Telecommunications (Development Levy) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeTelecommunications (Development Levy) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3695. Text is incorporated into the Bound Volume.]Telecommunications (Development Levy) Amendment BillFirst ReadingHon AMY ADAMS (Minister for Communications): I move That the Telecommunications (Development Levy) Amendment Bill be now read a first time. There are few countries in the world where connectivity is more important than it is for New Zealand. We are a nation of 4.5 million people and a country situated at the last bus stop on the planet spread across three islands with plenty of mountains lakes and rivers in between. The tyranny of distance from the rest of the world and our unique geography make rolling out high-speed connectivity all the more difficult and all the more important. Broadband is critical to our future because it creates opportunities of untapped potential. It connects New Zealanders with one another and with new markets across the world. It allows our best and our brightest to export new ideas services and products. It is a vital part of the Government’s plan in developing a productive competitive economy and creating more jobs for Kiwis and their families.Over the past 6 years the Government has been rolling out its Ultra-fast Broadband Initiative and Rural Broadband Initiative programmes to lift the connectivity of 97.8 percent of New Zealanders. The first stage of that roll-out is going well. We are ahead of schedule and we are within budget. The Ultra-fast Broadband Initiative build is 46 percent complete and we have completed more than 75 percent of the Rural Broadband Initiative stage one programme. Almost 325000 households are now covered by the Rural Broadband Initiative with 80 percent uptake of the main fixed line component of the programme. We have upgraded almost 80 percent of towers and installed 113 new ones. In the March quarter alone there were nearly 1.8 million unique Vodafone mobile customers using these towers. In addition we have completed the auction and allocation of the 700 megahertz spectrum which will enable the widespread roll-out of 4G cellular networks across more than 90 percent of New Zealand.But although all of that is an outstanding achievement this Government is not resting on its laurels; we are already looking ahead to the next stage. Last August we announced that if re-elected the National Government would look to use the telecommunications development levy to extend the rural broadband programme by $100 million and establish a fund of $50 million to provide mobile coverage to the most remote parts of New Zealand. In March I confirmed that this extension was going ahead. With the success of the first stages of the Ultra-fast Broadband Initiative and Rural Broadband Initiative behind us this Government is looking further forward. We want to push on and extend coverage even further. We want more homes connected to better broadband. We want more businesses participating in the digital economy. We want more remote communities being able to tap into the internet’s potential.The Telecommunications (Development Levy) Amendment Bill is a vital part of this plan. The bill itself is incredibly straightforward but let me set out a little bit about the levy. The telecommunications development levy is an industry levy that is collected from telecommunications companies to fund open access infrastructure in areas where it would otherwise be unlikely to be commercially viable for them to build that infrastructure. The levy payers can then use the funded infrastructure to provide services for their customers. So the key factor worth noting is that the levy is used to fund infrastructure that all of the telecommunications companies can then use—so they are essentially funding their own communal infrastructure which they then use to sell products over. The levy to provide Rural Broadband Initiative facilities is paid back to providers through contestable processes. It funds non-economic aspects of infrastructure so that the industry giants cannot just cherry-pick the profitable areas such as high-density urban areas and leave rural New Zealand in the dark ages.The levy was first introduced in the Telecommunications Amendment Act 2011 and has been applied since the 2010-11 financial year. It replaced the existing telecommunications service obligations liability allocation process which had been in place much longer. This bill does not change any operational aspects of the levy nor does it determine the parameters for how the second phase of the Rural Broadband Initiative will be rolled out. It simply resets the levy amounts for the 2016-17 to 2018-19 years to keep the levy amount at its current level. The telecommunications development levy is currently set at $50 million a year. This is about 1 percent of industry telecommunication services’ revenue. The levy amount is not going up. It is staying exactly the same so the industry will not need to put its prices up or explain to its customers why the bill is changing.It is worth noting that the levy we are proposing to extend is substantially less than the levies that were funded under the previous telecommunications service obligation arrangement which was an average of about $65 million a year. The levy makes up a very small portion of an average monthly bill and as this is an extension of an existing levy it will not increase costs to consumers in any way. Because the levy has been in place for a number of years now we do not expect consumer bills to change. The telecommunications companies already incorporate the levy at this level into their pricing and so there is no reason to change. Let me put this in context in terms of the impact to the average New Zealander. For a consumer on a $19 basic prepaid mobile phone package their contribution to the telecommunications development levy is around 22c a month. This is the equivalent of the cost of a single text message. For a comprehensive broadband package it is around 80c a month. The consumer impact is so low that even if the bill did not pass it is completely implausible to think that consumer prices would be dropped by the few cents a month that are involved.Although the impact of the levy on consumers is tiny the impact is hugely significant for reaching rural communities. It is available to fund charges relating to the telecommunications service obligation—that is the obligation that Spark gave to provide a telephone connection to every household options for free-calling and the 111 service. It funds improvement to the rural telecommunications infrastructure including as we are discussing today the Rural Broadband Initiative. It funds upgrades to the 111 emergency calling system and it is already being used to fund the relay service for the deaf and the hearing impaired. These are essential services that New Zealanders need and use.The $150 million extra that this bill will provide will mean that we can set aside $100 million for the extension of the second phase of the Rural Broadband Initiative to the regions meaning that almost every New Zealander will get access to better broadband and another $50 million to establish a contestable Mobile Black Spot Fund to enhance network coverage in black spot areas as increasingly mobile coverage is expected to be almost universally available.The changes in this bill should come as no surprise. We initially proposed these changes in our election manifesto last year and announced in March that our intention was to follow through. We have been very upfront and transparent about our ambitions to extend rural connectivity and how we are going to go about funding it. Passing this bill in all stages is part of Budget legislation it provides certainty and stability to the telecommunications industry but even more important it allows the Government to get on with the job of rolling out the extension of the Rural Broadband Initiative and better mobile coverage to areas that desperately need it as the legislative mandate must be in place before contracts can be negotiated and this Government wants to get better broadband to New Zealanders as fast as we can.The Ultra-fast Broadband Initiative and Rural Broadband Initiative programmes that this Government initiated are key components to ensuring critical communication services are available to New Zealanders. Now more than ever it is important that businesses and communities right across New Zealand and into our rural and remote areas have access to the information and communications technology capabilities that they require to operate effectively in a competitive global economy. This bill enables us to put the funding mandate in place so we can get on with providing that connectivity. We will continue to look for opportunities to enable New Zealanders to realise the benefits of our investment in connectivity and to ensure that New Zealand is digitally competitive on the world stage. It is with great pleasure that I commend the bill to the House.CLARE CURRAN (Labour—Dunedin South): Let us just be clear: a levy is a tax. You cannot dress it up. Levies are not intrinsically bad but this Government said there would be no new taxes. That is my first point. If you are going to introduce a new $150 million broadband tax on an industry under urgency with no consultation and no evidence that your proposal is sound then it will immediately flow on to consumers. This bill imposes an immediate tax on consumers for their internet for their landline phone for their mobile phone.Prices are going to go up and it is Amy Adams who is to blame. What this Minister is doing is one of the biggest scams this Government has tried on. It warrants examination by the Auditor-General it warrants an inquiry and I am surprised that Treasury has not commented on this legislation. But on closer examination of the departmental disclosure statement at 2.3.1 the regulatory impact statement was identified as not meeting the threshold for receiving an independent opinion on its quality from the team based in Treasury. So Treasury never even got the legislation in front of it to comment on. There is an unpleasant smell about this legislation that smacks of a Government covering up massive wasteful spending with very little to show for it. The bill needs a select committee. The whole scheme needs to be scrutinised. It was a Government election promise and it did not need urgency. There has been no consultation on the levy being increased or on the passing of it under urgency.Again I refer you to the departmental disclosure statement where it was asked whether or not there had been any external consultation on the policy to be given effect by this bill or on a draft of this bill and the answer was no. There is huge disappointment and anger about this bill being passed under urgency and with no consultation. The regulatory impact statement is misleading. All it does is reflect the Government’s decision back to itself. There is no free and frank advice.Labour absolutely recognises the educational social and economic benefits to New Zealand of better rural broadband. It was our policy that all New Zealanders deserve connectivity opportunities. Labour took comprehensive policy into the election last year in respect of extending rural and urban connectivity and addressing the digital divides that exist. No other party did the work that we did.Amy Adams’ contribution was to announce spending $150 million of the industry’s money which she knows will be passed on as a tax to consumers. Either she is too lazy or not bright enough—or she is trying to cover up the failure of the Rural Broadband Initiative—to know that you should not spend money unless you have done your homework first. Why should we care about this? Well maybe we should not care if this was a sound policy. But it is not. This legislation fast tracks Government spending and it is more money after bad. It is Government waste. It is economic mismanagement. Who is going to pay? The consumers are going to pay. To all consumers listening to this this afternoon who have got internet and phone connections your prices are going to go up.Rural New Zealand will continue to receive crap broadband. It is a flop it is a failure it is a disaster and it is a scandal. There is no proof that the Rural Broadband Initiative as it is now has worked. There are three parts to this scheme. There is the building of new towers which the Government insists is on track and I am hearing that there are issues with the capital that Vodafone requires to complete the job. The Government however insists that it is on track. However as I understand it all the easy ones have been built and the harder ones are still to be built.The second part of this scheme was a Chorus upgrade of broadband to 85000 lines which go to households and businesses. That has never been evaluated. But the biggest scam of all in the Rural Broadband Initiative is the fixed wireless component of it. That is the biggest scam. Vodafone’s role was the provision of fixed wireless broadband capable of peak speeds of at least five megabits. So how has that worked out? Well there are no figures. There has been no evaluation. We do not even know for sure how many people have actually been connected through this part of the scheme.Mysteriously into my in-box yesterday afternoon came the response from a written question from the Minister. It was the first time there has ever been any indication of numbers of people who have been connected through the fixed wireless scheme. Guess how many it was? It was 8500 people. Guess how much money was committed to that part of the scheme? It was $60 million. If you divide 8500 connections by $60 million guess how much that is? It is $7000 per connection. If that does not sound like a scam and a big scandal that warrants the Auditor-General getting involved in evaluating it I do not know what is. There are no reports. We were told by the Ministry of Business Innovation and Employment yesterday morning at a select committee that it had done no evaluation of the Rural Broadband Initiative and now the Minister is about to commit another $150 million to it.There is no business case. There is no real data. There has been no consultation. But there already is data—and it has not worked and if you do not believe me maybe you might believe the research that—Mr DEPUTY SPEAKER: It is not me you are trying to convince; it is the House.CLARE CURRAN: Thank you Mr Deputy Speaker; my apologies. If the other side of the House does not believe me there is unpublished research that I have come across from Colmar Brunton which was done for Chorus just before the election and which shows that of 600 rural businesses and 300 rural households 68 percent are frustrated and angry with their internet connections and feel restricted and left behind. That is a pretty high figure. I am pretty sure that the Minister and her Government knew that this was an issue in rural New Zealand and miraculously 3 weeks before the election we got a new policy whereby $150 million was committed to rural broadband out of the blue with no consultation—and no consultation since—and no business case to support it.How do we know there is no evidence? Because the regulatory impact statement says so—it actually says so on its first page. The Ministry for Business Innovation and Employment has failed. It has failed big time to provide an analysis for the Minister. It is just doing the Minister’s bidding. So how do we know there has been no consultation? Because everyone in the industry says so and because the departmental report says so. How do we know it is going to be a tax on the industry? Because when any levy is imposed on an industry it is passed on.There is another issue a final issue. Rural New Zealand is standing still on broadband and it is about to get more of the same. The digital divide between rural New Zealand and urban New Zealand is being entrenched under this Government. The 5 megabits that is being provided in rural New Zealand under the existing scheme is going to be provided under the new scheme. This is treating rural New Zealand like second-class citizens or poor cousins. It is treating them with disdain. Even the US has announced a few months ago a new standard of broadband of 25 megabits per second. If we stick with 5 megabits per second then rural New Zealand is never going to go ahead. There is going to be no economic development and it is an absolute travesty and a demonstration of regional neglect and treating rural New Zealand as if it really does not matter.MELISSA LEE (National): I am just a tad surprised by the member Clare Curran who has just sat down. I was slightly confused as to whether she was in fact for rural broadband or against rural broadband—I guess that is just like the Labour Party. This is actually Budget-related legislation that has been brought to the House and yesterday when the Budget speech was read I think the Labour Opposition was absolutely gobsmacked that we for the first time in more than 40 years are delivering for the poorest people in this country and increasing benefits. There has been nothing from previous Labour Governments.We live in a world where it no longer takes ages to deliver mail. It used to be that people used to write a longhand letter put a stamp on it and put it in the post. It might have taken weeks before it was actually delivered. With the advancement of modern-day technology it is almost instant. Somebody could write an email from Korea or America and it will be here within a couple of seconds. Technology advancement has made our lives easier in some instances and sometimes in rural areas it has not actually caught up. This is what we are trying to do—to provide faster internet technology for the rural areas.I know that some other countries that Ms Clare Curran talked about have different speeds they are going for and some have managed to achieve some elements of their target. Korea has been a major leader in technology and even in Korean rural sectors where there is difficult terrain and small groupings of houses the target is only 2 megabits per second. In New Zealand this National Government is targeting 5 megabits per second. Tech advancements are fabulous but sometimes I lament the bygone days when we had to send letters. There are times when I wish I could disappear from the reach of the telephone calls I get.But I digress. The Telecommunications (Development Levy) Amendment Bill is a great bill. It provides further stability and certainty to the telecommunications industry and consumers. This bill will benefit businesses families and New Zealand as a whole. I commend this bill.Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a call on the Telecommunications (Development Levy) Amendment Bill which is being rushed through the House during Budget urgency setting aside the normal processes of Parliament—to have a select committee hearing and a report back from stakeholders.Why is this happening? I can only imagine the picture in the Cabinet room when this legislation was mooted and there was Nathan Guy bright as a button poking his eager little eyes up above the Cabinet table and realising that this sounded like free broadband for farmers. How wonderful! The Minister for agriculture could announce—Hon Nathan Guy: No; primary industries.Hon DAVID CUNLIFFE: Primary industries. He wants a bigger title. It happens in the third term of a Government. The Minister for Primary Industries—not primary schools but primary industries—wanted to be able to say in a press release “Free broadband for farmers.” National is the farmer’s friend. But nobody told him—David Bennett: Who’s your friend? You’ve got no friends.Hon DAVID CUNLIFFE: Oh there is another farmer. He is still alive David Bennett. I have not heard from him for months and months but he is still alive. He moves—proof of life! But nobody told Nathan Guy PhD that if they impose a levy on telecommunications companies which is a new tax it will simply be passed on to consumers and in the end the farmers will pay. I can see the look on his face now. The camera can zoom in on the crease in his brow as he realises that it ain’t as good as it sounded.What is the ostensible purpose of this bill? It is supposedly to fix things call black spots. That is when you are driving through the country and your mobile phone drops out.David Bennett: The Labour Party.Hon DAVID CUNLIFFE: Well we are law-abiding citizens. We do not often use mobile phones when we are driving and if we do—which is a rare exception—we always have them on hands-free.But there is a thing about Northland. Occasionally members of Parliament were in Northland for the by-election. There was a traffic jam as ministerial LTDs BMWs were backed up trying to get into Northland on their shabby rural roads and it suddenly dawned on Ministers that you cannot actually use a mobile phone through most of Northland because there is almost no coverage at all even on the main road. So you can imagine their haste as they scampered back to Wellington and realised that Simon Bridges was a bridge too far and that the good people of Northland would not be fooled by umpty-dumpty years of neglect followed by 10 bridges in 10 days but they could tell the difference between that and a regional development strategy and there was a black spot all over Northland. So this bill got rushed through.This is yet another example of the National Party hitting the policy panic button. [Interruption] “Who cares?” says the member at the back. I cannot remember his name but he sometimes speaks in the House. He says “Who cares?”. Who cares whether it is good policy? Who cares whether it is a good investment of taxpayers’ money because it was a bloody good press release? It sounded really good on the news and that is all that matters right? Postmodernism got the narrative right. Who gives a toss about the facts? That is the Government for you in its third term. Here is the issue. Have you heard of Google’s Project Loon? Have you heard about that? Do you know what Project Loon is? What is it? He is nodding.Brett Hudson: Balloons my friend.Hon DAVID CUNLIFFE: Very good you get a starter for 1.Project Loon is a new way of getting broadband to the rural regions by a mesh network of balloons that can broadcast and that way you do not need expensive lines in the ground or on power poles. It may or may not work at scale around the world but the point is this: before you go spending another $150 million of New Zealanders’ hard-earned cash you had better look at things like that.Brett Hudson: You’ll wait for years. Mr Cunliffe suggests you wait for years. Let rural New Zealand suffer for years he says.Hon DAVID CUNLIFFE: There are two ways I say to the noisy backbencher on the far side that that can happen. The first is a thing called a regulatory impact statement that tests a whole bunch of options. But the department here in its disclosure has said that it really did not have time for any options analysis because this was a panic-button measure as my colleague Clare Curran has pointed out. So there goes option one.Option two is to have a select committee process and hear from the industry: hear from Vodafone Chorus Spark 2degrees—hear from the experts—about how they think they can get the most broadband possible to the most people possible in rural New Zealand at the least possible cost. Oops—the Government did not do that either. That is why we are here on the dead of Friday passing this legislation through all stages under urgency which denies the sector and the public the opportunity to comment. Why on earth would you do that when you are spending $150 million? I will tell you what: the industry is hopping mad. The Government may be the farmers’ friend but it is certainly not the friend of the telecommunications companies right now because they know it is a muddle waiting to get worse—a muddle waiting to get worse let alone that it is a broken promise—David Bennett: Sounds like the Labour Party.Hon DAVID CUNLIFFE: —let alone that members like Mr Bennett could not give a toss about the facts—they are interested only in the media—and let alone the fact that this measure has not been justified in terms of evidence or a select committee process. This is bad lawmaking and it is a bad process.The broadband obligation that is contained in this bill will be passed on to consumers. There is no such thing as a free lunch. A telecommunications levy can be levied on the phone company but of course it will pass it through and it will be Mr Guy’s farmers whom he will have to face when their phone bills and their broadband bills go up because nobody has done the analysis to find the cheapest way to get them the bandwidth. But let us just assume that all of those problems were not there. Let us just assume that the Government had done its homework it had done options analysis it was having a select committee process it had consulted the industry the industry was onside and that consumers were going to get a good deal. Just assume for a moment that was all true.Ah—the other big problem every time the Government goes near broadband telecommunications is that nobody hooks up. The Government set an objective of 80 percent coverage for its ultra-fast broadband. Well nobody was ultra-fast to hook up to the thing. The last time I looked there was about 3 percent usage. Three percent of New Zealanders have actually ponied up the connection costs to hook themselves to the so-called ultra-fast broadband network and that was in the cities where it was easy. Spend another $150 million of taxpayers’ money with no select committee process no data analysis and no consultation with the sector and guess what is likely to happen—sweet nothing because people cannot see the reason to spend $2000 or $3000 of their hard-earned savings to hook up to a system that may or may not work. That is why there has been a knock-on effect through the sector from this Government’s incompetence.Here is the sad story although it is mainly about urban not rural areas but it is relevant. Chorus pressed the panic button. It rang up Steven Joyce and his sidekick Amy Adams and said: “Hell we’re going to go bankrupt because you put us over a barrel with the ultra-fast broadband roll-out costs. It looked OK but as nobody is actually joining up and no one is using it we are losing money. Please write us a big fat cheque.” or words to that effect. So what did the Government do? The so-called economic managers who are zero for seven on running a surplus said: “Sure.” They rang up Mark Ratcliffe and said: “Mark how big a cheque do you want?”. He said: “Oh well look it’ll look better if you just let us renegotiate our ultra-fast broadband contracts.” So they did. Chorus shares rose faster than just about any other share on the stock market last year because the deal that it got out of this brain-dead Government was just so sweet that they were rolling in shareholders’ funds and the Government got duped.Well here we are again. The Government has obviously learnt from its mistakes because it would never again spend taxpayers’ money without consulting the sector or having a rigorous select committee process. Oops—except here we are on a Friday passing this $150 million new tax through all stages without a select committee hearing. Can New Zealanders see the problem with this process? Well I will tell you what—the telecommunications company sector can see the problem and even Nathan Guy’s favourite farmers will when they pick up the bill. Mr Guy’s smiling face as he lifts himself up to the Cabinet table will not be smiling quite so much. Thank you.SIMON O’CONNOR (National—Tāmaki): I am not sure who that member was at the backbench of the Labour Party who was just speaking but there were two interesting themes. One was about Project Loon from Google and Labour would know all about that—hot air and balloons floating around in the stratosphere and it is like the balloon in Missouri that crashed to the ground recently. The Labour members were also I see talking about black spots and I think the Labour Party knows all about black spots because most of them would have loved to be in a black spot yesterday when they heard their leader’s speech falling on deaf ears and collapsing and crashing to the ground.This is a good bill. It seeks to increase an existing levy in order to roll out services that our people want. I was on a select committee yesterday where we were hearing evidence from people who were saying that they want more broadband be it in the rural or urban areas. They want it faster as well—that was one of the things they said. This is a Government responding to that. You are hearing very positive thoughts from this side but unfortunately all it is from the other side is ad hominem. With that I take my seat.GARETH HUGHES (Green): Kia ora Mr Deputy Speaker. Ngā mihi ki a koutou kia ora. I rise to support the Telecommunications (Development Levy) Amendment Bill. This is a pretty uncontroversial bill and it should be. It is simply keeping the telecommunications development levy where it is. You could argue it is marginally increasing it but look it is keeping it where it was—at $50 million. This increase is for $100 million to spend on Rural Broadband Initiative 2 and then $50 million on a contestable mobile black spot. It is fulfilling a governmental election policy. We are disappointed with the process. We think it could have gone through a select committee. There is no reason to pass this bill through all stages today on a Friday afternoon or early evening. The fact is that the Government has sat on its hands when it comes to this issue since that election promise. When it comes to actual industry involvement the Government’s own officials advise that no one in the industry was consulted and in fact the officials then go on to say that at least they will get a parliamentary process to give their input which we will not see given this bill is passing through all stages. It is unfortunate that we are seeing this pass in the way that it is. The second unfortunate aspect of this is that this is an area that the Government is currently consulting on—it is currently consulting on it. So at the same time it is passing legislation through all stages in a single day under urgency it is asking the public and the industry to consult on the process for spending. It seems a bit like the horse after the cart.I raise these issues because I think that a critical question this Parliament needs to ask itself is: given the questions around the original Rural Broadband Initiative what we do not want to see is simply a cut-and-paste job with this extra $150 million for Rural Broadband Initiative 2. That is why I support greater industry and public input and a better process. But I am supporting this bill because of the importance of the internet to our rural communities in terms of social cohesiveness in terms of health outcomes and in terms of regional economic development. We know that the internet plays a critical role for our communities and we have been hearing about those communities on the Commerce Committee—from Outram from Mosgiel and from a host of communities that have not been able to access ultra-fast internet to date—and how it is holding their communities back. I have a vision that kids in rural schools can access the world’s best educators via the internet. Our farmers who are using data to increase their productivity can do so more and sell their products around the world.When it comes to the internet it breaks down some of the strategic challenges our country faces. There is a limit to how much milk powder we can export around the world. In fact we are seeing it in our streams and rivers at the moment. There is no limit to the amount of intellectual property services new ideas and entrepreneurialism that we can be exporting across the internet cables. As the Government is now with this legislation set to spend more than $2 billion on internet access over the course of its term we have to ask ourselves whether we are simply just building an ultra-fast intranet. We also need to focus on those international conventions which is something the Green Party has pushed. So rural broadband is good for farmers it is good for kids and it is good for our rural communities. It lessens that digital divide which we know is based both on income but also on region.Disappointingly when you look at the original Rural Broadband Initiative though the Government cannot point to a comprehensive economic evaluation of its outputs. This is important because we know that a lot of our communities are not able to access ultra-fast internet particularly in rural regions. The Government is able to point on paper to the amount of potential connections but I think for many communities that sounds and rings hollow. They want to know how many people are actually connected. We can do this for the ultra-fast broadband project but not for the Rural Broadband Initiative. We should be measuring this stuff. We should be getting value for money for spending $300 million to date and the additional $150 billion the Government is now wanting to spend. It is important to invest this money. We saw from the report by Hayden Glass and others from the Sapere Research Group that providing greater internet access and use of the internet by our businesses could deliver $34 billion in economic benefits. We can see our regional economies thrive. I will not name the person but I know someone down south who literally is managing a network of global satellites for climate change research and managing assets worth hundreds of millions of dollars yet this person is able to live in picturesque central Otago. We know that there are a lot of people who would love to come to live in New Zealand and we need to attract the quality of those who want to live here by our quality of life. So let us build up our regional communities. Let us offer them good internet access.I would like to touch on some of the questions and concerns. We have heard some of them from the Labour Party members. I think there are three big concerns around the evaluation of the reporting around the role that Vodafone has played to date but also around an expectation gap. So let us look at the effectiveness of the original Rural Broadband Initiative. It was a $300 million investment. It is incredible that the Government cannot point to a comprehensive evaluation. I think when you are spending such significant sums of taxpayers’ money it is prudent and reasonable to be able to ask those questions. We are seeing a market failure in our regions. Obviously the big telecommunications companies are not rolling out ultra-fast broadband to the level they are in our cities and you can understand that. That is why everyone I believe in this House thinks it is eminently reasonable for public subsidies to rectify this market imbalance to provide internet access to our communities. So a subsidy is valid but look taxpayers want to know whether their money has been spent in a cost-effective manner. They want to see the benefit-cost ratios.The Government does not ask these questions basically because the asset infrastructure it is installing is open access and anyone can use it. But I think that rings hollow. I think that the Government—and I place the blame squarely at Steven Joyce’s feet—should have made this a requirement of the contract. Look if the Government is going to spend $300 million of the money of telecommunications companies’ customers ultimately it should be able to at least say how many people are connecting as they can for the ultra-fast broadband. Do not just take my word for it; we have seen Chris O’Connell of the Telecommunications Users Association of New Zealand write in August last year around some of the questionable Rural Broadband Initiative spends. He writes: “my recent travels have shown me that the RBI has yet to make a real impact and even when it is available it’s is decidedly average in its performance because it is basically delivering last decade’s broadband at best and often less than our innovative regional wireless ISP’s have been doing for years.” So we have got to question this. We have got to have that evaluation and I will be pushing through the Commerce Committee for us to actually show some leadership step up and do that evaluation.The second key concern is around Vodafone’s role in the original Rural Broadband Initiative. It received $60 million of telecommunications development levy funding for the wireless Rural Broadband Initiative stage. It has been estimated that only 8000 people have connected to Vodafone’s wireless system—8000 people from a $60 million investment. If you do the simple maths $60 million divided by the 8000 customers is $7500 per connection. Let us have that debate as to whether that is a worthwhile use of taxpayers’ money or not—but let us have the facts and have that debate. I am concerned to read in the officials’ advice to the Government in section 17 of the regulatory impact statement that they do anticipate that the majority of funding will go to the larger telecommunications development levy players. This is concerning because there are questions around Vodafone’s wireless versus the Chorus copper upgrades and cabinet upgrades. So let us have those questions.We have also heard thirdly that there is an expectation gap arising from our regional communities versus our urban communities over what they can expect. The Government has really got to step up here and show some leadership. It needs to improve its communication. It needs to actively communicate the time lines to these communities. To address some of these concerns around further telecommunications companies and customers subsidising particularly large players—and I am thinking of Vodafone here—I have got Supplementary Order Paper 83 in front of the House that will request the Minister to take regard in her decision making to ensure the use of the telecommunications development levy to promote competition to promote diversity in non-urban telecommunication markets and to look at the range of different technological solutions. We have heard of the Project Loon balloons and it is true that technology is changing fast so I think it is prudent and eminently reasonable that the Minister should have regard to new technology.Secondly the Government also as part of the 700 megahertz spectrum auction has achieved at discount for the successful auction winners around 75 mobile towers to eliminate some of the regional black spots. That is a good thing. That is why I have got another reasonable Supplementary Order Paper in front of the House to make sure that those existing telecommunications companies who have received a discount from the spectrum auction are not going to be able to access telecommunications development levy funds and essentially get a second bite of the cherry. These are two issues I think that Government members should be able to agree with and if they do they should support them and there is no reason not to. There is the Green Party position. We stand for good regional internet access. We have got some concerns around the process some suggestions and some solutions to make it better and that is why we are supporting the bill today. Kia ora.TRACEY MARTIN (NZ First): Kia ora Mr Speaker. New Zealand First will be supporting the bill. Again we agree with the Green Party. We believe that it is an uncontroversial bill. To date there is only one part of the Labour Party’s contribution that we would agree with and that is the fact that this is actually a broken promise. It is a broken promise to the telecommunications companies however and that is something that the telecommunications companies will need to work out with the Government and the Minister.With regard to where this bill came from let us talk about the fact that much has been made of the possibility that there has not been any consultation on this. The reality is that this is an amendment to an amendment. The Telecommunications (TSO Broadband and Other Matters) Amendment Bill—brought into this House in 2010 with the member responsible being the Hon Steven Joyce—actually set up this levy to start with. And in this case New Zealand First actually believes it is a levy under the dictionary meaning of the word “levy”—as opposed to the term “tax”. So therefore we believe this is a levy. However back in June 2011 when this bill was finally given Royal assent the agreement that was reached—and the table was put inside that amendment to the Telecommunications Act 2001—was that in 2016 the $50 million contribution which was spread over 22 telecommunications companies would then be dropped to $10 million only. And at that time way back in 2011 consultation was done.We understand that there were telecommunications companies that were not thrilled that they had become part of that process. We understand that Chorus took a case to the Commerce Commission and argued that it should not have to be part of this levy payment. We understand that other telecommunications companies took cases and sought that. Take Skycity for example—not Skycity I beg your pardon. The National Party and Skycity are normally so connected that sometimes I forget. They argued that Sky TV should actually be part of this levy payment because there is now so much content actually put out over those networks. Possibly—possibly—that is something that a review might pick up—that with the shift since 2011 around what is delivered in this digital environment there are maybe more people more corporations or more companies. Perhaps there are more companies that should be contributing into this levy pot.But the reality is that this levy needs to be extended for the continuation of the Rural Broadband Initiative. It needs to be extended and we are very pleased to see the establishment of a mobile black spot fund.We can only assume that as Mr Cunliffe said when driving through Northland on a bus or in any other mode of transportation you realise more often than not that you have just lost signal again. The reason why New Zealand First will be supporting the Green Party’s Supplementary Order Papers is that we want to make sure that that mobile black spot funding is tagged and that it can be used only for the delivery of that service to our consumers. We can only hope that if this fund is tagged and kept and spent exactly for that then people like Robyn Dixon will be able to stop going outside her house in the middle of the Dome Valley—again sitting in the super-city of Auckland—standing on one leg with her arm in the air on a hilltop to try to get a signal.I am just going to quote from an email sent to Prime Minister John Key by his neighbours in Ōmaha. Let us remember that Ōmaha sits in the super-city of Auckland. When we talk about the Rural Broadband Initiative Ōmaha is actually sitting in the super-city of Auckland. The email says: “Ōmaha is a part of a fast-growing area taking into account new subdivisions in Matakana Point Wells and further intensification of Ōmaha itself. We are close to Warkworth and know it of significant growth as a future satellite town for the Auckland Council. In simple terms we have very poor radio reception poor AM and virtually no FM capability at all. We cannot access free-to-air HD television signal. Terrestrial TV signals are too weak. We have extremely low internet speed a maximum of 5 MBs which slows by 90 percent on weekends and busy periods. Ōmaha and close are not included in the UFB rollout.” But Ōmaha is in the super-city of Auckland.We accept the fact that with this extension of what is an already consulted-on levy the industry may not be happy about the fact that it is going to continue; but it was consulted on. This extension is for up to 2020. It is not another $150 million in this coming financial year; it is $50 million in the pot and means extending that levy from 2016 all the way through to 2020. We can only hope that by using that money places like Ōmaha and Northland will be able to have these issues addressed. However we think that it is also a very fine suggestion by the member from the Green Party that the Commerce Committee pick up this topic of evaluation. I mean one cannot miss the point that the original amendment that this bill now extends was sponsored by Steven Joyce and the fact is that other contracts that Steven Joyce negotiated and other situations like this where there have been levies and so on with telecommunications companies have not gone that well. So it would not be untoward in our view if the Commerce Committee were to take this as an inquiry topic or as an evaluation topic and we will let it do the work. I understand that it is not necessarily doing a lot of legislation work at the moment so there is some space for it to do thisactually. It might even fit with some cabling inquiry work that it is doing right now.The only other thing I guess I would address in this first reading speech is the comment about New Zealanders’ wanting to know how many people are connected. I take on board $60 million divided by 8000 is $7500—Kris Faafoi: Ish.TRACEY MARTIN: —ish—but actually most of the New Zealanders I know do not care about that. What they want to do is connect. They want—Clare Curran: But they can’t.TRACEY MARTIN: Exactly. That is exactly what I am talking about Ms Curran. They want to connect. They want the Rural Broadband Initiative to actually work. They want to be able to get in there. They want to see their children able to do their homework at home. They want their schools to be connected. They want all that to happen. They want it to happen now because they are being held back. This will not put up the price. In our view this will not put up the current price for consumers. This has been in place since 2011. This is not an increase of a levy; this is an extension of a levy. Also the companies already knew it was coming. They were consulted in 2011. The Minister and the Government indicated this before the last election and they also indicated it again in March of this year.I can appreciate that those telecommunications companies may have projected their budgets and that they are going to have to do budget amendments. I can appreciate that their shareholders may actually have to take a cut. I can appreciate that. But I think it is a little bit of a stretch to suggest that the extension of the levy is going to mean that a huge amount of increased cost will now be placed on consumers when the levy has already been there. New Zealand First will support the bill because we want to see this finished but we will be supporting the Green members’ Supplementary Order Papers and we would certainly support the Commerce Committee working on an evaluation around what is going on now. Perhaps later we will talk about the dangers of changing course midstream to look at other technology because technology is always improving but you do not necessarily change to balloons just because balloons are there.Hon JUDITH COLLINS (National—Papakura): What a joy to be able to contribute on the Telecommunications (Development Levy) Amendment Bill. Having listened to all of the previous speakers I think we are in danger of peace breaking out. Fantastic! I never thought I would say that I agreed with almost everything that Tracey Martin from New Zealand First said. I never thought—ever ever ever—and not in my wildest nightmares believed that I would ever say that I agree with almost everything that Mr Gareth Hughes from the Green Party said. I have to say that that was spectacular except for the nonsense about the inquiry and attacking my dear colleague the Hon Steven Joyce. I do not think we want to do that.What I am really pleased about—Hon David Cunliffe: She’s having to cast a wide net for Cabinet votes now. She’s even asking the Greens for votes.Hon JUDITH COLLINS: Oh Mr Cunliffe is upset because I have not mentioned him. All right. I really liked the part where Mr Cunliffe said: “It looked OK but no one signed up.” He was talking about his own leadership of course.But apart from all that to hear that we have 73 percent of rural homes now with the Rural Broadband Initiative—that roll-out has happened—that is fantastic. But the Green Party is dead right. Not having broadband particularly in rural areas is not only really disadvantageous for homes and for people in businesses but also it is a danger now. In so many places along the roads in various parts there are black spots—it is now a danger. We have mobile phones not just because we like to but actually because it is a safety measure. I think we need to sort this out in the 21st century and I fully support this bill.The ASSISTANT SPEAKER (Lindsay Tisch): A 5-minute call—James Shaw.JAMES SHAW (Green): I rise to speak to the Telecommunications (Development Levy) Amendment Bill and to agree with virtually all of the previous speakers on this bill. What does the bill do? It increases the existing levy it extends the Rural Broadband Initiative and it creates a mobile black spots fund.The ultra-fast broadband roll-out around New Zealand has not been smooth over the last few years but it is critical. Although it has had its rough spots it is incredibly important that it continues and that it gets completed. That is because ultra-fast broadband is an absolutely critical piece of New Zealand’s economic infrastructure.I have just spent most of the last 10 weeks travelling around places like Northland Gisborne New Plymouth Whakatāne the Coromandel Whanganui and down to Invercargill—incredibly remote places around New Zealand. The divide between our rural and provincial towns and our main urban centres is enormous. If they do not have access to broadband it is going to get worse and worse and worse. As my colleague Gareth Hughes said that is because the internet provides us not just with economic infrastructure but with access to educational opportunities to health care opportunities and with the ability to connect with one another.In terms of the economy of course the digital economy is how we are going to get to a sustainable smart Green economy which the Green Party has been talking about for years and years and years and the idea of weightless exports where we can earn huge amounts of revenue without having to transport heavy goods or pollute or degrade the environment. Given the tyranny of distance that New Zealand has historically been subjected to this is an absolutely critical piece of infrastructure for us.I will also just say something about the mobile black spots. In addition to the safety component to it this is a really significant tourism issue. An increasing portion of our tourism dollars are coming from particularly China and East Asia and South Asia where the expectation is that you are connected all the time. It is actually not meeting our tourists’ expectations that they are travelling around parts of New Zealand and they cannot connect to the internet and to Facebook to be able to post their photos and so on. Of course that word of mouth gets back to their home countries and it weakens our reputation in the tourism sector. Most significantly as I was saying before this is about the rural economy and our ability to develop in areas where we currently have a massive divide. Not getting this piece of infrastructure in place will make it even worse.As my colleague Gareth Hughes said we do have some concerns about the bill. It does seem odd to us that the Government is currently consulting on how it will spend the money and is passing a bill under urgency for raising the money that it is currently trying to work out how to spend. That does seem like putting the cart before the horse but we can work with that because we do believe that this is so important to get through. Having said that it does seem odd that this bill is being passed under urgency. There does not seem to be any real need for it to get passed tonight. It could go through a proper process of evaluation through the select committee process and so on.We will be putting forward two Supplementary Order Papers later on during the debate which are about promoting competition promoting diversity in the system and exploring new technologies as well. The second Supplementary Order Paper is to prevent telecommunications companies from having two bites of the cherry. We do hope that they will get accepted and that they will improve the bill given that it is passing through under urgency so quickly after the Budget. Overall we do support this bill and I commend it to the House.KRIS FAAFOI (Labour—Mana): It is my pleasure to take a call on this Telecommunications (Development Levy) Amendment Bill. One hundred and fifty million dollars is a lot of money. It is a lot of money for this House to expend so if we are going to do that we want to make sure that it is going to be an effective use of money. When it comes to the Rural Broadband Initiative 2 and the $150 million of funding that this bill is basically going to create we want to make sure that the Rural Broadband Initiative 1 has been effective. For those at home who do not know what the Rural Broadband Initiative 1 is that is roughly about $300 million—$250 million of which has come from the telecommunications development levy—that has helped some of our remote areas in our rural sector become more connected. There are many many reasons why that is good for our country—and they have been said on both sides of the House—like obviously the primary sector the health and well-being of our remote areas and of course economic development.The reason why we have a problem with this piece of legislation is that we have not had enough of an assessment of the Rural Broadband Initiative 1—the first $300 million of this programme—to see whether or not it has been effective. At the Commerce Committee—a select committee that would have loved to have seen this bill by the way; I will come back to that later—we heard from a number of submitters just I think—Clare Curran: Yesterday.KRIS FAAFOI: —yesterday morning. Oh it seems so long ago! Yesterday morning we heard about the lack of assessment that has been done about the spending and the effectiveness of the Rural Broadband Initiative 1. We do have an issue with this piece of legislation: with it being a new tax of course but also because we have not seen enough evidence of the effectiveness of the Rural Broadband Initiative 1.I do want to point to a submission given to us yesterday by InternetNZ at the Commerce Committee if I may where it pointed out its concern around the lack of assessment of the Rural Broadband Initiative 1. This came about via three areas of Otago that have petitioned the Commerce Committee about the lack of effectiveness in their experience of the Rural Broadband Initiative. Basically they do not think that this initiative has served their communities well and that it has not made them as connected as was promised by the Government. InternetNZ said in its submission: “These petitioners are motivated not by a lack of clarity but by a lack of satisfaction and we see a different requirement. This could call for a verification of commitments made as part of the RBI delivery to ensure that whichever provider responsible is delivering the expectations that were set. Have the committed time frames for the Rural Broadband Initiatives been met? Is the minimum speed commitment of 5 megabits per second also being met?”.So there is concern out there in those rural communities. They were promised a service of 5 megabits per second but that has not been their experience. For us to sit here and say that that is the experience of $300 million of investment and we are about to say here is another $150 million for the second phase of the Rural Broadband Initiative then we on this side of the House think we need a better assessment of whether that $300 million that has been spent on the Rural Broadband Initiative 1 has been spent effectively.There are some good things in this bill I believe especially around the black spots. I think that is a good development in terms of State Highway 1—if someone can look at the Ngauranga Gorge that would be quite useful—and also for tourism as well. If we can get the Government to look at those black spot areas that will be useful.This piece of legislation does not meet the test for us to support it because as I said $150 million is the commitment here. That is $50 million for each year that we are continuing this levy—a levy that was not necessarily promised. We want to know if we are going to be spending $150 million more whether the first $300 million was spent effectively. Communities in small remote rural areas around this country do not think that is the case. InternetNZ—a bit of a watchdog for these kinds of issues—does not believe that is the case. Because of that we share those concerns and we are not going to support this piece of legislation.KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to contribute on this bill. I would like to share something with this House. Last month we visited Spark and it shared a very interesting fact with us about how the internet has changed the whole scenario in New Zealand. Spark mentioned that 15 years ago the total internet traffic from New Zealand was 40 gigabytes—the total traffic from New Zealand was only 40 gigabytes—and today the average household has got a connection of 40 gigabytes.Paul Foster-Bell: How much?KANWALJIT SINGH BAKSHI: Forty gigabytes on average.Kris Faafoi: Who told you that?KANWALJIT SINGH BAKSHI: Spark told us. You were there I think Kris.Kris Faafoi: No no no.KANWALJIT SINGH BAKSHI: Ah! You heard that.Kris Faafoi: I was at the Porirua McDonalds.KANWALJIT SINGH BAKSHI: OK. Ha ha! Technology is changing as we heard from a lot of members. This is a very good bill which will make the difference. I commend the Minister the Hon Amy Adams for her thoughtfulness and I commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): It is not often that I rise as speaker No. 11 on a bill with some breaking news but today I have some breaking news. It is interesting that the member opposite who has just taken a seat Kanwaljit Singh Bakshi mentioned a visit to Spark because Spark has just put out a press release in the last hour explaining very clearly that this bill is going to cost customers across their whole user base. This is a new tax. Spark is saying that it is going to pass it on to its users and it is going to be transparent about that. It has just put out a press release—and the members opposite might like to think about the cannon fodder they are going to be when they get back to their electorate offices—saying that it is going to pass it on to every single user in New Zealand. This is a new tax. It is going to cost New Zealanders and that is another broken promise from this Government.I will read out what it says in the press release for the benefit of this House: “ ‘Now that the Government has confirmed the levy will continue rather than reduce as originally legislated for it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers. We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution they are making to the Government’s Telecommunications Development Levy fund’ says Mr Moutter.” That is a clear picture of a new cost to customers. That is what Amy Adams said would not happen in her speech in slot No. 1. By slot No. 11 the news is out: it is happening New Zealand.This Government has broken another promise. It is introducing a new tax. Government members should have known this—they should have known this. This is also new and has not been covered in the previous speeches. Perhaps they have not read the departmental disclosure statement. Perhaps it was too rushed for them to get to. But I believe that the Minister will have read this. If members in the House turn to page 8 of the departmental disclosure statement I will read it out to them. It is headed “Charges in the nature of a tax” in the departmental disclosure statement and asks: “4.2 Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?”. The department says and I will hold the statement up for those at home—they probably cannot read it. It is highlighted but it is on the website if anyone wants to go and have a look. The answer the department has given is “Yes”.This is a new tax. It is in the nature of a new tax. We heard yesterday Paddy Gower on TV3 ask the Minister of Finance: “Is this another broken promise? Is this a new tax Mr English?”. He said: “Well um mm ah you can call it what you like.” and so on. He would not admit that this was another broken promise from this Government. Well now we know that it is going to be an additional cost to customers and different from what Amy Adams said in speech No. 1 in the first reading of this bill. Now in speech No. 11 we know that there is an additional cost to New Zealand broadband users.This is a Government that is determined to charge more people for the use of rural broadband. It has not even measured the effectiveness of this scheme. That is the great shame. My colleague Kris Faafoi drew attention to this and so did my colleague Clare Curran earlier on. We have heard from InternetNZ that it believes that it would be in the interests of the select committee to take leadership on this issue. We do not know whether the Rural Broadband Initiative has worked. We do not know whether it is a successful scheme because there is no data to measure it. The Government has not measured the success of the scheme but it is about to give another $150 million in the area. Current spending on the scheme amounts to about $7000—my colleague Clare Curran has calculated—for each and every household that has taken up this scheme. It is hardly value for money.This is a Government that is failing. It is scratching around. It does not have a long-term plan. It is trying to make it look like it is doing something but we learnt today that there is a new charge a new tax. The Government had been warned about it in the disclosure statement. The Government knew this was a new tax and it did nothing to stop it despite promising to the electorate before the election that it would introduce no new taxes. It reminds us of course of the GST increase. John Key said he would not increase GST and then fast forward in Government and it went up to 15 percent.It reminds us of the wage rise promise. By the end of next year employees should expect a wage increase of about $7000. Well in this Budget we heard the Minister of Finance kick that promise out 3 years. We were promised that exports as a percentage of GDP would rise to 40 percent under this Government and then we have heard since that Bill English says they would need to double the rate of improvement that they currently have in order to achieve the target. It is out of reach.The final biggest promise that the Government has broken the promise that was central to its election campaign was that it would get to a surplus. It is broken promise after broken promise after broken promise after broken promise after broken promise. That is five I have gone through—five broken promises in this Budget alone.This is a Government that is out of touch with New Zealand. It is now so arrogant that it thinks it can say to the electorate “We will not introduce new taxes.” and then put them in straight away in its first Budget after the election. This is a Government that is out of touch and out of ideas. We will hold it to account on this side of the House.There has been a review called for. The Ministry of Business Innovation and Employment says that there is no way it can measure whether this has been good value for money. The Government does not care what happens with New Zealanders’ money any more. It does not want the criticism. It does not want to know if it is not working. We are being told by the companies using the system that it is not working. We are being told by the department that it cannot measure it. It is not good enough. Taxpayers deserve better.Then of course the point has been made that this bill is being passed under urgency without the opportunity for example for those telecommunications companies to tell the Government that this tax is going to increase costs for customers that this tax is going hurt ordinary New Zealanders that it is a broken promise that the Government should not go through with it and that it should indeed review the system to make sure that the money is being well spent.I know why the Government is hiding this. I know why the Government is rushing this through under urgency. It is because the programme is failing. I know that from my own electorate. The people out at Karitane a rural area put up a petition to this House because they were so concerned about the internet speeds they were experiencing. People were telling me they could not run businesses from home—they simply could not run businesses from home as things were so bad.Then there were letters to the providers and there were letters to the Minister. Nothing happened but following a petition to the select committee and other petitions to the select committee lo and behold the problem was fixed. Well I urge all of those rural communities around New Zealand—if you are unhappy with a new tax and unhappy with the slow progress on rural broadband and unhappy with the broken promises of this Government please start a petition yourselves. Please ask for proper rural broadband in your areas.This is a Government that is failing to diversify the economy. It is failing to deliver on its export targets. If the Government does not actually review what it is doing and increase rural broadband and broaden the base of our economy so people can run other new industries then it will continue to fail and we will slip further and further behind. A Government that is prepared to manage decline is not a Government that we need. We need a Government with a plan. We need a Government that will keep its promise and actually stick to what it says it is going to do.This broken promise is not acceptable and New Zealanders will not roll over and take it without a fight. This tax is just another broken promise. The broken promises mount up. A Government with so many broken promises is losing the confidence of New Zealanders. So I ask New Zealanders to start their own petitions in those rural areas to petition any committee. Ask your local MP how you at home can start a petition that will be acceptable to Parliament and passed on to a select committee for consideration.This Government needs to hear it. It is so out of touch that it does not even know what is going on and it does not want to know what is going on. The Government will not launch an inquiry into what has happened. It is determined to spend more money without asking what is happening without consulting stakeholders and to ram legislation through this House. We have heard it today we have heard it now in the last hour that this levy which the department says is in the nature of a tax—another broken promise—is going to be passed on directly to customers who are users of broadband. Broadband is the very thing we need to be happening for our economy to broaden and get ahead.The Government has broken its promise to grow jobs it has broken its promise to lift wages it has broken its promise not to introduce new taxes and it has broken its promise to get to surplus. This is a Government that is out of ideas and a new tax seems to be what passes for a big idea under National. It will not do.BRETT HUDSON (National): It is an absolute joy to rise and speak in this first reading. It is incredible—twice incredible. Yesterday the Minister of Finance delivered an incredibly good Budget one that helps those in most in need by increasing real benefits for the first time in 43 years. Those members over there should hang their heads in shame at the two previous Labour administrations—absolutely shocking—and today it is incredibly bad that the same Labour members are opposed to our helping people in rural New Zealand by expanding the rural broadband coverage. Dr Clark just said that he thought that communities should encourage us to give faster broadband although he is going to vote down this measure that is going to expand the coverage.This is a great bill. I commend it to the House.A party vote was called for on the question That the Telecommunications (Development Levy) Amendment Bill be now read a first time.Ayes 89New Zealand National 59; Green Party 14; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Bill read a first time.Second ReadingHon AMY ADAMS (Minister for Communications): I move That the Telecommunications (Development Levy) Amendment Bill be now read a second time. We heard a lot in the first reading in the various speeches. We heard from process issues to Labour wanting to declare this successful important programme a failure. Well we know that Labour never wanted it. We know that if Labour had been in Government it would not have done it. But I can stand here as a rural MP—one of the few rural MPs who have actually contributed on this—and say that I am incredibly proud that we have already brought better broadband to more than 325000 rural and provincial houses. I know that that matters in rural New Zealand and this bill is about taking that even further.We have heard claims that this is somehow a surprise move and we have slipped one past New Zealanders. We announced this in August which was pre-election. We announced it again in March which was several months ago.Hon David Cunliffe: Why is it going through all stages in urgency? What’s the hurry?Hon AMY ADAMS: The bill is the most simple bill imaginable with one operative clause doing exactly what we said it would do. To answer Mr Cunliffe’s very simple point the hurry is that New Zealanders want broadband they want it fast and we are going to do everything we can to get it to them.I also want to reiterate at the beginning of this contribution that the telecommunications development levy cost for consumers is a few cents a month—a very few cents a month—and it has been built into prices for some years. The costs to the telecommunications companies remain exactly the same under this bill. This extension comes into effect on 1 July 2016 but it has not taken some of the telecommunications companies long to jump at the chance to announce price rises and blame the Government.I have to say to claim that this extension warrants a price rise is disingenuous at best and a blatant money grab at worst. Furthermore the changes do not take effect for 14 months. Given that the telecommunications development levy represents a few cents a month I will be very interested to see whether prices do rise when and by how much. If they do it is a blatant grab for more profits that they want to blame someone else for.Let us be very clear about this. What Spark is saying is that it thinks that taxpayers should fund its business infrastructure. We do not. This is infrastructure that telecommunications companies use to provide their commercial services over and we think that they should pay for it. I am not going to charge every New Zealander to fund business assets for Spark Vodafone and others to use. They should pay for it—which is why we levy them—and then provide it on a common basis. It is a well-designed process it works well and New Zealand likes it.The first phase of the Rural Broadband Initiative programme is creating a huge opportunity for regional economic growth and that is something that this Government is delivering. Alongside investment from the partners the Government’s deployment of the Rural Broadband Initiative is delivering better connectivity to our rural and remote communities. The next phase will build on the success of that by providing infrastructure to rural homes to farms to schools to businesses and to health centres.Brett Hudson: We back these communities Minister—we back them.Hon AMY ADAMS: That is right. We back them we represent them and that is why this Government is getting this done and Labour would oppose it.We are seeing a significant number of rural communities able to access fast broadband through upgrading the copper line network. So far this has included upgrading copper landlines for more than 85000 rural households to speeds of up to 20 megabits a second. For the last quarter I am pleased to tell the House the rate of deployment for upgrading copper lines for fast broadband is equal to about 46 lines every day being upgraded. The upgrade of fixed line copper broadband in rural areas is progressing incredibly well and it is meaning that our businesses and export sector can grow innovate and sell to the world and we want to take that further because we back success in rural New Zealand. Better connectivity means access to cloud-based software and other benefits like high-definition video streaming giving our businesses a competitive advantage.The programmes and the regulatory environment are showing dividends in our international rankings. We are now No. 1 amongst all developed countries for annual growth of fibre connections with an annual growth of 272 percent and we are now ranked 15th out of 34 OECD countries. Do you know what it was in 2004 under Labour? It was 22nd. We have now gone from the bottom third of the OECD to the top half—it is making a difference.Deployment in the first phase of the Rural Broadband Initiative has also seen a significant expansion of cellular coverage in rural New Zealand with 113 new towers and 308 existing towers upgraded so far. We are establishing new towers at the rate of about one every 10 days which is very impressive. Cellular towers have facilitated greater network coverage for mobile users to make and receive mobile calls and data on their devices. But it is not just about households and businesses actually—38 out of 39 rural hospitals are now able to connect at a 100 megabits a second.Hon Member: How many?Hon AMY ADAMS: It is 38 out of 39 of our rural health-care centres. Also 972 rural schools are now able to connect with peak speeds of 100 megabits a second under the Rural Broadband Initiative and 51 of our most remote schools have received point-to-point wireless connections. Because infrastructure established through the Rural Broadband Initiative is open access it means that existing and emerging telecommunications companies throughout the industry and throughout the country can take advantage of this infrastructure to provide innovative services.As we know the bill enables funding to be made available for further improving rural connectivity by also establishing a mobile black spot fund as well as extending the Rural Broadband Initiative programme. The mobile black spot fund will address gaps in cellular coverage with a focus on transport corridors and tourist spots. This brings important gains for convenience and business productivity but also importantly for public safety through 111 calling accessibility from mobile phones in some locations away from landlines. This programme and the bill that funds it will bring fast reliable broadband to more New Zealanders to more Kiwi businesses and to more parts of regional New Zealand.The rural areas targeted for improvement will now be identified through a tender process and technology solutions that will best meet the needs of those communities will be selected. It is worth noting that the technology to be used in the second phase of the Rural Broadband Initiative may not be the same as for the first phase. I am certainly open to technology suppliers providing new and innovative options to consider and that is all part of the process we are now working through. A registration of interest has been released to obtain more information and I encourage all rural communities to get involved. I encourage councils to take part and to talk to their households and businesses.This Government’s vision is for a New Zealand where anyone anywhere can take advantage of digital opportunities and we are not going to let only the highly densely populated highly profitable parts of New Zealand benefit. That is why we levied the telecommunications companies to ensure that the infrastructure is strong right across rural New Zealand. This is a Government that works for all New Zealand and that is why we are supporting this bill.CLARE CURRAN (Labour—Dunedin South): Well Minister Amy Adams came into the House and she delivered her first speech on this bill. She said that this was not a tax she said that prices would not go up and she said that it was a mere extension to a levy. So what happened within 40 minutes? Prices were announced to be going up by one of the major telecommunications companies. It called it a tax and said that it was unfair and that there had been no consultation. And in the most important part of the release that it sent out it said: “We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution that they are making to the Government’s Telecommunications Development Levy fund.” Well if that is not a demonstration of a new tax being imposed then I do not know what is.All I can say is that this Government said it would introduce no new taxes but it has. This is the latest one and it is going to go on everybody’s phone and internet bills every month because this Minister has not done her work. She has not consulted properly with the industry. She has not done an evaluation of the original rural broadband scheme. There is no evidence that it has been successful despite what she gets up and says. InternetNZ which came before the select committee yesterday said that we could expect more petitions from communities around New Zealand that have very bad broadband speeds and are desperate to try to change that and that there was no evidence that had been provided. The Ministry of Business Innovation and Employment told us the same thing. It said that there was no analysis of the economic outputs or the benefits because it has not been done and all we are hearing is that it is money that is being spent on rural New Zealand but it could be going down a big black hole. Here we are committing another $150 million from an industry levy that is directly being passed on to consumers—[Interruption] Oh the Minister scoffed at me when I said that. But what happened? It is being directly passed on to consumers.Hon Bill English: Scoffs at you no matter what you say.CLARE CURRAN: Mr English an extra dollar a month on every consumer’s phone and internet bills is a direct result of a piece of legislation that is going through under urgency. That is a result. Whether it is a good result or a bad result is another matter. I call it a bad result but it is a result that is going to put an extra dollar—so you give $25 and you take away $1. The Government has introduced three new taxes during this Budget. I would say that the Government and Amy Adams have got egg on their face—egg on their face. I would also say to the National MPs who are in the House right now and who live in rural electorates that they would know that they are having—particularly Stuart Smith in Kaikōura and Barbara Kuriger who are two that I know of who are having steady streams of constituents coming in from rural New Zealand saying that the quality of their broadband is inadequate and please do something about it. I would imagine that there are many other rural MPs who are saying the same. Well I say to them that this legislation which commits $150 million of a levy on industry being directly passed on to consumers is not going to make it better because the first scheme has not been evaluated. There is no evidence that said it has worked.In fact the information that we are getting is saying that it absolutely has not. And let me give you some examples. There has been a road trip undertaken by a group that calls itself Hills Holes and Poles which is a project that is part funded by InternetNZ and has been touring the country over the last few months in rural and regional New Zealand looking at the quality of broadband experience that people are having. What it is finding is that for many rural Kiwis broadband remains frustratingly out of reach or unaffordable which is despite successive Government policies including the Rural Broadband Initiative. What they are finding is communities are instead doing it for themselves. They are not using the rural broadband scheme. They are coming up with community initiatives with local wireless providers with trusts and with providers to actually form their own community wireless schemes. They are doing in some of the communities really well.But this is not Amy Adam’s initiative; this is not what she gets up and trumpets in the House. There are dozens and dozens of them and more are happening but they are doing it themselves. What Labour would have done would be to support them to do it themselves better and faster. Instead we are having a Government imposed levy that will be passed on to consumers—Dr David Clark: A tax.CLARE CURRAN: —a tax which is not going to deliver and that is the great tragedy of this. Even the ministry involved acknowledges that the work has not been done and that there has been no evaluation. It cannot be evaluated. Therefore it cannot be decided whether or not it is a good idea to invest the extra $150 million. Actually the most innovative rural broadband is happening as I said in communities around New Zealand and there is one happening in mid-Canterbury which is ironically right next to the Minister’s electorate. Maybe she should go and visit that. One of the problems with the telecommunications development levy which is highlighted in the regulatory impact statement is the expectation by the major payers that the funds will in large part be recycled back through them.I note that the Green Party has introduced two Supplementary Order Papers that we the Labour Party will be pleased to support during the progress of this bill through the Committee stage. We will be keen to debate those Supplementary Order Papers and what the impacts are because one of the issues that lies behind the lack of evaluation and the lack of economic analysis in this legislation is knowing whether or not the recycling of funds back into the big players such as Vodafone and Chorus has actually in effect ended up being a subsidy to those players and has enabled them to entrench their status out in rural New Zealand. I am not making that assertion in the House tonight but I am asking the question and the problem is that we do not have the answers because we have not been able to have the analysis about this very matter and that is a great shame.Another example of what communities are doing for themselves is in Marlborough. The Marlborough District Council has just managed a survey and 700 people have responded to its online survey on connectivity which is a very high response for a community. As I understand it is four times the number of people who have engaged in the long-term district planning process which indicates that there is a high degree of interest out there in rural New Zealand. I challenge any of the National Party MPs who have got parts of their constituencies that are rural to tell the House that they do not have people coming into their offices on a constant basis or writing to them about the state of their rural broadband. Colmar Brunton has done a survey. They have come up with the figure of 68 percent of rural businesses and households in New Zealand that are angry and frustrated about the state of their broadband. After nearly 5 years of the first scheme you would think that things would be better than that and now the Government is introducing another $150 million for a failed scheme.MELISSA LEE (National): Very briefly I would like to make two points. One is that I would have thought that the Opposition understood competition. I thought competition was actually a good thing—that if you provided competition within telecommunications companies and had more than one company which would actually be a monopoly the companies would do everything that they could to appeal to customers. They would provide the best possible service so that they can actually get more customers. Oh but no those members are in the Labour Party. They had a competition and they ended up with Andrew Little. Ah that is the reason why they do not understand competition—OK I get it now.This is a great bill. I was actually despairing when I saw on my Facebook a post that a friend had made. She is visiting. She is the manager of New Zealand Tourism in Korea. She is here with a bunch of travel writers. They have been here for a week I think and they could not access the internet properly in our rural areas. These are people with millions of followers but because they have been travelling in our beautiful country—what good is beauty when there is no internet and these people are travel writers? They finally got to a place where they could actually tweet and this is the photo that I got.I will not lament the day that we have very fast internet. This is a great bill for the rural sector. This is a great bill for New Zealand where businesses will grow families will benefit and New Zealand will actually benefit as a whole. Thank you very much.Dr DAVID CLARK (Labour—Dunedin North): There has got to be some irony in the previous speaker Melissa Lee getting up and decrying the Government’s broadband system. It has spent nearly $300 million and the member opposite who is a Government member is saying that it is appalling and she is right—she is right. That is the kind of confession from a Government that is so out of touch it thinks it can tell New Zealanders it is spending $300 million of their money and deliver no result. That is what we have opposite. Honestly this is reaching a ridiculous standard. But Mr Speaker—I think with my voice cracking like that I am going to turn into “Mr Squeaker” myself—I do not want to speak about that; what I want to talk about is the contribution from the Hon Amy Adams the woman in charge of the Telecommunications (Development Levy) Amendment Bill.The Minister for Communications said in her speech introducing the bill and I will read it that “the industry will not need to put their prices up or explain to their customers why the bill is changing.” Those are words from the Minister’s mouth. Let me read them again: “the industry will not need to put their prices up or explain to their customers why the bill is changing.” Well we have learnt during the debate that the big provider Spark is going to put up its bills and it is going to do it in a transparent way so that people know how much extra the Government is charging for this broadband service. It is going to put up its levies. It is saying: “Now that the Government has confirmed the levy will continue rather than reduce as originally legislated for it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers. We are exploring options for adding this cost in a transparent way to our customers’ monthly statements so they understand the contribution they are making to the Government’s Telecommunications Development Levy fund”. That cost is going to borne by every business broadband and mobile customer. That will be across all of the firms and that is because this Government is so determined to ram this through that it has not consulted on the legislation. It is just going to impose a new tax on all New Zealanders who are interested in using these kinds of internet services.That is what this Government does because it is so out of touch. It is breaking its promises. It had those promises that of course we remember: that this Government would return to a surplus. That was its big promise—its central promise in the last election campaign. Well we found out yesterday. We were told to wait—we were told to wait for the surprise. Well the surprise was no surprise. For the seventh time in a row this Government has failed to deliver a surplus. It keeps promising it. It keeps promising it—always jam tomorrow. The wage rises—the Government has broken that promise. It said that it would deliver an average increase of $7000 by 2016; now it is saying that increase will not be delivered until 2019. It is leaving it to the next Government to deliver the wage increase. This is a Government that cannot keep its word any longer. It did it with the GST increase. If we think back John Key said there would be no increase in GST and then lo and behold once he was elected up it went to 15 percent. That was at the same time of course that the Government delivered those tax cuts to the wealthiest New Zealanders.Well middle New Zealand is struggling every day going out to work trying to pay the bills but getting behind because this Government does not have its concerns at heart; it has at heart only the interests of the 1 percent. They are the very very elite; those who have the capital from a previous generation. They are all it is interested in serving. It is not interested in the people who go out every day and work hard to try to get ahead to try to look out for their families. On this side of the House we are—on this side of the House we are—and we are upset that the Government has broken its promises because it was elected on those promises. It was elected on the promise of a surplus. It was elected on the promise of increasing wages. Now it is not delivering. It said it would introduce no new taxes—we have had three in this Budget. We have had three in this Budget.I will read again from the departmental disclosure statement that the Ministry of Business Innovation and Employment put out and that the Minister will have seen. It asks whether there are in this bill any charges in the nature of a tax. In section 4.2 it asks: “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and in big bold capitals it says next to that “Yes”. Yes this is in the nature of a tax. Now we hear that the telecommunications providers are going to pass it on to their consumers. That makes a lie of what the Minister said. The Minister said “the industry will not need to put their prices up or explain to their customers why the bill is changing.” This is a Government that is so out of touch it thinks it can introduce a new tax after saying it would not. It thinks that it can say that surplus is its central promise and then not deliver on it. It thinks it can say wages will go up for hard-working New Zealanders and then not deliver. And we learnt yesterday of course that Working for Families is going to go down for many families in middle New Zealand. They are going to be further further behind. Sure it is really good that beneficiaries are getting a little bit extra but it should not be the case that that little bit extra is taken out of the pockets of those who are just a couple of rungs further up the ladder. That is not fair. New Zealanders know that is not fair. They know that these promises are promises that have been broken. This is a Government that can no longer be trusted to keep its word. This is an appalling appalling state of affairs and New Zealanders will be rightly upset about it.We know of course that InternetNZ has called for a review. Its representatives came to the Commerce Committee yesterday and they said it would be really helpful if the Government or the select committee or anybody—actually—would take a lead on investigating what has happened with the Rural Broadband Initiative part 1. That is what they said. They said that some leadership would be great. Let us see whether it worked or not. Let us see when you spend $300 million as a Government whether there is any effect. The Government is not interested. It is not interested. It does not want to be held to account any more. It can spend hundreds of millions. It does not need to account to the taxpayers or the voters—that is how out of touch it is. That is how far removed from the truth it is. That Government over there will reap the public displeasure as the public see their bills go up for this Rural Broadband Initiative while many of them cannot access it.The other thing I want to say is that I recently read that Ashburton has one of the best rural broadband connections in the country. I have been to Ashburton. Its connection is not that good. If that is the best that this Government can deliver it is appalling. New Zealanders deserve better than that. Now the Government is throwing more money at it but it is not going to test whether it is actually getting to where it needs to get to. My colleague Clare Curran has calculated that for every connection that has been made so far it is around $7000 that the Government has forked out. Are New Zealanders feeling better off for that $7000? Well they are actually going to be charged extra on top of that—about another buck a month for every kind of connection whether they have got a business connection or a personal connection. That is what they are facing now because new taxes are being introduced by this Government. It is a Government that is out of ideas that is breaking its own promises and it does not have a plan.The Government has not articulated how it is going to increase exports. It has promised an increase to 40 percent of GDP. Well actually under its watch exports are going backwards. They used to be 30 percent. They are going backwards. Treasury predicts that they will go backwards further—that next year exports as a percentage of GDP will drop further. Exports are becoming a smaller portion of the economy under this Government. It is no wonder that fewer small businesses are starting under this Government. It is a Government without ideas. It is determined to carry on with the commodity price cycles. It thinks that is the only answer. Well it is not. We need vision. We need aspiration. We need a Government that will keep its word. We need a Government that will be keeping its word and will actually deliver on the promises it makes. This Government seems determined not to do that.This Government is so out of touch it thinks it does not even need to answer to New Zealanders. It thinks it can introduce a tax and then say it is not its problem. It thinks it can reduce Working for Families for hard-working Kiwi families and say it is not its problem. This is a Government that is out of touch and out of ideas.It has also brushed off we learnt a housing idea from the Labour Government but it has not done the research. We saw in the Budget documents that there is $52 million in a capital contingency fund. When I worked at Treasury the things that went in the contingency fund were things that had not been thought through yet that could not be quantified from a Government that had not done its work. The Government was responding to the polling at the last minute. It set up a contingency fund and said: “We will do something about housing. We’ve got to do something—the polls are telling us it’s a real issue.” Six years on having done nothing the Government has put a little bit of money to one side. It is going to be a long time before that solution gets implemented. This Government is out of ideas. It has got no long-term plan. It is a Government that is breaking promises left right and centre and it will be held to account.BRETT HUDSON (National): For the edification of the member David Clark who has just resumed his seat the telecommunications development levy exists today. It has existed since 2011. It is already built into the pricing packages that businesses and consumers pay today. The change here does not increase it. It is the same rate as it is today. It merely extends the number of years that it will apply for. So look Spark is entitled to send whatever message it wants but if it wants to send a message to its customers that a levy they are already paying for is going to be charged again then it risks its customers saying to themselves: “Different brand same old Telecom.” I will leave them to decide whether or not to do that.This is an extremely good measure that supports rural New Zealand and I commend it to the House.GARETH HUGHES (Green): Kia ora Mr Assistant Speaker. It is not often I find myself in the same voting position as the National Party but the Green Party and I will support good legislation when we see it. I am not going to stand here and make a political point at the risk of not actually providing internet access to New Zealand communities. I support the roll-out of the Rural Broadband Initiative. I want to see our farms our regional schools and our communities across provincial and regional New Zealand accessing the internet and I thought that the Labour Party did too. We have seen a passionate call around taxes. I know that Labour is rightfully trying to hold the Government to account for previous statements which is right but let us not buy into a frame where taxes are all bad. I support collective community capital investment to rectify market failure. I support that I think it is the right thing to do and that is why I am voting for this bill.It is right to criticise the Government for putting the cart before the horse. It is currently consulting on the roll-out of the Rural Broadband Initiative 2. It is currently consulting and here it is putting legislation in front of Parliament and passing it under all stages. I have suggested to the Minister for Communications that it is putting the cart before the horse and that the Government should have put it the right way round. It is obviously not doing that which is disappointing because the industry is not going to get a say and the public is not going to get a say. In fact the officials had advised: “Well at least the industry will get a say during the parliamentary process.” but when you are passing a law in 24 hours that is a big fat “No” to the industry.The Government also has not addressed the critical concerning question of the existing Rural Broadband Initiative which is whether this is just going to be another big subsidy for Vodafone or for someone else. The Labour Party is right to question this. When you divide the anticipated number of customers of the wireless system run by Vodafone—around 8000—by the $60 million it got it is an incredibly high $7500 per connection. Those figures might not be correct because the Government and the officials have not released the exact numbers. It seems they are worried about doing that. It seems they were short-sighted to not include it in the contract. But if they are not the accurate numbers—if it is not costing $7500 per connection—the Government should front up and give us the statistics.We do not want to see another massive subsidy paid for by Vodafone’s competitors to another one in a different scenario. That is why I have put forward a solution—Supplementary Order Paper 83—and I appreciate the Labour Party’s support and the support of New Zealand First for it. What I want to promote is the idea that the Minister must have regard to competition and diversity in the regional markets. I think these are good reasonable things that all parties should support. The Minister has intimated that this is her thinking and her direction. Well if that is the case the Government members should have no problem in supporting this Supplementary Order Paper.The officials also warn in section 17 of the regulatory impact statement that it is likely the large telecommunications companies which are currently contributing the most are the ones that will be most likely to benefit from this. There are fantastic regional solutions happening right now and the Government should not be ignoring them and just going to some of the big players.New Zealand is a challenging country in which to roll out considerable coverage of broadband. We have got topographical and other issues. Locals all across the country are already coming up with those solutions in their communities with their local councils and with local experts. Let us not sideline them. Let us in fact not compete them out of the market with a big-scale Rural Broadband Initiative - funded competitor. I hope that the Government can support the Supplementary Order Paper. I hope the Government can have a contestable fund that some of the smaller players—the real locals on the ground—can have and the first step to getting there is supporting the Supplementary Order Paper.I am voting for greater internet access. I am voting for coming together and acting in a communal fashion to invest in new capital infrastructure. I am supporting that and that is why I am voting for this legislation.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Assistant Speaker. I am going to admit that I was not looking forward to coming down and speaking on this bill because it was not that controversial. It was not that controversial but I have got to say that it has taken an interesting turn. The comment I would give to Spark is: oh come on! Come on! I went back and looked and this levy was originally passed before the 2011 election so New Zealand First was not here but I think the voting was interesting. The voting was interesting when you actually go back to the votes that were taken. I am going to give the Labour Party points for consistency because it voted against the levy then. So well done because it voted against it then. The Green Party voted against it then but the Green Party has obviously shifted its position because it can see that there has been some movement. We have to get this rolled out—we have to get this rolled out. How much longer can rural New Zealand stop and wait for this Parliament to make up its mind? Something has got to be done to actually connect these people. They have been promised it long enough and we need to make it happen.But the most interesting thing about the vote on this legislation before the 2011 election was that it split the ACT Party. The ACT Party had three members vote for it and two members vote against it. I wonder whether Mr Seymour is going to split over this vote. Is this going to put Mr Seymour into some sort of a tizz? We never know.There is another comment that I think is most interesting and this is why I say to Spark “Come on!” and to the Labour Party “Come on!”. Do not tell me that a company the size of Spark does not have the Minister’s telephone number on speed dial. Do not tell me that a company the size of Spark cannot reach out to this Government and tell it what it thinks; that it does not actually have dinners with this Government to tell it what it thinks. To say that there has been no consultation on what is just an extension of a bill from 2011 is pushing the bounds of believability—it really really is pushing the bounds of believability.Spark is being disingenuous. I have not seen Spark’s press release. I am going to take the member’s word for it that Spark has said that it is going to pass this on to the customer. But if that is what Spark has said then I want to suggest that Spark is pushing both sides of the same horse here. In 2013 members on this side of the House fought to stop an increase in copper pricing to subsidise rural broadband roll-out and to subsidise fibre. We fought against it. But Spark just—and this is when we are talking about; we are talking about 19 May 2015. Spark Chief Executive Simon Moutter said he was encouraged by the public’s response to its campaign to cut copper broadband costs. You cannot have it both ways. If we want to keep the copper price low—and we should keep the copper price low because it is not right that those customers who have remained on copper need to subsidise those customers who can afford and who get fibre. So if Spark wants us to argue on this side to keep copper pricing low you cannot come out in the next minute and decide you are going to up the prices when a levy you have already priced on that you already knew was coming and that already way back here—when is this article from? This is from 5 January 2015. Spark had a conversation with the Commerce Commission around its final decision on the liability allocation for telecommunications providers. Please do not argue that you did not know. I fully understand that you may have budgeted for more profit going forward when you believed that—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!TRACEY MARTIN: Beg your pardon. I fully understand that that business may have budgeted for more profit going forward when it believed that the levy was going to drop to $10 million in 2016 as that was the promise made. Take your issue to the Government; do not take your issue to the people of New Zealand. Take your issue to the Government. If it misled you then take it to the Government but there is no need for Spark to raise its prices. And I agree with the Minister that if it does so when this bill goes through then it does so disingenuously. It cannot have it both ways.As for the digital literacy inquiry I am sorry but I find it interesting that Ms Curran who sat on the digital literacy inquiry and at the time pointed out that rural New Zealand was missing out that lower socio-economic areas of our urban cities were missing out on broadband and that there was a delayed roll-out because the big players were actually going where the money was and where the number of connections were—you cannot argue that there are not enough connections and so therefore they are not valuable if at the same time you want us to put that provision into those areas so that there is the capacity for those people to connect. That will be happening once we find a method by which they can actually afford to connect—that is the first thing. And also how can you therefore argue against a tender system that says that all areas now will be decided through a tender system rather than the telecommunications companies deciding that if there is a whole group of rich people sitting in that space who can pay the bill who will download a lot of internet then the companies will actually go and put the signal into there? I cannot understand the Labour Party and its position at this moment although its position is consistent.And although I certainly want to use any opportunity I can to have a go at the Government about breaking promises—and I will mention it again if the Government broken a promise to you the telecommunications companies take it up with the Government. But to suggest that this levy is new is just beyond belief. It has been here since 2011. This legislation is an extension of the levy. It is an extension. The reason why it is an extension—and unfortunately this might turn the Labour Party right off New Zealand First—is because of Northland. One of the reasons why—Sitting suspended from 6 p.m. to 7 p.m.TRACEY MARTIN: At the time I was interrupted I was launching into a bit of a tirade one might perhaps call it around Spark. I want to let the directors of Spark know that Mr Conor Roberts earns his money because within 1 minute of me sitting down Mr Roberts emailed me to make sure that I had a copy of the press release to make sure that I knew what it was that I could not believe Spark had said. However I still do not believe that you said it but thank you very much Mr Roberts. I really appreciate it.Can I just read this other little bit about what this levy pays for. We have gone on and on—it has been on and on—about rural broadband and the mobile black spots. They are incredibly important particularly the mobile black spots and particularly for Northland. I think I was referring to the fact that on 12 March 2015 in Kerikeri “the Prime Minister confirmed funding of $100 million to extend the Rural Broadband Initiative and $50 million to fix mobile phone black spots in remote places around the country.” One cannot say that the industry did not know it was coming I would have thought. This was back in March. So all the way along the industry has known that this is what is coming. So to say that it was not consulted to say that it did not have an opportunity is disingenuous.The last thing before I sit down because I know there are other members absolutely gagging to stand up and talk to this bill—and I will have more to say at the Committee stage and at the third reading—is that I just want to read this out from the Telcoreview.co.nz website to make sure that we all understand that this is not just about mobile black spots and it is not just about rural broadband. It says this “levy is used to pay for telecommunications infrastructure including the relay service for deaf and hearing impaired persons broadband for rural areas and improvements to the 111 emergency service.” These things are important to New Zealanders. They were concerned at the time when it was removed. It is interesting that it is now being suggested that the cost will be passed on and that it is onerous to the consumer. It was originally a cut in cost in 2011 from $65 million to $50 million.As I say New Zealand First does not just agree with the Government because we wish to agree with the Government; we are here to hold them to account. But the reality is that New Zealand First will not just stand and oppose legislation on a political basis. This is a levy that is being continued. It came in in 2011. The telecommunications companies need to take it up with the Government if they have a problem. There is no need for them to increase their pricing. So Mr Roberts I hope to see you next week in my office probably but at this stage please reverse your press release. Kia ora.KANWALJIT SINGH BAKSHI (National): It is my privilege to stand and contribute to the second reading of this bill. I agree with what Tracey Martin said. It is a very good bill from this Government.This Government is working to ensure that all New Zealanders are connected to the latest technology. I congratulate the Minister the Hon Amy Adams on bringing this bill to the House. I hope all New Zealanders will appreciate the work that this Government is doing. I commend this bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. James Shaw—5 minutes.JAMES SHAW (Green): I am standing to speak on the second reading of the Telecommunications (Development Levy) Amendment Bill. I just want to address the concern that this bill is a new tax on New Zealanders or on users of broadband services. Frankly the Minister of Finance over the last 7 years has introduced so many new taxes and raised so many other taxes that I have kind of become a little bit blasé about it.This is an incredibly important piece of economic infrastructure particularly for rural New Zealanders. We have a huge economic divide between our regions and our main centres especially Auckland. It is absolutely vital for the regions that we get them connected to broadband and that it is a really high-quality service. Only then will they be able to access the social connections the educational opportunities the health care and in particular the economic infrastructure of being able to participate in the digital economy which is a growing and increasingly critical part of New Zealand’s economy overall. It has to get paid for somehow. It is a huge and expensive project and somebody has got to pay for it. This seems to us to be the best available method of paying for it.I do want to speak very briefly to the Supplementary Order Papers that my colleague Gareth Hughes introduced earlier—sorry I just wanted to say before that that we have not heard anything yet in the debate that would have us change our vote on this bill. We recognise that there are some concerns from the industry. We also understand Labour’s concerns in relation to this being a new tax and so on but at the moment our support for the bill still stands.We are introducing two Supplementary Order Papers. The first Supplementary Order Paper 83 if you do not mind my reading them out is to insert a new section 90(4) into the Telecommunications Act 2001 where the telecommunications development levy is used for purposes specified in clause 90(1)(b) and 90(1)(d) and particular regard will be taken to promote “… (a) competition in non-urban telecommunications markets; and (b) the diversity of non-urban communities intended to be served by the levy; and (c) the range of different technological options that may best serve particular non-urban communities; and (d) the rapid pace of technological development.”I would just like to speak to that because we did have some concerns that in the previous phase of the roll-out I guess the beneficiaries primarily were Vodafone and Chorus; that they in essence received a really significant subsidy paid for by other industry players. We want to make sure that there is maximum competition and a diversity of providers in the market place and that it does not benefit just a couple of large companies too much.The second Supplementary Order Paper 82 is to insert a new section 90(4) into the Telecommunications Act 2001. Where the telecommunications development levy is used to promote cellular mobile coverage in rural areas—for example through a mobile black spots fund—the levy will not be used to fund any of the existing contractual requirements between the Crown and mobile network operators.There is a risk that the Government’s telecommunications development levy - funded mobile black spots fund could be used to fund these from cheaper requirements. This would essentially short-change the taxpayer and the rest of the industry. Again we just want to make sure that companies that have got these contracts already do not get two bites of the cherry. Again it is about ensuring that there is a maximum number of players in this and that the benefit is sort of spread through the economy.We think that those amendments are quite sensible that they aid diversity and competition in the market place and we hope that we can get support for them. In the meantime I commend this bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): Kris Faafoi—5 minutes.KRIS FAAFOI (Labour—Mana): It is a pleasure to take a call on the second reading of this Telecommunications (Development Levy) Amendment Bill.There are a number of questions that we have of the Government which we will also ask in the Committee stage. The first one I will put to the Minister and that is why in her first reading speech did she say: “The industry will not need to put up their prices or explain to customers why their bill is changing.”? For then less than an hour later Spark put out a press release saying: “Now that the Government has confirmed the levy will continue rather than reduce as originally legislated for it has put upward pressure on future costs and we will have to pass that cost through to our broadband and on-account mobile customers.”So less than an hour after the Minister saying that this will have no effect on consumers and nothing will change Spark says that yes it will because it is going to make the consumers pay. Regardless of who was at fault—either the Minister’s wrong or Spark is playing silly buggers with this—someone is going to pay. It looks like it is going to be everyone who has a broadband account with Spark at this stage and potentially more because we have not heard from any other telecommunications companies at the moment. It further emphasises our point that this is a new tax.Further to that in the regulatory impact statement put out by the Ministry of Business Innovation and Employment on this bill point 50 talks about the level of consultation that the Government has had with the Telecommunications Forum. It says that “While formal consultation … has not been undertaken MBIE regularly engages with the telecommunications industry and as such the issues considered by this Regulatory Impact Statement have been widely canvassed … MBIE has monthly meetings with the New Zealand Telecommunications Forum (TCF) which represents levy payers and others in industry … ”. Point 51 says: “The intention to continue the levy at its current level was communicated openly during the election campaign …”.So from that regulatory impact statement you would think that the telecommunications companies know they are pretty OK with that. The Telecommunications Forum has been informed. It has got no problem with this bill and the implications of it but lo and behold not only has Spark put a press release out today the Telecommunications Forum has put a press release out this afternoon as this bill makes its way under urgency through this House. Geoff Thorn the chief executive of the Telecommunications Forum says: “This bill has been introduced under urgency and doing so avoids any public debate.” We agree with him on that. He also says: “This is a proposal which has not been the subject of any consultation …”—but the regulatory impact statement said there was consultation—“and which has avoided the usual scrutiny that would apply to Government spending.” which we do agree with.This bill is being pushed through under urgency and we would ask why. If as the Minister says this has been signposted and if as the Minister says there has been consultation with the Telecommunications Forum that does not necessarily look like it was the case.The press release from the Telecommunications Forum goes on to say: “The bill extends a tax which to date has not been explicitly recovered from consumers.” So the Telecommunications Forum itself says well in the past it had not got this money from consumers. So the assertion from the other side of the House is that this is not going to hit consumers. From this perspective Spark has said it is going to put up its prices. The Telecommunications Forum has said well it has not done this in the past. So someone is going to pay and it is not the Government. This Government said that there are no new taxes but when it continues this levy someone does have to pay and they are the broadband users of New Zealand.I would like to reiterate that we have no problem with rolling out broadband further into rural areas. It is a great idea but the $300 million that has been spent so far—we do not have any idea of how effective it was. And before we spend another $150 million—we do not think we should be rushing this through under urgency until we make sure we are going to get good value for money. That is why we are opposing this. This Government just wants to throw money around—another $150 million—without knowing how effective the first tranche of the Rural Broadband Initiative has been. We do not think that is on.Hon JUDITH COLLINS (National—Papakura): The money that has been spent has been so effective that 74 percent of rural households now have broadband. That is how effective it is and frankly it is only going to get better under this Government.I feel sorry for the Labour Party. It is the only party that is voting against rural broadband for New Zealanders who need that for their businesses for the schooling of their children and for them to be connected to the rest of the world like the rest of us are. It is disgraceful that a party that used to say it stood for telecommunications and broadband is now voting against the bill. It is the only party—disgraceful. I think about the fact that we are talking about it being an extension of a levy that has been in place now for some years not some new thing just dreamt up and the only person I see who has really come out against it is Mr Conor Roberts who has not been that long with Spark. I remember him from his days as an often-failed candidate for the Labour Party and also with Len Brown’s press office. So I think that Mr Conor Roberts is a very nice chap and I wish him well in his career but he needs to get his facts right.I commend this bill to the House.Hon DAVID PARKER (Labour): Well that does deserve a reply. That member Judith Collins used broadband repeatedly in respect of her dealings with Cameron Slater where she showed herself to be morally bankrupt—which is why she is now on the backbenches.Hon Judith Collins: I raise a point of order Mr Speaker. I take offence at that.The ASSISTANT SPEAKER (Lindsay Tisch): Yes the member has taken offence. I ask him just to withdraw that comment.Hon DAVID PARKER: Point of order Mr Assistant Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): No I ask you to withdraw that comment.Hon DAVID PARKER: Point of order—The ASSISTANT SPEAKER (Lindsay Tisch): Order! The member has taken offence. Any member can take offence and if a member takes offence I ask the member to withdraw the comment.Hon DAVID PARKER: I withdraw the comment. I raise a point of order Mr Speaker. Could you please tell me which of my comments was unparliamentary?The ASSISTANT SPEAKER (Lindsay Tisch): The member took offence. It is not for me to judge. The member took offence at statements that were made and she brought it to my attention. On that basis I have asked you to withdraw the comment which you have done and now we will proceed.Hon DAVID PARKER: That member who just criticised a person outside of the House who was unable to defend themself was removed from her post as a Minister for disreputable conduct. There were about five or six instances—Hon Judith Collins: I raise a point of order Mr Speaker. I take offence at that. I was not removed for disreputable conduct. It is completely false.The ASSISTANT SPEAKER (Lindsay Tisch): That is a debating point—[Interruption] That is a debating point and we are going to proceed.Hon DAVID PARKER: —the first of which was the conflict of interest that she had in respect of Oravida which was a company that her husband got paid by and she took steps to advance their interests and then lied to the media and misrepresented the position to the Prime Minister. Having showed herself—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Hon Judith Collins: I seek leave to make a personal explanation in accordance with the rules in relation to the accusations made by the Hon David Parker.The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.Hon Judith Collins: Mr David Parker is quite incorrect. I was not removed for disreputable behaviour. In fact I was asked to resign on the basis that I was accused by way of an email to somebody else from someone else. It had nothing to do with me. There was an allegation for which I was utterly cleared by the Chisholm inquiry. In addition Mr Parker has long commented on a Mr Pleasance. That matter has been dealt with by the Privacy Commissioner. I have been cleared of that as well. I was cleared by the Cabinet Office of any conflict of interest and actually Mr Parker knows that well. He of course did resign as Attorney-General.The ASSISTANT SPEAKER (Lindsay Tisch): All right we are now on the Telecommunications (Development Levy) Amendment Bill and I ask all speakers from now on in to concentrate on the substance of that debate.Hon DAVID PARKER: What rubbish! That is not correct at all. History shows that that is not correct.This bill is said by the Government not to be in the nature of a tax. We heard that from the Minister at first reading and at second reading. Yet in the Ministry of Business Innovation and Employment’s own departmental disclosure statement it is asked a form question. It is asked: “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?”. In bold writing and capitals on page 8: “Yes”—yes. The Minister then said that this would not result in any increase in charges to consumers and yet already we have a press release from Spark saying that it will; the average person’s bill will go up by about $1 every month. That is $12 a year for an increase in a connection fee. To quote Spark: “ ‘The bill for this from the Government to Spark New Zealand averages out at almost $1 per month for each of our consumer and business broadband and mobile customers.’ ” So that is for people who are using bandwidth both in broadband at home and also through mobile devices.Everyone I think in this Parliament recognises that the roll-out of broadband is a good thing. No one disputes that. What we do dispute is the competence of this Government which just months ago was saying that it was going to cost only $10 million a year—in respect of this particular cross-subsidisation—to roll it out across rural areas whereas now it is saying that that cost is going to be $50 million per annum. This is in an environment that as the Government says has virtually zero inflation. So in an environment where inflation is running at zero how come the costs have ballooned so that the cross-subsidy that has to be paid through this mechanism has risen from $10 million per annum to $50 million per annum? The answer is that the Government is doing it incompetently. That is also apparent from the fact that the Rural Broadband Initiative is being ignored by some consumers who are going around the side of that not getting the cross-subsidy that is available through the Rural Broadband Initiative. Instead they are without subsidy going about their business and using wireless technology to get broadband.That is why we are opposing this bill. If the Government had come to New Zealanders at the start and said “Look this is the full cost of the roll-out of broadband. There will be some cross-subsidy between cities and rural areas to ensure that rural areas will get it.” I think all New Zealanders would have gone along with that. We certainly would have on this side of the House. But to then come along and pretend that a failed Rural Broadband Initiative which is now coming in over the original budgets obviously and is not doing what it was originally promised to do—to come to us and say “Oh look please there is nothing happening there that needs scrutiny.” well we just do not buy that.Here we are under urgency. We heard one of the prior speakers from the National Party throwing off at the release from the New Zealand Telecommunications Forum the TCF. That release complains that “ ‘This Bill has been introduced under urgency and doing so avoids any public debate.’ ” That is why this is being done under urgency. It is not because it is urgent. This measure does not take effect until next year so it does not need to be done under urgency. Now Government members slag that off. Do you know who the writer of that press release was? It was Mr Thorn the former chief executive of the Parliamentary Service. He knows how parliamentary processes are meant to work. That is why he is critical of this being done under urgency. He also notes that it “extends a tax which to date has not been explicitly recovered from consumers.” and that the industry cannot continue to absorb the tax.The Minister for Communications will soon be sitting in the chair during the Committee stage and I want the Minister to stand up and tell me that I am wrong when I read out the departmental disclosure statement at paragraph 4.2 which asks “Does this bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and answers “Yes”. I would like her to tell me how I am misreading that because I cannot reconcile that with her statement that it is not in the nature of a tax. Look I do not know. This is the Minister for the Environment who seems to think that dirty water is clean water—[Interruption] She did when she was the Minister for the Environment—so maybe there is some consistency of principle between those two ridiculous statements.I also want to say that she is still contending that there is going to be no on-charge to consumers. I cannot work that one out either.Dr David Clark: Industry says there is.Hon DAVID PARKER: I know the industry says there is; I have read that out already as you did earlier Dr Clark. It is absolutely clear that this will result in an increase in charges.It is a tax. It is because the Government’s financial performance is so poor that it can no longer absorb the Rural Broadband Initiative through the Crown balance sheet. That is essentially what has happened. It was going to pay some of this out of Crown finances but its mismanagement of the economy is such that it can now no longer afford to do so and so it is going to charge what is effectively a tax on consumers. That is what is happening here. The Government has not consulted on it. It says it has. I have no doubt that it consults regularly with the community but again in its regulatory impact statement and its departmental disclosure statement it says it has not in respect of this. That is confirmed by the telecommunications industry in its releases today so again I expect the Minister to be saying how she can justify those comments when her departmental report says it is wrong and when we have had two releases—from both the industry body generally and from our largest telecommunications company Spark—to say that that is not the case.I just want to return to this issue of how incredible it is that the Government needs another $40 million per annum when inflation is running at virtually zero. How does that happen? The Crown says that the reason it is not hitting surplus is that we have got such low inflation that people’s wages are not going up as much as it thought they would and therefore it is not collecting as much tax. There is a little bit of truth in that. We all acknowledge that with low inflation wages and costs do not go up by as much. So how could you in a zero-inflation environment need to come along to this House and seek authority for $50 million per annum? I tell you what. It is because the Government is incompetent in respect of telecommunications companies. We saw it with the Chorus fiasco last year when it was going to override the regulator when it was trying to help out its mates at the big end of town. The telecommunications companies came out and spoke out against the Government at that stage. And what are they getting in response? Because they spoke out last time they are now getting whacked with a levy of $50 million—because the Government did not like them exposing the incompetence of the Government last year in the telecommunications space in respect of Chorus. That is why the Labour Party is opposing this legislation not because we oppose the roll-out of broadband in rural areas.JAMI-LEE ROSS (National—Botany): I commend the bill to the House.A party vote was called for on the question That the Telecommunications (Development Levy) Amendment Bill be now read a second time.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Bill read a second time.In CommitteeThe CHAIRPERSON (Lindsay Tisch): This debate is by clauses and the question is that clause 1 stand part.Clause 1 TitleCHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a brief call on this particular legislation. I want to say to the Government first of all that there are people in my own electorate—and despite being in an urban Wellington electorate I have quite a significant rural hinterland in that electorate—and in the rural part of my electorate who are very supportive of the idea of getting better rural broadband. But the issue here is that many of them according to the Government’s definition supposedly have already got rural broadband—and yet it does not blimmin well work.The number of complaints I have had in my office from people whom the Government claims get 5 megabits per second rural broadband but who claim that they do not has been increasing exponentially. So they are getting flyers in the mail saying “Connect to this broadband service it’s great—you’ve got rural broadband.” But of course what it does not say is that in order to get that particular speed they have to be the only person connected to it at that given time. The more people who connect to it the slower the speed gets to the point where somebody at home if they have cellular connections getting faster connections through using a cellphone—and in some of these cases they are in a cellphone dead zone so they are not even getting that—is getting very very slow broadband speeds like the type that we might have had once upon a time when we had the old dial-up over the old copper network. In fact they were faster than what they are getting now with supposedly broadband connections.I want to say on behalf of the people in the rural communities in my electorate and I am talking about Whitemans Valley Kaitoke Mangaroa and those areas that they—Clare Curran: The Minister is writing it down.CHRIS HIPKINS: I hope she is writing those areas down. They do want rural broadband. The Government claims they have got it but they do not. Their rural broadbandis actually slower than what they would have got under the old dial-up system and the more people who are connected to it the slower it becomes. These are small-business people who might be working from home. There are small farmers in that area and they are not getting what the Government promised them.They will come to me and ask why it is that the Government is now spending all this extra money to roll this out to its next phase when the first phase is not working and why is it that they as consumers are paying for a service that they are not able to get. These are people who are paying now. They are paying for broadbandnow as of today and they are not getting the broadbandthey are paying for. The cost of that broadband is potentially going to go up because this is an extra tax and taxes ultimately get passed on to the consumer to the end-user.So the Government is increasing taxes despite its very clear pre-election promise that there would be no new taxes under National. This debate is the first one on the first of three new taxes that it has introduced with this Budget. Ultimately the consumer will pay the cost of it. It is yet another broken promise.I want to say that I support full broadbandavailability to all New Zealanders and I would support reasonable measures to do that where there is evidence that they were working and that they were actually going to deliver it. But spending $450 million—that is what we are talking about despite the fact that the Ministry of Business Innovation and Employment has admitted that there is no business case or analysis of the Rural BroadbandInitiative’s effectiveness. It is staggering that the Government would spend this quantity of money without actually establishing whether it is any blimmin good. I can tell you now that the people who have been coming into my office to complain about the quality of their broadbandconnection are very firmly of the view that it is not any good and that they are not getting the speeds of rural broadband that the Government already claims they are getting.When the Government says—what were the numbers it gave—that something like 86 percent of rural households and businesses are getting speeds of up to 5 megabits per second it should put a very clear rider on it that it is only if they are the only person connected in that area. The clear reality of this situation is that in many of these rural areas particularly the rural areas closer to the city centres where there tends to be higher density population than in a rural area the broadband speeds are woefully slow—absolutely slow. We have got people getting in their cars with their laptops and driving over the hill literally into Upper Hutt because that is the only way they can get a decent broadband speed. It is good for the cafes in Upper Hutt if you are business person working in Whitemans Valley because you will end up going over to Upper Hutt and sitting in one of the cafes there so that you have got access to decent broadband because they are not getting it despite the Government’s claim that they actually are.I want to say over and over again that I support rural broadband but I want to make sure that if we are going to spend money on rural broadbandthen that is actually what is being delivered. It is not being delivered. The Government claims that Whitemans Valley has rural broadband. It does not. The Government has not delivered it and now it is saying that it wants to spend more money on a programme that clearly is not delivering what was promised.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Chair. Just taking a quick call in the Committee stage of the bill I understand what Mr Hipkins is talking about—I absolutely do. I have a 20-year-old son his mate who ended up homeless a 17-year-old son and a 14-year-old daughter and they complain to me constantly about lag. I am assuming because I am not that up to speed with IT that lag is when everybody is on Dungeons and Dragons or whatever the heck it is that they are playing and there are too many people on the line as such and so it slows down the speed. I understand that.But what I do not actually understand is the argument that the continuation of the levy is not the answer. I am yet to hear—Clare Curran: I’m about to tell you all about that.TRACEY MARTIN: And I hope Ms Curran will stand and tell me what the alternative is. Who will build this infrastructure and how will it be paid for if not in this way? Dr Clark is nodding his head so I am hopeful that those members will stand and take a call—and Dr Woods apparently is also going to stand and give us an alternative way to make this work.Nothing is worse than spending $300 million and then changing direction and spending $150 million in another direction while some people still have nothing. Nothing is worse than that. I take up Gareth Hughes’ contribution around the Commerce Committee and while it is at it have a look at it do a review do an inquiry and let us see how it went. But do not let us not change horse mid-stream after $300 million has been spent. Let us not leave the Robin Dixons and the Ōmaha residents and ratepayers out there on their own yet again with a levy that has been in place since 2011. Let us get real.There is no cause for Spark to raise its charges. Let me just ask you: who actually pays this levy? Spark formerly known as Telecom pays $25 million per year of the $50 million levy because it is a percentage of what its take is of the market. I would say to its customers that if Spark decides to pass on the cost to them which they have already been passing on to them since 2011 then change your provider. Change your provider. That is why we have 22 providers: Vodafone contributes $10 million Chorus contributes $6 million Vodafone fixed contributes $4 million 2degreescontributes $1 million; Orcon TeamTalk Vector FX Networks CallPlus Services BayCity Communications World. Where is the press release from all those providers? Where is the press release from the 21 other providers apart from Spark? The reason why Spark has put out a press release is that it has the largest amount of your business New Zealand and it does not want to pay this levy. But this levy is required in order to deliver for the rest of New Zealand no matter whom you have your business with. So I suggest that to you if Spark is not happy about paying its fair share around infrastructure.New Zealand First agrees that there should be a review on the $300 million. There is nothing to be afraid of if it is doing well and we could learn some lessons about it. What we know from inside our schools is that telecommunications can be a black hole of money. Everybody comes up with another great idea. But what is a sustainable idea are we on the right track and what is the cost of switching horses mid-stream?So I hope Ms Curran will tell us how the Labour Party would fund this infrastructure throughout New Zealand. I hope that Dr Clark and Dr Woods will because right now as far as—Dr David Clark: I hope New Zealand First will change their vote if there’s a good idea.TRACEY MARTIN: If you give a good enough argument Dr Clark you never know your luck. Today is Friday; it could happen. But at the moment New Zealand First stands with the Green Party. This infrastructure is required. The rural areas require it and actually most of the super-city of Auckland requires it. That is the most bizarre thing. Many parts of the super-city of Auckland like Wellsford Te Hana Tapora Ōmaha—these places are in the super-city of Auckland created by this Government—still cannot get reasonable broadband. Sitting in Warkworth—what are we called? We are a satellite town of Auckland. We are going to go from 10000 dwellings to 30000 dwellings in 20 years but apparently we have got lag.So New Zealand First will continue to support the bill but I will be listening to the contribution from the Labour Party. I am looking for alternatives but at this stage we see it as appropriate that the infrastructure is built on a levy that has already been in existence since 2011. They have already passed on the cost. Do not up your prices any more Spark using this as an excuse. We will be watching. Kia ora.CLARE CURRAN (Labour—Dunedin South): There are so many things to say. I am going to start my contribution in the Committee stage addressing clause 1 by talking to the history of the telecommunications development levy and the legislation within which it sits. The Telecommunications Act was passed in this House in 2001 with a vote of 65 to 52. One of the most interesting things about that vote was that the ACT Party which then had five members in the House split their vote. Three members voted against and two members voted in favour. The two who voted in favour were the two who had been sitting through the select committee process for the whole time.That piece of legislation split Telecom in half. It was structural separation. The Labour Party did not oppose that. It did not oppose that at all. The person sitting on my left was the Minister for Communications who brought in the legislation for the operational separation of Telecom. We did not oppose that. What we opposed was the process and the setting up of a monopoly—a monopoly that is now called Chorus which was set up to be given handed over on a plate the contract for the ultra-fast broadband project. We opposed that implacably we opposed the way it was done and we opposed the concessions and handouts that it was given along the way to do that.Chorus has now become the monopoly provider of 60 percent of the roll-out of ultra-fast broadband at the same time as being the monopoly that has the copper network which sits alongside that and has continued to provide problems.In that legislation was the establishment of the telecommunications development levy. Labour did not oppose that part of the legislation. We never opposed that because we knew the benefits of providing a fund that was provided by the industry for the provision of services that could not be got through the market. My colleague over here talked about the market gap. There are many market gaps in this country with regard to the digital divide. There are market gaps within urban areas as well with people who cannot afford to access broadband cannot afford to access home phones anymore and use prepaid mobile phones. There are people who are disadvantaged particularly families with children which is the biggest problem.Nobody—nobody—could say that the Labour Party has not stood up for those people. Nobody could say that the Labour Party has not been the champion of closing the digital divide in this country and has not led the charge on that. It led the charge in that select committee which you referred to earlier around it and has pushed and pushed around those issues so nobody could say that.That telecommunications development levy—and by the way everybody should remember that this was Steven Joyce’s baby; the brainchild of Steven Joyce was to create this—has caused so many ongoing headaches for the Government. He created the legislation that set the terms for that levy to be reduced to $10 million next year. What the National Party—and the Minister in the chair sitting over there was a candidate in the election—introduced 3 weeks before the election out of the blue was to just willy-nilly extend that levy. It extended it created a new levy and came up with more money. This was because National members knew—their market research was telling them—that there was a big problem in rural New Zealand because there were too many people getting crap broadband. It was turning out to be a problem for National members in their polling and in their market research.So what happened? All of a sudden we get $150 million. There was no consultation no reports no analysis and interestingly since the election—and it is now more than 6 months since the election—we still have not seen any reports. There still has not been any analysis and the regulatory impact statement admits it. It is embarrassing for the Ministry of Business Innovation and Employment I have to say that it has put out a regulatory impact statement that acknowledges that it has not done the work. What we have got is a levy that was supposed to go to $10 million and now—oh—it is up to $150 million.I think that my colleague David Parker made it clear that if there had been a different process around this if there had been full consultation around how to spend that $150 million how to do that with the community not just with the providers who are paying the levy but full consultation about whether the Rural Broadband Initiative worked and which bits have worked which bits have not worked and then how could we do it better if they had done that in a way that had been contestable and fair we would not have opposed this—because we had never opposed it at the time when it was made before the election. What we said was that it needed to be contestable. It absolutely needed to be contestable and fair.What we are seeing in the regulatory impact statement is that there could be capture by the big providers again which is a rort an absolute rort. This is why we are opposing it. This is why we are retaining our consistency of opposing something that is wrong. It is putting good money after a bad outcome and we are terribly concerned about that.I want to turn to a curious thing. My colleague Chris Hipkins referred to the fixed wireless broadband and the terrible situation that is occurring out there. Well what we think we have discovered—and this is one of my questions or many questions that I have for the Minister tonight during this debate—is that there is some information around the number of customers. This goes to the 8500 customers on fixed wireless broadband which looks as if it has cost around $7000 per customer. Who are they and who are the providers behind them?Dr David Clark: How much?CLARE CURRAN: It is $7000 per customer. That is a rough estimate but it is just doing some basic maths.Dr David Clark: No evaluation.CLARE CURRAN: We have no other information to go on Dr Clark—no other information. There have not been any reports produced.Well let us have a wee look at who those customers might be and who is doing the connecting. Well the top provider—self-described top provider actually—for the Rural Broadband Initiative’s fixed wireless connections is a company called Farmside. It describes itself as that and I have even got a piece of paper here that I would be very happy to table if anyone wanted me to. It talks about how it provides fast broadband via satellite Rural Broadband Initiative’s fixed wireless and fixed line solutions as well as phone and mobile access. It says it has got more than 15000 rural customers.Well that is really interesting because what I have heard is that it is transferring many of those customers over to fixed wireless broadband which is fine in itself but it might be interesting for the House to know that the managing director of TeamTalk which is Farmside’s parent company is David Ware who is the—Hon Amy Adams: Brother-in-law yes.CLARE CURRAN: —husband of Belinda Milnes who happens to be the Minister’s sister. It is curious—Hon David Cunliffe: —and Jason Ede’s employer.CLARE CURRAN: Oh and Jason Ede’s employer. I forgot about that. The fact remains that it is a little bit curious that Farmside which describes itself as one of the top providers for fixed wireless broadband which has got very few customers—and I think everyone would acknowledge that given that it has had 5 years has spent $60 million and now it has got 8500 customers which equates to about $7000 each.Dr David Clark: Good transparency. It’s an evaluation.CLARE CURRAN: I think there is a really important issue here around transparency and around what actually is going on here with rural broadband. There are questions about how the money is being spent on the towers and there are questions around what actually is being delivered out there for rural New Zealand.So I say to the House tonight and I say to anyone from the other parties who wants to listen that there are some very very good reasons to say: “Hang on a minute. Let’s not commit another $150 million to a programme that is highly questionable and needs scrutiny. Let’s take a pause.” We are absolutely committed to rural broadband and delivering that infrastructure and delivering it in the best possible way.JAMES SHAW (Green): I have been listening to the debate on the Telecommunications (Development Levy) Amendment Bill and I am trying to sum up what the different objections and questions are that have been raised by various members previously—and there are nine that I can discern. I just wanted to flag these and to ask the Minister in the chair to provide some kind of response to these questions.The first question is of course about the concern that was raised earlier tonight when Spark released a press release saying that it was going to be passing along these costs to its customers. What is her response to Spark about that?The second question that I have got is around some of the questions that were raised to do with the quality of the connection. Is the work that has been done so far actually producing the kind of result that we would want it to? Are those connections actually working for people? Are they providing the kinds of benefits that we would expect?The third question is about the evaluation and the reporting of the existing Rural Broadband Initiative. Is it an effective way to spend the money? There have been questions raised about the sheer amount of money per connection. That has come up so we would want an answer to that.The fourth question that we have got which Gareth Hughes raised earlier is about the extent to which we are considering new technologies as part of this initiative. Is that being considered? And is the pace of change in these new technologies being considered? Is it possible that there will be a disruptive technology that will come along while we are still rolling out the existing solution that may actually render it redundant?The fifth question that we have got is about whether companies will have two bites of the cherry. As we understand it when the Government auctioned off the 700 megahertz spectrum it reached a contractual arrangement with Spark and with Vodafone to roll out cellphone towers which meant that they got a slightly reduced price on the spectrum. If that is correct will they be bidding for this new money essentially to be doing the same work? Will they get two bites of the cherry for the same piece of work?The sixth question is around process. Why is this being considered under urgency? I will leave it at that.The seventh question is related which is: why are we seeking funding for initiatives now before the policy details about how that money is going to be spenthave emerged and while the policy design is still being consulted on? Why do we have the cart before the horse in terms of seeking funding before we know the details of the policy?The eighth question is in relation to competition and our concern that was raised earlier about needing a more diverse and multiparty approach with different solutions for different rural communities.And the ninth question is: what is the Minister’s response to the two Supplementary Order Papers that are being put forward by Gareth Hughes and me?I do not know whether that is comprehensive. I have been trying to discern what the different objections and questions are that various members have raised. I may have missed some but if we could start with those nine I would be delighted. Thank you.Dr DAVID CLARK (Labour—Dunedin North): I rise to speak in the Committee stage of this bill the Telecommunications (Development Levy) Amendment Bill. I want to speak a little bit about the title of the bill because I think that there are some more fitting titles for this bill. I think it would be useful to consider them as sensible amendments to the bill to illustrate more clearly just what this bill is doing and to make it transparent to the public what will happen when this bill is passed—so that people are not surprised when their bills go up further down the track so that they are not surprised when a new tax is put on them so that they are not surprised when there is Government waste and so that they are not surprised when there is another broken promise from this Government.I want to address though a point that was first raised by Tracey Martin in her contribution earlier which was a good one I have to say. The issues are being debated here and although we may disagree on whether this bill should be supported or not at this stage part of the point of the Committee stage is of course to hammer out the ideas and to have a full debate and to ask whether this is a good idea or a bad idea. We are pretty firmly convinced that it is a bad idea but Ms Martin raised a very sensible question: how otherwise would this be funded? From this side of the House—from the Labour side—there are two things that we would say are obvious. The first is that it is not wise to fund something that is not working. And because there has been no evaluation of the existing programme it makes very little sense at all to continue to fund something that has not been proven to be effective or to be working.Let us put that to one side because we all want good rural broadband. I think that is the one point that everybody around the House is unanimous on. It is something that will take the country forward. The Government seems to have a somewhat limited vision of what might be possible but we would all agree that rural broadband needs to be better. I wonder whether the Government might consider investing its Future Investment Fund in such an activity. I mean what is that fund for if it is not for investing in future infrastructure? That the Government might choose to invest that money in it seems the most logical thing in the world.Let us put to one side the fact that it has promised to spend that money 10 or 15 times over. It talked about paying off debt at one stage; well it is $88 billion in debt. The $4.8 billion it got from flogging off the family silver will not cover that. But if we actually take the promises that it has owned up to and has put in ink in terms of the Future Investment Fund this would seem to be a sensible thing to fund that out of rather than by imposing a new tax on users. We have seen earlier this evening Spark come out and say that this is a tax that it will be transparently passing on to its customers. We have had the Telecommunications Carriers Forum come out and say that it has been bearing the cost in this industry and that it cannot continue to bear it any longer. It thought this tax was time limited but a new tax has been issued that takes it for ever into the future. This Government has promised not to introduce a new tax and now it is.So the first of the alternative titles that I suggest should be considered by the Government is—let us just call it what it is—the “Telecommunications (Development Tax) Amendment Bill”. This is a Government that is trying to introduce three new taxes despite having promised—crossed fingers behind its back—that it would introduce no new taxes if it was elected. In this Budget we have got three of them. This is a Government that is introducing a new tax and we have had the proof of that of course in the departmental disclosure statement which says quite clearly: “Does this bill create or amend a power to impose a fee levy or charge in the nature of a tax?”. And the department says in the biggest letters on the page “Yes”. This is in the nature of a tax. Bill English has tried to deny that but the public of New Zealand know a tax when they see one. It is an additional charge on top of what they are currently being charged—exactly what the industry now proposes to pass on transparently as an additional charge.So we have got that and it makes sense therefore to call this bill the “Telecommunications (Development Tax) Amendment) Bill”. That would be plainer. That would be clearer. More people know what a tax is than what a levy is. It is a nice clear way of saying what it is. This tax of course is going to be imposed on small businesses around the country.Hon DAVID CUNLIFFE (Labour—New Lynn): I have to say that I was enjoying the contribution of my colleague David Clark and I will pick up where he left off. Members opposite seem to be disputing the question of whether this is in fact a tax. In this Committee stage it is proper for us to address that question in the debate on clause 1 of the Telecommunications (Development Levy) Amendment Bill because that contains the title. The fact that this is a tax is I think quite plain. It is a cost that is imposed on members of the public through this instrument that applies through the companies concerned. We had a statement out today from Spark—the old Telecom New Zealand—which uses the language of a tax and which makes it clear that it is going to have to pass the cost on to its customers. What is more it is looking at doing so with an explicit splitting out in everybody’s phone bills so that they can see what this extra tax is. This is an extra tax and it will be shown on people’s phone bills. That is a statement from Spark. I think that colleagues and members of the public know that in the past I have had cause to take issue with some of the statements from the old Telecom New Zealand so I do not give it a soft run but I will take it at its word on this.If that was not good enough for people let us turn to the statement published today Friday 22 May on the Telecommunications Carriers Forum. This is the industry body. It is not one company pushing its own barrow; this is the forum of all the players. It talks about this being unnecessary to pass under urgency “in order to tax the industry”—this is quoting from it. This is the industry body. The industry body is calling it a tax: “The bill extends a tax which to date has not been explicitly recovered from consumers. However the industry cannot continue to absorb ongoing costs of this magnitude.”Members opposite have said “Look we don’t need a select committee process because there is nothing new in this.” Well what is new? I think Mr Moutter the chief executive officer of Spark makes the point very clearly: the original tax was a one-off to support the development of ultra-fast broadband through the Rural Broadband Initiative. It was time limited and the downsizing of those taxes was legislated for in the formal bill. So to change the law is in fact a change because under the continuous disclosure rules of the stock market the companies’ concerns have to build that into their forecasts and that has to be notified to the exchange and made public. If Parliament wants to override—people will see the irony of my having to set this out for members opposite—those private property rights that are enshrined in the securities legislation then we are using legislation to do it; therefore something is definitely changing. We are overriding legal rights.What then is the proper framework of objectives to consider the questions? I want to commend our Green colleagues for the list that they have come up with. I am going to refer to it again. Let me just set out for the public what Labour’s goals are here when we look at this type of policy issue. The first one reminds me of the old digital strategy with the “three Cs”. We want great connectivity for all New Zealanders. To be frank we want faster cheaper broadband wherever you are in New Zealand. We support the goal—I think every member of this House does—that broadband ought to be ubiquitous and available anywhere in New Zealand. The whole country benefits from the fact that everybody is on the network. You can ring peopleup; their phone numbers are in the phone book or they are on the net or what have you. Nobody is left out and the whole country benefits. That is the first goal: faster cheaper ubiquitous connection. But it leaves open the question: is this the right instrument? Is this helping? How would you know? There has been no evaluation done.The second one is user capability. We are opposed to digital divides. We abhor the digital divide which is an income-related divide where about a third of households—low-income households—do not have fast broadband access. And that impedes children’s learning and all sorts of things such as access to Government services. We want every New Zealander to have access to the net at speeds that they can use. We are also concerned about the rural-urban divide. We know that there has to be a technology mix starting off with fibre in the backhaul out to perhaps ADSL copper VDSL or whatever else is the current flavour of technology and then out to mobile and then out to satellite. Or perhaps Project Loon will bear fruit and we will have a mesh network of balloons—who knows. The technology frontier will shift. That is the point. Because the technology frontier is shifting because technology is changing it is prudent and proper and really important for the Government of the day to carry out a proper analysis of how the tax has been operating before imposing a new tax over the top of it. That brings us of course to the third “C”: content. We want a vibrant content environment. We want there to be competitive conditions online so that New Zealanders can access the content that they need and want on the cheapest possible terms.Those are the goals. What questions arise? I am just going to come back to Mr Shaw’s list. I think it is a really good one. Will these taxes be passed on to consumers? Well we have the industry body and one of the largest players saying that they will. That is at the very least a very important and open question. Secondly what about the quality of connections? There are two issues. There is a technical sufficiency argument and there is a benefit-flow argument—who gets what? They need to be answered. The third issue: has there been sufficient evaluation and reporting? Well there clearly has not been because there is not a proper regulatory impact statement and there has not been an options analysis done by officials. Fourthly what do we know about disruptive technologies? I mentioned Project Loon; there could be others. The point is: who would know? The Government has not done the work. Fifthly will companies have two bites at the cherry? Are they under existing obligations? I do not know we do not know and the public does not know but that is a very important question because we are opposed to companies double-dipping. If they are contractually bound because they have concessional terms under a previous spectrum licence auction then we should not be making New Zealanders pay twice by imposing a new tax on them especially not under urgency in the dead of night.Was the process proper? Well clearly it was not. There has not been an options analysis done and there has not been a regulatory impact statement done. Why should seeking funding from policy have been designed in this way? Was the cart before the horse? It looks like it was. To answer that question we turn to the OECD’s telecommunications policy unit and a very major report on telecommunications development obligations or levies which was published in 2012 and which was widely regarded at the time as “the gospel”. The report sets out the following points which it is a shame that the Government has not apparently addressed. First “define the specific features of the service under consideration”. Second “determine whether broadband is essential for full participation in society” and therefore in the public interests. Third “establish that market mechanisms are insufficient to ensure that service is available”. Fourth “assess the options of imposing a universal service obligation relative to other policy alternatives” Note: that has not happened in this case. Fifth “evaluate those alternatives in light of the broader policy objectives and other ongoing programmes.” That has not happened either. What are the criteria that an evaluation should take care of? Page 24 of the OECD study lists parsimony sufficiency neutrality focus adaptability predictability accountability and effectiveness. It is quite a long list. The OECD has done a lot of work.Well what are they saying? Turn to page 27. “At present revising universal service policies to include service from any location may not be feasible in all OECD countries.” It goes on to say that those with high population density like Korea will have no problem. Those with low population density like Sweden Australia or New Zealand may well have a problem and the issue of a universal service obligation is a very pertinent issue to be evaluated and raised. There is certainly in terms of the OECD’s work no case for an automatic roll-over. This is highly contentious stuff. What issues arise? Well what they name is cost relative to benefits. “In large countries with large unpopulated or sparsely populated areas”—like the South Island of New Zealand—“…the cost of providing access from any location would exceed the benefits.” How much is too much? How far away is too far away? We are never going to run a fat fibre pipe to Mount Cook. There are not enough people there. But we may want to use mobile broadband satellite or “Loon”—who knows. The point is the work has not been done and the public does not get access to that information.The OECD asks what the range of services to be provided is. What is the impact on competition of imposing a TDO? What is the impact on the quality of service? What about the affordability of the service if the tax is passed on to the consumer? What about technical issues like emergency services and social tariffs and so on and so forth?Hon AMY ADAMS (Minister for Communications): Given that the debate on clause 1 is quite a wide-ranging debate it is probably a useful chance to take my call on this matter. I was not otherwise intending to speak on the title but I do want to make a few comments. The first is that we have heard repeatedly from Labour in this debate—as if saying it often enough makes it true—that this is somehow a new tax. It has been in place in its current form and at its current level since 2011 and it was in place at a higher level under the telecommunications service obligation before that. Neither is it something that we have decided to do post-election without telling anyone. It was announced in August as part of our election manifesto which said that if elected this is what the National Government would do. So there is no question that this is in anyway inconsistent nor can anybody through any sort of twisting of the facts to suit the argument suggest that this is new. It is not new.The costs are in place. The costs of this are already in place. There is zero increase to the costs to the telecommunications companies. I have said that there is zero justification for any increase in their bills. I have never said that they will not be opportunistic and craven and try to justify some profit grab through it. I have said that there is no increase in costs to the telecommunications companies and therefore zero justification for them to increase their fees. If Spark wants to announce that it is going to put its prices up that is something it will have to explain to its consumers but let me tell you as others have said in this Committee it cannot sensibly justify raising prices because of this legislation. These levy extensions that we are talking about tonight do not take effect until 2016. So if they do put the cost up let us remember two things: when and by how muchwill they go up? At the very most we are talking about cents per bill per month. So if they put costs up from 1 July 2016 by more than 19 cents for a prepaid plan and maybe up to 80 cents for a consumer then they are not being honest with New Zealanders. Even then it is already in your bill so they would be double-charging you.Can I make the point that it is very easy to stand in this House and say how much you support rural broadband but not be prepared to do anything to make it happen. Here is the reality: we are building infrastructure in rural communities that telecommunications companies will use to sell their products. The telecommunications companies that are paying this charge use this for their business services. So who should pay for it—taxpaying mums and dads or the telecommunications companies? My view is that the telecommunications companies should pay. When Labour says to take it out of general taxation it is saying that we should pay for the infrastructure that Spark Vodafone Chorus MyRepublic CallPlus Services and all of the others use to carry on their business. That does not make sense. That would be irrational and unreasonable. It should fall on the industry. Those in the industry should not be allowed to sell the service just where they can make a lot of money. Instead we levy them to say that actually we have an expectation that they will provide services everywhere. That money then provides the communal infrastructure that those same companies provide their services over.The question that has come up also is: “Why is it urgent?”. This is a fair question. I accept that because yes the extension takes effect from July 2016. I will tell you why it is urgent. It is because anyone who understands how these processes work will know that I cannot go out and start negotiating for contracts for this to work until the money is legislated for. So the first step is that there has to be a legislative mandate to say that the money is available; then I can start the process. The longer that is pushed out the longer it will be until people get better broadband. To every member in this House who has talked meaningfully about “Oh we have got to get better broadband it is taking too long.” I say that that is where the urgency is. The urgency is that New Zealanders want this and they want this as soon as possible. This bill has been made the simplest bill possible. It does not talk about the levy’s operation how it is allocated how it is spent or how the Commerce Commission divides it. It simply provides the basis for the money so that we can get out and start getting these processes in place.Let me close by just saying this: broadband is critical to everyone in New Zealand—everyone. Somebody has to pay and I am absolutely comfortable that the right place for that payment to fall is a levy on the telecommunications companies that will use it and that will benefit. There is zero justification for anyone to increase prices as a result and if they do that is a conversation that they should be having with their consumers. If I was their consumer I would be looking to shop around.KRIS FAAFOI (Labour—Mana): I would like to thank the Minister for taking a call because now everything is as clear as mud. I am really happy because it is so clear that it actually goes against what the Telecommunications Carriers Forum has said in its press release tonight. The Minister has said that the telecommunications companies are the ones to blame here and that this is not a tax. But it is clear from the press release put out by the Telecommunications Carriers Forum I guess a couple of hours ago that this situation as I said before is as clear as mud.The Minister said that because of the level of levy—or tax I should say—the prices should have come down. Well—Hon Amy Adams: No I didn’t.KRIS FAAFOI: Yes you did. But the Telecommunications Carriers Forum disputes that and in its press release from this evening I guess it says that the bill that we are currently debating “extends a tax which to date has not been explicitly recovered from consumers. However the industry cannot continue to absorb ongoing costs of this magnitude.” So who is right? Is it the Telecommunications Carriers Forum which is saying that “We have absorbed this for some time and now we have to charge.” or is it the Minister who says: “Well it shouldn’t be double-charging.”? I guess that is why we have got a problem with this piece of legislation because as I said the situation is as clear as mud.This is a new tax. In fact the departmental report on this bill says it is a new tax. It has been quoted but just because the Minister said that this is not a new tax I will quote it again. Part 4 of the departmental report asks a very specific question at 4.2. That question is: “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and the answer is yes. The answer is yes. And then Spark—[Interruption] Here is a question for the Minister if she is disputing a lot of things that I have said today. Does she dispute something that she said today? In her first reading speech she said: “… the industry will not need to put its prices up or explain to its customers why their bill is changing.” Well that would be great because she is obviously trying to cushion the market and people at home will be worried if they are going to have to pay more in their bills. But the reality is that less than an hour later Spark said it was going to put its prices up by $1 a month. You can question whether that is the fault of the company—and that question has been asked by New Zealand First and also by the Minister—or whether it is the fault of the Government but the reality is that people are going to be paying more for their monthly bill. They are going to be paying more for their monthly bill—that is the cold hard reality of this.This is a new tax and this Government is trying to spin its behind off to say: “Oh well it’s not our problem. It’s not our fault.” Well you created this problem—you created this problem. We are not going to vote for this piece of legislation for a very good reason: $300 million has already been spent and as we on this side of the Chamber have said the assessment and the critique of the Rural Broadband Initiative phase one has been well less than ideal. So if we are going to go and spend another $150 million which is going to be put together by this tax in this bill I think the New Zealand public would like us to know whether the Rural Broadband Initiative phase one has been effective or not.The Government claims that 86 percent of rural users now have access to this. Well we do not necessarily think that that is the case. There has been no assessment of the Rural Broadband Initiative phase one. This issue was before the Commerce Committee yesterday morning. InternetNZ wants us to have an assessment of the $300 million—which is you know not pocket change—to find out whether it has been effective. I do not think it is a bad thing for members on this side of the Chamber to say: “Was that $300 million spent well so that we can commit another $150 million to the next phase of this programme?”. We cannot sit here and say: “Well yes go and do whatever you like.”We absolutely agree with the objectives of the Rural Broadband Initiative but $450 million is a hell of a lot of money and we want to know whether the first $300 million has been effective or not. We have big questions about that. We have had a number of communities come to our select committee and say: “Well our experience hasn’t been that flash.” So is this something that is happening up and down New Zealand? Is it something that we need to address and is it something systemic?Dr DAVID CLARK (Labour—Dunedin North): I want to talk again about the title of the bill because I had raised only one of my suggestions when the bell so rudely interrupted me earlier. The second suggested title that I have for the bill is “Telecommunications (Government Waste) Amendment Bill” because that would label clearly the problem that we have here where the Government is refusing—refusing—to evaluate this proposal before it takes any further steps.Before I elaborate on this I want to touch just quickly on a point raised by my colleague Mr Faafoi in his contribution. He talked about how things are now as clear as mud and whether this is a tax or a levy. The Minister says that it is a levy; the industry says that it is a tax. Mr Cunliffe has raised the point that the OECD would probably define it as a tax and we have numerous other references including from the Minister’s own department referring to it as “something in the nature of a tax”. The Minister now claims that she is the only one who is right on that point and that everybody else is wrong and perhaps it is as clear as mud in the same way that the Prime Minister’s promise not to raise GST was as clear as mud—and the promises made by the Government that it would raise wages by $7000 by 2026 were made in the same vein. All these promises were meant one way and now the Government is trying to say that they mean something else. It said that it would get to surplus. That was the central promise of this Government’s last election campaign. Well we know now that that has not been achieved.It is not clear whether this is a bill about a development levy. It is a development tax as I have suggested in my previous contribution but it might well be labelled “waste”. If something is not measured—and this is a simple precept—we do not know whether it is actually being spent well or not. We have suggested alternative ways that it could be funded and we have asked the Minister to explain—or others in this Committee have—why it will not be evaluated properly. Questions that hint at conflicts of interest have been raised. I am not aware myself of the detail of that but I think the Minister ought to be on her feet explaining why she is not going to evaluate it. Even if she is going to press ahead without public scrutiny of this bill I think it would be reasonable for her to explain to us why no evaluation is happening. This is why it could well be called the “Government Waste Bill” because the facts that we have insofar as we have them are that $60 million has been spent on this particular initiative so far to get only 8500 connections. That is the best estimate available. That is $7000 per connection and the quality out there is not great. We have heard that from several MPs who have had people coming into their offices to complain. I have certainly had them. I took the petition to the select committee which has seen a change in behaviour as a result and I know that my colleague Clare Curran has done the same and I encourage others to do so.This is a wasteful bill. If we are not going to evaluate whether the programme works—and all of the evidence points to it not working and not being an effective use of taxpayers’ money—then there is an arrogance in not evaluating it in not being able to explain and in not being able to actually front up and say “This is why we think it is worth investing again.” I do not think the public at home are going to say that $7000 per connection is good value for money. There are plenty of other ways that we could get broadband there more quickly. I think the overseas experience would be that it could get there more cheaply and be of a better quality. This is a Government that needs to do some explaining. So I am hoping that the Minister will soon get to her feet and explain to us why it is that what appears to be incredibly wasteful spending is not being evaluated. We all want better broadband—we all want better broadband. All of us would like to have happy people coming through our electorate offices saying: “Look I’ve just started a new business and I’ve got this great fast broadband and now I’m able to participate in the world.” The reality is that that is not the experience.This Government has been in Government for nearly 7 years now. We heard Melissa Lee earlier complaining about the poor quality of broadband. The irony of Government members also complaining about the poor quality of broadband despite their having been here for quite some time seems to be lost on them. So I suggest that in addition to the title “Telecommunications Tax Amendment Bill” being considered the alternative title “Telecommunications (Government Waste Amendment) Bill” also be considered. Thank you.The CHAIRPERSON (Hon Chester Borrows): I will give a call shortly but by way of being helpful and in no way being patronising I will note that the debate is becoming somewhat repetitious at the moment. The discussion around this clause 1 “Title” is the widest ranging part of this debate. After that we move on to clause 2 “Commencement” clause 3 “Principal Act” the amendments that are around clause 3A and then clause 4 “Schedule 3B amended”. These will be very narrow debates and very little leeway will be given in so far as members must address those parts. Members seeking clarification on this could look at Speaker’s ruling 114/7. I just draw to the attention of members that now they should be looking to draw on new novel and innovative avenues of inquiry or debate or discussion.TRACEY MARTIN (Deputy Leader—NZ First): I will definitely try to be original; thank you very much Mr Chairperson. First of all can I thank Dr Clark. I am actually enjoying myself. This is a debate but I find it very interesting that I am doing the Government’s work. Not a single member of the Government apart from the Minister has stood up to actually address the issues that the Labour Party has raised. So first of all—Hon Judith Collins: You’re doing a great job Tracey.TRACEY MARTIN: Thank you Ms Collins. First of all New Zealand First would agree absolutely with the comments around evaluation that Dr Clark raised. Absolutely we would agree. It has been raised also by the Green Party and previously in conversations we have said that the Commerce Committee would be a perfect organisation through which to do an evaluation. But that is no reason to stop this bill.We can accept that urgency may not be the best thing but even if we—[Interruption] I think I am in a parallel universe. I am standing here arguing against the Labour Party about a levy on a corporation. Can I just talk about a press release from Friday—Hon David Cunliffe: I raise a point of order Mr Chairperson. The member’s address raises an interesting point. If the New Zealand First Party were in the position where on the basis of its concerns about the lack of an evaluation it wished to change its vote is there any possibility of correcting the record on clause 1 which has already passed?The CHAIRPERSON (Hon Chester Borrows): No it is not an issue and it is not a point of order. Continue.TRACEY MARTIN: Speaking to the point of order New Zealand First is quite clear in its own mind how it votes and when it votes. It does not require the Labour Party—The CHAIRPERSON (Hon Chester Borrows): That is a matter for debate not a point of order. The member may continue with her call.TRACEY MARTIN: Thank you Mr Chair. And the evening goes on so there you go. Can I just draw the Committee’s attention to a press release on Friday 22 August 2014 headed “Spark annual profit almost doubles … grows mobile revenue”. It said: “Spark New Zealand … the rebranded Telecom almost doubled annual profit on the sale of its Australian AAPT unit and grew mobile revenue as it repositions itself away from relying on dwindling landline use.” It made that record profit with this levy in place—with this levy in place. And that net profit rose to $460 million or 25c per share—25c per share—but 22c only per month is what it needs to recover on mobile calls to actually pay this levy. Yet it made 25c per share in the 12 months ended 30 June from $238 a year earlier.I am arguing this against the Labour Party. I find that unfathomable. I would not have believed when I came down to the Chamber today that I would be standing here doing the Government’s job—doing the Government’s job on a Government bill. Why on earth am I doing your job for you? Get up and argue.I agree that there needs to be an evaluation. Surely because the National members are not rising to their feet National must agree also because the Green Party and New Zealand First appear to be doing their job for the consumers of New Zealand and those in rural New Zealand who want broadband. The other thing that Dr Clark said if I can just address it was that the alternative way to pay for this infrastructure which as the Minister quite rightly pointed out is used by every one of the 22 telecommunication companies—upon which a percentage of their profit is paid into to create this infrastructure. [Interruption] For goodness’ sake Mr Jami-Lee Ross please take a call and stand up for your own Government bill. This is just so unusual that I am having difficulty dealing with it. One of the things missed out that Dr David Clark said was that the Future Investment Fund could pay for this.Hon David Cunliffe: Would the member change her vote if the National Party—TRACEY MARTIN: No we will not change our vote Mr Cunliffe because you have not provided enough evidence to suggest that this is the way that we should go. The Future Investment Fund—New Zealand First quite clearly said that we believe that 49 percent of our State-owned assets should not be sold. How on earth now could we vote for the use of those profits when we said that they should be reinvested in income-earning assets that provide an essential service such as power which has been sold off? How on earth would New Zealand First then actually stand by and support some organisation that said we should take it out of the income of the Future Investment Fund?But here is the irony that blows my mind. Whether the consumer is currently paying 22c per month for a mobile call or 80c for any other service because the levy is currently in place or whether as the Labour Party suggests we actually take that money out of another taxpayer bucket they are the same people—they are the same people. The consumers of New Zealand who have got the mobile phone in their hand and I suggest if Spark puts up its prices they change their provider—JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.Dr MEGAN WOODS (Labour—Wigram): It is my great pleasure to take a call on the widest-ranging part of this debate as you identified Mr Chairman on this Telecommunications (Development Levy) Amendment Bill. This is a seemingly very short piece of legislation that we have before us of just four parts. But I as a number of my colleagues have done before me want to talk about the title of this bill in terms of the Telecommunications (Development Levy) Amendment Bill. One of the objections that has been raised from Labour members who have spoken previously is that this is an increase in tax from a Government that purported that there would be no new taxes. What do we have here? A new tax and an increased tax. It is dressed up. We are trying to call it a levy trying to soften the blow but let us call this what it is.We have had the industry come out today and one of the questions we have had is why there is the need to use this process of urgency to go through this. I think that that is a real question that does need to be addressed. Why is it that we are not having the chance for the industry and the concerned players—the people who need this broadband in their small businesses and the rural families and families in our regions that need this access to broadband—to be able to come and speak to the people making the decision and to have that chance to have submissions at the select committee stage? Urgency should be used for real reasons not just as a way to ram through some legislation that you think might be a little bit unpopular and where you do not want to give people a chance to front up and have some objection to it.But this legislation is absolutely on message for the Government. Its Budget was one that was long on broken promises. It was from a Government that is short on vision. It is a Government that all round tried to scurry around the fact and get as close to reaching the non-surplus as it could—the non-surplus of course otherwise known as a deficit. What we do have here is a piece of legislation and a title that is quite misleading for people.Of course it goes without saying that Labour supports more people getting connected to broadband. We know that this is absolutely imperative for the future of New Zealand. We know it is important for education. We know that it is important for our businesses. We know that it is important for our industries. We know that it is absolutely vital. We have consistently focused on getting rural and regional New Zealand a plan for community-based fibre schemes. This is something that has occupied our minds and our actions when we have been in Government. However the existing rural broadband scheme has been a flop. It is a rural broadband scam. It is not working. Not only is it a waste of Government money but it lacks accountability and transparency.Once again what we are seeing here is economic mismanagement from a panicking and desperate Government. We can hear the shrieks from the other side that are serving only to underscore this point from the reaction that comment got over there. It is another example of how it is that National is neglecting the regions and treating them like the poor country cousins. Rural customers are going to end up paying more for this far from less.Dr David Clark: It’s shocking in Waitaki.Dr MEGAN WOODS: It is shocking in Waitaki—that is what I am told by my colleague Dr David Clark. He wants to know why the member Jacqui Dean barracking from the other side does not stand up for those constituents in Waitaki who are experiencing shocking internet and broadband connections and why it is that instead of taking a call and explaining to her constituents why she will not back them and stand up for them she chooses just to interject in an incomprehensible way from the benches opposite. So get on your feet take a call and stand up for the people who elected you to represent them. It would be great to hear from you. We are all holding our breath and would like nothing better at this time on a Friday night.The Rural Broadband Initiative was supposed to deliver speeds of 5 megabits to 86 percent of rural households and businesses. At the time Steven Joyce said that this was meant to mean 252000 customers in rural New Zealand getting access to high-speed broadband comparable to urban levels of services and prices.RICHARD PROSSER (NZ First): I was not sure whether I was going to take a call on this when I came down here but listening to the debate I feel that I cannot not take one. I do want to talk about the title. I think the two words that really matter most are “telecommunications” and “development”. Frankly I do not care whether we call this thing a levy or a tax or a koha or a Danegeld or anything else; what matters is that it is money that gets paid.I agree absolutely with Minister Adams that it should be the telecommunications companies that pay it because it is actually the companies who since privatisation are responsible for the fact that we have not had development in telecommunications in the rural areas.I am going to put this from a slightly different perspective from some of my Labour colleagues because I actually live in the boondocks. I live in a cellphone blackspot—it is called rural New Zealand. There is no coverage. I have got maybe one little sweet spot up by my garage where I can get two bars if I hold the phone up there—sometimes on a good day if it is not raining. But in the house? No chance. This is 40 minutes north of downtown Christchurch so it is hardly the middle of nowhere.We moved up to Canterbury about 6 years from Central Otago. The previous 2 years we had been enjoying blisteringly fast broadband speeds of about 2 megabits and that was because they had upgraded the cabinet round the corner finally but prior to that we were on dial-up. If you wanted to look at a picture you just sort of set the thing going and then went to bed and in the morning your 14 kilobyte photo had come through—if you were lucky if the thing had not logged off through the night.Going back a little bit further in time when I was growing up I remember the telephone was a black Bakelite thing on the wall with a crank handle. To use it you would pick up the handle crank the handle and the nice lady on the other end would say “Number please?” and so you would say whom you wanted to talk to. Being a little boy at the time of course the nice lady in the phone exchange was in the post office and she could see the town. She knew everybody and she knew whom I was probably talking about. She would say “Do you want to talk to Paul?” and I would say yes and she would say “I’ve just seen him go out.” And that was the way that rural New Zealand was. Actually in broadband terms most of rural New Zealand is still like that. Most of rural New Zealand would just like to have broadband.So in 2009 we moved to Canterbury and Telecom said yes that was fine it could hook us up to broadband it had checked our lines and they were all fine. It sent us a nice free modem and that was all going to be good. And then Telecom came to hook it up and said actually no our line could not take it. We asked when that was going to happen and Telecom said it was looking at upgrading the exchange—maybe in about 2012. We asked what we were going to do until then. A couple of the Labour members mentioned companies like Farmside. In those days that was pretty much one of the only alternatives. It was doing mostly satellite internet in those days. So we looked into that and we looked into radio and ended up getting a radio link with a company out of Christchurch. We were on the outer edge of where it could reach. It was slightly cheaper and slightly faster than the terribly slow speeds that that satellite was offering.I think it is a bit rich that we have got members—and they are mostly Labour members—who are standing up here talking about rural this and rural that and provincial this and provincial the other thing. They talk about constituents coming to see them and they relate these second-hand stories about the services that are provided in the provinces kind of holding it out at arms’ length as if it is some sort of distasteful thing—“We’ve heard about the countryside. We see documentaries about it on television from time to time. Every now and then an angry person from rural New Zealand will phone us up and sometimes a scruffy one will come into our office and sing us a tale of woe about how terrible things are. Of course we sit there and smile sweetly and nod and take these concerns on board—at a distant academic level because actually we do not live that.”Well people like me do live it. I understand that maybe the upper levels of the National Party have lost touch with the heartland but there are plenty of members on the Government side who still live in the rural areas who still know. They themselves experience these things. And so I agree with my colleague Tracey Martin that it is a bit odd that here we are doing the Government’s work for it but in actual fact as far as this is concerned we agree with them entirely. I heard Ms Lee talking earlier about the plight of some travel writers I think they were who were having difficulty out in the cellphone blackspot that is called rural New Zealand trying to get a link to their Twitter. These things do not mean anything to urbanites who understand them at an academic level. Of course here we have got connectivity. We have got cellphones that have got lots of bars on them all the time. We can go up to our offices and we have got high-speed broadband. Members can go back to the hotel and they have got broadband. They can go back to their apartment and they have got broadband. They can go home to their urban electorate offices and they have got all of these things. And so they hear this sort of whining noise from people—“Oh the poor people of the country have not got fast broadband.”—and talk in highfalutin conceptual ideas about having another review or perhaps forming a committee and looking at things again.People in the provinces have actually had a gutsful of that. It is the provinces that earn this country’s living. It is the provinces that create the wealth. It is the provinces who are always on the rough end of the stick.KANWALJIT SINGH BAKSHI (National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 75New Zealand National 59 New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 45New Zealand Labour 32; Green Party 13.Motion agreed to.The result corrected after originally being announced as Ayes 75 Noes 46.A party vote was called for on the question That clause 1 be agreed to.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Clause 1 agreed to.The result corrected after originally being announced as Ayes 89 Noes 32.The CHAIRPERSON (Hon Chester Borrows): I will just remind members that votes are to be heard in silence. We have had previous precedent today when that was breached and there were ramifications. We will hear votes in silence.Clause 2 CommencementCHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a call on clause 2 which is the commencement clause of the bill the Telecommunications (Development Levy) Amendment Bill. It is a nice simple straightforward clause which reads: “The Act comes into force on the day”—on the date after—“on the day after the date on which it receives the Royal assent.” That seems relatively straightforward. What does that actually mean?Hon Ruth Dyson: Can you say that again?CHRIS HIPKINS: I will read it out again because I botched it up completely the first time. “The Act comes into force on the day after the date on which it receives the Royal assent.” That might seem relatively straightforward. Typically the Royal assent would be given within a few days of the bill being passed through all of its stages by Parliament with the Governor-General signing it effectively on behalf of the Sovereign the Queen of New Zealand who is of course Queen Elizabeth. However there is no guarantee that the Royal assent will in fact be given. All New Zealanders work under the assumption that if a law is passed by Parliament it will automatically become the law of New Zealand. That is not correct. In fact we have the royal prerogative which does allow the Sovereign of the country not to provide Royal assent. That has not happened in New Zealand but it has happened in other jurisdictions that have a similar procedure. If I look at the Parliament of Belgium for example—Hon Member: Let’s!CHRIS HIPKINS: Oh we will look at the Parliament of Belgium where the issue of the Royal assent came up when a law was passed by Parliament—and I think from memory it was around gay marriage—that the King of Belgium objected to and therefore refused to provide the Royal assent. Therefore the will of the people through the democratically elected Parliament was thwarted—or perhaps it was not. What the Parliament of Belgium did—and this is quite a novel approach—was effectively to remove the king from office for a day. The law was signed—The CHAIRPERSON (Hon Chester Borrows): I would not want the member to feel that I was being pedantic in any way but it has been drawn to my attention that speculating as to what the Sovereign may do at any one time is not only a long way away from the ambit of this particular clause but also may draw disrespect towards the Sovereign. The member may wish to check Standing Order 118 in relation to that. I would ask him to stick fairly close to as he has conceded the very narrow nature of clause 2.CHRIS HIPKINS: Absolutely and I mean no disrespect to the Sovereign whatsoever and I wish to make that abundantly clear. However the Royal assent is granted by the Sovereign of New Zealand who is Queen Elizabeth II or by the Governor-General. The point that I am making is merely that there is no guarantee that the Royal assent would be given by the Sovereign and I am not speculating in any way as to whether the Sovereign may or may not give the Royal assent. I am simply pointing out that there is precedent of the Royal assent not being given in other jurisdictions that follow the same legal process as us. In the case of Belgium what that resulted in was the Parliament effectively taking the sovereignty for itself for a short period of time which allowed the Prime Minister to sign the law and then of course the Sovereign was reinstated. That was the precedent in Belgium.We are very fortunate that in New Zealand the Royal assent as far as I know has never been refused under the royal prerogative. And that of course is a very good thing. The principle that we have in New Zealand is that the Parliament the will of the people through the majority in the Parliament—even when the minority is right and the majority is wrong—will be given the Royal assent and that will become the law. So this bill will effectively come into force at some point within the next few days probably. I think early next week would be the next opportunity for the Governor-General to sign the law for it to come into force. Of course we are debating this bill on 21 May despite the fact that the rest of the country has moved on and it is now 22 May. The Hansard records of the House if this bill is passed—and by the looks of the votes it is going to be passed by a reasonably comfortable margin—will show that this was passed on 21 May. One would assume that the Royal assent might be given on 22 May.That will not be the case because in fact by the time the bill makes its way to the Governor-General for the Royal assent it will be at least 23 May. I would think that it is not going to go to the Governor-General today—“normal people time”—which is 22 May. It is 21 May according to the House. It will be 23 May tomorrow by the time the bill is prepared and ready but that of course is a weekend. So Monday 25 May would probably be the first opportunity for this law to actually come into force. This is quite correct. This is when the Royal assent will take place. The earliest opportunity for this bill to come into force would be Monday when you work through the logical sequence of the dates that we are talking about. The reality would be that if the Governor-General were unavailable to sign the legislationfor some reason it may not come into effect on Monday and it may be given the Royal assent further down the track. There are of course other provisions that mean that if the Governor-General is not available on Monday the legislation could be signed by someone else.TRACEY MARTIN (Deputy Leader—NZ First): I am ecstatic to rise to speak on clause 2 particularly the part of clause 2 that my learned colleague Chris Hipkins from the Labour Party has started us down. I think he has raised a very very good point about the fact that nobody can assume that any legislation will be passed. Obviously one of the reasons for the beginning date of this legislation is that one of the things the Governmentwants to do I am sure and one of the things that parties supporting this bill want to do is make sure that those telecommunications companies have the widest possible opportunity to amend their budgets to make sure that the levy that is in place—the levy they know has been in place since 2011—is going to continue until 2020. We want to give them a strong lead-in on that because nobody wants to actually negatively affect those telecommunications companies in the way they do their business.Also the Minister made the point that as soon as we know where the money is going to come from there are other conversations that can take place around the provision and who is going to do this that and the other. But actually I want to go back to the point that Mr Hipkins raised and that is around Royal assent. I think it is a very very valid point. For me personally it is one of the reasons why New Zealand should never become a republic. I think it is one of the strongest reasons why New Zealand should never become a republic.Let us imagine that this piece of legislation with the start date that is required is not in the best interests of the country. Let us just imagine that for a moment. With a start date such as this where it requires Royal assent to begin then the Governor-General can actually refuse to sign it. Until the Governor-General signs it on behalf of Queen Elizabeth—a very fine woman whom I personally admire—it does not become the law of the land. Therefore if this was not a billthat was in the best interests of the country—and New Zealand First is obviously supporting it; we believe it is—that one little clause around the start date around Royal assent would actually save the country. It is the last backstop to bad decisions by this House. I am not sure that that is where Mr Hipkins wanted to go with his contribution but from a New Zealand First perspective or from my perspective specifically this particular clause is incredibly important. That piece around Royal assent keeps us safe.One of the things we must never get rid of with regard to start dates and pieces of legislation is the Royal assent. That is our last protection for bad legislation. The Governor-General can decide to sign any legislation. People might decide to do away with the Governor-General but until he signs a bill it cannot be put in place. I agree with Mr Hipkins that that is a very very important clause. More members of the Government should stand and take calls on that particular clause because I believe that they obviously would support it. They would support the start date being on Monday possibly or Tuesday if the Governor-General has appointments.Kris Faafoi: We could still be sitting on Monday.TRACEY MARTIN: Oh well there you go. You see it may not get out of the House by then. But the moment it gets to the Governor-General he will make a decision as to whether it is in the best interests of this country. We all know what a fine man the Governor-General is. All of us trust the Governor-General and his judgment. Therefore that clause again is a very very important clause inside this piece of legislation. Kia ora.The CHAIRPERSON (Hon Chester Borrows): I will give a member the call. I would just like to make the point that we have well traversed the Royal assent even in various European countries by the Governor-General as well as the Queen and the King of Belgium. So I look forward to the next speaker cutting a fresh track on this very narrow clause.Hon DAVID CUNLIFFE (Labour—New Lynn): There is a strong precedent in this House not to bring the Chair into the debate. I am going to depart from that on this occasion only and very gently to note that you are a member in another capacity of the esteemed Regulations Review Committee on which in fact we serve together. The Chair will have almost I am sure uppermost in his mind at this time that the Regulations Review Committee has a tradition of objecting to legislation where the date of Royal assent or the date on which a bill comes into force is not specified in the primary legislation. That is seen as very very poor drafting practice.What normally happens as you know is that the Regulations Review Committee will write to the substantive subject select committee—in this case it would be the Commerce Committee—asking them to invite the Minister to reconsider whether in fact there should be a fixed date put into the equivalent clause the commencement clause.That is where we run into problems with this bill. I guess it is yet another little proof of why we should not be here on a Friday night trying to ram a bill like this through all stages because there is no substantive select committee that the Regulations Review Committee can write to to object about the fact that it does not have a proper commencement clause in it. This is an open-ended commencement clause. It is poor drafting practice. It would be pulled up by the Regulations Review Committee and the Commerce Committee would have to deal with it. The Commerce Committee would probably then write to the Minister. There would be an amendment made in the usual way and there would usually be either a fixed date for commencement or a deadline for commencement.That is particularly odious and improper when it comes to a tax bill. This is a tax bill. This raises taxes. Apart from the fact it is breaking an election promise it is a serious matter. There should be no taxation without representation. Representation includes the full select committee process. So here is a tax bill being rammed through Parliament without a select committee process and with an improper commencement clause.The Regulations Review Committee would take this very very seriously. It would write to the subject select committee the Commerce Committee and it would ask for an amendment or consideration of an amendment on that point. It is not too late for the Minister given that the Minister has seen fit not to send this to a substantive committee to respond to that point and to assure the Committee in some way as to the timing of the commencement. It may be that the Government may see fit even in the time that is still available to amend this commencement clause by way of Supplementary Order Paper to give at the very least a back-end assurance to the public that there will be some certainty about this.As my colleague Mr Hipkins Dr Hipkins has said there is a very important precedent which we are not allowed now to refer to from a small European country where Royal assent was withheld on a matter of almost equal import as this unjustified unwarranted and improperly drafted piece of tax law that we are ramming through the House in the dead of a Friday night.I invite you Mr Chairman to ask the Minister to take a call and for you to at least share with the Committee your experiences on the Regulations Review Committee where you know—The CHAIRPERSON (Hon Chester Borrows): Order! Please be seated. The member knows that it is wrong for him to draw the Chairman into the debate. I certainly will not be jumping when he yanks my chain.Hon DAVID CUNLIFFE: Thank you for the admonition Mr Chairman. It must be getting late but since you put it in those terms your chain shall be completely unyanked by the Labour Party. But it is not too late for the Government to yank this bill from the House because this bill is improperly drafted. This is an improper commencement clause for a tax bill.We should not be pushing tax bills through in the dead of night. We should not be doing it when the Government said that there were not going to be any more tax laws no new taxes—well here we have got one. It was brought in through urgency without a select committee process flying in the face of established constitutional convention. This is legislation for cowboys and the Labour Party wants none of it.BRETT HUDSON (National): I move That the question be now put.Dr MEGAN WOODS (Labour—Wigram): I am very happy to take a call on this commencement clause. Mr Chairman with the greatest respect I have listened to your calls to move on beyond the Royal assent but it has become somewhat of a debating point in this Committee tonight around the circumstances in which the Governor-General on behalf of the Sovereign can actually—could they or when could they—refuse the Royal assent. When such questions come up being the hard-working parliamentarian that I am I like to go to the source and consult McGee to see what the circumstances are under which this could occur. I think it is important that we clear up this debating point in this Committee tonight and actually see what the facts are around this. There is no longer explicit statutory recognition of a power to withhold the Royal assent as there was in a previous law. This was admitted in 1986 as being unnecessary. It was felt that to re-enact—The CHAIRPERSON (Hon Chester Borrows): Order! Just for clarification for the member speculation as to the inclination of the Sovereign or the Governor-General is not relevant to the detail of this clause. I previously warned all members that we have pretty much covered this ground. So I ask the member to explore new territory take us to new depths in this clause.Dr MEGAN WOODS: Just speaking to the point of order Mr Chair.The CHAIRPERSON (Hon Chester Borrows): Not challenging it in any way?Dr MEGAN WOODS: No I am seeking your clarification Mr Chair and asking for some guidance from you in that there has been a debating point established around whether or not—I am not questioning the reputation of the Sovereign—they could do that. I am just asking your guidance how it is that a member can address what has become a debating point in this debate.The CHAIRPERSON (Hon Chester Borrows): Well fortunately for me as Chair I am the sole judge of the scope of this debate and I have judged that we have traversed that. I believe that it has reached the full extent of the scope in relation to the Royal assent in this matter. We are looking for new territory. If the member has not got any new territory to explore there are plenty of other people seeking the call—Mr Faafoi for one.Dr MEGAN WOODS: Thank you Mr Chairman. I appreciate your guidance in this matter. It is always useful to have your wisdom shared with us. We always appreciate it greatly.In terms of the commencement date on which this bill receives the Royal assent and when it comes in to date my colleague Chris Hipkins has already talked about when that might be. I think there are some serious matters that remain unresolved around when it is and how it is that we treat taxation law in regard to the Royal assent because it goes back to some of the material that was covered. There is a clear intersection here between clauses 1 and 2 around what it is that this bill the Telecommunications (Development Levy) Amendment Bill is called. This is called a development levy bill but in reality this is a taxation bill and as my colleague the Hon David Cunliffe has pointed out in his previous contribution actually there are some very serious questions that we need to ask around taxation law and how that may be treated. Mr Cunliffe raised a very serious point about the Regulations Review Committee and howthis would be treated if it were going through a regular select committee process and how it is that this might have to be treated differently. I think it is important when we are using this mechanism of urgency that we are not circumventing what are some very important conventions in this House and that is that people in this country need to have the peace of mind that they do not have a Government or a Parliament indeed that will pass legislation that unfairly taxes that there are important checks on that and one of those is that—Clare Curran: Shouldn’t be doing it under urgency.Dr MEGAN WOODS: —we should not be doing it under urgency and if we are we should at least be putting some of the normal procedures around it. I know whether or not the Sovereign would give this piece of legislation Royal assent has been ruled out. Royal assent is not something we would ever consider talking about again but I am sure other members of our team here in Labour will have very serious questions that they will need to raise around this very important clause 2 of this legislation being the commencement clause. We should always ask the serious questions of any bill that we as legislators are asked to pass. We should never just think of ourselves as rubber-stampers. We should examine legislation clause by clause and we should always be asking questions especially when we are not going through the proper processes that we would expect of a select committee of this House. So there are important questions to be answered and I invite the Minister in the chair to take a call and to address some of these very very important questions that members have put to him because this is what we deserve as a Parliament.KRIS FAAFOI (Labour—Mana): Thank you very much Mr Chair for the opportunity to speak to clause 2. As your predecessor in the Chair has mentioned it is a very narrow clause. I do not intend to go into some of the issues in terms of the Royal assent but I do want to take this opportunity to talk about the commencement date. We do not know when this bill will come into force—it may be Monday it may be Tuesday—but when it does come into effect it will set in train a chain of events to allow the Government to negotiate with other telecommunications companies not only to allow the tax that is going to be collected under this piece of legislation to be collected but also because we know that this bill will become an Act to allow the second stage of the Rural Broadband Initiative to get under way.Although we on this side of the Chamber have noted some concerns about that I did want to use that in terms of the chain of events that starts when this bill becomes law to take issue with something that New Zealand First member Richard Prosser said earlier on. He suggested that members on this side of the Chamber—or from this party more or less—were using constituents who were coming to us into our electorate offices by dangling them out there to use as examples of people we do not really care about. I would say to Mr Prosser that that could not be further from the truth. There are a number of electorate MPs on this side of the Chamber who have had a number of constituents come to them and ask them why their rural broadband is so rubbish.One example of that is someone in my electorate. Like Chris Hipkins I have got a mixed electorate. I have got the rural areas of Pukerua Bay and some rural areas in Pāuatahanui and—Brett Hudson: Pukerua Bay is not rural.KRIS FAAFOI: Well there is a farm there. You want to come and have a look at it. It has got livestock and everything—come and have a look. One person who lives in those rural areas came to me and said: “Look my internet connection is not what I want it to be because of where I am located.” and he was in a rural area. So I looked at that case. I took it to Vodafone and said: “Look this chap lives here.” and I am just about to get to my point Mr Chair.The CHAIRPERSON (Hon Trevor Mallard): Well the member had better because if he does not his call will be terminated.KRIS FAAFOI: The outcome of that conversation was: “You’re going to have to wait for the second phase of the Rural Broadband Initiative.” because he was not going to be in phase one. It is absolutely crucial for him to now get his broadband up to the speed that he wants. Is the commencement date of this piece of legislation—I will give him that. We want Rural Broadband Initiative 2 to start rolling out and this piece of legislation will commence probably on Monday or it might be Tuesday if we are still here.There are a lot of people who I guess are waiting for this piece of legislation to go through but our point of issue with it commencing on that date is that we do not think we have had a justification or a good analysis of the first piece of legislation which saw Rural Broadband Initiative 1 come in. So before this piece of legislation comes into force or commences we do not want this piece of legislation to go through without the right scrutiny of the first tranche of Rural Broadband Initiative 1.Do not commence this bill to spend $150 million without looking at the first piece of legislation which came in to bring in Rural Broadband Initiative 1 which was worth $300 million. We are not sure whether it has been effective so we do not think this piece of legislation should go through which is why we are not supporting it. Why? This piece of legislation is to expend $150 million. We on this side of the Chamber think that that is a lot of money. The Government does not seem to care about the accountability of expending $150 million. We would like a closer look at how effective that first $300 million has been before we go anywhere near letting this piece of legislation go through.To Mr Prosser I would say please do not take the examples we have used in this debate as something you can simply throw away. They are people whom we have cared for. It is our duty as electorate MPs to make sure that the Rural Broadband Initiative is as best as it can be. When this legislation commences hopefully that person—JACQUI DEAN (National—Waitaki): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): I am not going to take it now but I am going to issue a warning and it—Dr Russel Norman: Oh come on Trevor.The CHAIRPERSON (Hon Trevor Mallard): Who was that? Can I remind the member of what happened to Mr Mark earlier in the day for interjecting in a similar circumstance.Hon Member: What happened?The CHAIRPERSON (Hon Trevor Mallard): Mr Mark had a short holiday from the Chamber. So I now give the Committee a general warning about interjecting when the Chairman—[Interruption] Yes Mr Williamson will be required to stay if that is the case. The point that I am going to make to Mr Faafoi is that this is a bill about collecting money and not spending it so any further arguments about when the money is spent will not be tolerated.KRIS FAAFOI (Labour—Mana): I am not quite sure of how much time I have got left to take. I might have another 5 minutes but I am not sure. I am sure the bell will tell me.We do not believe that this piece of legislation should continue and I take your point that this piece of legislation is about the collection of a levy or a tax as we have argued on this side of the Chamber. We do though think that it should have gone through the proper process before it did start collecting this tax.Jacqui Dean: I raise a point of order Mr Chairperson. I am just seeking your assistance. I did rise and request a closure motion which I do not know that you addressed but you then called upon a member to make a speech who had not actually asked for the call.The CHAIRPERSON (Hon Trevor Mallard): Well actually he had and he asked at the same time as the member asked for the closure. He called at that point and that is the right time to call. Actually by going to another member it is probably a pretty clear indication of my decision on the closure motion. If the member wants me to sort of underline it I had declined it.KRIS FAAFOI: Thank you very much Mr Chair for that clarification of your ruling. I do not want to unnecessarily take up the time of the Committee but there is—from what the Minister said in one of her Committee stage contributions—a fair bit of negotiation that has to happen from the commencement date up until about June 2016 when I understand that the Rural Broadband Initiative 2 comes into force. I think from a couple of the press releases we have seen that there is a fair bit of negotiation that needs to be done between the telecommunications companies and the Government before this piece of legislation can actually become effective and until those taxes can start being collected.We have heard a submission via a press release from the Telecommunications Carriers Forum. From the commencement of this piece of legislation until—The CHAIRPERSON (Hon Trevor Mallard): OK I have now decided that the member has struggled for long enough.A party vote was called for on the question That clause 2 be agreed to.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Clause 2 agreed to.The result corrected after originally being announced as Ayes 89 Noes 32.Clause 3 Principal ActCLARE CURRAN (Labour—Dunedin South): Clause 3 entitled “Principal Act” amends the Telecommunications Act 2001 which is the principal Act. This amendment is an amendment to an amendment of the Telecommunications Act 2001 that was passed in 2011. The 2011 amendment was about changes to the telecommunications development levy where the imposition of a levy was made on telecommunications provided—[Interruption] I am very happy for you to take a call Mr Williamson. That would be quite useful. I am sure it would further the debate. The levy was imposed on telecommunications providers who received a minimum of $10 million gross revenue annually and that levy was established to contribute to the cost.The issues which I think have been canvassed well tonight were around non-urban telecommunications infrastructure—that is infrastructure in rural New Zealand. I do not think that anyone has argued about that or has a differing view about the purpose of the telecommunications development levy—namely that we need more infrastructure for rural broadband. We think that is a good thing but the matter at hand is about this amendment bill tonight which is going through all its stages under urgency. This clause “Principal Act” is about where it came from what it is actually intended to do and the way in which it is being done. That is the issue that the Labour Party has with this piece of legislation before the Committee.I am hoping that the other parties in the Chamber tonight have had enough of the debate canvassed for them to be clear about the strength of the views that have been espoused by the Labour Party about why it is so important that when an amendment is going through that actually imposes a new levy—a tax; the departmental report has been very clear that this is a tax—that it is a significant matter that should not be allowed just to pass without due process.There are so many other things sitting behind this around the Rural Broadband Initiative version 1 and whether or not it has actually been successful. And here we are voting on an amendment to provide more money for version 2. There is a lack of evidence a lack of process and a lack of accountability from the Government which has expended that money—that $300 million—in the past 5 years for a programme that it is now planning to re-fund.In the meantime there are many other ways that the lack of rural broadband is being dealt with throughout New Zealand which again members have talked about tonight. Communities are actually trying to do it for themselves and are doing it in conjunction with rural local providers and are doing it more successfully and are bypassing the scheme that has been funded by the Government because it is just not working. Here we are about to commit another $150 million in the same vein with no scrutiny no evidential base and with even the regulatory impact statement telling us that there is no achievement of the policy directives relating to it because they have not been evaluated. So it seems to me that it would be irresponsible and even negligent to actually approve this bill.Hon DAVID CUNLIFFE (Labour—New Lynn): The clause that we are currently debating is clause 3 which directs the Committee to the principal Act being the Telecommunications Act 2001. I think that it is important for the Committee to bear in mind the history of the development of that Act—in terms of the shaking of the Chairman’s head which means that one might want to stay somewhat closer to the detail of the Act. Therefore this is not the occasion on which to go into the Fletcher inquiry and the review that followed the legislative process which as I recall was a full process that included a very wide set of consultations with the community. It led later to amendments to the Act in around 2005-06 following a 6-month review called if I remember rightly the “Stocktake Review” at which every single company was brought in and the nature of the issues confronting the industry were surfaced and a set of quite far-reaching amendments were brought into play which broke up the incumbent telecommunications monopoly which unbundled the local loop which set in place I think a pretty proactive regulatory framework that brought completion to bear in the industry while at the same time protecting consumer rights and property rights.The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now to remind him—[Interruption]—that the Committee has accepted the principle of the change. Who said that? The member will stand withdraw and apologise.Jacqui Dean: I withdraw and apologise. I raise a point of order Mr Chairperson. I am just seeking your clarification. For what am I withdrawing and apologising?The CHAIRPERSON (Hon Trevor Mallard): You are withdrawing and apologising for yelling out while I was on my feet. You were the member who pleaded guilty I think to making the noise. Is that right?Jacqui Dean: Is the Chair asking me a question?The CHAIRPERSON (Hon Trevor Mallard): I will apologise to the member if I have got it wrong but I thought the member was the member who yelled out and that she did indicate that she was. That is why the member withdrew and apologised.Jacqui Dean: Yes I did. It is just that I was pointing out to the member that it is the normal procedure of this Committee that when the Chair is on his feet members sit down and I was merely reminding the member of that fact. I was trying to be helpful. If I am guilty of anything I—The CHAIRPERSON (Hon Trevor Mallard): The member will now resume her seat—[Interruption]—and I will remind her that when anyone in the Chair is on their feet the member should sit down. It is the role of the Chair to enforce that rule and not the role of any other member. Although I might need some coaching the member is welcome to do that at some stage outside the Chamber.Mr Cunliffe going back to the point that I was making: this is a very narrow bill. It is the most substantive clause in the bill but it is a very narrow bill and it does not go back to either the origins of the Act or the 2005 reforms. I think one might be able to go to the amount we are talking about and that shape of it.Hon DAVID CUNLIFFE: Thank you for the clarification Mr Chairman. I guess the point that I was trying to come to albeit a little slowly is that the process that this amendment here is following is so different from the process that the principal Act went through on several occasions. Here we are going through a process of urgency without the benefit of a select committee—and I know that that is something that you Mr Chairman will be taking into account by allowing for a full debate of these albeit quite specific clauses.The reason that that is an issue is that a number of members have made the point that there has been no evaluation of the existing $300 million programme that is enshrined in legislation including its sunset clause. Mr Chairman you may not have been privy to the statement from the Telecommunications Carriers Forum that drew attention to the fact that this new tax is overriding provisions made in law for the sunsetting of the previous obligations. That is a serious matter; one which members—certainly of this party if not this side of the Chamber—would wish to see investigated thoroughly by a select committee which has the benefit of public submissions from the industry as well as consumer groups. I think I have made the point that I need to make.In summary this is amending a very substantive piece of legislation. It has fiscal consequences. I think it is now generally accepted by the House that this is a new tax—that this is a breach of an undertaking that the Government did give to the people of New Zealand that there would be no new taxes. I think that is now quite widely accepted around the House. It has certainly been stated on multiple occasions not only by individual companies but also by the industry group concerned the Telecommunications Carriers Forum. And as such we are in the situation where we are amending through urgency a very important piece of tax law.Earlier Mr Faafoi was going to draw the attention of the Houseto a matter that is close to Mr Bennett’s heart—that the generic tax policy process has been thwarted on this occasion. As members opposite well know when a piece of legislation goes through—either by amendment to a principal Act as in this case or when it is a new Act that has revenue consequences—there is an established convention during the generic tax policy process that the accounting profession and the legal profession are consulted to ensure that there are no unintended fish-hooks in the design of the legislation and there is a sharing process normally over a period of about 6 to 9 months where feedback is sought and consultation occurs. This way there are no surprises. The industry implementation issues are thrashed through. None of that—none of that—is occurring in this case. I am sure that Mr Bennett will want to rise to his feet and express his condemnation of the Minister for this outrageous breach of standard tax process; one that has kept the country safe over many years.Recalling very briefly the impact from the previous clause around the commencement issues there is no fixed date for commencement.DAVID BENNETT (National—Hamilton East): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): No this is the most substantive clause in this bill and it has not been to a select committee. We are quite a long way off.JAMES SHAW (Green): At this point I just want to speak to our Supplementary Order Papers.The CHAIRPERSON (Hon Trevor Mallard): We will wait until we get on to the Supplementary Order Papers. That is a separate debate because you are proposing separate clauses.A party vote was called for on the question That clause 3 stand part.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Clause 3 agreed to.The result corrected after originally being announced as Ayes 89 Noes 32.New clause 3AThe CHAIRPERSON (Hon Trevor Mallard): We have two amendments on the Table: one from Gareth Hughes and one from James Shaw. Although not the same they are quite closely related and I propose to the Committee that we debate the two Supplementary Order Papers Nos. 82 and 83 together but vote on them separately. Is there any objection to that process?JAMES SHAW (Green): I just wanted to speak briefly to these Supplementary Order Papers. We did speak earlier on in the debate about the Supplementary Order Papers that we will be introducing. If you would just allow me to read from the Supplementary Order Papers the first one which is in the name of Gareth Hughes adds new clause 3A which is to amend section 90 of the Act “Crown use of telecommunications development levy”. After section 90(3) it would insert subsection (4): “The Minister must ensure that any use of the telecommunications development levy for purposes specified in subsection (1)(b) or (d) promotes—(a) competition in non-urban telecommunications markets; and (b) the diversity of non-urban communities intended to be served by the levy; and (c) the range of different technological options that may best serve particular non-urban communities; and (d) the rapid pace of technological development.” The second Supplementary Order Paper which is in my name would amend section 90 as well and inserts “(4) The Minister must ensure that any use of the telecommunications development levy for the purposes under subsection (1)(b) or (d) does not fund any person to meet their existing contractual requirements with the Crown.”I would just like to speak very briefly to these Supplementary Order Papers. Earlier on in the debate I tried to discern what the different objections were and the Labour Party has raised a number of extremely pertinent questions about the bill. One of those is to do with the evaluation of and reporting on the effectiveness of the existing Rural Broadband Initiative. That is essentially the intention of Gareth Hughes’ Supplementary Order Paper which is to ensure that new technologies that are emerging and the pace of that change are taken into account in order to ensure that there is competition and diversity of players in the market place. The Supplementary Order Paper will ensure that the needs of the local environment and the local communities and some of those variances between places are taken into account so that we do not have a one-size-fits-all approach.Earlier on in the debate Mr Cunliffe used the example of Mount Cook saying that we are not necessarily going to lay a massive ultra-fast broadband pipe to Mount Cook because there are not enough people there. But there are a range of technologies that we might consider. As an example people have used balloons or mobile telephony and so on. The intention behind this Supplementary Order Paper is essentially to ensure that these funds raised are used wisely and that they encourage a market-oriented approach as opposed to favouring just a few big companies.The intention of the second Supplementary Order Paper in my name where it says “The Minister must ensure that any use of the telecommunications development levy … does not fund any person to meet their existing contractual requirements with the Crown.” is to deal with a question raised about how Spark and Vodafone—particularly when they were awarded earlier contracts with the 700 megahertz spectrum—got a lower price because they made a commitment to install black spot towers in return for a better price. We wanted to ensure that the funds raised through this extension of the levy are not used to fund existing contractual requirements—essentially so that those companies would not have two bites of the same cherry. That is the intention of those Supplementary Order Papers and I shall rest here.CLARE CURRAN (Labour—Dunedin South): I would like to speak in support of the Green Party’s two Supplementary Order Papers. I suppose I would make the comment that this is the discussion that we would have been having in the select committee if we had been able to have a select committee hearing. In fact I would argue that the Committee of the whole House stage tonight has been like a select committee hearing although it has been fairly one-sided because the ability to have a proper debate with all of the parties has not actually occurred which is one of our main problems with this bill. We are also unable through this process to hear from submitters representing consumers from different communities throughout rural New Zealand. The only chance that we have had to do that is through a select committee process with some petitioners from specific rural communities just outside of Dunedin who had very strong views.With regard to the two Supplementary Order Papers before the Committee I would argue that they hit some of the nails on the head with regard to the concerns around the problems that lie with the existing Rural Broadband Initiative. The problem that I have and that the Labour Party has is that we are unable to judge the value of the existing Rural Broadband Initiative in these terms. It is only an amendment to the Telecommunications (Development Levy) Amendment Bill that goes forward for the next tranche of the Rural Broadband Initiative; therefore there is no ability for there to be an in-depth discussion about matters such as diversity for non-urban communities.I would contend that competition is one of the most important things here and I just draw your attention to page 7 of the regulatory impact statement to point No. 17 where it says that it is anticipated that much of the future telecommunications development levy funding earmarked for Rural Broadband Initiative extensions could be allocated to the larger telecommunications development levy players if they secure contracts to supply infrastructure for the Rural Broadband Initiative extensions. Well right there is a significant issue. The whole purpose of the Rural Broadband Initiative or one of the purposes was for it to be open access—for the infrastructure to be built but for there to be the ability for other players to come in and for there to be a competitive environment. We do not think that that has occurred; or if it has it has occurred only in a very limited way. But we are not absolutely sure because there has not been a proper evaluation done. Here we have a regulatory impact statement telling us that the next tranche may be dominated by big players. If that is the case then is that the best expenditure of the money?The competition aspect of Supplementary Order Paper 83 is quite critical in ensuring that the different technological options that may best serve particular non-urban communities are available. With regard to that I am not quite sure what that is referring to specifically but I am hoping that it is referring to the fact that 5 megabits which was offered in the initial Rural Broadband Initiative is patently insufficient particularly in the era of Netflix where rural New Zealand is basically unable to access the new technologies and the new content offers that are coming into our country. It is urban New Zealand that is going to be able to access and benefit from those and enjoy those things and rural New Zealand is just not going to have the capacity. These are really critical issues and they are critical issues that should have been teased out in a select committee with the full ability for submitters to come before us. That is not going to happen. Instead the shadowy entity that is the Rural Broadband Initiative is going to be allowed to continue on unchecked and with no accountability. We implacably oppose that.RON MARK (NZ First): I came down from my office especially to take a call particularly on these Supplementary Order Papers because of the fact that New Zealand First is hopeful. As a Wairarapa-based MP I am very hopeful that this legislation which New Zealand First is supporting led by our MP Tracey Martin will actually deal with those black spots. But we have had some concern over the years looking at the way in which the roll-out of the Rural Broadband Initiative has been delivered.As Mayor of Carterton and in my time there it was somewhat frustrating after all of the good news about the rural broadband roll-out and where it was going to find that in places where you would expect there to be good coverage astonishingly there was not. I point to a little place in the Wairarapa called Greytown. It is a little place where you drive up State Highway 2 through Featherston into Greytown and the first thing you note when you come into Greytown on the weekend is the number of Wellingtonians who are there. You hear consistently in the hotels the bars and the shops and at the festivals and the fairs about how frustrated people get by their inability to use their cellphones to ring back to David Seymour or to anyone else in Parliament or to anyone else in Wellington or to anyone else in doing business. I would just hope that—The CHAIRPERSON (Hon Trevor Mallard): Order! It is not at all hard to relate what the member is saying to the Supplementary Order Papers but the member does have to do it in order to remain relevant.RON MARK: Thank you for your guidance Mr Chairman. I take confidence in this particular Supplementary Order Paper put forward by Gareth Hughes. Where it says “(a) competition in non-urban telecommunications markets” that is us. Where it says “(b) the diversity of non-urban communities intended to be served by the levy;” we would hope given the number of small telecommunications companies in rural provincial New Zealand—small telecommunications companies that have a lot of experience in how to tackle the difficulties of getting good communications through rural New Zealand—that this Supplementary Order Paper would give them the opportunity to be involved and would allow them to compete so that they can apply their extensive experience.I can name probably half a dozen small telecommunications companies that are operating in the Wairarapa but they seem to be shut out. There seems to be something in the process that forever and for always puts the delivery of the service the provision of the service and the roll-out of the broadband in the hands of a very small bloc—namely Chorus. I would hope if nothing else even if the Government does not approve this—and I have got a strong sense that it is not going to vote for these Supplementary Order Papers—that it would still get the message because it is heartland rural New Zealand that is actually suffering right now.It is very frustrating for people there when they go to talk to WIZwireless—when they go to talk to some of the Māori telecommunications providers such as Tuarōpaki Communications Ltd up in the central plateau. Tuarōpaki Communications Ltd has invested very heavily in communications. In fact it is a strong shareholder in 2degrees but where did its roots start? Its roots started very small in a small telecommunications company. The question is: would Tuarōpaki Communications Ltd and its derivatives would the company that it is now a shareholder in—I think it is now working with Thinktank; it was with Timaru-based BayCity Communications—would these small telecommunications companies get an opportunity to have a shot without this clause?I would hope that we would support this clause. I would hope that this clause would allow greater competition opportunity for the small telecommunications companies which are experienced in rural New Zealand and in delivering services out to place like Akitio Flat Point and Tora. Those are the areas that are suffering dearly. The notion that we are suffering in Greytown is absolutely astonishing and I would argue that so far the dependence on the major telecommunications companies to deliver this service has done Greytown poorly—very poorly. That in itself is a very strong argument for the Government considering making sure that these other rural telecommunications companies which do have the experience which are out there which very often do the work for half the price and are a lot more productive because they are grateful for the business and which do this service very well because they want more business get a better shot. And we believe that this Supplementary Order Paper would give them that opportunity and that it would give them an absolute assurance that they would be invited and asked to give it a shot.I am grateful that our caucus is supporting this Supplementary Order Paper and I am grateful to Gareth Hughes for putting it forward because for far too long these small rural telecommunications companies have been ignored. For far too long the productivity they offer has been let slide by.TRACEY MARTIN (Deputy Leader—NZ First): Kia ora Mr Chair. Thank you very much. If I could just pick up where my colleague Ron Mark left off with regard to these Supplementary Order Papers—specifically the Supplementary Order Paper that Gareth Hughes has put forward which is around making sure that there is competition in the non-urban telecommunications market and diversity in non-urban communities. Specifically I would like to request that the Māori Party and the ACT Party cast their votes for these amendments—the ACT Party because it is a believer in competition and because that is what the party stands for: an open market. This is something that I cannot imagine the ACT Party would not support: making sure that all members of the telecommunications community have an opportunity to vie for these Government dollars so that they can compete in a real market. I would also seek and I am hoping that the Māori Party might also support these amendments because again this is about rural communities rural workforces and rural companies and small to medium sized enterprises. That is what these clauses are about.In the last few minutes I have received an email with regard to these Supplementary Order Papers from Taylor Communications which is the largest fixedwireless rural broadband provider in the Hawke’s Bay. It wishes to confirm that the charges of the telecommunications development levy will not result in extra costs being passed on to consumers. It says: “The telecommunications development levy (TDL) has been built in to our existing pricing and will continue to be done.” This is one of those companies. They pay the levy. They already pay the levy these small telecommunications companies. But unless this Supplementary Order Paper goes through there is no guarantee that they will be allowed to play with the big boys. The email continues: “It is well known that the previous $300 million has not been well spent but with the new funding that is planned for the next few years it will bring real results bringing real broadband to rural New Zealand if it is distributed by our regional players. The New Zealand Wireless Providers Association is a collective of rural broadband providers that are applying for TDL funding. With no Government funding in the past they have achieved over 50000 rural subscribers providing download speeds in excess of 5 megabytes per second.”This Supplementary Order Paper supports those providers. I implore the Māori Party and the ACT Party to assist today and to stand by their principles of real competition supporting Māori and supporting rural communities. Vote for this Supplementary Order Paper to place this in the legislation. I am sure that they have the opportunity and the time to walk over and let the whip of the Government members know that that is the way they will be voting—thereby meeting the obligations of their agreement. Therefore again I implore the Māori Party and the ACT Party to stand up for what they believe in and to vote for this Supplementary Order Paper.MELISSA LEE (National): I move That the question be now put.DAVID SEYMOUR (Leader—ACT): I take great pleasure in responding to the previous speech by Tracey Martin and in particular to subclause (4)(a) of new clause 3A of one of the two Supplementary Order Papers currently on the Table Supplementary Order Paper 83. The assertion is that people of a certain philosophical persuasion should be in favour of supporting that particular paragraph because competition in a particular location is always a good thing. There is some quite interesting economic theory behind this particular topic relating back to the Nobel Prize winner who sadly died only a couple of years ago Ronald Coase. Ronald Coase won his Nobel Prize primarily for his work on the nature of the firm. The story of Coase will take us directly to the matter at hand in subclause (4)(a). Is competition the only value that believers in free enterprise and economic efficiency should pursue? Or is economy of scale also a particularly important virtue that we should want?Coase’s story was that he started as a socialist. He might well have found his place on the far left of New Zealand First but unlike those members he was a thinking man a very inquisitive man who knew to ask the right questions. What he did was he travelled from his home in England to at that time the centre of industry in Chicago and he asked the people at General Motors: “Why is it that in a capitalist economy you practise an island of socialism a firm where you have a dictatorship over a group of resources? Why do you do that when competition works so well? Why do you believe in so much economy of scale? Why might you 80 years hence be opposed to (4)(a) being inserted in this bill?”. And the answer—Chris Bishop: He definitely asked that.DAVID SEYMOUR: He may well have asked that question had he been able to anticipate such a silly speech from Tracey Martin but despite being a great man and a Nobel Prize winner Ronald Coase was not able to anticipate Tracey Martin. Few of us would have been able to. The answer that Ronald Coase got from asking the right question which eventually earned him a Nobel Prize was that firms should expand. The nature of the firm is that firms should expand up until the point where the marginal transaction outside the firm has greater transaction costs than the marginal transaction within the firm.This is something that is very very difficult to determine by statute. It is something that must be discovered in the market place and that is why the ACT Party is a believer in free markets but opposed to subclause (4)(a) in this Supplementary Order Paper. Interestingly in the course of this inquiry—I hope they are learning something there—Ronald Coase discovered transaction costs. Transactions costs are one of the most important things to understand when it comes to being a true believer in free markets and economic efficiency. I do not think we will see that level of sophistication or understanding in some seats across the Chamber but since I was asked that is why I am opposed to this Supplementary Order Paper. I do not believe that it will increase economic efficiency or the welfare of New Zealanders in respect of telecommunications. Thank you.Dr PARMJEET PARMAR (National): I move That the question be now put.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 82 in the name of James Shaw to insert new clause 3A be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 83 in the name of Gareth Hughes to insert new clause 3A be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Clause 4 Schedule 3B amendedJAMES SHAW (Green): Earlier in the debate I tried to summarise the various arguments that I had been hearing and some of the concerns and questions that had been raised about the bill. Some of them are pertinent to schedule 3B which discusses the amounts that are being raised saying in 2016-17 it will be $50 million the same in 2017-18 and again in 2018-19.I would just like to acknowledge the Minister Amy Adams for taking the call and responding to a number of the questions that I had itemised. I think that she gave responses to four of the nine questions but there are still five to be answered and in fact there have been a couple of other questions that have been raised since. The questions in relation to the amounts are really to do with the value for money of the previous programme and whether we should be seeking to raise this $50 million a year as specified in clause 4 here when we are unsure about the $300 million that has been spent on the programme so far.The questions that I put earlier—and I would appreciate hearing from the Minister or someone on the Government benches—were about whether there has been good use of the money. Firstly there have been a number of complaints about the quality of the connections that people have received as part of the existing programme and the sense that actually for all of that money the quality of the connections is not all that good. Secondly there is the issue of the evaluating and reporting on the effectiveness of the Rural Broadband Initiative. There is sort of a sense that actually some really good programme evaluation has not yet occurred and that that money may be kind of good money after bad. We have not yet heard I believe from the Minister or from the Government about those concerns. I would like to get a response from the Government on that in relation to these amounts here in this clause. Thank you.A party vote was called for on the question That clause 4 be agreed to.Ayes 63New Zealand National 59;Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 4 agreed to.The result corrected after originally being announced as Ayes 63 Noes 58.Bill reported without amendment.Report adopted.Third ReadingHon AMY ADAMS (Minister for Communications): I move That the Telecommunications (Development Levy) Amendment Bill be now read a third time. As I have heard in this debate fast and reliable connectivity is critical to New Zealand’s economic growth. Like running water or electricity connectivity has become a fundamental must-have service for homes and businesses. The Telecommunications (Development Levy) Amendment Bill—we should have given it a catchier name—highlights the Government’s commitment to extending enhanced connectivity to regional New Zealand. It will help us to deliver faster more reliable connectivity to the regions.I would have thought that it would be hard to argue against better connectivity for our rural and remote communities but there have been a number of MPs across the other side of the House—Labour MPs—who I believe are putting politics ahead of people. I cannot wait to be out on the stump in 2017 reminding rural New Zealanders that Labour campaigned against their getting better broadband. Labour is the only party in the House opposing this bill and I find its position astonishing. It is showing tonight that it would rather side with the telecommunications company executives and their profits than support the extension of broadband to communities that need it. No wonder it cannot win in regional New Zealand. No wonder it is so out of touch. No wonder it is bottoming out in the polls. It cannot even bring itself to support better broadband for regional growth for rural and provincial New Zealanders who desperately need it. It annoys Labour so much to see a Government programme succeeding that it will cut off its nose to spite its face. And of course Labour members cannot filibuster if they are voting in favour which is what we know they are all aboutreally.There has been some confusion from the benches opposite so let me set some things out very clearly. Opposition members who are opposing the extension of the Rural Broadband Initiative are opposing the basic principle of ensuring that our most rural areas have the same opportunities that faster broadband offers our cities. We do not support that. Opposing this extension is refusing rural New Zealanders the same connectivity that other parts of New Zealand enjoy. Labour members will tell us—and they have been telling us throughout this debate—that uptake of the Rural Broadband Initiative is low. They are cherry-picking the numbers and they know it. We know that 8500 people have signed up under the fixed wireless broadband programme and that is only 20 percent of the Rural Broadband Initiative 1 spend.Furthermore Labour members are completely ignoring the fact that one of the core benefits of that part of the spend is enhancing cellphone connectivity. The cellphone connectivity benefits of those Rural Broadband Initiative towers mean that every quarter nearly 2 million New Zealanders benefit from it. The other 80 percent of the programme is fixed line copper broadband. As of 31 March more than 85000 households were able to connect and almost 68000 households have. That is an uptake rate of 80 percent. That does not even begin to cover the service provision to rural hospitals rural health centres and rural schools. This is the programme that Labour is trying to tell you is not working and is failing. If that is the definition of failure Labour has not got a clue.We have also heard that this is some sort of new tax. Well I can tell you that it is not a tax and it sure the heck is not new. Taxes for those who do not know have a broad-based application. Levies are targeted and are used for specific targeted purposes. The telecommunications development levy has been in force since 2011 and replaced the telecommunications service obligation which had been in force even longer and was higher. And of course we announced these changes in August. In this case it is a levy charged against some of the large telecommunications companies and it is used to fund open access infrastructure in areas where it would otherwise not be commercially viable for it to be built. Someone has to pay for it and I do not believe it is fair that taxpayers should foot the bill for the infrastructure that the telecommunications companies use to provide their commercial services. The levy is user-pays and that is exactly how it should be.The Government’s rural broadband programme reflects our commitment to rural communities. We are working with our private sector partners to provide services and coverage that would not otherwise be feasible. By 2016 90 percent of New Zealanders in areas not covered by ultra-fast broadband will have access to rural broadband under Rural Broadband Initiative 1. The $150 million raised by this levy extension will be put specifically towards extending the Rural Broadband Initiative so that almost all Kiwis can benefit from better connectivity under the National Government. That is $100 million for expanding fast reliable broadband to the regions and a further $50 million for expanding mobile network coverage in black spots.The Rural Broadband Initiative is making an immense difference to the way that rural firms do business to the way that our kids learn in rural and remote schools and to the way that health services are delivered to patients. There does however remain a high level of unmet demand in rural areas that are not scheduled to receive upgrades under the original Rural Broadband Initiative. This is due to increased numbers of customers high download demand constrained by existing cabinet technology and backhaul limitation. This bill is about letting us get on with making funding available for communities to improve their connectivity with a $100 million contestable fund for extending broadband in our regions. The criteria for the fund will focus on enhancing connectivity across all areas outside the ultra-fast broadband footprint and they are open-minded about the range of technologies that will be used. This bill means better connectivity for more people.Mobile phone coverage is an essential form of connectivity and can be even more important in rural and remote New Zealand where it has benefits for public safety as well as the potential to grow productivity in our regions. Currently the Spark Vodafone and 2degrees networks claim to provide collectively mobile access to approximately 97 percent of New Zealand premises. However those existing mobile networks achieve less than 50 percent geographic coverage of New Zealand. There remain many rural and remote areas of New Zealand such as sections of State highways and remote tourist areas that would benefit from extended coverage. The benefits of expanded mobile coverage include of course improved communications for businesses and residents who live and work in those areas; improved public safety particularly on our State highways; and making our tourism destinations more attractive particularly in some of those smaller communities. As a result this Government is establishing a $50 million contestable fund with the aim of providing mobile emergency calling and voice and contemporary data service coverage. The fund will enable companies and communities to nominate black spots in key tourist areas and work together to make a case for funding. Let me also confirm that none of the money from this contestable fund will enable any company to satisfy its existing obligations to provide coverage.Rural connectivity is absolutely critical and everyone in this House agrees on that except for Labour. Everyone in this House agrees on that except for Labour. Can I thank New Zealand First the Greens the Māori Party United Future and ACT for their constructive approach and for recognising that actually we do need to get on at pace with rolling out broadband to our rural communities. Someone has to pay and it is appropriate that it should fall on the telecommunications companies. I thank those parties for recognising that this levy has been in place for a long time. It is a matter of cents in each bill and if any telecommunications companies argue that they needs to put their prices up as a result then their consumers should look long and hard at those claims because I do not believe that they stack up. This is a Government that is fulfilling its promises to regional New Zealand. This is a Government that knows that connectivity is the core plank for regional economic growth and this is the Government that is delivering it. I am proud to commend it to the House.CLARE CURRAN (Labour—Dunedin South): Labour believes that there should be an inquiry into the Rural Broadband Initiative. If there is anything that has come out of the debate tonight then it is that this Government does not listen and that that Minister Amy Adams does not listen. This Minister pushes things through and ignores concerns. She has denied that this is a tax. It is obvious that this is clearly a tax on consumers and it is going to be imposed on consumers. She has refused to answer questions about the evidential basis for the rural broadband scheme and whether it has actually delivered. She has refused point-blank to provide any evidence to the House or in this debate and her ministry has not provided any information on this.The debate that the Opposition parties have had tonight begins the debate that should have been held in a select committee. This should have been a first reading speech. If this had been a first reading speech then the Labour Party would have supported the bill in its first reading. The Labour Party would have supported the bill in its first reading. This is a bill that is being taken through all its stages under urgency with no opportunity for submitters to come before a select committee or for members of a select committee to ask for evidence from all parts of the rural community. We have heard tonight from some of the industry players. We have heard from a major telecommunications company. We have heard from an industry association that represents the telecommunications industry and we have heard from the organisation that represents the smaller wireless internet service providers which are the ones that are coming up and the ones that are building strong community-based connectivitythroughout New Zealand that is not part of the Rural Broadband Initiative. Those are the organisations that should be being supported and nurtured but the Rural Broadband Initiative is not doing that.The Rural Broadband Initiative has had no scrutiny and the next part of the Rural Broadband Initiative will have no scrutiny either which is why Labour cannot support it. If there is to be an inquiry then we need to take a principled view on this and that is what Labour has done tonight. Labour members took a consistent principled view on these issues when they went into the election. We went into the election with policy that raised concerns about the Rural Broadband Initiative. We said that there had been ongoing concerns over a number of years that the Rural Broadband Initiative was not delivering broadband to the tens of thousands of rural New Zealanders. We said that the existing scheme was inadequate for the needs of many of our rural communities and that although it was providing internet access via cellphone towers—that is an improvement over dial-up and there is no doubt about that—it falls far short of the quality and speed provided to urban New Zealanders through ultra-fast broadband and existing connections. This is not the step change that the Government promised. The standard of rural broadband services has been woefully less than the step change that was promised. We have taken a principled position on this and we are holding to that position.This issue is not about telecommunications companiesactually. It is not even about the instrument of the telecommunications development levy as a levy—that is not what this debate is about. It is about what this Government is doing without scrutiny under the cover of urgency. It is pushing legislation through that will spend $150 million of new money which is going to be paid for by the industry but will be passed on to consumers—and I do not think that anyone can argue about that tonight—and the debate is about whether or not it is right to do so. We have missed a stage in the process and it is a critical stage. We are the legislators. We are the legislators who are making the decisions on these issues and we have got to be accountable for them. If you do not take a principled position and you allow a piece of legislation that commits $150 million to go through all its stages under urgency with no scrutiny then the Labour Party thinks that that is irresponsible. We cannot in good conscience vote for this bill because it has not gone through the right process. The Minister has not addressed the important questions that have been raised tonight. She has glossed over the issues. She has refused to answer questions about where the accountability for the Rural Broadband Initiative lies and where the economic analysis for the next tranche of this programmesits.There are real New Zealand businesses that are investing heavily without Government or industry-funded money through a levy. They are investing heavily in their local communities. They are based in places like Gore Ōwaka Timaru Ashburton Culverden Seddon Richmond Masterton Napier Palmerston Palmerston North Inglewood Hamilton Tauranga Waiheke and Whangarei. The organisation that contacted us via the email that my colleague from New Zealand First Tracey Martin read out earlier is an organisation that was formed only recently and that represents those wireless internet service providers that are the quintessential essence of what innovation in rural New Zealand looks like. But they are struggling because they are doing it themselves and this Government has allowed a programme to be developed around rural broadband that firstly has not delivered for consumers and secondly has provided the money mainly to big providers which have entrenched their status in rural New Zealand and have blocked many of those smaller companies from coming through.There are no guarantees by passing this legislation tonight that those smaller companies are going to get a look-in and are going to be able to thrive. That is the story. That is what we should be promoting here tonight: the progress of a piece of legislation that is going to nurture those sorts of businesses and allow communities to develop connection capability that actually suits their region and that is not part of a one-size-fits-all structure which is what this Minister is proposing and which the previous Rural Broadband Initiative has done and has not delivered on. Labour cannot support this bill tonight because we have taken a principled position. We are absolutely committed to rural connectivity. We are the party that took comprehensive policy into the last election. We are the party that works alongside rural New Zealand and rural communities. We are the party that knows how to do this well rather than the once-over-lightly from the Minister and what she is proposing to this House. We do not support this bill.MELISSA LEE (National): I could start off in many ways in this third reading of the Telecommunications (Development Levy) Amendment Bill but I will actually start by borrowing a line from a movie that I saw many many moons ago: you Miss Clare Curran had me at “inquiry”. I mean you had me gobsmacked with the word “inquiry”. This is how Labour does everything: “Let’s do an inquiry.” With the modern-day techno speeds that we actually get in this world she wants an inquiry that will take months and possibly years and millions of dollars potentially. She wants an inquiry. People in the rural sector are complaining to her as she commented and she wants an inquiry. This is so typical of Labour. This is how ineffective it is and this is how wrong it is about this issue. It is the only party in this Parliament that is opposing this bill. We live—Todd Barclay: Shame!MELISSA LEE: Yes that is right shame. Todd Barclay you know about the rural sector. You actually live there. You know how desperately we actually need this. We live in a world where things are instant and accessible. We can even access our telephones with a thumbprint nowadays. We cannot wait for an inquiry. This is the reason why we are here. This is a good bill and we need to pass it tonight. I commend the bill.Hon DAVID CUNLIFFE (Labour—New Lynn): It is so disappointing to see a Government so out of ideas so vacant so desperate to hit the panic button that it has New Zealand’s Parliament in urgency after Budget night for a bill that from its point of view is simply a bill to roll over an existing tax. The Government cannot have it both ways; either this bill is a “nothing”—in which case the Government should not be taking Parliament’s time abrogating the select committee process and ramming the bill through under urgency—or it is actually an issue and it is actually a problem and it needs to be thoroughly debated. The Government cannot have it both ways. The Minister “Out of Breath” Amy is back here saying the oldest trick in the book: that Labour opposes broadband. We do not oppose broadband. Our whole history has shown leadership in the telecommunications sector without which this Government would have very little to play with. It does not have to lecture us about our commitment to rural broadband. We are absolutely secure in our commitment to broadband roll-out. Straw man arguments never work. They never work because in fact we know why we are opposing this bill.I am going to take you through the objectives of good policy. I am going to take you through the issues that arise with this bill and finally why we cannot support it on grounds of process. The objectives are quite simple: better connections for faster cheaper broadband everywhere in New Zealand—ubiquitous coverage. We want to see users with strong capability and the confidence to use the gear wherever they are in New Zealand. We want to close digital divides. And thirdly we want vibrant content competition wherever people are in New Zealand. That means having enough bandwidth so that terrestrial aerial and online providers can compete to deliver the best deals to consumers. We are firmly on the side of getting broadband into the regions. The issue is not “whether” but “how”. That is where the Government’s arguments run into fundamental trouble.Earlier we quoted from an extensive OECD study that showed the really wide range of issues that arise with rural broadband roll-out. It is necessary to evaluate the $300 million worth of investment that has already been made. It is necessary for a range of reasons. The technology is shifting and the frontiers between backhaul fibre copper extension mobile satellite and innovative disruptive technologies like Project Loon from Google—all of those things—are changing and we need to assess the best way to deploy the public’s money. The second issue is that this is a tax. The industry has made it clear that this is a tax. The Telecommunications Carriers Forum has made it clear that this is a tax. It is a tax; therefore it is a broken promise. It is a tax; therefore it should not be done under urgency without a generic tax policy process or proper select committee consideration.The Government in its attempt at a defence said: “No no it is just the rolling over of an existing programme.” No it is not. It is not because the existing law legislates for the sunsetting of the current telecommunications development levy. It legislates the sunset. That is why the Government has managed to enrage pretty much the whole industry with this seemingly simple piece of law because companies have had to disclose their profitability based on some certainty of contracts under the existing law. They certainly did not expect the Government to undermine that by pushing legislation through under urgency. This is a change it overturns preceding law it overturns preceding contracts and it is somewhat strange to see members opposite delving with some torture through the archaeology of Coase theorem to find some justification for standing on their liberal heads and saying that they are in favour of Parliament expropriating private property rights without so much as a by-your-leave or the “The Maestro” of the Northland by-election giving a decent explanation. Chris Bishop—back to strategy school.The other problem with this is—without evaluating the rural broadband programme that has currently been in place—that there could be very very few technology areas as dynamic as broadband roll-out over long distance. We have got 3G we have got 4G and we have got 5G coming which looks like it will deliver more broadband speed than you can get through a closed deployed copper wire. It is certainly going to be very disruptive for the industry. Any prudent Government would want to look very carefully at that technology frontier before putting a new obligation on the industry which is designed for the old world not the new—designed for the old world not the new.The bottom line is that we can have a whole lot of arguments about the technology about the construction of the tax about how good or bad the previous deployment has been but the fact that those issues are out there should be proof enough of the fact that we need a select committee process. The industry said that it wanted to have a say. It offered to co-design this legislation with the Government but it got a salute instead. The public wants to have its say. The public wants to say “No taxation without representation.” We do not think that ramming this stuff through under urgency is fair representation. Then of course we have got technical problems around the fact that the commencement date is not specified and that we are overriding with the stroke of a pen law that has been painstakingly developed through multiple public processes.In summary there are both very important substantive technology and policy problems and there are significant process issues as well. This is not simply an extension of an existing agreed industry position; this is a new tax. This is a broken promise. This is desperate government. This is desperate government because it does nothing to lift productivity it does nothing to create jobs and it does nothing to deliver a better future for New Zealanders. It is just a tax. Ask people in New Zealand’s regions whether they think National has a plan for them. Chris Bishop did you ask Northlanders? I think you did and I think you got the answer which was that Simon Bridges’ bridges convinced nobody. They convinced nobody that National had a plan for the region because 5 years of being ignored and then 5 weeks of random pork barrels—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Hon DAVID CUNLIFFE: So here we are and you are rightly bringing me back to the point that this bill should be about regional New Zealand. Give regional New Zealand a say. Have a select committee process and call for submissions. Although we strongly support rural broadband we do not support abrogating the parliamentary process in this way. We cannot support this bill.EUGENIE SAGE (Green): I seek leave to correct the record of the House for the voting during the Committee stage. It should have been 13 votes for the Green Party and not 14.The ASSISTANT SPEAKER (Lindsay Tisch): This is for the Committee stage—Eugenie Sage: Since dinner—since the dinner adjournment.The ASSISTANT SPEAKER (Lindsay Tisch): For all Committee stages since dinner?Eugenie Sage: Yes.The ASSISTANT SPEAKER (Lindsay Tisch): And the first reading?Eugenie Sage: No just since the dinner adjournment.The ASSISTANT SPEAKER (Lindsay Tisch): I will just check with the Clerk. Leave is sought for the Green Party to change its vote from—Eugenie Sage: From 14 to 13.The ASSISTANT SPEAKER (Lindsay Tisch): —14 votes to 13 votes in every vote cast since dinner. Leave is sought for that purpose. Is there any objection? There is none. The record will be changed accordingly.BRETT HUDSON (National): The telecommunications development levy when we continue it with this bill will provide the funding to provide support to the rural communities of New Zealand because this Government works for all New Zealanders. I commend this bill to the House.JAMES SHAW (Green): What is in a name? That which we call a rose would by any other name smell as sweet. Is it a levy? Is it a tax? Actually who cares? Has Bill English broken his “no new taxes” promise? Well he put up GST he put up the petrol tax he has introduced an airport levy he is introducing a capital gains tax he has cut the paper boy rebate and he has put a tax on private jets—it does not actually matter whether he says he was not going to introduce any more taxes. He has extended and introduced new taxes left right and centre—in fact literally left right and centre if you think about the political spectrum. It just does not matter.The relevant question is: what do we do about paying for the continuation of the Rural Broadband Initiative and for these black spots? Earlier on in the debate I was trying to work out what the different objections were and what the questions were about. I just want to acknowledge again the Minister for having taken a call and responded to some of those questions. I just want to reflect back on some of those.The first question was in relation to the press release from Spark about passing on prices. The Minister said that it cannot be justified as that would be double-charging consumers because it is already contained in the price. The Telecommunications Carriers Forum has a different view. It said that actually the industry has been absorbing those costs rather than passing them on and so it would be new for the industry to pass them on. It is kind of unclear which of those views is correct. It becomes quite difficult and I can fully appreciate why the Labour Party would like to have a proper select committee process so that we can get to the bottom of that.The second question was about the quality of the connection and whether the money that has been spent so far—the $300 million that has been spent so far—was a good use of the money and whether it was producing the results. I am afraid that we did not get a good answer on that question; nor did we get a good answer—or in fact any answer—about the issue of evaluation and reporting on the effectiveness of the existing Rural Broadband Initiative. Tracey Martin raised the question of why it is up to the Greens and New Zealand First to do the Government’s job for it. There are a bunch of questions here and a Government bill about the quality of the spend. Where was the Government’s response? We are not getting a response to a number of these questions.There was a related question that was about new technologies. Mr Cunliffe spoke very eloquently about that and again I do not feel that that was addressed. We did have a question about whether companies would get two bites of the cherry. We received an unequivocal answer from the Minister on that that they would not and I am very pleased to hear it. That was the point of one of our Supplementary Order Papers and so we feel that that has been answered and I appreciate that from the Minister.We also asked why this legislation needs to be passed under urgency. Again the Minister responded directly to that saying that we cannot start negotiating and there is such urgency to roll out the whole programme that we cannot wait for the full legislative process to go through this. I empathise with the Government’s sense of urgency. As I said in my first or second reading speech having travelled around the country over the last 10 weeks in the rural areas in particular the digital divide is exacerbating an existing social educational and economic divide. We have real urgency to get this out there which is why the Green Party is inclined to support this bill even though we would normally not support bills being progressed under urgency because of the lack of scrutiny that goes with passing legislation under urgency.We asked a related question that was around why we are doing this now—seeking funding while the policy design is being consulted upon. Again I think that relates to the sense of urgency so we were satisfied with that answer from the Minister. The question about competition—and this was another Labour Party concern that I do not feel was sufficiently addressed—was whether small companies and a broader range of companies will be able to participate in the programme or whether it is just going to be the established players. So that one is still kind of up in the air. The ninth question was around what the Minister’s response was to the two Supplementary Order Papers put forward but I feel that that was answered as well.So some questions were answered; some were not. We are left actually with some discomfort about voting for this bill because there were a number of the key issues we feel the Government did not actually bother to try to answer.We also had the question of whether the legislation is constitutional so it has been quite a surreal night. Who would have thought that a telecommunications funding bill would have involved the regent of Belgium and other constitutional arrangements? And there was the question of the Royal assent which took up close to an hour and was sort of a fascinating piece that we got into on this bill. It has been quite a strange legislative process tonight. Strange enough as I have said because I felt like New Zealand First and the Green Party were kind of doing the Government’s work for it because we were not getting answers to those entirely valid questions that the Labour Party was raising.We will be voting for this bill but we are disappointed that some of those questions have not been answered including some of the really substantive questions about the quality of the spend of the money so far and the possibility that we would be throwing good money after bad here. I did want to gently remind the Labour Party which stood on principle tonight on the matter of urgency and said that it could not support such a weak legislative process that only a couple of months ago it supported the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill through the urgency process. This piece of legislation was passed not only without any of the normal legislative processes but it contained algebra that no one in the House could actually comprehend. At least we have some idea of what this bill will actually result in which is the raising of $50 million a year for the next 3 years. That is actually a pretty simple proposition. That is easy enough to argue about but the MPs’ remuneration bill contained a formula that literally no one knew what they were passing as they were passing it.It has been a fascinating evening. We will be supporting this piece of legislation because we do believe that the programme needs to continue with a great deal of urgency but we do have some discomfort and we will be looking to the Government to answer those questions that it did not bother to answer tonight. Thank you.TRACEY MARTIN (Deputy Leader—NZ First): Can I just allay the fears of the Green Party member James Shaw by saying that New Zealand First member Darroch Ball is a member of Mensa and that he actually understood the algebra in this bill—so New Zealand First was well-informed when it voted thank you very much.New Zealand First is supporting this bill because New Zealand First believes it should be supported. We would agree with Labour in some areas. We would agree with the Labour Party that it would be a good idea for the Commerce Commission to do an inquiry or a review of the $300 million spend. I disagree with Melissa Lee when she waved her hands wide and said that you have to stop everything in order to do a review. I remind Ms Lee of the digital literacy inquiry which actually looked at the work of Network for Learning. It was done by the Education and Science Committee under the chairmanship of Nikki Kaye and that inquiry changed the direction of Network for Learning while it was still going. While it was still being developed the inquiry identified that it was going in the wrong direction and it shifted direction so that it was a much better provider.We would also agree with the Labour Party on the need for local small to medium sized enterprises to be part of this roll-out and to be able to participate in the provision of the Rural Broadband Initiative. We are sitting here on 21 May and it interests me that on 19 May the Warkworth Area Business Association put out this email to all its members. The title of this email is “Ultra-fast broadband improvements”. Much has been made that the industry did not know that this funding was coming. Much has been made that the industry did not have an opportunity to be consulted. Again I say that lobbyists for industries always have the telephone numbers of Ministers. I find it hard to believe that the industry did not call the Minister’s office and have a conversation about this. The email goes on to say that on 12 March the Government announced that this funding was coming.I think it is pertinent to the bill that we are talking about—and to the conversation that has been had about whether there has been consultation about whether there has been a review about whether there is going to be participation by the public which is the other area that has been addressed—that this email says: “The ultra-fast broadband 2 funding is intended for rural towns.” It says: “In order to make an informed decision about how to allocate funding central government has invited local authorities including Auckland Council to submit a registration of interest. This is an opportunity to communicate to central government any issue with broadband and the level of demand for better services in rural Auckland. We would like your help to make sure that we get as much accurate information to Government as possible.” The questions they ask relate to a description of where you live i.e. the boundary of your community; what your current internet service is like; what problems you have with your broadband connection; the extent of the problems; and what demand for broadband services is like in your community. They ask members to please provide other information around business information and any other information that they want to provide to the register of interests for the funding for the broadband roll-out.That is the Warkworth Area Business Association. That is a local group taking control and talking and sending directly to Government information around how this—what we are talking about tonight; what will be funded—is delivered. We take the Minister’s word that the reason this needs to go through under urgency is that without the levy that has been there since 2011 and without it being secured in legislation until 2020 there is no way that the Minister can start the process of deciding how and where it will be spent. This is a process matter at the moment. We agree that sometimes process needs to be short-circuited. In this instance this is a continuation of a levy that has been in place for several years that was fully consulted on and that the telecommunications companies knew was coming and the levy is to continue to deliver what we know is needed.However we do support many of the areas that the Labour Party has mentioned; we just do not support their call to try to stop this bill tonight. We have a member on the Commerce Committee. We would support a call from that committee to do a review or an inquiry and to actually have a go at making sure that up to this point we have been in the right direction—how we could possibly while the Minister is consulting the communities have a look at this and make some bright decisions. Let us not change just for change’s sake but let us actually look at where we might be able to improve. Kia ora.KANWALJIT SINGH BAKSHI (National): We have made very good progress tonight on this bill. It provides excellent infrastructure for New Zealanders. I commend this bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Dr David Clark—5 minutes.Dr DAVID CLARK (Labour—Dunedin North): I rise to speak for the last time on the Telecommunications (Development Levy) Amendment Bill a bill of broken promises. Labour will be opposing this bill. As many of my colleagues have outlined there are many problems with it. We must say first and foremost it would have been much smarter for the Government to expose this to public scrutiny. The fact that this evening it has imposed on New Zealanders a tax that will be borne by businesses and households without allowing the public to have its say is shameful. There is no need for this rush absolutely no need whatsoever. This obviation of the normal processes is a travesty.Of course we heard the Minister for Communications Amy Adams in her opening speech say that “the industry will not need to put their prices up or explain to their customers why their bill is changing” and within the hour we had one of the major telecommunications companies saying that it would be putting up its prices as a consequence. And of course we know the reason why this is. It is because in that industry planning is years ahead. Telecommunications companies plan years ahead for infrastructure developments and so of course—of course—they have taken into account the fact that the levy was supposed to run out. Of course they have taken that into account in their planning and so they had built in what charges they thought necessary. And now they get slapped with another charge which was unexpected a tax on them that they can and must pass through to their customers. They are going to make their bills transparent so that we see when we use their services the extra dollar per month that that will be costing as a result of this change for each and every business or person connected to this service. That might not sound much to some people but to many business people struggling in the regions that extra dollar does matter—it does matter. It is a marginal cost but it is a cost. Every marginal cost matters. It does become prohibitive for some people. That cost is on top of many other costs that this Government has put on top of small business. It has put up red tape left right and centre. It seems to have no heart for small business. We have heard of plenty of additional taxes: the paper boy tax in the last set of Budgets. We have had the additional child support—The ASSISTANT SPEAKER (Lindsay Tisch): Order!Dr DAVID CLARK: —expectations and so on.But coming back to this bill here we have got in the departmental disclosure statement a clear yes as to whether this is in the nature of a tax. Yet we have the Deputy Prime Minister dancing on the head of a pin. It is a shame he cannot land an aircraft on the head of a pin like the last Labour Government did nine times in getting to surplus. We have him dancing on the head of a pin when his own department says that yes this is a tax. It is one of three new taxes after this Government said it would introduce no new ones before the last election. InternetNZ of course called for a review. It said: “Why do we not look at it and see if this rural broadband money is being spent effectively?”. There is $300 million being poured into this. It does not seem an unreasonable request but a Government that is out of touch might say “No we will not have a review. We do not care that only 8500 people have taken this up by our best estimate. We do not care that it has cost $7000 a head for this particular initiative to be taken up because we are the Government. We won the election and we do not care any more what the people think.”Well that is a Government out of touch I am afraid. It is a Government out of ideas. Introducing new taxes seems to see the big idea we are facing today. The reason of course we can see that this is being passed under urgency is because Government members are trying to hide their failure in rural New Zealand. They are embarrassed at least for their failures in rural New Zealand. Of course I have seen in my own electorate the need to get a petition. A group has gone to the extent of having a parliamentary petition to get rural broadband. I encourage others who are experiencing the same difficulties around New Zealand to do the same to approach their local MPs and to get a petition set up that will be heard by Parliament because this problem is costing hundreds of millions of dollars and the Government is wanting to be unaccountable for spending. This is a Government that does not care about taxpayer funds and that does not care about small business. It is a tragedy. It is a shame. I hope the next speaker because I know he is sympathetic to the issues of small business will take on some of these challenges as well. We have seen a Government that is prepared to break its promises on the surplus in the Budget the biggest promise of all. It was central to the election campaign promise and it has broken it.The ASSISTANT SPEAKER (Lindsay Tisch): I call David Seymour—5 minutes.DAVID SEYMOUR (Leader—ACT): Well I had enormous hopes for the previous member’s speech. I hoped to see a principled detailed economically literate public policy - based rebuttal of the bill. Sadly—sadly—my hopes were misplaced. But I thought that in the interests of informing the House I should show the member how somebody might have given such a rebuttal and might have critiqued the bill. The first question to ask about any public policy intervention or revenue-raising initiative is: where is the market failure? Why is the game theory outcome not Pareto optimal? You might look for an answer like that in the regulatory impact statement.It is a sad commentary on the standard of regulatory impact statements in New Zealand I am afraid to say that they are not very strong. It seems the problem definition is mostly about why the current policy is not as big as we would like it to be. It even quotes political party websites in the regulatory impact statement. That is not the kind of problem definition and identification of market failure that one would like to see in a regulatory impact statement.One might well argue that there is no public policy basis or intervention logic behind this bill. The Opposition could have done that but sadly it did not. It might have raised the question of technological change. If I could indulge the House with a small personal anecdote 15 years ago my flash uncle wired his entire house with ethernet and we thought that was pretty cool and he thought that was pretty cool. Then along came something called Wi-Fi and then we did not think he was so cool and neither did he. You might think that is a small personal anecdote but I recently heard that larger organisations are capable of such mistakes. Indeed the entire Tasman District Council recently—as recently as 15 years ago that is—made a regulation that every house in its region should be wired with ethernet. That lasted for about 3 years and it was swallowed by the same fate. Anybody who wants to fund a rural broadband initiative through any kind of revenue source should be very wary that technological change is happening a lot faster than Government programmes and legislation even legislation as fast as tonight.Hypothetically if you did agree that there was a case for the public funding of telecommunications infrastructure you might ask some questions like: to whom is the benefit and what is the most appropriate source of revenue to fund that benefit? It seems the principle is that it is current telecommunications users. Well what we find in the regulatory impact statement is that one of the best rationales you can find is that we need to do this for people who do not have access to telecommunications services. So we are charging the people who are using the services on behalf of people who are not using them. That sounds to me like a public-good argument or a redistribution argument and if you adopt the principle that you want to raise revenues in the ways that are least distortionate of behaviour then you should use low-rate broad-base taxes such as indirect taxes like GST.None the less that was not the quality of argument that we heard even from some of the most able members on the other side of the House. So I conclude with another thought which is that even the best public policy relies upon political support to be sustainable. What this bill is really about is ensuring that the body politic of New Zealand is able to keep supporting the public policies under which it lives. That is why there is a naked unashamed redistributionist element in this bill and perhaps in another time and another place and another electoral result I might speak out about it a little bit more strongly. But seeing as those who can actually are unable to apparently for cognitive reasons I will not either and will be supporting this bill. Thank you Mr Deputy Speaker.TIM MACINDOE (National—Hamilton West): I support this bill.KRIS FAAFOI (Labour—Mana): It is a sad indictment on the level of debate in this House from the National Party that that was one of the better contributions to this bill. I commend Mr Macindoe for getting up and at least telling the truth about their position on this bill. He did not say anything to support it because the grounds on which to support this piece of legislation are very thin.It was with ultra-fast speed that the Minister for Communications was forced to eat her words from her first reading speech. I will for the benefit of the House remind the National Party what Amy Adams said in her first reading speech: “The industry will not need to put their prices up or explain to their customers why their bill is changing.” Within the hour not even 60 minutes had passed from those words leaving the Minister for Communication’s mouth Spark New Zealand issued a press release making a liar of the communications Minister. That press release says that now the Government has confirmed the levy/tax will continue rather than reduce as originally legislated for it has put upward pressure on future costs and Spark will have to pass that cost through to its broadband and on-account mobile users. Not even an hour had passed.We had the Minister who said: “No New Zealanders don’t worry we’ve got this sorted. We’ll get this money from the telecommunications industry.” And then the telecommunications industry said: “Well actually Minister we’re going to get it from Kiwis.” According to this press release from Spark the average bill of Kiwis using broadband will go up by $1 a month. You can argue: “Hey that might not be a lot of money.” It certainly is not a lot of money for the people who support the National Party with all their big cheque books but it certainly is to people on this side of the House.There needs to be some scrutiny around this piece of legislation as to the effectiveness of the expenditure for the first tranche of the Rural Broadband Initiative. Maybe Mr Seymour might like to join the Labour Party and other parties on the Commerce Committee to get an inquiry on the effectiveness of the Rural Broadband Initiative. I think Mr Seymour actually raised a very good point: is what we are doing the most effective use of the money? Is it the right technology?We may not agree with everything that Mr Seymour may want to look at but he might want to join our initiative to get an inquiry into whether or not we are getting good value for money. I always thought that the ACT Party was the bastion of trying to make sure that every taxpayer dollar was spent well. But no no no not tonight—not tonight. Three hundred million dollars was spent on the first tranche of the Rural Broadband Initiative. We want to know whether that money has been spent effectively.From that side of the House we heard during the Committee stage at least very few speeches. They are lions in their seats but lambs on their feet. They would not get up and take a call to say: “Well this is good spending of $300 million.” At least David Seymour stood up and said: “Hey is this money being spent effectively? Are we doing the right thing?”. I look forward to Mr Seymour getting to the Commerce Committee—a very good select committee—and helping us get our inquiry over the line. I look forward to you coming to our meeting next Thursday.Four hundred and fifty million dollars is not chump change; it is a lot of money. And $300 million has already been spent on the first tranche. There is concern in rural communities as to whether that expenditure has been effective to deliver what has been promised by this Government and that is that 86 percent of rural people would get at least 5 megabits per second. There have been—and I believe that the number is three or four; I think it is three—rural communities come to our Commerce Committee and say: “Well Parliament that hasn’t been our experience. We have slower or ineffective broadband speeds in our area and we were promised this.”We thought it was a really good idea to see whether or not that first $300 million was spent effectively. I thought that the Government might think that too but no we have already heard from the chair of the Commerce Committee that she is not interested in having an inquiry. Maybe we need just that one more vote. Maybe on Thursday morning at 10 o’clock which is roughly when we have our meetings Mr Seymour you might want to turn up and help us out. I am sure that you and your members do not want to see $450 million go down the drain.We actually do want to make sure that the Rural Broadband Initiative is effective. We actually agree with the objectives of the Rural Broadband Initiative. Who would not? Isolated rural communities want to make sure that they are connected not just for economic benefit; there are educational benefits and health benefits from the Rural Broadband Initiative. If we are going to spend more money we want to make sure that that money has been spent effectively and that simply has not been the case.There has also been an argument from that side of the House—not a very strong one—that this will not affect the telecommunications industry. That is not necessarily the case because the telecommunications industry is not very impressed with this Government. The industry is saying that this piece of legislation has been rushed through urgency. Geoff Thorn—no stranger to us; he used to be the general manager of Parliamentary Service—who is now the chief executive of the Telecommunications Carriers Forum—[Interruption]Hon Member: Take a call Mr Bennett.KRIS FAAFOI: Yes take a call. Get up. You were here for the Committee stage but I did not hear one peep out of Mr Bennett—not one. All he can do is interject—all he can do is interject. Well just shush for a minute Mr Bennett and listen to what the telecommunications industry has got to say about your process—slamming this through at 11 o’clock at night.This bill has been introduced under urgency and doing so avoids any public debate. Well heaven forbid that we have public debate. Heaven forbid that we actually let the public have their say on this seeing as they are going to be the ones who are paying for it—a dollar every month. We cannot have the people coming in here. This is a proposal that has not been the subject of any consultation and that has avoided the usual scrutiny that would apply to Government spending. They go on.For the benefit of Mr Bennett this bill extends a tax. That word “tax” is mentioned four times in this press release I must add and that tax to date has not been explicitly recovered from consumers. However the industry cannot continue to absorb ongoing costs of this magnitude. Translation: the telecommunications industry has absorbed these costs and is saying it cannot do that any more. As we saw from Spark who is going to be paying now? Its customers—its customers. The Government is furiously trying to spin: well do not blame us; blame the telecommunications companies. Well who is passing this legislation through in the dead of night? It is this Government—it is this Government—and there is no scrutiny. No members of the public can come and ask any questions and this is the way the Government is doing it.The Rural Broadband Initiative is a great thing but if we are spending $450 million we want to make sure we do it properly. Do not just throw the money out there into the wind and hope that everything is all right. If we are going to spend $300 million we want to make sure it is being done properly and this piece of legislation allows us to collect $150 million more to roll out the second tranche. I think we should take a big deep breath and have an inquiry to look at whether the first tranche worked before you have $150 million more spent. It can be done otherwise we might be wasting taxpayers’ money. I know Mr Seymour hates that so I look forward to seeing him on Thursday morning at the Commerce Committee. It might be your turn to bring the baking.TODD BARCLAY (National—Clutha-Southland): I can do no better than to echo the sentiments of the senior whip.A party vote was called for on the question That the Telecommunications (Development Levy) Amendment Bill be now read a third time.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Bill read a third time.