical in nature and believes that it has been largely non-controversial. 
The bill amends the Fair Trading Act to provide that the criminal limitation period runs for 3 years from the date that a breach is discovered or ought reasonably to have been discovered. This has been done because in some markets such as building investment products insurance and long-term guarantees consumers or the Commerce Commission are unlikely to discover a breach until well after 3 years from the date that the breach occurs. Specifically the bill has doubled the existing maximum fines under the Act which are currently $30000 for an individual and $100000 for a company to $60000 for an individual and $200000 for a company. 
The bill amends the definition of pyramid-selling schemes in the Act to take into account newer types of schemes. These may involve participants buying or selling an investment opportunity and using an agent who is provided by the scheme operators to recruit other participants on their behalf instead of trying to recruit new participants themselves. It also extends the Commerce Commission’s search powers so that the commission may obtain a warrant to search for evidence to demonstrate the nature and extent of a breach of the Act revenue obtained through offending or other matters material to the seriousness of the breach. This will assist the commission in gathering evidence for courts to consider in sentencing. In particular it will help implement the commercial gain penalty for pyramid-selling schemes. 
Also introduced is a new power that will allow the Commerce Commission to issue notices requiring people to supply information or documents. This power would give the commission more flexibility and is most likely to be used when the commission seeks information from witnesses who are not hostile. United Future is happy to support this legislation. 
BRENT CATCHPOLE (NZ First) 
: I would just like to take a short call on this bill on behalf of New Zealand First to support the expanded provisions dealing with pyramid selling. The provisions under the original Act were reasonable for the pyramid-selling schemes that existed at the time but as new and innovative ideas have come into being those provisions have become inadequate. Therefore this bill tightens them up and captures a lot more of them. We are confident that the bill does not affect existing legitimate franchise operators. With that we hope this bill is not used to try to close down any of the legitimate franchise operators and we are confident that it will not. 
 New Zealand First does have some reservations about the wording in clause 14 of paragraphs (a) and (b) of section 47(2) of the principal Act particularly the use of the words “may constitute”. I would like to give an example of where those words are used. Subsection (2)(a)(ii) states: “the nature or extent of any conduct that constitutes or may constitute a contravention of this Act;’’. We feel that those words are too loose and they should be tightened up along the lines of the Crimes Act—particularly the sections of that Act beginning with section 312A which are very specific about the reasons for interception warrants and the way that they can be applied for. This particular area of the bill should be tightened up so that it does not capture people who are undertaking legitimate activities that may well be assumed to be outside the law or to constitute an act outside the law. In that case we feel that the way the bill has been worded is too loose. It could capture some of those people and inconvenience them to some considerable extent. When the Commerce Commission does inconvenience people often the result for those people ends up being a major financial loss without any compensation for their loss. We feel that particular part of the bill should have been tightened up and we are disappointed that we were unable to do that with our Supplementary Order Paper. 
But in essence we support the bill because we feel it is far better to have the law tightened in respect of pyramid selling—particularly the new forms of pyramid selling. Therefore we support the bill. 
DAVID PARKER (NZ Labour—Otago) 
: It is with great pleasure that I rise to speak in support of the third reading of the Fair Trading Amendment Bill (No 3). I recommend it to the House. 
STEPHEN FRANKS (ACT NZ) 
: The Fair Trading Amendment Bill (No 3) was introduced to the House more than a year ago as a bill to deal with pyramid selling. The New Zealand First member who has just resumed his seat—I do not think that the brief interruption since then counts as a speech—was obviously taken in by the spin that accompanied the introduction of this bill. There is nothing in this bill that deals with pyramid selling in any way that the existing law does not. 
This bill as a bill dealing with pyramid selling is simply misleading and deceptive conduct. Indeed if the politicians in charge of introducing this bill were judged by the same standards that were applied to the commercial people it purports to regulate they should be in prison although I do not think that imprisonment is used in these matters. The misleading part of the bill is that the only change to pyramid selling is to insert the words “whether personally or through an agent” into paragraph (ii) of section 24(2)(a) of the principal Act which is amended by clause 5. That I suggest to members and to New Zealanders will catch almost no pyramid selling if any is still occurring. What it may do is end up catching the people who run Lotto or perhaps the people running bingo or housie or the people who are running the pokies. The definition states: “that to many participants in the scheme constitutes primarily an opportunity to buy or sell an investment opportunity”. 
Even the TAB describes what it does as “investment”. The TAB has a guaranteed loss ratio over long-term “investment” which would probably be worse than a number of these pyramid schemes that we are supposed to get to. But of course Mr Mallard who is trying to intervene is part of a Government and sits alongside Ministers who told us what this bill was going to do. Does Mr Mallard know what they told us? They told us that they were going to get to the bottom of scams. Let me tell Mr Mallard what his colleagues said. Mr John Tamihere of course was chosen as the appropriate representative to deal with this. He came in here with some ringing words about misleading and deceptive conduct. He gave us a good definition of it and told us that any person of standing in our community involved in a scam unwittingly or otherwise should have the integrity credibility and ethics to stand up come back to the country and publicise the scam so that others would not be unwittingly misled into that type of investment. Of course it was a little different when Mr Tamihere had to try to hide behind a personal explanation so that members of this House could not go any further. There is no comment from Mr Mallard. Does he give up on interjections when Mr Tamihere’s name comes up? I ask him whether interjections are quite unacceptable now. 
But there is more. It got a lot better. Here is another Minister of the Labour Cabinet on what this bill was going to do. He said: “I want to see a very rigorous investigation of those issues.” that is the pyramid trading issues. “I am absolutely confident that the Labour members on the committee will dig deep on that investigation. They will drill all over the place and many things will be flushed out for the benefit of the whole community. I look forward to the rigorous debate and investigation by the select committee. I expect it will be better than a Senate committee investigation in the US. It will be deep investigation and the public will be better off for it and for this bill.” 
Now let us look at what the committee did. Let us look at what this House got from this tawdry little piece of deception introduced by this Government. What we got was a hearing of evidence that took 30 minutes and consideration which presumably included getting rid of Mr Peck’s typos of 55 minutes. So there is the Fair Trading Amendment Bill (No 3)—the pinnacle of the Minister’s career; the pinnacle of the honourable Judith Tizard’s time in this House to date no doubt. She satisfied Mr Rick Barker and Mr John Tamihere and no doubt that is exactly what Mr Mallard was expecting. 
What do we have instead? It is not simply that this bill does not do anything. It is not that it is just empty deception. It actually on the way returns to “soak the rich”. It takes a swing at business. Give a good thump on the way because they will not complain. Sadly it managed to drag in National Party members. I believe they have been improving I believe that they are getting better but sadly they too went along with “have a thump at business” because no doubt they thought it would not look good if they voted against increasing the sentences. 
What we got of course is the new power for the Commerce Commission to decide that it does not matter what the courts do about justice “we will do justice ourselves”. All it needs now for the Commerce Commission to stuff someone’s business completely to send out a signal that “you don’t monkey with us” irrespective of the bona fides that “you do not challenge the commissars from the Commerce Commission” is to apply for an injunction. We are told by Labour’s little gift here that the court must not as a condition of granting an interim injunction require the commission to give an undertaking as to damages. A protection carefully developed by the courts over generations is swept away in five short lines. Until now if we get a court order without a proper opportunity to investigate without full argument without giving an opportunity to mount the defence if we get an interim injunction which means immediately then we have to undertake that if we are wrong we will meet the costs of the person who has been wronged. 
So what did the Government do? It abolished it. That is not enough when we want to thump business. So we got new subsection (6) in section 41 inserted by clause 10 which states that the court faced with this injunction application knowing that it is not going to have the full story knowing that there is not time must not take into account that the commission is not required to give an undertaking as to damages. So we see the true measure of the malice in this bill. It is that the court when deciding whether to grant the injunction cannot even consider that it may be an engine of gross injustice—completely uncompensated injustice—with no remedy for the wronged person. 
There was another provision in the bill that excited a bit of attention. In fact it had the Greens United Future ACT and National voting for it. It was an amendment by Mr Brent Catchpole that tried to bring the power of search within normal parameters. It tried to say that at least when a warrant is issued there must be a suspicion that an offence is being committed. Instead this Government—the “Minister for Auckland Transport”—has brought in a search provision saying that warrants should be issued if an offence may be being committed. In other words officers can say that the evidence even if they find it does not need to amount to an offence. All it needs to amount to is an argument that it could constitute an offence. That is way beyond the powers of search that have been the product of careful protection of the liberties of the subject against the overweening power of the State for generations. This is not just an embarrassing bill; this is not just a tawdry piece of political malice; this is actually viciousness against the business sector. 
DARREN HUGHES (NZ Labour—Otaki) 
: It is little wonder that the ACT party would oppose a bill called the Fair Trading Amendment Bill (No 3). It is no wonder when we consider the actions of that party. When this bill was first introduced into the House we know that ACT members went on a big retreat. They went on an out-of-Parliament retreat all the way around to Pipitea Street to talk about how this bill could be defeated. But tonight it will be read for a third time and ACT party members are shaking in their boots about it around in their electorate office in Pipitea Street because they are so concerned. 
Mr Franks quoted from  
Hansard 
 and said that Labour members in the first reading had said that we would be coming after pyramid schemes and dodgy schemes and he accused us of not doing that. But Mr Franks has not noticed that we have come after those schemes and that is why that party sits at 2 percent in the polls. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: The Greens support this bill. I refer members to the excellent comments made earlier in debates on the bill by my colleague Sue Kedgley in earlier debates on the bill. 
MARK PECK (NZ Labour—Invercargill) 
: I support this bill. 
JOHN KEY (NZ National—Helensville) 
: Obviously members in the Labour Party are paid by the word. I do not think that even my cat could give a speech more quickly than that and I still have not managed to teach it to speak English! National will support this legislation because on balance there are more good parts in it than there are bad parts. But I have to say that it is not great legislation. Let me start by waving some red flags for the House so that members can see where there are some risks. 
Richard Worth 
: Blue flags. 
JOHN KEY 
: Blue flags! Here we are at a quarter to twelve at night in urgency whipping through legislation that was introduced 2 years ago. It was introduced 2 years ago yet here we are in urgency whipping through mediocre legislation that has some good bits and some bad bits in it. I will discuss the bad bits at length but I will start with the good bits. 
We have spent hours discussing the bill in the House and giving it some rigorous debate. That is not what the Commerce Committee did. It did not take hours to hear evidence; it took 30 minutes. An episode of  
Coronation Street 
 runs for 30 minutes and that is a programme that has been going for about 30 years. The select committee listened to evidence for 30 minutes. There were six submissions and the committee bothered to listen to only one of them. I hope the reason was that the other five submitters did not want a hearing. That is all I want to know because the committee heard only one submission and it took 30 minutes to do it. 
John Carter 
: Who from? 
JOHN KEY 
: I do not know. It was Business New Zealand I think. It took the committee 55 minutes to deliberate on the bill. So this legislation which was introduced 2 years ago is now being discussed under urgency after having had the wonderful time of 1 hour and 25 minutes in the select committee process. The Labour member who spoke before me with such passion uttered four words. He is on the select committee I think. 
John Carter 
: He’s the chairman. 
JOHN KEY 
: He is the chairman of the select committee! It is no wonder that the legislation that goes through this House is hopeless. 
Hon Member 
: This bill is hopeless. 
JOHN KEY 
: Absolutely hopeless! He had four words to say about legislation that has been around Parliament for 2 years. Well members should not worry; the cavalry is here in the form of the National Party and it will give it some rigorous debate. We will tell members why we are supporting it because there are some good bits— 
John Carter 
: Are we sure? 
JOHN KEY 
: We are but we should not get too excited about it because it is mediocre— 
Richard Worth 
: This is a good speech. It should be heard in silence. 
JOHN KEY 
: Yes I would prefer fewer interjections but generally they come from the opposite side of the House and not from my own team. We are supporting the legislation because of what it is attempting to do in the area of pyramid selling. Pyramid schemes as anyone will know are very unfair and very unethical. They are schemes that are designed with the intention not of doing a real transaction but of defrauding the people who invest in them. One of the reasons that they are so dangerous and that so many New Zealanders have been caught by them is illustrated by doing the numbers very quickly in our heads—for example: a person sells the scheme to five people who sell it to another five people who then sell it to five more people and so on. The Labour Party might need a calculator to do that but on this side of the House we can do the numbers in our head. In a country of 4 million people we do not have to go down many layers to realise that all of New Zealand could be sucked into a pyramid-selling scheme. Only last night on television we saw evidence of a disastrous pyramid scheme that young New Zealanders were being sent via the Internet. It used very graphic pieces of information and very graphic photographs— 
John Carter 
: That’s very serious. 
JOHN KEY 
: It is very serious and the very graphic information was quite alarming and quite concerning. We are supporting this legislation because we do not want to see that sort of muck being sent on the Internet. We do not want to see New Zealanders being sucked into those schemes. The Internet is a very powerful medium by which to send pyramid schemes. 
I also want to point out to members that the good news of this legislation is that it aligns our position with that of Australia. It aligns us with the position outlined by the Australian Competition and Consumer Commission in Australia. If this legislation had been in place some years earlier—for instance if it had been put in place much faster than the 2 years it took from when it was introduced into the House—then a number of schemes that have operated since its introduction into this House would have been closed down. That is one of the reasons we are supporting the bill. 
The second point I want to move on to is the issue of the criminal limitation period. It is late into the night and we do not need notes— 
Hon Trevor Mallard 
: This is not one of the member’s better speeches. 
JOHN KEY 
: It could be. It is not over yet. Like a whole lot of things it is not over. I tell that member that it is a helluva lot better than the contribution from the member on his side of the House which comprised four words—that stunning performance from the chairman of the Commerce Committee that heard 30 minutes of submissions and took 55 minutes to write up its deliberations. I ask the Minister to answer this question for me: why does it take 55 minutes to write up the committee’s deliberations on something it took only 30 minutes to hear? 
Hon Trevor Mallard 
: Because you’ve got slow Tories on the Commerce Committee. 
JOHN KEY 
: No no. There are no slow Tories on that committee. There is no such thing as a slow Tory. 
Let us move back to the 3-year criminal limitation period. The legislation will change the period from 3 years of the discovery of the breach or when a party should have discovered the breach as opposed to 3 years since the product was developed—and there is very good reason for that. If we move to something like the investment products that are covered by this legislation members will know about long-term guaranteed products. 
 For instance one of the major financial institutions in New Zealand is currently marketing a product that has a capital guarantee out for 12 years with a minimum return of 40 percent on an investor’s money if it is invested for those 12 years. It is impossible under the Fair Trading Act to understand whether that guarantee will be lived up to within 3 years. So it is very logical that this legislation will cover that. It is doing it and that is one of the reasons that National is supporting the bill. The situation is similar in respect of insurance and long-term warranties and guaranteed offers. Those are the reasons we are supporting the bill. They are very important sensible reasons for supporting it. 
I do want to talk about the bad bits of the bill. Had the chairman of the Commerce Committee allowed the committee to take more time on the bill rather than despatch it in such a despicable way within 55 minutes—and with four words—he would have addressed this issue. It is the issue of exempting the Commerce Commission from an undertaking for damages. That means that the commission can go out there like a big bully and take an injunction against a company and if it is wrong and puts that company through living hell it is not liable for damages. I say that is wrong. That is big bully stuff. It is just plain wrong. The second thing it can do is to require the production of information and documents that do not even exist. It can ask to see a computer report for something that does not even exist. That is heavy-handedness and it is— 
Rt Hon Winston Peters 
: Is that true? 
JOHN KEY 
: I say to Mr Peters that that is absolutely true. That is sloppy. It is one of the reasons we had to wrestle with in terms of whether we would support this legislation—that and the way it was so poorly treated by the chair of the select committee with those 30 minutes of deliberations. It just was not good enough. But in the end we have decided to support the legislation because of what it is doing in the areas of pyramid selling and the criminal limitation period. I am sure the bill will pass into law and in due course when National is back in Government in 2005 we will address those issues that I have outlined. 
LYNNE PILLAY (NZ Labour—Waitakere) 
: This is yet another example of a great bill before the House this evening. I support it fully. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I call the honourable member Pansy Wong— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I have already called the member. 
Rt Hon Winston Peters 
: Like who cares what she thinks? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is not a point of order. I have already called the member. 
Rt Hon Winston Peters 
: I have not had a speech here yet. She has. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No the member will be seated. I am on my feet. Under Speaker’s ruling 23/3 I have already called the member and I call her again now. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The fact that you have called her improperly is no explanation. We have a thing called precedent here. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I just say that the member has not spoken— 
Rt Hon Winston Peters 
: I am sorry Mr Speaker but we have a thing called precedent here based on parliamentary rules. I am calling my first call in this debate. I ask you to ask the Clerk what the rule is. 
Hon Trevor Mallard 
: I think the member might not have picked that in the last few minutes we have moved from the Committee of the whole House and are now on the third reading of— 
Rt Hon Winston Peters 
: It’s on the bill. 
Hon Trevor Mallard 
: No it is not on the bill. It is a question of debate on a particular question. I think those rules have not changed even in the last quarter of an hour or so. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the honourable member for that. As I said previously the honourable member Pansy Wong has not spoken in this debate. I have called her under Speaker’s ruling 23/3. I cannot take the call away from her. I call the honourable member. 
PANSY WONG (NZ National) 
: It is a pleasure to take a call in the third reading of the Fair Trading Amendment Bill (No 3). I am grateful that today this bill has received about 4 hours of debate. We spent about 2½ hours on the Committee stage and about 1¼ hours on the second reading and with the diligent contributions particularly from the National Party at least we all now understand why we support this bill. We did not have a contribution from the Minister. We have had not one single syllable from all those back-bench Labour Party members and if nobody from the National Party had contributed they probably would not know what bill we were debating or why the Labour Government supports the bill. 
However there still remains a question to be answered. As my colleague John Key has pointed out this bill was introduced into the House in December 2001 and referred to the Commerce Committee on 2 May 2002. We supported the bill at the first reading and we supported its referral to the select committee mainly because of the amendment to toughen up the penalty against pyramid selling—an issue we believe is an issue worth the House’s consideration. But I guess members like myself did not expect that the select committee would only bother to spend half an hour listening to submissions and take 55 minutes to deliberate. It might be something to do with the chairman Mr Mark Peck. He might believe that the time taken in a select committee has to be in proportion to his size. I notice that the Assistant Speaker in the chair is a member of the select committee. He might appreciate why the National Party believes that in such a rushed process some provisions will require amendments. My colleagues have been working very hard. We support the legislation mainly because it addresses pyramid-selling schemes. However we also believe that it needs some amendments in order to make it an even better bill—a bill that will not lead to additional compliance costs with no corresponding benefits. 
Let me just touch on the four areas that National has promised to fix when we become the Government in 2005. The first one is that whenever legislation is introduced there should be a transitional period. It is not fair to the business community or to organisations that have to implement the legislation when there is no transitional period. I commented briefly on this at the select committee because even some technical changes or amendments would lead to the business community not being sure how the implementation would work and how the courts might interpret those changes. It is important that a transitional period exists so that educational sessions can be conducted. So the first amendment we would make would be to ensure that no bills are enacted without having a very fair transitional period. 
The second area that we believe needs to be looked at again is the power given to the Commerce Commission. For example the Commerce Commission has the power to demand any documentation to be produced by any entity if the commission is investigating that entity. It is fair that the Commerce Commission should receive cooperation but if it happened that it was wanting documentation that is not produced as part of that entity’s financial statement etc. the Commerce Commission’s power should be restricted. A lot of people might think that with computers it is easy to produce documentation. But if the documentation is not part of the company’s system it will lead to substantial compliance costs. That leads me to another point. This bill contains no compliance cost statement. 
Sitting suspended from midnight to 9 a.m. (Thursday)