Volume 637 Week 37 - Wednesday 28 February 2007 
Volume 637 Week 37 - Wednesday 28 February 2007 
[Volume:637;Page:7737] 
Wednesday 28 February 2007 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Ministers Finance Education and Social Development and Employment—Confidence 
1. JOHN KEY (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she have confidence in the Minister of Finance the Minister of Education and the Minister for Social Development and Employment; if so why? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes because they are all hard-working and conscientious Ministers. 
John Key 
: Does the Prime Minister agree with Michael Cullen that National’s policy of removing the cap on charitable donations is just a cut-and-paste from the Government’s own discussion document; if so can she tell me exactly on what page the cut-and-paste of such a policy is and on what page the details of the removal of the cap on donations is listed? 
Rt Hon HELEN CLARK 
: I would have thought that any discussion document that calls for debate about whether the threshold should be capped at a certain level opens up a debate as to whether there should be a cap at all. 
Hon Dr Michael Cullen 
: Has the Prime Minister seen reports that Mr Key claims to donate his entire parliamentary salary to charity—if so he would benefit by some $70000-odd a year by the removal of the cap—or the alternative claim that he donates $40000 to charity by which he would benefit by over $13000 a year from his new policy? 
Rt Hon HELEN CLARK 
: I have seen such reports and would regard them as entirely consistent with National’s policy of tax cuts for the rich. 
John Key 
: Does the Prime Minister support the removal of the cap on charitable donations; if so will it be included in this year’s Budget? 
Rt Hon HELEN CLARK 
: All those issues are being considered in the current review. In Government we take a responsible approach developing policy rather than slogans. 
Hon David Benson-Pope 
: What reports has she seen on the impact of the Working for Families tax credits? 
Rt Hon HELEN CLARK 
: I have seen reports that show that when the process of introducing the Working for Families package is completed on 1 April—with $10 a week going to every child where families are eligible for family support—our child poverty rates are due to fall below the European Union average. That last crucial step of $10 a week per child from 1 April is opposed by the National Party. 
Hon Peter Dunne 
: Does the Prime Minister recall that during the post-election discussions regarding confidence and supply arrangements United Future raised the issue of charitable donations and the need for a review and as a consequence provision was made in the agreement for there to be such a review—both of charitable giving by individuals and also of corporate donations—and does she acknowledge that without such a review the current debate would be largely irrelevant? 
Rt Hon HELEN CLARK 
: I want to give full credit to the member and United Future for bringing this issue into the Government’s work programme years before Mr Key went looking for a slogan. 
John Key 
: Does she agree with Michael Cullen that New Zealanders who go to Australia for tax reasons are “functionally innumerate and we are probably better off without them.”; if so does she think this assessment applies to Jan Cameron the founder of Kathmandu who went to Australia because the tax treatment of her charitable donations was far more generous there than it would be in New Zealand; and given that Dr Cullen has been nodding his head in agreement can I assume that he agrees with the statement that those who go to Australia for tax reasons are functionally innumerate and we are probably better off without them? 
Rt Hon HELEN CLARK 
: To the best of my knowledge tax rates are actually higher in Australia. 
Hon Ruth Dyson 
: Can the Prime Minister outline any other changes in policy and legislation that are designed to address poverty in a sustainable way? 
Rt Hon HELEN CLARK 
: Indeed I can because in the Labour Party we believe poverty is best tackled by good policy like Working for Families like income-related State rents like fair labour law like investing in programmes for our low decile schools like the Primary Health Care Strategy and like lifting the minimum wage—all things the National Party has opposed. 
John Key 
: Does the Prime Minister agree with Steve Maharey that businesses giving donations to their communities constitute Tory charity; and if so has she corresponded with the Minister for Arts Culture and Heritage to see what she thinks of Tory charity given the amount that is given to the arts and culture sector? 
Rt Hon HELEN CLARK 
: I am totally in support of philanthropy in our community. My difference with the member is that I do not think it is the primary solution to poverty. 
Hon Dr Michael Cullen 
: The member has got his courage up at last to come into the House—goodness me! Could I ask the Prime Minister if she would be prepared to accept an offer— 
Rodney Hide 
: I raise a point of order Madam Speaker. I think you know my point of order Madam Speaker and I think the rules should apply to the Deputy Prime Minister as well. I think he should be asked to withdraw and apologise. 
Madam SPEAKER 
: I am sorry I thought your point of order was going to be on the fact nobody could hear what was being said. I am sorry Mr Hide I do not know what you are talking about. 
Rodney Hide 
: The Deputy Prime Minister accused a member of this Parliament of lacking courage. That is certainly outside the Standing Orders and he should be pulled up for that. 
Hon Dr Michael Cullen 
: Speaking to the point of order I actually said the member had got his courage up to come into the House. I was paying tribute to the courage he was now showing. 
Madam SPEAKER 
: That response was in response to interjections from that side of the House. If members could just please contain themselves. If the member takes personal offence would he please indicate and I will ask the member then to withdraw and apologise. That is the normal procedure. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. I do not want to prolong things but are you now saying that everything goes it is a free for all and it will only result in someone being pulled up if a particular member takes personal offence? 
Madam SPEAKER 
: No I am not Mr Brownlee. I am saying in this set of circumstances with the chipping that was going across there was not a lack of courage. That was not the term used. Courage was mentioned in the comment in response to another comment. Under those circumstances in the context of the debate of course if the member takes offence then the member must withdraw and apologise but I have to take the context into account and I have. 
Hon Dr Michael Cullen 
: Given Mr Key’s references to Australia would the Prime Minister be prepared to accept an offer from the National Party to lift the cap on charitable giving for both individuals and companies in return for two top tax rates of 47 percent and 42 percent and a 9 percent payroll tax on business to pay for individual superannuation? 
Rt Hon HELEN CLARK 
: In my experience the National Party only ever refers to those parts of the Australian tax regime that it likes and not to the total scene of the Australian tax regime. 
John Key 
: Has the Prime Minister seen reports from reputed accounting firms that show 99 percent of New Zealand taxpayers would be far better off paying tax under the Australian system than they are under the New Zealand tax system—and that is a fact? 
Rt Hon HELEN CLARK 
: No. I would advise the member to go away and check his facts. I would be very surprised if he could substantiate that. 
Venture Investment Fund—Reports 
2.  
H V ROSS ROBERTSON (Labour—Manukau East) 
 to the  
Minister for Economic Development 
: Has he received any reports referring to the Venture Investment Fund? 
Hon TREVOR MALLARD (Minister for Economic Development) 
: 
 Yes. I have seen one showing that investment in the Venture Investment Fund is clearly paying off. Kiwi science and innovation has received a US$35 million backing for anti-cancer drug company Proacta. This Labour-led Government set up the New Zealand Venture Investment Fund with exactly those sorts of goals in mind. We are committed to backing New Zealand innovation as part of our work to transform the New Zealand economy into one that is high-wage dynamic and export-led. I am somewhat surprised that the National Party has not yet congratulated the Government on this fund—one that it whinged about at the time. 
H V Ross Robertson 
: Can the Minister therefore inform the House what role the Government has had through the Venture Investment Fund in this company? 
Hon TREVOR MALLARD 
: The Government has through the fund made an investment of about NZ$4.5 million in it. The US$35 million is therefore very good leverage. More significantly if we had not been able to support the series A round Proacta would not have been able to set up in New Zealand as an independent company based on New Zealand research with continuing research and clinical trials here and with the continued involvement of the very good New Zealand science team based out of Auckland University in all stages of the drug’s development. The intellectual property would have left New Zealand. 
Gerry Brownlee 
: Well why are the scientists all leaving the CRIs? 
Hon TREVOR MALLARD 
: The woodwork teacher from Christchurch is interjecting to say: “What about the CRIs?”. Actually Auckland University is not a Crown Research Institute. 
Madam SPEAKER 
: That was a gratuitous comment. The interjections do however lead to that level of disorder. Would the Minister please continue. 
Hon TREVOR MALLARD 
: Thank you Madam Speaker. I want to make it clear that the intellectual property developed at Auckland University—and Auckland University of course has a share of this company—would have left New Zealand rather than continue to be developed here— 
Gerry Brownlee 
: Too little too late. 
Hon TREVOR MALLARD 
: I know that that is the objective of some people who do not understand the difference between Auckland University and a Crown Research Institute. I hear the member saying: “Too little too late.” Why then did the Tories oppose the fund at the time? 
Roading—Ministerial Advisory Group Findings 
3.  
Hon MAURICE WILLIAMSON (National—Pakuranga) 
 to the  
Minister of Transport 
: Does she support the findings of the Ministerial Advisory Group on Roading Costs; if not why not? 
Hon ANNETTE KING (Minister of Transport) 
: 
 In general I do. The report is one valuable stream of advice and certainly the Government is interested in value for money. After all we are spending about $24 billion over the next 10 years on land transport. 
Hon Maurice Williamson 
: What is her response to the ministerial advisory group’s findings: “To achieve value for money there needs to be a strengthening of the focus on cost efficiency in the evaluation of projects. Roading sector participants and communities need to accept that affordability is a key issue.”? 
Hon ANNETTE KING 
: I think that is an important issue. It is an issue I would like looked at in terms of the current review that I have the State Services Commission undertaking. 
Hon Mark Gosche 
: How has this Government improved land transport infrastructure from the state it was in in the 1990s? 
Hon ANNETTE KING 
: We have been working hard to plug the infrastructure deficit left by the National Government in the 1990s. Investment in land transport has risen from $929 million in 1999-2000 to an expected allocation of $2.2 billion in this financial year. We passed the Land Transport Management Act in 2003 which provides for tolling in public-private partnerships provided they fit the criteria. We have put a lot of money into public transport and developed a land transport strategy. This Government is committed to improving our infrastructure and it has certainly put its money where its mouth is. 
Sue Kedgley 
: Did the ministerial advisory group consider the extensive international research showing that building new roads simply creates or induces new traffic and does she agree that the new inner-city bypass in Wellington is a classic example of this rule because instead of reducing peak-hour traffic congestion by 7 to 9 minutes as the previous Minister of Transport promised in this House it would it is actually causing havoc in Wellington and causing delays of up to 40 minutes? 
Hon ANNETTE KING 
: The ministerial advisory group looked at a number of issues including passenger transport. In the light of the question regarding the inner-city bypass: as the member knows the inner-city bypass is not completely opened yet. Half of it is opened. I am assured by Transit that when it is fully opened we will see much-improved traffic flow. 
Hon Maurice Williamson 
: Does the Minister accept the ministerial advisory group’s findings that: “the change in project evaluation criteria away from solely using BCR”—benefit-cost ratios—“means that Transit NZ has less incentive to contain project costs.” and that: “Some major Auckland projects such as ALPURT B2 seem to have escaped the close scrutiny of costs and consideration of value for money that might have been anticipated.” in such projects? 
Hon ANNETTE KING 
: There is some dispute with the ministerial advisory group on its comments particularly relating to the Albany to Puhoi realignment B2 (ALPURT B2). In fact many of the changes in scope came from consultation with the community in relation to what it wanted in environmental terms etc. and it led to additions to ALPURT B2 over the time it was being built. However I do not believe they were the only issues that caused problems in terms of blowout. 
Peter Brown 
: Is the Minister aware that under section 8.8 of the report headed “Funding Issues” whilst recognising that funding systems are largely outside the terms of reference the advisory group makes the statement that more formal longer-term funding is needed and does she recognise that many of our roading problems are a direct result of the National Government’s—and the early years of her own Labour Government’s—deliberate policy of underfunding? 
Hon ANNETTE KING 
: I am aware of that comment within the report. I need to tell the member that the report was written before the Government announced that it would be putting in long-term funding. We announced a 5-year funding track then the Minister of Finance increased it to 6 years. I agree that short-term planning and funding for roading in New Zealand in particular but also for public transport have led to short-term decisions and an inability to make decisions in the long term because of a lack of commitment to funding or planning. 
Jeanette Fitzsimons 
: Can the Minister explain why the fact that the bypass is complete in only one direction and not in the return direction which is on a quite separate route should be creating mayhem on the part that is complete? 
Hon ANNETTE KING 
: Because there has to be some engineering in the way that the traffic flows including the bus routes on our Wellington roads which is part of the re-engineering that is taking place. 
Jeanette Fitzsimons 
: I seek leave of the House to table two reports; the first relates immediately to the Minister’s answer right then. I am happy to wait until the end of— 
Madam SPEAKER 
: That is the normal process. 
Hon Maurice Williamson 
: Given the cost estimates for the Albany to Puhoi realignment B2 which have risen from $138 million in 2001 to $358 million by 2005 or my personal favourite State Highway 20 the Avondale extension which have risen from $185 million in 2001 to $1100 million—a 500 percent increase in 2 years—does the Minister believe as the ministerial advisory group says that that “shows the lack of robust process of evaluation or rigorous review of costs needed in projects of this size.”? 
Hon ANNETTE KING 
: No because that is not the only reason that one has an increase in costs. In fact if the member took the time to look at what happens internationally he would see that increases in costs are around 30 to 40 percent. Can I also tell the member that Dr the Hon Lockwood Smith as a local member in the area is very supportive of the ALPURT B2 road and wants it built. At the end of the day it will be a toll road for which the people of New Zealand who use it will pay. 
Peter Brown 
: Does the Minister acknowledge that had the National Government and the subsequent Labour Government from when it was first elected in 1999 injected all the petrol tax or its equivalent into the roading account this country would be far better off economically and socially and people who have been killed on our roads would have been alive today? 
Hon ANNETTE KING 
: I am pleased to tell the member that all money gathered from the three revenue sources available to the Government are being spent on transport in New Zealand besides an additional $300 million. One could argue what should have been done in the past but what I can talk about is what this Government has done. 
Hon Maurice Williamson 
: Does the Minister agree with the ministerial advisory group’s recommendation that: “Value for money indicators should be incorporated into the performance monitoring system. Land Transport New Zealand should take an enhanced role in the evaluation of major projects and monitoring scope and costs.”; if so why has this not been happening? 
Hon ANNETTE KING 
: In general I do agree. In fact in terms of the review that has been undertaken and the work that has been undertaken by the Cabinet committee those are areas where we would like to see better performance. However I would have to say that that member was a Minister of Transport and there is absolutely no way he would have known what import costs there were in transport. He certainly did not have to worry about spending much money because a National Government did not. 
Peter Brown 
: Is the Minister in a position to advise the House how roading will be funded once the grant money which currently the Labour Government does inject into roading is exhausted; will it be by transferring all the tax collected on petrol into the roading account? 
Hon ANNETTE KING 
: In terms of funding for transport in the future that is something being looked at very closely by this Government and work is being done both by the Ministry of Transport and Treasury. We do know that the money we collect from petrol excise duty road-user charges and motor vehicle licensing will not be sufficient for our roading and public transport needs of the future. Looking at ways that we can have appropriate funding for our infrastructure is very much part of the work being undertaken now. 
Jeanette Fitzsimons 
: I seek leave to table two peer-reviewed papers from the transport literature. I thank the Speaker for advising me to delay my tabling because the papers address particularly the question raised by Peter Brown. The first paper is by Peter Newman called  
Sustainable Transportation and Global Cities 
. The other is by Anna Nagurney”:  
Congested Urban Transportation Networks and Emission Paradoxes.  
The papers show that the cities with the most roads have the highest fuel use the highest air emissions and the highest transport costs. 
Documents by leave laid on the Table of the House. 
Peter Brown 
: I seek leave to table a member’s bill in the name of the Hon Winston Peters and an extract from  
Hansard 
 in which the Minister of Transport at the time said that if he had extra funding he had no idea how it could be spent on roading. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Sue Kedgley 
: I seek leave to table first a written response by the previous Minister of Transport Pete Hodgson in which he says that the inner-city bypass will cut 7 to 9 minutes off delays in the busiest peak time in Wellington; and second a Transit New Zealand website statement that people travelling across the city will save 7 to 9 minutes during busiest peak hours and up to 5 minutes at other busy periods. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Savings—Households 
4.  
R DOUG WOOLERTON (NZ First) 
 to the  
Minister of Finance 
: What if anything is he doing to address New Zealand’s declining level of household savings? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I thank the member for his question. On 1 July this year the KiwiSaver scheme will begin. The scheme makes it easier for New Zealanders to save for their retirement. Earlier this month the UK’s Secretary of State for Work and Pensions John Hutton commented that the British National Pension Savings Scheme has been designed essentially around KiwiSaver. There has also been a range of tax reductions in relation to various forms of savings including the tax reductions on the earnings of people earning below $38000 a year and the abolition obviously of the specified superannuation contribution withholding tax on up to 4 percent of employer contributions to KiwiSaver and KiwiSaver-compliant schemes. 
R Doug Woolerton 
: Has he read recent reports suggesting that public opinion towards compulsory savings may be changing and that 63 percent of respondents to a  
New Zealand Herald  
survey felt that saving for retirement should be compulsory; would he agree that one way of mitigating the effects of compulsion on those of modest means would be corresponding personal tax cuts to offset their initial loss of income? 
Hon Dr MICHAEL CULLEN 
: I think one of the key issues here is that people tend to be in favour of compulsory savings until they are asked who will pay. The assumption of employees is that employers will pay and the assumption of employers is that employees will pay. I had an interesting experience at a recent seminar in Wellington along those lines. I think the biggest problem about requiring compulsory superannuation savings of employees is the fact that then the Government effectively in my view takes on the risk in terms of the success or failure of those schemes. If people arrive close to retirement and their savings scheme falls over—and the Government has forced them to save—what recourse do those people have at that point? 
Hon Bill English 
: Can the Minister confirm or otherwise that under KiwiSaver any person who earns any level of PAYE liable income—as little as $10 a week for instance—will qualify for the full $1000 Government payment on the day he or she enrols in KiwiSaver? 
Hon Dr MICHAEL CULLEN 
: The issue of minima was looked at but it was considered not really worth worrying about that in terms of the likelihood of people actually signing up and the ongoing obligations that they may enter into in that respect. There is always a trade-off between compliance costs and efficiency in those respects. 
Sue Bradford 
: What steps is the Minister taking to ensure that KiwiSaver offers a socially responsible investment option for New Zealand workers and if he is not taking any such steps then what guarantees can he give workers that their savings will not end up being invested in things like tobacco gambling and nuclear weapons as happens with the New Zealand Superannuation Fund? 
Hon Dr MICHAEL CULLEN 
: KiwiSaver schemes are required to meet a set of criteria. If they are not default schemes then the criteria are those for registered superannuation schemes. It is a matter for the House to consider whether it wants to change the entire rules around registered superannuation schemes. I am advised according to the co-leader of the Green Party that at least one socially responsible investment scheme is considering applying for registration. 
R Doug Woolerton 
: Has the Minister read any other recent reports that support the New Zealand First leader’s call for compulsory retirement savings particularly Monday’s  
New Zealand Herald 
—a publication not usually amongst his closest allies—which stated: “He was right then as we were among the few to acknowledge at the time and he is right now.”; and is the current Government totally opposed to revisiting this issue in the future? 
Hon Dr MICHAEL CULLEN 
: I am aware of some considerable support. I am also already old enough now to have lived through a period when there was considerable support for tolling roads in Auckland until we started talking about actually tolling roads in Auckland at which point support for that seemed to disappear. That does tend to lead one to a certain level of scepticism perhaps about public support for things that people have not quite thought through in terms of who is actually paying. 
Sue Bradford 
: Would the Government consider introducing legislation that would provide a clear ethical mandate for all Government investments including those of KiwSaver the New Zealand Superannuation Fund and the Accident Compensation Corporation? 
Hon Dr MICHAEL CULLEN 
: Maryan Street has a member’s bill in the ballot that raises some interesting issues around that. I think it will require quite considerable scrutiny and debate. This is not an easy issue at all—partly because of course it is easy to throw accusations at international corporations that prove to have little substance on further examination and partly because some people for example think Boeing is inherently a bad company because some of what Boeing does involves defence equipment. Given that this country both buys Boeing aircraft and purchases defence equipment it would seem extraordinarily hypocritical to say the New Zealand Superannuation Fund could not invest in Boeing. 
R Doug Woolerton 
: I seek leave to table the excellent editorial from Monday’s  
New Zealand Herald.  
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Peter Brown 
: I raise a point of order Madam Speaker. A few moments ago I took a point of order and referred to a former Minister of Transport who did not know how to spend any extra money if it was granted to him. Apparently I have upset some Labour colleagues. The Minister I was referring to of course was the honourable Minister Maurice Williamson. 
Madam SPEAKER 
: That is not a point of order. 
Deforestation—Rates Comparison 
5.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister of Forestry 
: How does he reconcile his statement to the House on 14 February 2007 “that the rate of deforestation under the previous National Government was higher than any deforestation rate that is going on now.” with his statement of 26 February 2007: “Deforestation is increasing and new planting and replanting is steadily declining.”? 
Hon JIM ANDERTON (Minister of Forestry) 
: 
 I would like to say “carefully and skilfully”. As I told the House and Mr Smith on 15 February the total area of afforestation or new planting from 1994 to 1999 under a National-led Government fell by a larger amount than it has under the current Government. The member has been asserting that forest planting levels have been falling due to the current Government’s policy. What I am endeavouring to illustrate is that the area of forest planting fell very significantly before this current Government even came into office. 
Hon Dr Nick Smith 
: Does the Minister’s Government accept some responsibility for what the Ministry of Agriculture and Forestry described yesterday as “rapidly increasing deforestation” and the  
Independent  
newspaper described as a “chainsaw massacre” in that the sharp reversal from positive planting to deforestation followed the Government’s announcement that landowners would not receive any credits for carbon stored and may be lumped with liabilities for harvesting; and how can he be so naïve as to assume that there is no link between that Government announcement and the sharp deforestation that has occurred since? 
Hon JIM ANDERTON 
: Whatever political point the member thinks he is making does not detract from the fact that the area of forest planting has been falling steadily since 1994 under both National- and Labour-led Governments. The fall in planting has everything to do with the relative economics of forestry compared with pastoral farming and very little to do with Government policy. In fact I have in front of me a graph that shows that since planting subsidies were removed in 1994 forest planting has closely mirrored the expected rate of return from planting new forests. I will seek leave to table that graph at the end of this question. 
Steve Chadwick 
: Has the Minister seen any reports about deforestation policy? 
Hon JIM ANDERTON 
: As a matter of fact I have. It is called  
A Bluegreen Vision for New Zealand 
 and I understand that it was released by the National Party. Last Thursday the National Party’s climate change spokesperson said to this House: “that halting the massive deforestation going on in New Zealand right now should be the No. 1 climate change priority …”. Although I welcome Dr Nick Smith’s sudden concern about deforestation it is somewhat at odds with the National Party’s blue-green discussion document which makes only one mention of deforestation—to abandon any cap or controls on it. That would be at a cost of $650 million. I would like to know when the hollow rhetoric the member is giving here is going to be backed up with some substance. 
Hon Dr Nick Smith 
: Does the Minister stand by his quote that the argument that foresters have a right to carbon credits for forests planted after 1990 is “not worth a cup of cold water”; if so is he saying that the word of his senior ministerial adviser on forestry Mr Kevin Steel is not worth a cup of cold water given that as a spokesperson for the Ministry of Agriculture and Forestry Mr Steel wrote in June 2000 in a rural bulletin sent to all farmers a piece entitled “Forestry ‘Carbon Credits’ …” which said: “Farmers and foresters are poised to benefit from any future system of carbon trading.”? 
Hon JIM ANDERTON 
: Kevin Steel to whom the member refers is an adviser in my office from the Ministry of Agriculture and Forestry. He has a long and proud history of giving advice to successive Governments including National-led Governments. His piece at the time speculated as to how carbon emissions might be traded in the international marketplace and credits might be distributed. This Government has proposed in a consultative document that tradable permits be distributed and that there be access for those who are planting trees from 2008 onwards. That is exactly what Kevin Steel had in mind when he produced those reports. 
Hon Dr Nick Smith 
: How is it credible for the Minister of Forestry and the Prime Minister to say that there is absolutely no evidence that this Government has ever suggested that foresters might get a credit when the adviser of whom the Minister has just spoken wrote to all farmers: “Beginning in 2008 NZ farmers could own a major share of carbon credits worth many hundreds of millions. The ability to sell those credits either within NZ or on the international market would introduce a new cash flow to sit alongside those from lamb beef and wool.”; is it not absolutely true that the senior Ministry of Agriculture and Forestry adviser was telling cockies that they could get credits and that now his Government has decided to take them away? 
Hon JIM ANDERTON 
: It may come as a great surprise to Dr Smith that officials like Mr Steel are not elected representatives. They do not promise forward for Governments; they write in discussion documents for discussion and consultation all of the options that are on the table. This Government has put on the table an option for tradable permits under the Kyoto Protocol regime for forests planted from 2008 onwards. I thought the National Party supported that but perhaps it does not. This is another one of those flip-flops that we get almost every second day. 
Hon Dr Nick Smith 
: Talking of flip-flops does the Government stand by its statement in the  
MAF Policy Rural Bulletin 
 dated June 2000 in an article entitled “Forestry ‘Carbon Credits’ …”: “Cast your mind forward … it is March 2010 and the prices of the carbon credits … have just skyrocketed … NZ’s farmers are well placed as sellers in this market. The carbon credits they own … have just become more valuable and the return from their sales provides a welcome respite from continuing difficult market conditions for primary products. Is this a realistic scenario for the new century? Probably.”; and how was it credible for that to be put out by the Ministry of Agriculture and Forestry in 2000 and for the Minister to say today that the argument of foresters that they deserve some credits for those forests is not worth a cup of cold water? 
Hon JIM ANDERTON 
: If Dr Smith does not know the difference between the words “scenario” and “possible options” in a discussion document I cannot be of any help to him whatever. 
Hon Dr Nick Smith 
: Is it— 
Rt Hon Helen Clark 
: What did Upton promise? 
Hon Dr Nick Smith 
: Well he would have at least kept his promises Helen which is something you do not know about. 
Madam SPEAKER 
: Would members please be seated. It leads to disorder when such exchanges go across the House. Would the Hon Dr Nick Smith please ask his question. 
Hon Dr Nick Smith 
: Is it not the truth in this whole sorry saga that the Government led landowners down the garden path by saying they would get carbon credits if they planted trees on the assumption that New Zealand had heaps of credits then stuffed up its numbers found that it had a huge debit and reversed its policy and grabbed the credits off the foresters in a policy that would be best described as: “We erred you pay.”? 
Hon JIM ANDERTON 
: I did not really want to go down this path but the only elected representative I know of who made what could ever be considered—by drawing a long bow—a promise to foresters and farmers was the Hon Simon Upton. Simon Upton made that promise. This Government was not compelled to honour it; he was and he did not. 
Hon Dr Nick Smith 
: I seek the leave of the House to table the written statement by senior policy adviser Mr Kevin Steel who has gone around the country speaking on behalf of the Government—now the Government says the only people who can be believed are the elected representatives—and has made it quite plain that it was the Government’s intention to allocate the forestry credits. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection. There is objection. 
Hon David Parker 
: Is the Minister able to confirm two points: firstly do the Government’s proposals include an option of full devolution of carbon credits for new forests; and secondly can he confirm in respect of previously planted forests that that is not only the policy of this Government but also the policy of the National Party? 
Hon JIM ANDERTON 
: I can confirm the first point and I have already said that in the House a number of times. What the policy of the National Party is I have not the faintest idea and I would not like to confirm it from one moment to the next. 
Family Wellbeing Services—Funding 
6.  
LYNNE PILLAY (Labour—Waitakere) 
 to the  
Associate Minister for Social Development and Employment (CYF) 
: What reports if any has she received concerning funding for Family Wellbeing Services? 
Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)) 
: 
 I have read a report that states: “Funding for Family Wellbeing Services vital in identifying and helping at risk families has been cut by $17 million in the past two years.” I would like to draw the attention of the House and the author of that report to three documents that are very very publicly available—the  
2005/2006 Non-Departmental Output Expense Report  
of Child Youth and Family and the Budget statements of 2005 and 2006. Pages 1 2 and 6 of the first report page 145 of the second report and pages 108 and 113 of the third report state that the alleged cut in funding was a transfer from Child Youth and Family to the Ministry of Social Development family and community services group. I recommend to the member Anne Tolley that she read the base documents before scaremongering in public. 
Lynne Pillay 
: Has the Associate Minister received any reports on the outcome of increased funding for Child Youth and Family? 
Hon RUTH DYSON 
: Yes as a matter of fact I have. Child Youth and Family is having a number of successes such as reducing the number of unallocated cases from 3000 in October 2004 to 435 in October of last year—all during a period of significantly rising notifications. I think all members should acknowledge this significant achievement although I would also note that responsibility for preventing child abuse rests with the whole community not just one Government agency. 
Anne Tolley 
: I seek leave to table the Department of Child Youth and Family Services expenditure showing that in the year 2004-05 Family Wellbeing Services outcome was listed at $55 million and in the year 2006-07 the budget is $38 million—a cut of $17 million in Family Wellbeing Services. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Question No. 5 to Minister 
Hon JIM ANDERTON (Minister of Forestry) 
:  
I apologise to the House but I did indicate I would seek leave to table a graph of the internal rate of return of new forestry plantings. 
Document by leave laid on the Table of the House. 
Breast Cancer—Treatment 
7.  
Dr JACKIE BLUE (National) 
 to the  
Minister of Health 
: Is he satisfied that women are receiving consistent breast cancer care throughout New Zealand? 
Hon PETE HODGSON (Minister of Health) 
: 
 Women across New Zealand receive a high standard of breast cancer care but there is variation in clinical practice which deserves closer scrutiny. 
Dr Jackie Blue 
: Can the Minister explain why 74 percent of women with breast cancer who live in Nelson-Marlborough have a mastectomy compared with only 30 percent of women who live in the Waikato? 
Hon PETE HODGSON 
: I welcome the member’s interest in this important matter and I saw the figures she released yesterday. She will be aware that one of the figures she released yesterday the highlighted figure is in fact wrong. The MidCentral figure is about a third of that which she had initially thought it might be. Furthermore the member requested what each district health board provided rather than the rate of treatment based on where people live. She is therefore inadvertently unable to compare one population in a district with another which is how comparisons of this ilk are usually made. I would make one last point. These decisions are of course clinical not political. 
Dr Jackie Blue 
: How will the Minister explain to the woman with breast cancer who lives in Rotorua that she has double the chance of having her breast removed compared with a woman who lives less than an hour away in Tauranga? 
Hon PETE HODGSON 
: I will say again to the member that the figures she has quite carefully collected in her research are to do with where the surgery is provided. She is therefore unable to take into account any effects from intradistrict flows where there are any. 
Sue Moroney 
: Are there variations in surgical services other than mastectomy; if so what is the Government going to do about them? 
Hon PETE HODGSON 
: Yes there are. Variations across the country exist for every surgical activity. Last year we began a process of making sure that data on intervention rates are as accurate as possible—itself a significant task which will be completed in a few weeks. From 1 July this year we will then use the extra surgical electives funding to address low levels of intervention in this or that surgical procedure where discussions with clinicians indicate that that is appropriate. I appreciate that mastectomy is a procedure where the optimal rate may be lower not higher than the existing rate. 
Dr Jackie Blue 
: Does the Minister understand that breast cancer surgery with the exception of breast cancer reconstructive surgery would not normally require referral to another district health board and however he wants to spin the data and make excuses the fact is some women may be getting their breast removed unnecessarily because they are simply living in the wrong part of New Zealand? 
Hon PETE HODGSON 
: I just say to the member that I agree with her that significant variation in intervention rates for anything is a measure of quality and that reduced variation means higher quality. The member however should reflect on this: New Zealand’s intervention rate for mastectomy is 32.5 percent. That is lower than the average across all of Europe and it is lower than that of the United States of America. 
Dr Jackie Blue 
: Does the Minister agree that there is an urgent need to investigate why there are such differences in surgical practice and to update the current breast cancer surgical guidelines which are well over a decade old so women can be reassured that they will be getting the best surgical treatment for their breast cancer and not this current haphazard surgery by postcode? 
Hon PETE HODGSON 
: The member will be interested to learn—I am sorry she did not already know—that as part of the Government’s cancer control strategy guidelines are currently being updated for all breast cancer treatments including of course the surgical options. [ 
Interruption 
] The member has asked me whether I would like to do something; I am just replying and explaining to the fellow over there that we are already doing it. I say again to the member that she is right—variations in intervention rates for any surgical procedure perhaps indicate a lower quality than is ideal. 
Dr Jackie Blue 
: Can the Minister guarantee that updated breast cancer surgical guidelines will be forthcoming or will it be like the long-awaited update of the prostate cancer guidelines on the Ministry of Health website which were promised 16 months ago but still nothing has happened? 
Hon PETE HODGSON 
: The guidelines are under development now. 
Beneficiaries—Reduction in Numbers 
8.  
DAVE HEREORA (Labour) 
 to the  
Minister for Social Development and Employment 
: What reports if any has he received on the Government’s progress at reducing the number of New Zealanders reliant on the benefit? 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 As members will be aware the unemployment rate has fallen by 76 percent since the Labour-led Government took office. In 1999 the number of unemployed people stood at 161000. It went below 40000 for the first time in June 2006. Members will be pleased to hear that the number of unemployed people has continued to fall since that time and now it stands at 37595—less than a quarter of what the figure was when this Government came to office. It is worth noting in addition of course that we are the only OECD country that has kept its unemployment rate below 4 percent for 10 consecutive quarters. 
Dave Hereora 
: What has been the reduction in youth and long-term unemployment? 
Hon DAVID BENSON-POPE 
: The number of people unemployed for more than a year has fallen from 70000—that is 70000—under National in 1999 to around 14000 today. That is a reduction of 56000. There has been I am pleased to tell the House a similar drop in the number of unemployed youth aged between 18 and 19. Although 18000 such young people were unemployed in 1999 that figure is now less than 3000 and falling—a reflection of course of this Government’s determination to see all young people in education training or work. 
Judith Collins 
: Why is it that despite all the so-called innovative employment programmes that have been funded over the past year to deal with the sickness benefit and invalids benefit numbers sickness benefit numbers have risen by another 2000 to yet another record high at a time when the Minister of Health keeps telling us that we are a much healthier country these days? 
Hon DAVID BENSON-POPE 
: Although I and members of this House will be understandably pleased that the rate of unemployment has dropped by 76 percent I am equally pleased that the total benefit roll number has reduced by around 25 percent. The most instructive comment I could make for that member’s information is about the international comparison between ourselves the UK and Australia. [ 
Interruption 
] Between 2000— 
Madam SPEAKER 
: The member will please be seated. The level of interjections is getting to the point where speakers cannot be heard. Members ask questions and they expect to be able to get those questions addressed. But if answers cannot be heard through the interjections it makes a nonsense of the whole exercise. I ask members to please control themselves and the Minister to continue. 
Hon DAVID BENSON-POPE 
: To provide some perspective for the benefit of members opposite who understandably do not want to hear these figures I say that between 2000 and 2005 the United Kingdom had a net reduction of 6.4 percent in the number of people in receipt of an unemployment benefit or some form of incapacity benefit. Australia comparatively achieved a 0.8 percent reduction in those benefits and in New Zealand over the same period our achievement was a 25.8 percent reduction. 
Judith Collins 
: I raise a point of order Madam Speaker. I listened to every word the Minister said but at no stage did I hear him address the issue of how it is that sickness benefit numbers keep going up to record high after record high. 
Madam SPEAKER 
: I heard the member address the question—at length. 
Ingram Report—Review of Immigration Matters 
9.  
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
 to the  
Minister of Immigration 
: Does he stand by his claim on Tuesday 20 February that he has reviewed the immigration matters covered in the Ingram report? 
Hon DAVID CUNLIFFE (Minister of Immigration) 
: 
 Yes a number of immigration matters are covered in the Ingram report which I have read on a number of occasions as previously stated to the member on 12 September 14 September 15 November and 20 February. 
Dr the Hon Lockwood Smith 
: If the Minister has read the report so many times can he tell us if it is correct that after considering the statements made by Mr O’Connor in relation to when he became aware of the allegations involving Taito Phillip Field plus the statements of his private secretary and the immigration officials Mr Tavita Mr Dalmer and Mr Gardiner who all tried to get information through to the Associate Minister Noel Ingram QC was unable to reach a firm conclusion as to when Mr O’Connor became aware of the allegations and instead had to construct a “possible sequence of events”? 
Hon DAVID CUNLIFFE 
: These matters were fully covered in the Ingram inquiry. Dr Ingram QC talks about the most likely scenario of events and that member in his select committee has issued a report that says the former Minister was blameless. 
Dr the Hon Lockwood Smith 
: Is it correct that Noel Ingram QC concluded that real uncertainty results from the available evidence as to when Mr O’Connor became aware of the allegations in relation to Taito Phillip Field? 
Hon DAVID CUNLIFFE 
: The Ingram report is on the public record and I suggest the member reread it if he is unsure. 
Dr the Hon Lockwood Smith 
: I raise a point of order Madam Speaker. I asked the Minister whether a specific statement was correct and he invited me to read the report. I do not believe that is an honest attempt to address the question I put to him. I am very happy to repeat it if the Minister is nervous of it. 
Hon DAVID CUNLIFFE 
: Standing Order 371 provides that questions must be concise and not contain inferences or imputations. For some months now the House has entertained Dr Smith repeatedly providing very long questions to the House and repeatedly inferring that my colleague—his parliamentary colleague—the then Minister of Immigration somehow did something wrong. The issues in his questions have been set out in the Ingram inquiry report on the public record for the best part of a year. I do not understand why the member would want the Minister to simply repeat what is in the report. 
Madam SPEAKER 
: I thank the member who was not addressing directly the point of order the point of order being whether the question was addressed. A Minister can be asked for an opinion but there is no requirement that one has to be given. 
Dr the Hon Lockwood Smith 
: Was the Minister’s answer to Parliament yesterday that “… the Ingram inquiry report conclusively concludes that the Minister in question did not receive the information before he made the decision.” the truth? 
Hon DAVID CUNLIFFE 
: My understanding of the balance of the Ingram inquiry’s report conclusion is the same as the member’s own and the select committee report issued 2 days ago which says that the department’s processes compromised the Minister. 
Dr the Hon Lockwood Smith 
: I repeat my question: was the Minister’s answer to the House yesterday that the Ingram report conclusively concludes the Minister in question did not receive the information before he made the decision the truth or not? 
Hon DAVID CUNLIFFE 
: The Ingram inquiry’s report is a matter of the public record. 
Dr the Hon Lockwood Smith 
: Can the Minister then explain to the House why he told this Parliament yesterday that the Ingram inquiry report conclusively concludes that the Minister in question did not receive the information before he made his decision when Noel Ingram states in paragraph 158 of his report which the Minister claims to have read that “… real uncertainty results from the available evidence as to when Mr O’Connor became aware of the allegations in relation to Mr Field.”? 
Hon DAVID CUNLIFFE 
: As I said in answer to a supplementary question two or three supplementary questions ago Dr Ingram QC’s conclusion as to the most likely sequence of events was the same as the member’s own conclusion in the select committee report 2 days ago. 
Dr the Hon Lockwood Smith 
: Is it correct that in paragraphs 138 144 150 151 and 156 Noel Ingram records five conflicting stories given by Mr O’Connor’s private secretary as to when she informed Mr O’Connor of information regarding Taito Phillip Field’s involvement with Sunan Siriwan? 
Hon DAVID CUNLIFFE 
: As in any report of that length there will always be conflict of evidence. The House has already heard what he regarded as the most likely scenario. 
Carbon Credits—Allocation 
10.  
RODNEY HIDE (Leader—ACT) 
 to the  
Minister of Forestry 
: Following the Prime Minister’s statement to the  
Sunday Star-Times 
 that there was never “any promise to industry that the credits would be devolved” has the Government in any way ever indicated that farmers and foresters would own any carbon credits attached to their trees; if so when? 
Madam SPEAKER 
: Would members please stop chipping at each other. If they want to have a private conversation would they please leave the Chamber. 
Hon JIM ANDERTON (Minister of Forestry) 
: 
 This Government has never promised carbon credits to anyone except for the Permanent Forest Sink Initiative which has the unanimous support of this House. However the Government is presently consulting on a range of options to encourage afforestation. One option proposes to devolve credits to those who plant new forests from 1 January next year. That would be a world first and if it proceeds it is hoped it will incentivise the planting of new forests. 
Rodney Hide 
: What then is the status of senior policy analyst Kevin Steel who wrote to farmers in the  
MAF Rural Bulletin 
 in June 2000: “Cast your mind forward … NZ’s farmers are well placed as sellers in this market. The carbon credits they own (like trees) have just become more valuable and the return from their sales provides a welcome respite from continuing difficult market conditions for primary products.”; why would farmers not conclude from that statement that they were being promised the credits for the carbon sink of their own trees? 
Hon JIM ANDERTON 
: I think that if we take the words of a very fine official of the Ministry of Agriculture and Forestry who has served successive Governments very well in terms of forestry and the issues that surround that we would think through to the period of 2008 when the Government is actually proposing to do exactly that. Kevin Steel was right to forecast that. 
Hon Marian Hobbs 
: Has the Minister seen any reports on the question of devolving carbon credits? 
Hon JIM ANDERTON 
: As usual I have. I have seen the ACT party’s environment and conservation policy which does not propose devolving credits to foresters. I have also seen the National Party’s Bluegreen discussion document which although still a draft document is the closest thing that the National Party has to a policy—and it does not propose devolving carbon credits to anyone. So although the Opposition tries in this House to paint itself as a short-term benefactor of the few it is offering nothing but hollow gestures of support. Meanwhile this Government is consulting on an allocation of carbon credits for all new forests planted from next year onwards which is a world first. 
Hon Dr Nick Smith 
: How can we believe anything this Government says when we are told not to believe the word of the most senior forestry official in Jim Anderton’s office when he writes in an official Ministry of Agriculture and Forestry publication and when yesterday we had the extraordinary spectacle of the Prime Minister saying that we cannot even take the word of Winston Peters as a Minister; who speaks for this Government if it is not a senior Ministry of Agriculture and Forestry official? 
Hon JIM ANDERTON 
: I think every single member of this House except perhaps Dr Nick Smith understands how officials in Government ministries give advice and write papers for discussion and consultation. I would refer him to the commitment or the promise—whichever way he likes to describe it—made in 1999 prior to the Labour-led Government’s coming into office when the then Minister for the Environment Simon Upton was telling people that it was his preference that the carbon credits would be devolved to forest owners. But it was never Government policy. He made that statement but it was never Government policy. I do not hold the National Party any more accountable for that than I do for the silly suggestion that we should hold reputable Government servants responsible for a non-Government policy when it was just a newsletter from a Government ministry discussing issues for the future. If we try to discourage that we will not have any decent advice given to us at all. It is ridiculous! 
Hon Dr Nick Smith 
: I seek leave to table the statement from Mr Anderton’s senior adviser so that the House may be able to read exactly what taxpayers’ money was being spent on—distributed from the ministry’s revenue—and what the Government’s policy was. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. [ 
Interruption 
] 
Madam SPEAKER 
: Would members please be quiet or they will be leaving the Chamber. 
Hon Dr Nick Smith 
: I seek leave to table the statement from Mr Anderton that any suggestion that carbon credits belonged to foresters was not worth a cup of cold water. 
Document by leave laid on the Table of the House. 
Rodney Hide 
: Is it then the case with this Government that when senior civil servants write in a Government publication that: “NZ’s farmers are well placed as sellers in this market” that because an elected politician has not said it the statement itself is meaningless and in fact the word of civil servants and their publications are of no value unless an elected representative actually says the same thing; what does that then say about Kevin Steel—is what he was saying in that document a lie? 
Hon JIM ANDERTON 
: We are looking at the period between 1998 and 2001 when officials were working under the direction of both the former National-led Government and the Labour-led Government on issues of climate change policy forestry policy and so on. Those documents were sent out for discussion and consultation as they should have been. But at no stage did that work promise or commit that there would be ownership of credits although it is probably reasonable that some expectation of credits was developed. But at the time even this Government understood that there was a huge credit in terms of emissions under the Kyoto regime. Subsequently scientific evidence suggested that that was not true. If Governments remain with policies when the evidence that comes before them shows that the basis on which some of the assumptions were made and discussions were held was erroneous then it would be the consistency of fools for the Government not to let the facts get in the way of prejudice. This Government has no record of letting that happen. 
Rodney Hide 
: I seek leave to table a news release from the forest industry calling for this Minister to resign or be sacked. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Immigration Service —Confidence 
11.  
PANSY WONG (National) 
 to the  
Minister of Immigration 
: Does he have confidence in the New Zealand Immigration Service? 
Hon DAVID CUNLIFFE (Minister of Immigration) 
: 
 Yes. 
Pansy Wong 
: Is the Minister satisfied with the cost-effectiveness of Immigration New Zealand spending more than $1 million setting up the NetworkZ Online website which aims to match employers and employees when currently only two job vacancies are listed on it one of which is for a hairdresser? [ 
Interruption 
] 
Hon DAVID CUNLIFFE 
: As much as the member’s colleague Mr Brownlee might need those services no. 
Pansy Wong 
: Why is the Minister spending another $2 million to attract information technology specialists from China and India when 1087 computer specialists are already listed on the Government’s taxpayer-funded million-dollar website NetworkZ Online? 
Hon DAVID CUNLIFFE 
: The Government takes very seriously labour shortages and skill shortages wherever they occur in the economy. It is for that reason that the Government prioritises recruitment of specialists in areas of skill shortage. 
Peter Brown 
: Does the Minister concur with New Zealand First that immigration policy should be skill-based that immigrants should be of good health of good character speak English and be more than willing to integrate into our society— 
Rodney Hide 
: How did Peter get in? 
Peter Brown 
: Now that would be a secret! 
Madam SPEAKER 
: Would Mr Brown please be seated. If there are any more interventions that will be it. Would the member please start again. 
Peter Brown 
: Does the Minister concur with New Zealand First that immigration policy should be skill-based that immigrants should be of good health of good character speak English and be more than willing to integrate into our society; and can he assure the House that the legislation produced as a result of New Zealand First’s insistence to address our immigration laws and procedures will reflect such criteria? 
Hon DAVID CUNLIFFE 
: I concur that the member himself is a shining example of everything that his party holds dear. 
Dr Pita Sharples 
: Tena koe Madam Speaker. How does the Minister believe the Immigration Service is able to uphold the intentions of the Treaty of Waitangi “To control the thousands of future immigrants to Aotearoa New Zealand and secondly to protect the rights of Maori people” as is declared on the Immigration New Zealand website? 
Hon DAVID CUNLIFFE 
: Whatever one might think of controlled immigration it has certain advantages over the opposite. 
Pansy Wong 
: Why after spending $1 million of taxpayers’ money setting up a job website that has attracted 1087 computer specialists looking for work is the Minister ignoring these people and spending yet another $2 million to attract information technology specialists from China and India? 
Hon DAVID CUNLIFFE 
: It will not surprise the member to know that computer specialists come in many types. Therefore there is an ongoing need to match the supply with the demand. 
Peter Brown 
: Can the Minister advise the House when we can expect to have legislation before it that will address our immigration laws and procedures? 
Hon DAVID CUNLIFFE 
: As soon as possible and certainly in the first half of this year. 
Dr Pita Sharples 
: In the light of the Immigration New Zealand website information what strategies does the Minister have for Immigration New Zealand to consult with Maori on immigration matters? 
Hon DAVID CUNLIFFE 
: Consultation with Maori is an important part of the work of Immigration New Zealand. In the first instance that is conducted through liaison with the relevant Government agency Te PuniKokiri. 
Pansy Wong 
: Has the Minister changed his mind in recognising work experience from China and India because in 2002 the Labour-led Government excluded this type of work experience from policy a decision that directly led to a significant reduction in the number of skilled migrants from those two countries? 
Hon DAVID CUNLIFFE 
: Firstly China and India will continue to play a very major part in sourcing New Zealand’s migrant flows. Secondly in the sectors that the member has drawn attention to significant steps have been taken to liberalise the long-term and immediate skill shortage lists. Thirdly there has been a removal of the comparable labour market test for employees of multinational companies from those countries. 
Dr Pita Sharples 
: I seek leave to table a document from the Immigration New Zealand website entitled  
The Treaty and immigration. 
Document by leave laid on the Table of the House. 
Pansy Wong 
: I seek leave to table the summary page from the million-dollar website NetworkZ Online which has two job listings one of which is for a hairdresser. 
Document by leave laid on the Table of the House. 
Pansy Wong 
: I seek leave to table career seekers statistics from the million-dollar website NetworkZ Online which lists 1087 computer specialists with no matching job offers. 
Document by leave laid on the Table of the House. 
Airport Infrastructure—Government Assistance 
12.  
RUSSELL FAIRBROTHER (Labour) 
 to the  
Minister of Transport 
: What Government action has enabled several territorial local authorities to operate their airport infrastructure more effectively? 
Hon ANNETTE KING (Minister of Transport) 
: 
 The Government has decided that two joint-venture airports Hawke’s Bay and New Plymouth will be given the option to corporatise if our council partners wish. The airports will remain in public hands and the company structure will provide clearer governance and enable the airports to borrow for investment if necessary. This paves the way for more active decision-making by the boards about these important community assets. 
Russell Fairbrother 
: How has the Government assisted the other joint-venture airports? 
Hon ANNETTE KING 
: This is of great interest to many New Zealanders who live in provincial New Zealand. The remaining five airports in Whangarei Whakatane Taupo Wanganui and Westport will continue to be operated as joint-venture airports with more active Government involvement and assistance. This means we will have a better understanding of the issues in relation to each airport and what is needed from the Crown. The Government has appropriated almost $4 million to cover its share of historic losses and the necessary upgrades of infrastructure and facilities. This includes $227000 for a new terminal at Westport $526000 for resealing the runway at Wanganui and $1.1 million for the Taupo runway subject to final costs. 
Chester Borrows 
: Can the Minister confirm that the $803000 recently released for Wanganui Airport is just the Government share of past losses as a 50-50 partner and what guarantee is there that the Government will pay the estimated $470000 in back interest payments or does she expect Wanganui ratepayers to cover the cost of this Government not paying its bills as it expected the taxpayers of New Zealand to cover the $800000 election over-spend until it was shamed into its yet unfulfilled pledge to pay the money back? 
Hon ANNETTE KING 
: That is a very good question because that member might want to ask why a National Government set out to sell off the airports then set out not to honour the money that ought to have been put in. This Government has promised money to cover those historic losses and to work with those local authorities to ensure they can continue operating their airports. 
Debate on Budget Policy Statement 
SHANE JONES (Chairperson of the Finance and Expenditure Committee): 
 I move  
That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2007 
. In contrast to what we hear from the Opposition I would like to start by reminding members and those folk in the public who have suffered the mental dandruff from the Opposition during question time and thankfully the very lucid answers from my colleagues on this side of the House that underlying this document is a very clear strategy. The strategy is to ensure that the nation is endowed with a very robust fiscal strategy that actually enables us to deal with future problems—in particular our ageing population. 
At the broad foundation of our Budget Policy Statement are three very important building blocks. Firstly during the 8 to 9 years in which we have enjoyed fantastic opportunities to take a role in growing the economy we have built up assets in our superannuation fund—building block No. 1. What is talked about in our Budget Policy Statement? The statement says how fantastically well the value of that particular asset has grown and that it represents a very sensible and far-reaching investment in the future. 
Secondly how is this strategy to be addressed in relation to the expenditure side of taxes and expenses? The idea is to provide certainty to our households by ensuring that they understand both through transparency and a lack of any surprises what sort of tax system we are running and in what ways it will be improved. Since the time of the last election 15 to 18 months ago there have been substantial improvements to our tax system in the areas of savings and of dealing with the vexed area of overseas taxation. And of course this year we will see a further improvement in the area of business taxation which our Budget Policy Statement refers to. It also refers to our needing not only to continue to refine a sensible and sophisticated taxation system—expenses of running the State—but to pay careful attention. 
I must remind members of the House and members of the select committee—who I must say were constructive in the main—that there was an exchange between our Minister of Finance and the Opposition spokesman on finance Mr English as to whether we were running an expansionary policy. The policy we run is in response to the multiple entreaties we hear from the community to ensure that the deficit we inherited is in a social sense not worsened and that incrementally we invest not only in the physical capital the human capital but in particular in our social capital through large expenditure areas such as health etc. 
Let us talk about what is perhaps one of the crowning definitions of Dr Cullen’s time here as Minister of Finance in relation to managing debt. Debt during the 1990s was a substantial problem. One of the things that certainly defines our Minister of Finance which is reflected in this document is that financial costs are being kept low. How are we managing to do that? We are doing it with high quality stewardship which enables ourselves on behalf of the community and the electorate to play a key driving role in relation to the economy. We see buoyancy huge levels of revenue etc. that were previously virtually unseen. To suggest that that was serendipitous—that it was a positive cohesion of various random forces—is to overlook the high quality of stewardship and the very careful approach taken to managing debt. At a deeper level it is to ensure that our gross debt level never moves far away from being 20 percent of GDP—a very very important feature. 
An additional issue that has been the subject of ongoing discussion in our Budget Policy Statement is the question of what to do with the cash position—how to handle it. The cash position which is referred to in the statement does dip slightly but it fulfils an important discipline so that we do not race off and incur debt and so that our economy is not saddled with a problem that future generations will have to inherit—in very much the same way that our Government inherited a host of deficit problems from the previous National Government. 
Let us talk about some of the other overdue issues that are touched on in our Budget Policy Statement. Revenue as referred to there is up. Why is it up? GST and PAYE payments are up. Why are they up? The reason is that employment is up. Employment is up because it reflects ongoing business confidence. Yes it might be said that company profits have dipped slightly but despite the best efforts of both major parties in this House we remain powerless in the face of currency speculators and the creep upwards of our dollar. Not only has revenue gone up but Crown debt has come down. Crown debt has come down because of the growth in assets. The growth in assets is reflective of the far-sighted decision taken by the Government to invest in what we colloquially call the Cullen fund to ensure that we are building up and husbanding a range of assets to meet future demands—demands that both demographically and naturally we are unable to stand against. Of course I refer here to ageing. 
The New Zealand economy which we heard about in relation to the Budget Policy Statement when Mr Cullen came to see us at the select committee has enjoyed the strongest period of expansion and growth in over 30 years. Unemployment is low growth is up as I said earlier and confidence is up. Let us talk for a moment about why unemployment remains low. It remains low because first employers are willing to take on more workers and secondly to work with the Government on a range of social programmes and human capital interventions in order to see workers’ levels of skill grow. We can contrast that with the experience suffered by workers in the 1990s when that area was chronically overlooked. 
What is in the Budget Policy Statement can be contrasted to the total absence of ideas from the other side of the House other than ongoing niggling disruptive chipping in. We see that particularly in question time. I hope I never have the misfortune to sit directly across from Dr Nick Smith. He reminds me of some fowl moulting; he continues to peck and chip. Nothing constructive comes forward because there is nothing there. On the one hand we have Mr John Key wandering around barnstorming promising all sorts of things to different communities—who are unwise at the moment to listen to him—and on the other hand we have Mr English attacking the document and saying it is too expansionary. They cannot have both: they cannot on the one hand give away lollies and on the other hand—back where the power apparently is—screw the lid on very tightly. There will be no lollies—no expenditure of the nature we have been able to sustain in our time. 
I cannot really go much further in this short contribution without isolating the obvious confusion we will hear about and which our Budget Policy Statement actually highlights. I refer here to where the Opposition will draw its expertise from in order to match what we have done here. The newspapers—very foolishly in my view—recently profiled Mr Groser and Mr Hayes. They have identified these two obscure—I was about to say “skeletal” but that would be very offensive to Weight Watchers—individuals who have been completely overlooked while John Key seeks to get views from first Ruth Richardson and secondly Jenny Shipley. I do have a charitable thought or three for Jim Bolger. He did go out of his way in contrast to Don Brash to uphold the kaupapa of the Treaty and the Maori world. But these two individuals have been superseded—eclipsed. They have hardly even made an indentation in their chairs—well one has. And hello they are being eclipsed circumvented by the very people who drove a toxic mix of policies in our view—I ask about the deficit that we were elected in 1999 2002 and 2005 to overcome. So what do we have? We have a group of advisers hoping to take care of the fresh leader but they are yesterday’s people. Kia ora tatou. 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 This could well be a special occasion because I think we have witnessed Dr Cullen’s last Budget Policy Statement appearance at the Finance and Expenditure Committee. The Government in its effort to refresh will have to do away with someone. Unfortunately Dr Cullen is by far the most capable of the Labour Ministers but equally he has made it quite clear in the last few months that he is past his usefulness to the Government. The Prime Minister is now treating him without respect. The other day when he floated the idea of the mortgage tax—a dopey idea as it was—she simply slapped him down and made him back off. But when Winston Peters goes out and says to the national media something that is directly counter to Government policy in a foreign country with its Minister of Foreign Affairs Helen Clark describes that as an honest opinion about tragic circumstances. Dr Cullen is now a lame duck within the Labour Cabinet. 
Dr the Hon Lockwood Smith 
: A dead duck. 
Hon BILL ENGLISH 
: Well his idea was a dead duck. But he is not dead; he is just lame. He is a lame duck. Of course he is going to be replaced by Mr Mallard who is another lame duck. He has blown his credibility in the finance area over the Auckland stadium before he has even got the job. 
Dr Cullen to his credit over the years has fought the worst spending instincts of the Labour Party but he has left himself confused about just where he is up to. The main issue debated at the Budget Policy Statement hearings was that Dr Cullen has always said his fiscal programme is prudent and that those people who are going around promising for instance to reduce taxes would create expansionary fiscal policy which would drive up interest rates. It turns out that Dr Cullen is describing his own policy because for the first time ever at the select committee hearings Dr Cullen conceded that it is his spending plans that are putting pressure on interest rates. 
He had to do that because the Governor of the Reserve Bank had already said so. In the most recent Monetary Policy Statement the Governor of the Reserve Bank who was sitting there trying to decide about the interest rates that New Zealand households will pay said that Dr Cullen’s fiscal policy was quite expansionary. What does he mean by that? He means that over the next 2 years Dr Cullen and the Labour Party have already programmed $5 billion of new spending. This is at a time when the Governor of the Reserve Bank is worried about the economy not adjusting to the imbalances. He is signalling through the Monetary Policy Statement that one of his problems with setting interest rates is the Government’s spending momentum. That $5 billion is before the election bidding starts—and we know how large scale Labour can get in its election bidding. 
So the Governor of the Reserve Bank is looking out over the next 2 or 3 years. He will decide whether the interest rate on the mortgages that New Zealanders pay from their weekly incomes will go up and he is saying that the Government’s spending plans are making his job harder. That is why it was illogical for Dr Cullen to be proposing the mortgage tax because Dr Cullen was trying to get out of the mortgage levy a situation where he could keep on spending but householders would pay the price directly through a mortgage levy. The Reserve Bank needed that to help cool down the economy. 
When Dr Cullen goes around shedding crocodile tears for exporters he should do what he can to take the pressure off them. The one thing he can do is to rein in the scale of Government spending because who believes that out of the $4 billion of new spending New Zealanders are going to get $4 billion of new services? No one believes that. They believe that Labour might claw back a few of the votes it has been losing. There will certainly be more pay rises for civil servants well ahead of the private sector. There will certainly be higher interest rates for longer for every New Zealand household. 
But we know the one thing there will not be is more and better public services. Because Labour has fallen into the trap of believing that if it spends more money on it then that will fix the problem. Of course it does not. Members should just look at health. The Government now spends 40 percent more than 7 years ago for roughly the same output. Roughly the same amount of health things are getting done and it is costing 40 percent more. Members should look at the problems our leader John Key has been highlighting with that smaller group of people with intense social and economic problems which he has called the underclass. Almost universally the public believe that the Government is complacent about it and more important that its solutions are not working. Spending more money on those kinds of big Government solutions is not going to make any difference. 
Dr Cullen has persisted with the spending programme that will mean interest rates are higher for longer. It is interesting that even though that spending programme is very large the Budget process is creating real tension within the Government. This is where Dr Cullen is really coming under pressure internally. You see when Labour signed up to its coalition agreements it gave away everything to the small parties. Labour was getting such persistent windfalls of new tax revenue that Helen Clark decided she could pay for whatever New Zealand First and United Future wanted. Even with the huge tax windfalls they have enjoyed New Zealand First and United Future are getting most of the discretionary cash out of this Budget round. 
That is leaving the usual hopeless big spenders like Pete Hodgson Steve Maharey and Annette King increasingly irritated. They are finally realising that Labour gave away large amounts and very expensive promises—like 1000 more police plus 250 non-sworn staff and the increase in national superannuation which are all things that New Zealand First campaigned on—and now it has to pay the bills. So Dr Cullen is trying to get the lid on the spending even though there is about $2 billion more spending. Those tensions in the Government are going to become more and more evident. 
In fact it is becoming clear now who is setting the agenda for the Government. New Zealand First has got its promises which are using up most of the Budget. United Future is the champion of tax cuts. We know that Dr Cullen is not in favour of tax cuts at all. So what is he doing now? What actually is the economic strategy of the Government? Because it is not clear at all from the Budget Policy Statement. What we needed to see from the Budget Policy Statement but did not see was a focus on two things. The first thing was quality of Government spending. One million dollars was spent on an Immigration Service website that has two vacancies posted on it. That is one of hundreds of low-quality Government expenditures. 
The second thing we needed to see was a shift in the balance of the economic strategy. The Government has focused almost entirely on strengthening the Government balance sheet and building up savings to manage risks that are 20 to 30 years away. Well that has some merit. But what we need is to balance that up with a focus on growth in the next 5 to 10 years. Because it is that economic growth that will allow us to spend what we need to support and help people and which will provide the opportunities for our young people who cannot wait 30 years. So the Government’s focus of 30 years away is too unbalanced. We need to balance that up with a focus on growth. But unfortunately it is not here. 
Dr Cullen is not able to adapt to the changing times. His thinking is still back in the late 1990s. He is becoming a stick in the mud who is stuck in the mud—that is why his political viability is running down. He is irrelevant to the economic debate. It will soon be time for a change to shift gear to a much more aspirational Budget Policy Statement which unfortunately is still 2 years away when it will come from the new National Government. 
R DOUG WOOLERTON (NZ First) 
: 
 In speaking to the Budget Policy Statement for 2007 I advise members that they should have listened to that speech made by Bill English. I invite members to get the transcript of that speech and come to me because I will interpret it for them. I will interpret that speech for the House and for anybody else listening now. 
At election time the National Party promised tax cuts for everybody—tax cuts that we in New Zealand First and the Labour Party said were unaffordable. Dr Cullen in particular said that time and time again. Bill English is a person who knows about these things and I will give him credit for that. He knows that what the National Party was promising at election time was unaffordable. That speech he just made is the first back-down from the tax cuts that National promised at the last election. They said that those tax cuts were affordable and Dr Cullen said they were not because the money was budgeted to be spent in the future. 
At the Budget Policy Statement meeting where Dr Cullen came before members of the Finance and Expenditure Committee Bill English was asking him in detail what that expenditure was about and trying to make out that it was expansionist. Dr Cullen said nothing at that Budget Policy Statement meeting that he had not said at election time. So Bill English knew what that was all about but he has spent the rest of the time climbing down from that position. 
I draw the public’s attention particularly to the little bit at the end of Bill English’s speech when he talked about the Government’s providing for issues—namely retirement—that will happen in 30 years. When Bill English talked about that my colleague Brian Donnelly said to me: “Doug that is where the National Party will get their tax cuts from.” National will go into the Cullen fund and get its tax cuts from money that has been put aside for our senior citizens. That is where the National members will get their tax cuts from in the future and I had just hoped that they would say so honestly openly and transparently. But they are not doing that which is why I am inviting people to come and see me and I will translate that speech for them. 
That speech was not only full of throwaway lines but also it was a very very deliberate and careful back-down from the tax cut promises of the election and it was an indication of where some tax cuts will come from in the future. The only way—and New Zealand First will say it now—to protect the Cullen fund bearing in mind what Bill English has just told us is to personalise those accounts as has been proposed by New Zealand First over many many years now. 
As far as New Zealand First’s view of the Budget Policy Statement goes we applaud it. We applaud sound financial management. We applaud pragmatic financial solutions. We applaud the slight incentivising of the tax system that Dr Cullen has alluded to in statements he made when he talked to the media in general even though that was not actually in this Budget Policy Statement. So we are in favour of pragmatic solutions and in favour of a fiscally prudent Government. 
I just have to go back to Bill English’s speech because its content sounded so outrageous to a professional politician like myself. He talked about my leader in his speech. That had nothing to do with the Budget Policy Statement but he talked about a statement my leader made. Mr English would like to construe that statement as a split in the Government between the Rt Hon Winston Peters and Helen Clark. 
Hon Clayton Cosgrove 
: Wishful thinking. 
R DOUG WOOLERTON 
: Of course it is wishful thinking; it is not going to happen. That statement was made about the Iraq situation and it should not have been a surprise to anybody familiar with that issue. New Zealand First supported the Labour Government in its stance on Iraq—and it still does to this day. 
On a personal basis the Rt Hon Winston Peters was asked what his views were and he gave them. There was no contradiction and no problem with the Government and he did not suggest that his views were Government policy—nothing of the sort. He is right of course. New Zealand First says that he is right and the Labour Government says that he is right. But the Opposition says that there are problems and the media say that there are problems and on and on they go. Because National is short of solutions it is looking for any issue whether or not it is true to put a stake between the Government and its support partners. I just wanted that to be put on the record. 
I wish to talk about a few things coming out of the Budget Policy Statement. It saddens me to say that we are still in a situation where we have imports exceeding exports and that the deficit is predicted to rise to something in the vicinity of $15 billion. I mention that in order to bring into the discussion Export Year 2007 which New Zealand First believes is critical. No figure better illustrates the fact that it is critical to have exports out of this country than our having a $15 billion deficit. 
It is all very well to talk about economic activity but at the same time we need to ensure that the books are balanced. [ 
Interruption 
] Dr Lockwood Smith as he interjects cannot have it both ways. He cannot talk about tax cuts and then talk about big-spending policies all of which were outlined at election time. I would like to see the National Party outline where it intends to get tax cuts from—and I would particularly like to see it do that in light of Bill English’s speech. I am led to suggest that National intends to take tax cuts out of the Cullen fund. We are not talking about big-spending issues; these issues were all outlined by both New Zealand First and indeed by the Labour Party at election time. 
I cannot as rural spokesperson for New Zealand First go past mentioning that the vice-president of Federated Farmers came along to speak to us when we were taking submissions on the Budget Policy Statement. He said that 2007 will be a difficult year for farmers. That is sad because by and large farmers are receiving very good receipts for their produce overseas. 
Dr the Hon Lockwood Smith 
: Tell that to sheep farmers. 
R DOUG WOOLERTON 
: Yes Dr Smith is right—mainly it is dairy farmers. But I would remind Dr Smith that that is 20 percent of our exports right there in one company alone. So it is not an insignificant amount. 
But 2007 will be a difficult year for farmers. One thing is the dollar and the other thing which will not be mentioned by Federated Farmers or other farming institutions is the high price of land. Most farmers in this country have gone forth and multiplied their acreages and they have done that at a high cost to themselves. A high cost of land means high servicing costs and that means less profit. So nobody knows how to deal with that problem but I just say to the Government that we need to help our farmers in every way we can because that is where the bulk of our exports will come from. 
To sum up I have quite obviously placed a big emphasis on savings. I have pleaded and I still plead with the Government to lock up the Cullen fund in individualised accounts because today we heard the first indication that that fund will be raided by some future Government if National gets to the Treasury benches. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In speaking to this Budget Policy Statement debate I would like to draw members’ attention to a particularly pertinent table on page 47 of the fiscal outlook. That table figure 2.8 forecasts the Government’s new operating initiatives. It is so important because when we talk about increases in Government spending we so often forget that it actually piles one on top of the other. What I mean by that is that over this next Budget period the fiscal outlook and the Budget Policy Statement identify that the Government will increase its operating spending by $1.9 billion plus 3 months’ worth of the company tax concessions—probably about $100000. So the figure is about $2 billion but the table of course identifies the figure of $1.9 billion. 
Then the Budget Policy Statement identifies $3 billion of extra new spending in next year’s Budget. Often people then look at those figures and say that the Government is increasing spending over the next 2 years by $5 billion—$2 billion this year and $3 billion next year. But as figure 2.8 shows that is not the way it works. The Government is increasing operating spending in this Budget by $1.9 billion plus the company tax concessions but this figure shows that in the next Budget compared with the current one the increase will be $4.9 billion. So the total increase in spending compared with the current level of operating expenditure over just the next 2 years by this Labour Government is an increase of almost $7 billion. That is not my figure; that is the figure to be found in figure 2.8 “Forecast New Operating Initiatives” on page 47 of the fiscal outlook. That is why the Governor of the Reserve Bank in his latest Monetary Policy Statement speaks of the Government’s fiscal policy being expansionary. He states: “This expansion can be seen in the national account measures of government spending but also involves substantial boosts to transfer payments to households. The effect of such a shift to an expansionary fiscal policy is significant at a time when the available pool of resources remains stretched.” 
The outcome of what the Governor of the Reserve Bank has said there is that New Zealanders face higher interest rates over the next few months because of this Government’s increased spending. The table on page 47 shows exactly what the Governor of the Reserve Bank is on about. If members look at the next 3 years—because normally in Budget cycles the Government looks 3 years ahead—members will see that the total increase in spending over the next 3 years compared with now is $2 billion plus $5 billion is $7 billion plus $7 billion is $14 billion. Over the next 3 years there will be $14 billion more Government spending than there is right now. It is little wonder that the Reserve Bank is saying: “Hang on this will just blow interest rates out of the water.” I want the next Labour speaker to tell this Parliament why the Government thinks it should be spending over the next 3 years $14 billion more and forcing ordinary mums and dads in New Zealand with their families to face higher interest rates on their mortgages. 
It seems that the Labour Government’s policy is one that expects mums and dads to tighten their belts and pay higher interest rates on their mortgages so that Michael Cullen can loosen his belt and spend a whole lot more just to try to get Labour re-elected. It might have worked once. At the last election there was a massive promise of extra spending including interest-free loans for students masses of increases in Working for Families—hundreds and hundreds of millions of dollars of extra spending leading up to the next election. None of that is included in these fiscal projections. That is what my colleague the Hon Bill English said. These increases in spending that Treasury identifies actually come before the bidding war by this Labour Government when it starts to try to get itself elected for yet a further term—God forbid! 
New Zealand mums and dads ought to think very carefully about how much higher interest rates they want to pay on their mortgages to support this huge-spending Labour Government. If the spending were on something worthwhile maybe some of it could be justified. The bit that is being spent on roading for example is justified although our roading is hugely expensive by international standards. Let me share with the House where so much of this extra spending has gone. Every year in recent years we know that this Government has put $750 million more into health. That means that over a 2-year period the total increase is about $2.5 billion in spending on health—a bit under that. But we see no more operations no more delivery of services. What this Government is doing is spending money on bureaucracy not on services. 
If members look at the actual number of employees employed in the central government agencies they will see that over the years this Government has been in office since 1999 the increase in public sector employees is 95 percent—almost twice as big a Government bureaucracy. Is it delivering any more service? 
One area where I was Minister for quite a long time was education. I was Minister of Education for almost 6 years. I was not only in charge of the school sector but early childhood as well as tertiary—these days that is too hard a job for any one Labour Cabinet Minister; it has about three of them involved. When I ran the tertiary sector when we were involved in a massive expansion of the tertiary sector we went from darn near the bottom of the OECD in terms of tertiary participation in the early 1990s up towards the top. I ran the tertiary sector with 15 officials in the ministry. About 15 officials with me ran the entire tertiary sector. Do members know how many officials Labour needs to run the tertiary sector? Over 300 are needed to do what a National Minister did with 15 and I know Brian Donnelly knows this is absolutely right; I see him nodding his head. 
Hon Member 
: And they’re doing it a lot worse! 
Dr the Hon LOCKWOOD SMITH 
: And they are doing it a lot worse. When I was Minister I had none of the scandals around the wananga. We set up the wananga and they went really well when I was the Minister. There are now 300 officials to do what National did with 15. It is little wonder that we do not see any improvements in productivity. There is a 100 percent increase in bureaucrats but no increase in service. That is why productivity has gone down under this Labour Government. 
These bureaucrats of course have to be housed. The floor space this Labour Government has taken on to house those bureaucrats it has employed is the equivalent of 15 rugby fields. Since Labour came to office it now leases 15 rugby fields’ more office space to employ that massive tribe of public servants that delivers no more service to New Zealand taxpayers. That is why the information presented to the Finance and Expenditure Committee showed that productivity so crucial to New Zealand’s future has halved while this Labour Government has been in office compared with multifactor productivity during the 1990s. This Labour Government has succeeded in halving the productivity of this country’s economy and it is no surprise why. It has poured so much money into massive bureaucracy right across the sector delivering no more service and we now suffer the consequences as our productivity winds down our prospects look more bleak and our interest rates are going to climb. 
Doug Woolerton from New Zealand First says that this is Export Year. Let me tell him that with the exchange rate being jacked up by his Government’s high interest rate policy and big spending our exporters are suffering because the exchange rate yesterday hit a 16-month high or more against the US dollar. I say to Doug Woolerton that if he wants to support exporters he should stop supporting this big-spending high interest rate Government that is jacking up interest rates and crippling our exporters. It is little wonder New Zealanders think it is time for a change of Government. 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 That was Lockwood Smith. He gave a wonderfully eloquent display did he not about his career as a former Minister of Education who also had responsibility for tertiary education. What a wonderful dissertation it was. But I say to him that he has a very selective memory of history. I say to that member that he might want it both ways but he cannot have it both ways. This is the member of course who told us that with 15 staff—and he has confirmed the record in the House today—he managed to destroy apprenticeships in 1995. He killed them off there were no more—the Apprenticeship Act was gone. He managed to put every tertiary student into mortgage rate debt with a shonky student loan scheme that he is proud of still. I say that we are in the presence of an absolute genius. That is his record. 
When I became the member of Parliament for Waimakariri in 1999 I visited the 40-plus schools in my electorate. This genius over here that wondrous former Minister of Education with only 15 staff managed to put principals in the back of Skyline garages. A Skyline garage doubled as a library at the school at Ohoka where I met my first school principal. He had books stacked up around him as walls in his office. This was all because this former Minister of Education ran down school funding. He managed to run down operational funding in our primary schools and our secondary schools. 
I ask any member of Parliament on this side of the House—and I include our coalition partners who do go out and visit schools—to remember when the rain came through the roof. It was not because the roof was leaky but because that genius over there Dr Smith as the then Minister of Education refused to fund schools. There was no 5-year property plan. No he just ran down the assets of schools with a view ultimately I believe to selling them off. 
Dr Smith talked about roading. I challenge him or Tim Groser the other so-called superstar to get up. Mr Groser came in here with Mr Blumsky and Mr Finlayson and they were determined they should be on the front bench of course. The problem was that the dead wood—or in their case the dead kindling—was in the way. Mr Blumsky of course is now saying: “I’m out of here. No one cares about me. I’m gone.” I challenge those members to get up today and tell us whether Maurice Williamson’s stated policy of privatising roads is still on the books. 
That member Dr Smith is a huge contradiction. He got up and talked about fiscal probity—tight fiscal management. He accused us of spending everything. In a moment I will read out some of the promises from his own people. Before that we heard from the organ grinder. There was no monkey of course—John Key never spoke. We heard from Bill English. I am told that he got up in the Finance and Expenditure Committee and lectured the treasurer about tight fiscal management. So we have the tight man Mr English over here and then we have John Key wandering around the countryside promising along with his National Party colleagues anything to everybody. 
I will read some of the National Party’s promises. Do not take my word for it—look at the evidence. Here we go. Katherine Rich wants more money to develop the Beachheads programme for economic development. Tony Ryall wants more places for medical training. On education John Key says he will bring back bulk funding—more dough there. Question: “Will National fund at the top rate?”. “Absolutely.” said Mr Key. We know about the charitable deductions and the policy that Mr Key has rolled out with regard to food in schools but it is at what cost? Then we have law and order. Chester Borrows another genius from the National side wants more police and Wayne Mapp endorses that. “Abolish parole.” those members say but at what cost? They want compulsory DNA testing for convicts—and the list goes on. There will be more community law services in parts of the country and electronic signage in transport according to somebody called Colin King. I would have thought a static sign would do the job if one could read but maybe not. 
So on the one hand Mr English stands up and says: “I want tight fiscal management. The Government spends too much.” Yeah we spend on teachers school halls classrooms libraries nurses and State housing—sinners though we are. But Mr English says: “No cut expenditure.” On the other hand every National Party MP candidate and whoever else up and down the country is promising expenditure after expenditure. I estimate that spending at over $1.5 billion to date. How is National going to get the money? 
Yet again National members stand up and treat the outside world and our communities as if they are stupid. Doug Woolerton made a very interesting comment. He talked about the Superannuation Fund. We all know what the hidden agenda with the Superannuation Fund was under Dr Brash. Dr Brash said: “We’ll bump it up to age 70.” then he backed off. Then he said—an amazing statement: “Anybody who is around 50 there won’t be a pension for you. Don’t come Monday.” I pose this question to the National Party geniuses over there. If mum and dad could balance their housekeeping expenses and their grocery bills and if they knew their wages were to be cut by a certain amount what would they do? They would have to contract their expenditure in the same way that if we dish out tax cuts revenue goes down and we have to make cuts somewhere. 
I also challenge National on this point. If mum and dad out there are smart enough and know there is a big expense coming up—they need a new set of tyres for the car or new things for the kids and they know this is on the way—what do they do? They budget. They start putting aside money each week to meet that expenditure. Why can the National Party not be as smart as the average Kiwi out there? 
What have we done with the so-called Cullen fund? We know that a bubble of elderly folk is coming through and we know when the baby boomers are coming through. We know when we will have to plan for a big wad of expenditure so what do we do? We start squirreling money away; we reinvest it in our economy and around the world at world’s best practice to make provision for that in the future. Why can those members over there not be as smart as the average Kiwi who balances his or her cheque book and housekeeping expenses every week? The truth is that those members are not as smart; they are arrogant and conceited— 
Dianne Yates 
: And desperate. 
Hon CLAYTON COSGROVE 
: My colleague says they are desperate. Those members think they will do the tried and true National Party thing. They think that because Labour has been in office for three terms—and we are going for our fourth—they can just promise the world to anyone. What do people want? National says it will give it to them—it will double it treble it no problem. National said that in 1990 but when it got into office it pulled the rug out from under all New Zealanders whether they were beneficiaries in the benefit cuts whether they were superannuitants in the multiple superannuation cuts or whether it was our Defence Force in the biggest defence cut in the force’s history. National pulled the rug out from under everybody. 
But I have some advice for those members. People have been bitten once. People out there are smart. They scrutinise policies. They know we have enjoyed the best period of employment for 30 years—we have the second-lowest rate of unemployment in the OECD. They know despite Dr Brash’s saying all through the election campaign that the economy would go to hell in a handbasket and his praying to the Exclusive Brethren or along with them that it would that the economy slowed—there is one member praying over there—then it bottomed out and then it moved up again. We are targeting 2 percent growth and further economic growth in the future. Over 350000 jobs have been created and the number of people on welfare is going down. Why? Because people are getting into employment. 
I tell the National Party to treat the people of New Zealand as fools as its peril. Dr Lockwood Smith should have stood up and told the world that he and 15 others in his office almost destroyed our primary secondary and tertiary education systems. That is what he should have said. He is proud of getting rid of apprenticeships and he is proud of putting students into debt. Well I challenge him to get out on the stump at the next election and go to a student rally or to tell some of the 9000 apprentices we now have how proud he was when—in 1995 I think it was—he abolished the Apprenticeship Act. I would love to be at such a meeting; I would really love it. It would be a cracker. And it would be good if he went out to pensioners— 
Dr the Hon Lockwood Smith 
: Don’t tell lies to Parliament. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member knows he cannot call out and accuse a member of lying. Would he stand withdraw and apologise. The member knows he cannot call out that another member is a liar. Please withdraw and apologise. 
Dr the Hon Lockwood Smith 
: I withdraw and apologise. I raise a point of order Madam Speaker. When members get up in this House and speak blatant untruths they invite challenges across the House that they are in fact—I cannot use the word. The records show that the numbers of New Zealanders involved in industry training climbed every year through the 1990s. What the Minister is saying is simply not supported by the records or the statistics of this country. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member will be seated. The member has done two things. First of all he has contested my ruling. Secondly it was not a point of order; it was a point of debate. The member will withdraw and apologise. He will withdraw and apologise to the Speaker. He contested my ruling when I had made the ruling about withdrawing the comment he made which was quite proper. The member should not have referred to it. I ask him to apologise. 
Dr the Hon Lockwood Smith 
: I apologise. I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I warn the member that he cannot contest the ruling again. 
Dr the Hon Lockwood Smith 
: Madam Assistant Speaker I can assure you that I am not contesting your ruling. I sought your advice as to what remedy a member has when a member on the other side of the House— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No—the member is doing it again. The member has been here a long time; he clearly knows that the matters raised were matters of debate. The Speaker cannot rule on those matters; they are matters of debate. Again the member is contesting my ruling. 
Hon CLAYTON COSGROVE 
: I think semantic debate just occurred a few seconds ago—the proof of the pudding is in the eating. We can ask any young person who was sold out by that member. When I came into Parliament I had a mother and father in Kaiapoi come to me and say that they had saved $30000. They were going to go to the local mechanic beg him to give their son an apprenticeship and pay for it. Why? Because National pulled the rug out from under our young people. Members do not have to believe me; they can go and ask the young people whom National dealt to. They can go and ask the pensioners—and he has been found out—whom National dealt to. Members can get the people of New Zealand to compare our record with National’s and they will be able to judge. Whether Dr Smith and I disagree whether he tries to weasel out of his history and whether he is proud of his history that member will be judged by the people of New Zealand—and I look forward to it. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The Budget Policy Statement was published on 19 December 2006 and that was just 7 weeks after the Prime Minister made a landmark statement to a party conference that New Zealand could be the first truly sustainable nation in the world—that was her goal—and that we could be carbon neutral. So of course 7 weeks later I opened the Budget Policy Statement with bated breath to see what financial provision the Government was planning to make to meet those excellent goals which the Green Party thoroughly applauds. But I could not find anything. 
I looked first at the objectives of the Budget Policy Statement which are “to continue New Zealand’s transformation into a more dynamic knowledge-based society underpinned by the values of fairness opportunity and security.” Policies will also “further enhance New Zealand’s economic transformation continue to improve wellbeing for families … and strengthen our sense of national identity.” Of course there is nothing anyone could object to in those objectives but they do not align with the Prime Minister’s statement of just 7 weeks before. They say nothing about carbon neutrality; they say nothing about sustainability. 
I thought that possibly even though those goals are not in the objectives they would be in the mechanisms that the Budget Policy Statement foreshadows for the 2007 Budget. So I asked Dr Cullen at the Finance and Expenditure Committee what impact there would be on fiscal policy in the Budget as a result of the Prime Minister’s statement and what he anticipated doing. He said he thought we now have to face up to competition from other spending priorities. It would seem then that when the Prime Minister made her very excellent statement on 28 October to a party conference she did not tell the Minister of Finance about her goals so that Minister has not in the Budget Policy Statement made any allowance in the Budget for 2007 to deliver on them. We find that really sad. 
The Budget Policy Statement prefigures a business tax package and we understand that we are talking about a billion dollars worth of tax cuts for business. The Greens are very much in favour of using the tax system to incentivise the sort of behaviour we want from business and to disincentivise the sort of behaviour that is not in the national interest. So we are not opposed to the concept of some targeted business tax cuts. But when we look at what they are to be used for we see that again sustainability is not one of the criteria and carbon neutrality is not one of the criteria. The criteria are productivity gains competitiveness with Australia and business investment—and research and development staff training and exporting have also been mentioned. Sustainability is simply not there. 
I asked the Minister of Finance again whether he anticipated that by the time the Budget came out sustainability would have been added to those criteria and along with those other goals we would also be trying to incentivise the behaviour that the Prime Minister had announced as the key issue for her Government in this term. But the Minister of Finance answered that it was far too late this year to do the kind of detailed work that could lead to sensible conclusions around that area. So the billion dollars is to be spent without any consideration at all of sustainability. He suggested that possibly in future years we could look at this matter but if the billion dollars has already been spent in the 2007 Budget on things that have nothing to do with sustainability where do we find the money from next time to go further? So that was a big disappointment. 
I looked in the Budget Policy Statement for the policies that would start New Zealand towards that very long-term and aspirational goal of being carbon neutral and I could not find those either. The only thing I can find in the statement that relates to incentives—or not—for carbon emissions is that the carbon tax has disappeared so we are down by $360-something million on the revenue we might otherwise have expected. Given that the operating surplus is only $1.9 billion and that that has mainly got to go Dr Cullen says towards funding increases in things like health and education—increases that do not increase the level of service but just deal with growth in demand—that $360-something million would have been really useful for trying to deliver on some of the other things the Government wants to do. But it has gone. 
What do we have instead? Actually nothing! 
Gordon Copeland 
: Good riddance! 
JEANETTE FITZSIMONS 
: Well the United Future member over there thinks that it is absolutely great that the taxpayer in 2012 will have to pick up the bill for all the energy inefficiency right through the economy that could have been turned around by an incentive. It is interesting is it not that across the economy every business I talk to is now saying that in order to deal with climate change it has to have a price put on carbon. But where is it? There is no sign of one in the Budget Policy Statement; there will be nothing in this year’s Budget. 
In fact the only thing really that affects carbon emissions in this Budget is the announcement that has been made since the Budget Policy Statement of the largest road-building programme this country has seen since the 19th century. I tabled in the House this afternoon two peer-reviewed papers from the international literature and they are just two out of a great many that show that the cities with the most roads have the highest carbon emissions the greatest traffic congestion and the highest cost of transport. The cities that have the lowest cost of transport the lowest emissions and the best air quality are those that have developed their rail system and their public transport system. So where is the money in this Budget Policy Statement to do that? Unfortunately it is totally absent. Huge infrastructure bonds and borrowing are to go into roads on top of the $1.5 billion put into additional roading in the last Budget—and that was on top of the $500 million that Dr Cullen found in his back pocket for roading just before the 2005 election. So we can expect an extremely negative effect on our carbon emissions and our 2012 Kyoto position as a result of the Budget Policy Statement and the forthcoming Budget. 
The Budget Policy Statement goes on to say that the most significant influence on the 2007 Budget is that demand remains strong. Dr Cullen is talking there about his squeeze between a rock and a hard place in that if he spends too much more it will be inflationary yet if he gives tax cuts it will be inflationary and the issue that we have an overheated housing market and also very strong consumer demand. A way to deal with that situation is to put a price on carbon which will cause some of that spending to go into capital things like home insulation and more efficient equipment rather than into day-by-day spending and energy waste. That would make our economy more efficient and would at the same time yield a return to the Government. But we do not have a price put on carbon. We have absolutely nothing to incentivise energy efficiency or the research and development that we need in order to make us eventually carbon neutral. 
Clearly the overheated housing market continues to be a concern for Dr Cullen. It is certainly a concern for the Reserve Bank and it should be for Dr Cullen as well. The overheated housing market and the speculation in housing by people who are not living in those houses but are buying them as an investment could quite easily be cooled if we had a comprehensive across-the-board capital gains tax on that speculative investment. That however is always seen as too hard a political bullet to bite and not surprisingly it has not been bitten here either. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Today is a day of reckoning for iwi Maori. It makes fascinating timing to be debating the Budget Policy Statement for 2007 on a day swirling with court action injunction and repossession and with tribal calls for rangatiratanga hot in our ears. This morning at 9 a.m. the Hauraki Maori Trust Board sought an urgent hearing in the High Court in Wellington for an interim injunction preventing the sale of the 1100-hectare Whenuakite Station near Whitianga and we understand that the hearing has been called for this Friday and that Minister Mallard has intervened. An hour later the Minister of Maori Affairs witnessed by our co-leader Tariana Turia signed a deed of settlement with Whanganui iwi to formalise transfer of the Whanganui courthouse to the iwi; an auspicious day to do so as it marks the day some 12 years ago in 1995 when Whanganui Maori repossessed the site of Pakaitore which is Moutoa Gardens out of frustration at the lack of progress with their land claim. It was a call for action that spanned some 79 days before it was evident that resolution for their claim could be taken up with the Crown. 
Against such a context to read that the Government’s Budget intentions for 2007 and future years are underpinned by the values of fairness opportunity and security is indeed ironic. How fair is it for tangata whenua to be dispossessed of their sovereignty and to be stripped of their identity and their resource base? What opportunity does the Treaty partner have to express the ongoing concerns about the process of negotiating Treaty settlements the terms of settlements the amount set aside for settlements and the agency charged with managing settlements? What security can Maori ever enjoy when they know that the Government keeps to a fixed formula that puts aside a mere $1 billion for Treaty settlements despite the fact that the 2005 Budget listed a $7 billion surplus? 
The Budget Policy Statement in referring to the current economic situation refers to the concerns of Federated Farmers who noted that farmers’ confidence has fallen to a 10-year low. The Maori Party is also aware of the concerns that farmers have raised about the actions of Government and State-owned enterprises including the country’s biggest farmer Landcorp. In an article last October in  
New Zealand Farmers Weekly 
 
the opinion of farmers was clearly put. In referring to Tuwharetoa’s experience with a 1500 hectare Taurewa block south of Turangi Landcorp chief executive Chris Kelly referred to progress as moving at a glacial pace staggeringly slow even under the threat of global warming. To summarise the view of farmers: “Landcorp [is] not winning many plaudits among rural landowners or Maori in the region during the past 12 months”. It is because of this longstanding ongoing frustration that this morning the Maori Party declared our support in listening to the intentions of iwi and doing what we can to advance their call for justice in this fraught area. We well understand the building resentment and concerns from iwi who are determined to follow due process to take their concerns through appropriate hoops yet are frequently being blocked. 
One would think in the climate of crisis of confidence that attention would be given to making a difference through strategic investment. Yet the policy statement confirms there will be little room for new Government expenditure in this year’s Budget. The recurring theme of Budget statements for Maori has been “no go no show no go no dough”. The 2006 Budget was the one where the Minister of Maori Affairs failed to even ask for any allocation for Maori. I remember the day he told the select committee that on the advice of his chief executive he had failed to submit any bid for new spending—no go. But it was worse than performance anxiety. One of the biggest groups to actually lose out from last year’s Budget was Maori tertiary students who lost $2.1 million from Maori student scholarship funding with the announcement that the manaaki tauira funding was cut. That is 9000 Maori students who since 1991 have been supported each year with financial assistance for student support. 
The Budget before that was a “no show” Budget when the word “Maori” did not even appear once. So when we read on page 5 of the report of the Finance and Expenditure Committee that there will be no dough in 2007 and that things were extremely tight it is not as if we have not been there before. The reality is that the 2007 Budget must heed the advice as the select committee reported it of the Public Health Association that a whole-of-Government approach is required to improve the social well-being of New Zealanders. Over the last 18 months we have tried to bring the voices of the Treaty partners to the House. We have highlighted the abject poverty and the growing disparities between the haves and have-nots which is part of the context in which too many Maori live. Early last year the United States Department of State report on human rights practised in New Zealand submitted to the United States Congress a report card on New Zealand that highlighted “a continuing pattern of disproportionate numbers of Maori on unemployment and welfare rolls in prison among school dropouts in infant mortality statistics and among single-parent households.” 
It does not please me to outline these negative disparities. Mid-year in 2006 the  
New Zealand Living Standards 2004: The Report 
 described Maori and Pacific peoples beneficiaries and low-income families with children as showing significant increases in the proportion of people in severe hardship. We have had other reports that describe Maori patients as being at a higher risk of preventable adverse events in hospital than patients of non-Maori or non-Pacific origin and as being more likely to receive suboptimal care. It is not much better in the education sector with the unacceptable high rate of Maori student expulsions and suspensions and a dramatic increase in Maori truancy rates and statistics for Maori school leavers who exit school without even a level 1 qualification in the National Certificate of Educational Achievement. 
On top of that the Budget Policy Statement confirms the significant problem of children being underfed which has emerged due to what the report describes as “inadequate family incomes and the proportion of the incomes being spent on housing”. The Minister of Finance told the committee that if we concentrate on one measure to the exclusion of others we may well end up with policies that are not maximising overall welfare. The Maori Party absolutely agrees with this advice and accordingly will be looking for targeted outcomes that do indeed address the widespread disparities in social opportunities and goals. In actual fact we would recommend that in the light of the dismal performance to date it could well be useful for an “Outcomes for Maori” section to be specifically included in the Budget so as to be straight up about the commitment to raise living standards. We want to see explicit proof of funding targeted towards Maori immersion education for example which provides the experience of success that our whanau deserve. Either we are serious about closing these gaps and we target them or we are not serious. 
Finally I note the comments referred to in the committee’s report about sustainability and carbon neutrality. The Maori Party is of course alarmed to read: “The Minister told us that resources would have to be found elsewhere to implement the Government’s commitments in this area but that they would not include a large component of spending in the next year.” Resources found elsewhere—is this code for sausage sizzles and cake stalls outside the Beehive or perhaps we could all have a whip-round and do something about climate change? 
Once again either we are serious about developing a strategic approach to ensure the well-being and the future health of the environment or we are not. The Maori Party believes in the efficient use of water the conservation of energy and the need for active environmental management and we know that investment now is necessary to ensure long-term gain. We should not stand by and witness more empty words policy platitudes and “no go no dough” Budgets. Let us take today—which is Pakaitore Day in Whanganui—as a signal to make a real commitment to achieving change. Thank you. 
GORDON COPELAND (United Future) 
: 
 The best news by far in the Budget Policy Statement is that in this year’s Budget there will be tax cuts for New Zealanders of $1000 million—commonly known as $1 billion. The plain fact is that these tax cuts would not be occurring at this time were it not for the fact that United Future won three vital seats in the 2005 election which eventually led to our being able to negotiate in exchange for support on confidence and supply matters that there would be tax cuts in this term of Parliament. 
I will set this in some sort of context because it is a red-letter day in that we will at last be announcing tax cuts of that magnitude. One of the incidents that happened in the last Parliament that will endure for me for the rest of my life was the time when Kenneth Wang arrived here as a new member of the ACT party to replace Donna Awatere Huata. On the first occasion that he got to ask a question in the House he addressed it to the Minister of Finance. His question asked the Minister of Finance if the Minister could please advise the House how many “taxes levies or duties” he had reduced since he had been the Minister of Finance and for the first and only time the Minister of Finance was speechless. He eventually told Mr Wang that he the new member had a point: “I cannot think of a single one …”. That was still Dr Cullen’s attitude during the 2005 election campaign whenever the question of tax reduction for business was raised. It was not on the Government’s agenda in any debate. Yet here we have in this Budget Policy Statement a commitment to $1000 million worth of tax cuts—and that is good news. 
One other thing in the Budget Policy Statement objectives is also good news—that is personal tax cuts. There are personal tax cuts through the adjustment of the thresholds which were announced by Dr Cullen in Budget 2005 of $360 million. When Dr Cullen announced that what did he say? He said he had decided to do that because he had to accept the logic which United Future—and he specifically mentioned myself Gordon Copland—had been advancing to him since we came into Parliament that it was blatantly unfair to leave the thresholds unadjusted for inflation. So if we put the two moves together we can see that United Future will be delivering at or about the time of this Budget tax reductions for New Zealanders of $1360 million—and it is indisputable that these things would not be happening without our presence here in Parliament. 
I say too that when I talk about business tax cuts a lot of people think that they are just for businesses and that they will not receive them if they have not formed themselves into companies. But I tell members that New Zealand is officially the easiest country in the world in which to form a new company. Self-employed people who are not incorporated can incorporate for a few bucks and then they can enjoy these tax cuts. Every business in New Zealand really can get in on the act. Tax cuts will mean that those businesses will have more scope to reinvest and to increase productivity and they will also have more scope to be a little more generous in terms of pay settlements for their staff. So I have no doubt whatever that this $1000 million we will see in the Budget will filter down into the pockets and purses of many many hundreds of thousands—if not millions—of Kiwis and that is really great news. 
I go back to the question of the adjustment of the threshold for inflation which I have argued for since I came into Parliament in 2000. I have a long history in this area which I will not go into but I tell members that we asked for the thresholds to be adjusted for the movement in the cost of living since 2000. The current thresholds were established by Dr Michael Cullen on 1 April 2000 and from that day to this—which is now 7 years—they have not been adjusted. They should have been adjusted not by the amount that Dr Cullen is promising in the forecast but by the actual cumulative movement in inflation since that date which is now around 19 percent. That would mean under United Future policy that the $38000 tax band would now be lifted up to $45220. So the 19.5c in the dollar rate would continue for people right up to $45220 at which point it would go to 33c in the dollar. The current level of $60000 would be moved up to $71400 at which people would move on to the top tax rate of 39c in the dollar. We continue to advocate that those adjustments should be made. 
From our point of view it is not a question just of affordability; it is also a question of doing the right thing of doing the fair thing and of doing the just thing. As Michael Cullen pointed out all the other things—excise duty on tobacco cigarettes alcohol and gambling; the whole list of levies—are all automatically indexed upwards every year for inflation. But when it comes to income tax rates there has been no movement since 1 April 2000. That is blatantly unfair. It means that in real terms most Kiwis have been paying increased taxes since that time because the value of the dollar has been eroded by cumulative inflation at 19 percent. So we will continue to press for that policy. 
But wait it gets better. In addition— 
Rodney Hide 
: There’s more? 
GORDON COPELAND 
: —yes there is—United Future has a policy of income splitting for couples with dependent children. There are 250000 couples with dependent children in New Zealand. We are saying that they deserve a tax cut as well. As is known the Hon Peter Dunne who is now the Minister of Revenue thanks to those important three seats United Future won in the election will bring out a discussion document next year about income splitting for couples with dependent children. This is something that also needs to happen as a matter of equity and fairness. It will not be grossly expensive for the Government because it will actually dovetail with and cut out to some degree payments that are being made under the Working for Families package. Some affected couples will not get income splitting on top of Working for Families but they will get it instead of—in part. So the fiscal cost will not be very great but again it should happen just to recognise the simple reality that when people have dependent children they are not in the same position as a single individual looking after himself or herself. At the moment a father for example supporting a wife and three children is paying exactly the same amount of tax as a single person and that situation needs to come to an end. 
Before I come to an end I want to mention that our policy is also to call on the Government to increase expenditure in relation to Official Development Assistance which is mentioned in the report for the Finance and Expenditure Committee. United Future would like to see the rate of that assistance shifted up to 0.5 percent of gross national income forthwith. The target of Dr Cullen and the Government is much more modest—0.35 percent by 2010. But here is the rub: in 1970 this nation agreed that that rate should go up to 0.7 percent by 2015. In 1970 we had 45 years to get there; we now have only 8 years left. Our amount of Official Development Assistance as a percentage of gross national income is now way way below what it was when Norman Kirk was the Prime Minister of New Zealand. That was the best it ever got. We are saying that we need to get back to that because it is important in terms of generosity to the poor and needy of this world. Thank you. 
TIM GROSER (National) 
: 
 Mr English our deputy leader at the start of today’s debate on the Budget Policy Statement made the point—and I think he will be proven correct—that this is probably Dr Michael Cullen’s last Budget Policy Statement. I think that from that perspective it is fair enough to sit back and look at this in the context of the overall policy he has been responsible for coming into the third term of the Labour Government. If we overlaid the business cycle of this country on top of the political cycle I would argue that we would be hard-pressed to find in the last 40 years a Government that has had at its introduction a softer ride than this Government. One can run one’s luck for some time but eventually one’s luck runs out. And luck like inherited wealth can be easily misspent and wasted. 
When I was a young person growing up in this country along with all young New Zealanders I learnt the song that is almost an informal anthem—“We Don’t Know How Lucky We Are”. I always understood that there was a sense of irony behind that anthem but I suspect that the Labour Ministers in particular if not the Labour caucus as a whole will appreciate the irony in that phrase only after they have been knocked off their electoral perch and reflect on the moment when they had stewardship and after coming into office with the best economic conditions any Government has had for about four decades on what they did and did not do with their time in office. 
The roots of this problem started with a deliberate attempt to misrepresent the situation they came into office with. One can have one’s own view on whether this is the result of ignorance or simply blind ideological resistance to market reforms but the fact remains—and we have heard it today in various speeches made by Government members—that there has been a deliberate attempt to misrepresent the starting point of their time in office. 
I have just picked up one of the many statements I could have picked up. It is a statement that Mr Maharey made on 24 May 2006 to this Parliament when he said: “The 1990s … were 9 long years of absolute and utter decline for this country. … every single region in this country was shrinking … the 1990s will be remembered as an utter disaster”. At least one thing we can ask about that statement is whether it is empirically verifiable. Let us just quickly go through the actual reality. 
The rate of inflation was between 15 and 20 percent until 1990. It plummeted down throughout the 1990s to low figures where it remained until tragically prior to the 2005 election a very clear message was sent to the Governor of the Reserve Bank: “Ease back a little guys. Let this genie out of the bottle just a bit. We’re in trouble and we can now feel the effects of this in terms of a grossly dysfunctional monetary policy compared with its original position.” 
The rate of employment fell from over 11 percent in 1990 when Labour came into office to 6 percent. We have heard today from various spokespersons who reiterated versions of Mr Anderton’s “jobs machine” as if somehow the fact that we enjoy low unemployment is a consequence of decisions they have taken. Policies like this take years to bear fruit. They have been the beneficiaries of a process that they reject for perhaps ideological reasons. 
One could say the same thing about the growth rate. Thanks to some tough market-oriented decisions taken earlier we have had a growth rate now of about 3.5 percent for 15 years. That was the actual legacy that Labour members inherited on taking office and on assuming their responsibilities to the rest of New Zealand. 
What have they done with the fruits of that inheritance? First of all they have falsely claimed political credit like a conductor who jumps on an engine just as it is leaving the station and claims that he was the chief engineer. They have spilt the milk on useless growth of bureaucracy with deeply dubious consequences from the point of view of the New Zealand community. Let us just look at some of the bigger picture figures. First there has been huge growth in core Government expenditure—well over 40 percent and way in excess of the level of GDP spending in Australia even when we take account both of Federal and state Government spending. 
I do not have a deep ideological problem with a dollar of Government money being spent. I know that some people do but I personally do not. But I do want value for that money and I take a different view on a dollar being spent on upgrading say the national grid to a dollar spent on advertising a State monopoly called the Accident Compensation Corporation for no discernible purpose other than a political purpose. I do want to see from the billions of extra dollars spent in health demonstrable health outcomes that improve the status quo as a consequence. 
We have heard in the House today National members ask for the evidence of improved outcomes from this vast increase in spending. When we look at health it is the same underlying picture—an enormous increase in Government expenditure. We still have an education system that I think gives us excellent results at the top end but it has become clearer and clearer that at the bottom end of the food chain in terms of our education system we are not getting results and we have had some shocking statistics that bear this out. So all of this money is being poured in and producing a huge growth in bureaucracy with very little to show for it. Well we have one thing to show for it and that is a vast increase in the number of bureaucrats. For example in the education sector the number of bureaucrats has increased by approximately one-third over the life of this Government. 
I thought it was fascinating to listen to Mr Cosgrove today—he has been in this Parliament for some time now—attack my colleague Dr Lockwood Smith as if he were the Minister and Mr Cosgrove was the Opposition member. That is the problem. Labour members still have an oppositionist mentality. When will they stand up and take responsibility for being the Government? When will they discharge their responsibilities to the people of New Zealand who put them there in the first place? When will they assume the real mantle of office? I am afraid that time is running out on them. 
If we drill a little deeper we find more examples of the same theme. In the area of health in spite of the enormous increase in spending on health over recent years—I think some $4 billion—what have we seen? We have seen the number of doctors per 1000 New Zealanders drop from 87 to 73. I personally do not think that the benefit of that is outweighed by the 24 percent increase in the number of health bureaucrats who have been added to the public sector bill. 
 So in the health sector managerialism has gone mad the number of doctors has declined and there are growing waiting lists all on the back of a huge increase in Government expenditure. If we drill down into some smaller departments we get the same underlying picture revealed. Inside the more modest Housing New Zealand Corporation the actual number of State houses has increased by less than 10 percent since 2002 but staff numbers unbelievably have ballooned by 42 percent. The number of those staff on more than $100000 a year has more than doubled in this short period of time. Another example is the Department of Labour. There has been a staff increase of 600 in the Department of Labour over the last 4 years and again the same pattern of increasing numbers of those on what would be regarded as very high salaries by the standards of most New Zealanders. 
So what we are seeing again is this growth in bureaucracy and expenditure and very little to show for it whatsoever. Then of course what is worse is what has been left unattended. The Government inherited with its good luck an economy that was in better shape than the economy any other Government has had to deal with in the past 40 years. Instead of using this as a platform to try to advance New Zealand to the next level of wealth creation the track the Government has gone down is to redistribute money to its stakeholders increase the size of the bureaucracy and increase the number of bureaucrats in control. What it has not done is put forward the agenda that would take this country forward increase our competitivity and give the young New Zealanders who are leaving this country some belief that they could make their fortunes here in our own country. 
RODNEY HIDE (Leader—ACT) 
: 
 It is always a great pleasure to follow my colleague Gordon Copeland. I think it is true: I think United Future has put pressure on the Government to have these tax cuts and not before time. But we should appreciate that there are tax cuts and there are tax cuts. What interests me in this is the size of the tax cuts. I know that Mr Gordon Copeland says it is $1000 million which to put a picture on that is $100 bills stacked a kilometre high which is a lot of money. But when one sees that in the context of Government spending and the tax that is paid it is rather small. So I would like to see the tax cuts much much bigger please I say to Mr Gordon Copeland. Maybe when the United Future party has more MPs and the ACT party has more MPs we will actually have some decent tax cuts. 
But it is also the nature of the tax cuts and it goes back to what one is trying to do with tax policy. I think it should be something that we understand as a principle of policy that each instrument is trying to achieve one objective. If one instrument is trying to achieve two objectives it actually falls flat on its face. The difficulty we have with tax policy is that we are trying to achieve multiple objectives. If we think about tax policy we see that the thing we are trying to do is raise money for the Government to spend on the things that people expect Governments to spend money on. 
If one thinks about that a bit further one says: “Well what you’re trying to do is raise the amount of money you need at less cost—at less cost to the economy and to society.” That is the principle that should drive tax policy at all times. Notice that I am not actually discussing in that how much money should be raised; I am actually talking about the principle of tax policy. But one is trying to raise the target amount that one needs at less cost. We know the cost is not just filling out the forms for the Inland Revenue Department implicit in that is the dead-weight cost of the tax. So I want to keep that in mind and jump ahead. 
So here we have Mr Gordon Copeland saying: “One of the things that we should address is bracket creep.” He says it is unfair because what is happening over time with inflation and economic growth is that more and more people are finding themselves in a higher tax bracket and therefore paying more tax. That is true; that is unfair. Mr Gordon Copeland was also saying that it is a bit unfair when one taxes individuals because when a couple marry they essentially become one unit and if there was income splitting that would be fairer. I think that is true compared with what we have. 
But what it does not do is address the fundamental problem here in that we do not have a tax system that is raising the target revenue at less cost. What we know is this. The dead-weight cost of tax rises geometrically with the rate of tax. So as one lifts the tax up and up one creates a bigger wedge between the price that people are paying and the price that they receive. And of course that wedge kills off trade kills off jobs kills off investment and kills off retail exchanges. So one wants to lower that wedge to lower one’s dead-weight cost of tax. 
The way to do that if one thinks about it logically is to have one flat tax. It could be 50c it could be 80c it could be 10c. But whatever amount of money one is raising there is no doubt in anyone’s mind that a flat tax is the least costly way of raising an amount of money. Because for any target rate it will be the lowest rate one could have. A flat tax is broad. 
Then interestingly if one did that there is no argument about income splitting because if everyone is paying the same amount of tax on the first dollar earned as the last dollar earned there is no advantage to income splitting. Indeed if one has a flat tax one does not have any bracket creep because one is paying 20c 10c or 50c in the dollar whatever it is. One can have growth one can have inflation or whatever and one is still paying the same amount because one is still in the same bracket because there is only one bracket. 
Hon Paul Swain 
: Kind of regressive though. 
RODNEY HIDE 
: Well it goes back to my point that Paul Swain wants to have an instrument that wants to achieve two objectives—he wants a tax policy that actually redistributes income as well as raises revenue. That is when one gets into a shemozzle and even if one looks at the work that this Government has done it is saying: “No we want to have a tax policy that raises the revenue and we’ll do the redistribution with the spending.” because then one is not actually having one instrument do two policies and one can have a good clean tax system and indeed one can have sensible targeted policy. 
I would be advocating if Mr Swain does not want to have a regressive fiscal policy a flat tax. He would be spending the money through income support or whatever he thinks would be a good way of doing it and one would actually achieve the result one wanted. If we did that we would have a tax system that is simple a tax system that is fair and a tax system that is efficient. It does not matter whether one is a socialist a capitalist a conservative or whatever one has to accept that a flat tax achieves all those objectives. 
What bothers me is that we are getting further and further away from that ideal. We are getting extra rates introduced—a 39c rate—and getting more and more arguments about allowing people deductions. If they do this or do that we will give them a deduction; they can combine things. All that is moving away from the ideal of having a tax system that is designed to raise a targeted amount of money and I think that is a mistake. So when I talk about tax cuts I say “Good I love tax cuts because I think people can spend their own money better than the Government can.” I would have the biggest tax cut that we could possibly get but I believe that that should be done in the context of having good tax policy. 
Again I make the point. We are having a tax cut that will lower the company rate of tax. Well that is great but how silly is it to have a company rate that is not aligning to the personal rate? They should be lined up. In fact why would you not have a tax rate that is the same for every entity? Would not that be the way to run the tax policy? If it was the ACT party taxpayers would have it at 20c. 
Gordon Copeland 
: What about charities? 
RODNEY HIDE 
: What about charities? 
Gordon Copeland 
: Should they pay tax too? 
RODNEY HIDE 
: Well if they are earning income of course they should pay tax. If a charity is making money it should pay tax because the principle is that one is taxing income and the charities are earning income. They should pay tax. Should they pay GST? Of course because they are consuming goods and services and one wants a comprehensive tax system. In fact the way to encourage charity is by letting people have more of their money through tax cuts not by trying to shape the playing field. 
Nandor Tanczos 
: What about taxing resource use? 
RODNEY HIDE 
: Well in a funny way it depends on how one defines resources and on what the issue is. One of the resources is my labour and I do not think that should be taxed beyond anything else. If resources like land are being used then I do not think those resources should be taxed because in a way the market is capturing that. People are buying and selling land and its value— 
Nandor Tanczos 
: What about water? 
RODNEY HIDE 
: Then the question becomes whether we should be taxing water. Actually what we have there is a big externality. Let us assume for a moment that I am going the way of the Resource Management Act: I could pile a bucket of crap into a river and not pay for it. Of course there should be a payment or a regulation on that but not necessarily on my land because I am capturing that externality. 
Interestingly better than a tax on water use is actually a market in the use of water. Why do I say that? The reason is that it is more flexible and adaptive. It is not like the Government setting a particular rate for the whole of the country and saying: “This is it for all time.” The great thing about a market and the way prices get set by supply and demand is that it is able to adjust. So where possible I think we should be charging for all resource use. We should not be able to use scarce resources for free because that encourages waste. But where possible we want a market price and not a price set by the Government. I do not think that is possible for the use of air and things like that but in principle that is what we should be doing. 
I think tax cuts are a great idea but we should not lose sight of good tax policy. Good tax policy is a flat rate of tax and very very good tax policy is a low flat rate of tax. Thank you. 
CRAIG FOSS (National—Tukituki) 
: 
 I think I may be the only member to have actually read the report on the Budget Policy Statement all the way through. I have not heard anyone pick up on the part I am about to read to members but I think there will be a lot of nods of agreement. It is a statement that should be considered in the context of 1999 which is when the problem started. Page 5 of the Budget Policy Statement 2007 the report so proudly presented by the chair of the Finance and Expenditure Committee Mr Shane Jones—and members should listen carefully to this—states that an inappropriate increase in taxation “would also increase the prospects for tighter monetary policy …”. The statement adds that that increase would place pressure on the exchange rate and adversely affect the export sector. Perhaps there might be a typo in there but if we look at an inappropriate increase in taxation in the context of 1999 we will see that the incoming Labour Government hiked tax rates. It did not need to increase taxation as we have seen it do year after year for the last 7 or 8 years. Surprise surprise—a billion dollars here a billion dollars there! Even Dr Cullen has not been able to spend it all. 
The point is that the problem started in 1999 when Labour became the Government and the document that has been tabled talks about an inappropriate increase in taxation. So perhaps the chair of the Finance and Expenditure Committee Shane Jones might want to address that issue later when he and the others come down to the House. I certainly hope Dr Cullen pays attention to it. 
The Budget Policy Statement is a sorry tale of two doctors. After I went through it—not quite line by line but pretty close to that—I was led as I am sure many other readers were to question which doctor is actually running the economy. Which doctor has responsibility for the prudent running of our economy? Is it Dr Cullen? Well he has responsibility for the supposed fiscal management of the economy. Dr Bollard has responsibility for the monetary side of the economy. But Dr Bollard has to take whatever Dr Cullen sends to him. Or to put it another way poor Dr Bollard has to go around cleaning up Dr Cullen’s mess—those little bits and pieces he leaves in the corner. He has to carry the can. Dr Bollard is forced to prescribe the diet pills to poor New Zealanders in order to treat Dr Cullen’s compulsive taxation disorder. Dr Cullen cannot help himself. He has to tax tax tax. The answer is only ever to tax. 
I was interested to hear Mr Hide speak of fairness. The Labour members opposite did not seem to understand what on earth that word meant. Dr Cullen is directly responsible for the core and persistent underlying inflation that is now in New Zealand. Dr Bollard mentions in the December Monetary Policy Statement that there is a worrying persistent core that is underlying inflation in New Zealand. If we delve deeper we find that most of it is coming from the expansionary growth—the loose fiscal growth—in the public sector. Dr Cullen is also therefore directly responsible for the probable increase in our interest rates mortgage rates and credit card rates come 8 March when poor Dr Bollard will have to try to alleviate the situation and prescribe some medicine for the mess and illness that results from what Dr Cullen is putting on New Zealand. 
An increase in interest rates has been forecast and most commentators believe it will happen—25 points on 8 March and 25 more points after that. That increase will lead to higher mortgage rates thereby making homes even less affordable. It must be noted that homes in New Zealand are almost the least affordable in the OECD. New Zealand has some of the highest interest rates in the OECD and those are the countries we compete directly against. So how on earth can our businesses and our people compete with strong competitors such as Australia when the cost of our capital the cost of our funding etc. is so much higher than theirs? 
Dr Bollard has repeatedly warned against loose expansionary fiscal policy—as recently as in the December Monetary Policy Statement—in writing in print and at various briefings and meetings he has given. Dr Cullen has repeatedly taxed taxed taxed and spent spent spent thus leading to the high inflationary state we currently find ourselves in and more important—and tragically for our economy—to higher inflationary expectations. That is what is leading to high interest rates and the high exchange rate—and all in this year which is supposed to be Export Year 2007. Companies that are trying to export are getting totally nailed on the cost of working capital. They get totally nailed when they convert back into Kiwi dollars. I ask my colleagues in the New Zealand First Party which promotes Export Year 2007 to ask the hard questions of Dr Cullen and to not let him get away with the rhetoric. 
It is precisely because of the loose spend-up and the overtaxation of the past 7 years that has created the pent-up pressure that is now starting to flow through into our economy. The Government has had a dream run on the back of rural New Zealand. My colleague Tim Groser pointed out the luck the Government has had and he is quite right; it has had a fair bit of luck. But the chickens are coming home to roost. 
Dr Bollard uses central bankers’ speak. It is very conservative. One has to kind of interpret between the lines. But the bottom line is that he is saying that the blame of New Zealand’s current situation—the problems of inflation interest rates and high overvalued currency—lies directly with Dr Cullen. And all Dr Cullen can do is thrash around looking for someone else to blame. He thrashes around with blunt proposals such as levies on mortgages. He wants to whack our mortgages up even higher even though we will have to pay a higher rate in a couple of weeks’ time. Any time anyone tries to address Dr Cullen’s issues he bullies them and accuses them of ideological burps etc. Yet these are learned people from Treasury the Reserve Bank and the Inland Revenue Department who are trying to cope with the mess he is leaving behind as he furiously writes cheques left right and centre and takes the money out of hard-working New Zealanders’ pockets. 
The inflationary chickens are coming home to roost on the head of Dr Cullen. I suggest he starts to wear a wide-brimmed hat. Dr Cullen has changed his tone over the last few years and I would like to give members a couple of quotes from Dr Cullen. In a  
Scoop 
 article of 15 July 1999 “Government stokes inflationary pressure” Michael Cullen the then Labour spokesperson on finance stated: “Inflation is still under control but no thanks to the Government”. He was also quoted as saying that things were in a right mess and that the New Zealand economy was then at a point where the only factor keeping the lid on inflation was the overvalued exchange rate.” If we zip forward 8 or 9 years do we not see that the chickens have come home to roost? We will be holding Dr Cullen to account for his previous statements. He is in big trouble. He knows it and he is trying to find someone else to blame. 
Before I sit down I will just touch quickly on the current account and one other item. In 1997 Dr Cullen called the current account which was 7.7 percent of GDP back then “horrendous” and said that it was damaging to compare the New Zealand economy to that of Mexico and Asia. I say to Dr Cullen that the current account is currently around 10 percent of GDP so if it was horrendous at 7.7 percent what is it now? 
I will make one final point that I heard an earlier speaker note in the Budget Policy Statement debate. There are 144-odd pages in this document. The lead item outlines the goals that drive Budget decisions and process for 2007. Not once in 144 pages do the words “carbon neutrality” appear. Yet according to the Prime Minister that is supposed to be the most important item facing New Zealand in the coming years. She mentioned carbon neutrality 33 times in her Prime Minister’s statement which was delivered about 3 weeks before these documents were discussed. 
To summarise the inflationary chickens are coming home to roost. Unfortunately New Zealand’s mortgage credit card rates are about to go up and we know exactly where to point the blame. It goes to Dr Cullen. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 I have just a couple of quick comments to make on Craig Foss’ contribution. He bemoans increases in Government spending but forgets that virtually every single one of his colleagues is promising to spend more wherever they go around the country. I will quote some of those colleagues a little bit later. Craig Foss says it is all about luck. For about 8 years now we have heard from National members that Labour has just been incredibly lucky. I remember the great golf quote: “The more I practise the luckier I get.” That in fact is what the Labour Government has been doing: practising hard in the interests of New Zealand and the New Zealand economy. 
Craig Foss also said that the chickens are coming home to roost and that it is all doom and gloom. To be frank for about 8 years we have also heard National members saying that at last the economy is going to fall over as if in some way economic underperformance is a good thing for New Zealand. He repeated that line as well. Of course this doom and gloom is always going to come. It is always going to be this year next year or the year after. Of course the reality is something different. 
One of the things people might have forgotten is what exactly the Budget Policy Statement is. It is what we have been debating. The Budget Policy Statement is really an indication from the Government about roughly what is going to be in Budget 2007 in a couple of months’ time and beyond. It contains a very important statement that people should reflect on. The basic statement is that the Government’s overall objective is to continue New Zealand’s transformation into a more dynamic knowledge-based society that is underpinned by the values of fairness opportunity and security. New funding has been prioritised for policies that will further New Zealand’s economic transformation continue to improve the well-being of families and strengthen national identity. 
You see there is a vision for New Zealand—and I like that. I will buy that. That sounds pretty good to me. There is a bit of a vision about where New Zealand needs to go to continue the work we have already started and to put funding into some critical areas. Of course we never hear anything like that from National. I will come back to talk about that in just a minute. 
The economy has been performing well—much to the chagrin of the National Party. Employment numbers are up as we all know and tax revenues are up as a result. What is happening as a result of that? Debt has been reduced and we are squirreling away our money for the Superannuation Fund which of course National opposed at one stage I seem to recall. Now it is supporting it and we have heard some comment about the fact that National might dive into that in order to fund its tax cuts which will be a great worry for the voters of New Zealand. We are funding social services health and education which were run down by National when it was last in Government 8 or so years ago. And we are supporting policies and those kinds of things that lead to this vision. 
I think the problem we have in this debate is that it is so one-sided. We never hear anything from National about what it is going to do. If one compares the National Party now say with the Labour Party as it was in 1998 one will see that Labour had been in Opposition for 8 years and we were fizzing. We were ready to go. We had policies for Africa we had leadership settled we had the team organised and we were ready to go. We were actually ready in 1996 but finally we got there in 1999. We set out the path and the agenda and we have not stopped since. 
And here we are with National after 8 years still flogging around trying to get a policy—one would be good—and now the Leader of the Opposition 8 years after National started to be in Opposition says he wants to set up a brains trust to see whether he can get some ideas. The National Party is not ready for Government. That is the point. A party cannot be in Opposition for 8 years and then ring a few mates and ask for some ideas for policy because it does not have any. I want to talk about that in just a minute. 
The problem the National Party has in these kinds of debates is that it is always whinge whine grizzle and groan from the members but we never ever hear what National is going to do. Let us take some examples. What is the National Party’s policy on tax at the moment? What is it? I see we do not know. Is it big tax cuts and now—which I think it was from Don Brash? Or is it little and later which are the weasel words I have heard from John Key and Bill English the co-leaders of the National Party who are slipping and sliding on that issue? 
Here is another example: what is National’s health policy? Could someone give me one policy apart from spending more on everything? Spending more on everything is what the National Party wants to do. No one at all has an idea about what National’s health policy is. In my view it should not be smoking cigars in people’s faces and then bopping someone in the face for complaining. It should not be about that. The National Party should not put that in its policy. Notwithstanding the fact that its health spokesperson sometimes practises that I do not think it should be in the policy. 
Here is another example: what is National’s education policy? Could someone over there summarise National’s education policy? 
Hon Ruth Dyson 
: I don’t think they’ve got one. 
Hon PAUL SWAIN 
: I do not think it has one. National members are all silent because it does not have one. This is after 8 years in Opposition. It has had 8 years to try to sort this out. There is no education policy. I wonder what the National Party’s policy is on the police. It just wants more of them. But hang on a minute was National not the party that cut police numbers when it was in Government? 
Hon Ruth Dyson 
: That’s right. 
Hon PAUL SWAIN 
: Yes it was says my colleague Ruth Dyson. Is this not funny? Eight years ago National cut police numbers and now it wants more of them. 
What is National’s policy on transport apart from wanting more roads? But hang on a minute relatively speaking did it not cut spending on roading over the 9 years it was in Government? Hang on National members criticise the Labour Government but was not a National Government going to sell the roads? That was a great idea! I wonder whether that is still the policy. That went down really well with local government! Local government really wanted National to flog off its roads! Yes that was a great winner! Probably one of the many things that actually saw the demise thank goodness of the National Government was flogging off the roads. That was a brilliant idea! It was one of Maurice Williams’ better ones. I wonder whether we will see that in the National Party policy on transport. I doubt it. 
When will we see these policies? That is what I ask of National members. They should just give us a couple so we can have a debate about it and say: “That might have a bit of merit but what about that?”. Instead all we get is whinge whine grizzle and groan about what the Labour Government is doing and when push comes to shove we should spend more on whatever. That seems to be what National members are saying. 
 We have problems with the co-leaders of the National Party. John Key wants a loose fiscal policy. He wants tax cuts all over the place and then he wants to spend up large because everyone is saying that. Bill English on the other hand criticises Government spending. He wants a tight fiscal policy and he wants cuts in social services. The problem is that the tighthead prop and the loosehead prop both in the same scrum are not pushing together. The tighthead prop is not pushing the same as the loosehead prop. What happens then is that the scrum always wheels and we make no progress because the scrum has to be set again. 
It is hopeless trying to have this debate with the National Party because there is nothing to debate from the National side—whingeing and whining are not going to do it. That will not get the National Party into Government nor is getting a brains trust together made up of people like Jenny Shipley—how is Bill English going to relate to Jenny Shipley? Can members remind me did not Bill English get rid of Jenny Shipley? Oh that is right he did. I also heard that Jim Bolger—a good bloke Jim Bolger—might be invited to be a part of that brains trust. Now did not Jenny Shipley get rid of him? Is that not how that worked? So we have all these people with old grudges hanging around and being invited by the National Party to be a brains trust to help it with policy making. 
Labour has the direction and the vision. The National Party has no policy nor a philosophy. It is trying to get people in to help with its policy making. The National Party is not ready for government. 
A party vote was called for on the question  
That the House take note of the report of the Finance and Expenditure Committee on the Budget Policy Statement 2007. 
Ayes 61 
New Zealand Labour 49; New Zealand First 7; United Future 3; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 48; ACT New Zealand 2. 
Abstentions 9 
Green Party 6; Maori Party 3. 
Motion agreed to. 
Injury Prevention Rehabilitation and Compensation Amendment Bill 
Third Reading 
Hon RUTH DYSON (Minister for ACC) 
: 
 I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill be now read a third time 
. This bill merges the Accident Compensation Corporation’s (ACC) self-employed work account and the employers’ account into a single work account so that levies better reflect industry risk and are more stable. The bill also renames the medical misadventure account as the treatment injury account. 
Under the current ACC account structure the use of self-employment as a rating factor results in the different treatment of small businesses that carry out similar activities that entail similar risks. For example self-employed plumbers currently pay a different levy rate from that paid by sole-trading plumbers who have set themselves up in a company structure even though they face exactly the same risk of workplace injury. The basis for this unfairness lies in the failed privatisation attempt made by the previous National Government. The insurance industry did not want to insure all self-employed people because they knew that they would not be able to make enough money from them due to administration costs. So an arbitrary distinction was made based solely on business structure and the self-employed work account was thus created. 
With coverage for personal injury being renationalised the self-employed work account is no longer needed. The account merger will allow levies paid by businesses to be paid on the industry risk associated with their industry grouping rather than on their business structure. In its time the self-employed work account has been very unsuccessful. It has high volatility due to its small earnings combined with a high turnover of levy payers from year to year. Small businesses in the self-employed work account particularly have cited levy instability as having created problems for their business cost planning. 
Merging this account with the employers’ account will ensure that the levies are more stable for both the self-employed and employers. The merger will also improve the focus on reducing the risk of injury by encouraging industries to better coordinate health and safety across their workplaces regardless of their business structure. 
This merger is not intended to redistribute the excess reserves currently in the employers’ account to the self-employed. The bill therefore provides for a 3-year transition period for self-employed and employer levy rates in each industry or risk class and the relative funding positions of the employers’ account and the self-employed work account to be equalised. This provision enables the Government to ring-fence the difference in the funding contributions between the self-employed and employers—approximately $100 million of the excess reserves in the employers’ account—and reimburse these funds to employers through rebates during the transition period. 
I know that the Opposition will again try to pick out the businesses that may have a levy rate next year that has increased on this year and blame it on the bill. The fact is that the indicative average levy rate under the new merged work account has been calculated at 89c per $100 of liable earnings for employers and the self-employed. This rate is based on the same funding target that is currently set down for the separate accounts and is considered to be sustainable over 3 years. After the transition period is complete employers and self-employed people in the same industry or risk class will pay the same levy rate. 
The Government intends that the remaining overfunding in the merged account be returned to levy payers during the 2007-08 levy year and out-years. If as some have requested the entire excess reserve in the employers’ account were to be refunded to levy payers in one levy year employers would experience a significant increase in levy rates in years to come. That is because the ACC would not have any excess to fund the future cost of claims. What many—including the Opposition spokesperson—do not understand is that levies are collected each year in order to fund not only the cost of claims for that year but also what the claims would cost across the lifetime of the injury. If the excess in the account was fully refunded to employers next year levies would need to be dramatically increased in future years in order to pay for the ongoing cost of the claims that were made. 
Using the bill to destabilise levies from year to year would be totally inconsistent with the objective of levy stability which is a fundamental principle of both this bill and the Injury Prevention Rehabilitation and Compensation Act which it is amending. If the amount levied from employers was lowered significantly more than is planned ACC Partnership Programme employers would be more likely to exit the programme to take advantage of the rebate of the excess funding. That would obviously jeopardise the functioning of the programme and it would also give financial advantage to partnership programme employers who had not financially contributed to the account from which they were benefiting. 
This merger is also likely to have a positive impact on injury prevention in workplaces. By bringing self-employed people and employers together at the risk-class level the experiences of the respective groups would come to bear on the levy rates. This will incentivise a greater level of cooperation on injury reduction between employers and the self-employed within the industry groupings of the new work account. 
 As both of the accounts are projected to be adequately funded for 2007-08 merging the accounts to take effect from 1 April 2007 will make the transition to a single work account easier by reducing the impact of the merger on levy payers. During the 2007-08 levy round ACC provided levy payers with information on the proposed policy package including indicative levy rates for the merged work account to assist those seeking to understand the impact of the merger proposal. 
Following the levy consultation ACC published updated indicative levy rates on its website. The Department of Labour also wrote to each of the organisations that provided a submission on the bill and to those who had made submissions on the proposal during the levy consultation with further information on how the merger of accounts would be implemented. 
I note that the two amendments in the name of Dr Paul Hutchison the former National spokesperson on ACC were defeated in the Committee of the whole House. What Dr Hutchison was asking for in his amendments will be provided under my assurance to the House—and I repeat this in my third reading speech—on the ACC website. In my view the proposal was sensible but it does not need to be in the legislation. However it is something that I would be happy to reconsider in the future. 
As mentioned the bill also renames the medical misadventure account as the treatment injury account. This renaming of the account is appropriate as the terminology in the Act was changed from “medical misadventure” to “treatment injury” some time ago. The reason for leaving the name of the account at the time was to allow health professionals and health professional organisations to become familiar with the treatment injury regime. Now that a sufficient period has passed for these groups to come to terms with the new terminology the time is right to rename the account. 
This bill builds on the framework provided in the existing legislation by ensuring that our accident compensation scheme is funded in a fair and sustainable manner. I conclude by thanking all members of the Transport and Industrial Relations Committee for their careful consideration of the bill in a short time frame. I also thank the officials from both ACC and the Department of Labour for their fine work on the bill. I commend this bill to the House. 
PANSY WONG (National) 
: 
 That was an appalling contribution from the Minister for ACC Ruth Dyson who is no more than an apologist for the State-owned monopoly agency the Accident Compensation Corporation (ACC). This bill does nothing more than legalise stealing from both the employers’ account and the self-employed work account and I will seek to explain that point further. 
First of all today Treasury released the 6-month account to December of the Government account. Once again that account recorded an operating surplus that was $1 billion up on the forecasts. But Treasury went on to say that most of the extra money could not be spent because the surplus was mainly due to increases in investment return from the New Zealand Superannuation Fund the Government Superannuation Fund and ACC. Actually that additional contribution from ACC amounted to $254 million. How appropriate it is for Treasury to go on to say in its press statement that those entities will hold on to any gains that are made. 
Let us now come back to ACC. Apart from holding on to that $254 million it is holding on to a $688 million surplus in the employers’ account which represents a 63 percent margin. It is also holding on to the $60 million surplus that is in the self-employed work account before it is merged which is a 20 percent margin. Even the Minister herself said that ACC wanted eventually to operate to an 11 percent margin on the account. But before the merger it insists that the surplus margin needs to stay at 53 percent so that in future it can make rebates to those people. But why in future? Which other entity in New Zealand has the luxury of taxing people holding on to the surplus and not paying interest? Even the Inland Revenue Department would pay interest on the use of taxpayers’ overpayment of tax—it would rebate that. 
This illogical ridiculous stance of ACC and the Minister seeks to penalise those hard-working self-employed people because for the next 2 years they will be asked to front up with the additional $100 million so that their account which sits at a 20 percent margin will go up to a 53 percent margin. How logical is that? Well let me give the public and those poor self-employed people in the meat industry a taste of what is to come for them in the next 2 years. Self-employed people in the meat industry if there were to be no merger would have to pay a levy of only $6.57 per $100. I ask members to guess how much they pay—[ 
Interruption 
] Well I am glad that Mr Peter Brown is at last speaking up on behalf of those self-employed people! He supported that—he thought that the rate of $6.57 was too expensive. But I ask members to guess what he did. He supported this bill so that that rate could go up to $8.83 per $100. I am looking forward to those poor self-employed people in the meat industry knocking on the doors of New Zealand First members’ electorate offices and asking them who put them into Parliament so that they could penalise those hard-working self-employed people. 
How illogical this bill is which the Minister insists is helping the self-employed! The Meat Industry Association wants an answer from the Minister which is still to come. It pointed out that under this bill members of the Meat Industry Association would have to pay an additional $360000 for the next 2 years though past history has shown that claims are only $25000. So I am really looking forward to Mr Peter Brown of New Zealand First who has no sympathy and no empathy for hard-working self-employed people taking a call to justify his party’s position. 
It is outrageous for this Government and the parties that support the passage of this bill to impose on the one hand a surcharge of $100 million on the self-employed and on the other hand to hold back the $688 million surplus from the employers’ account contributors. I proposed a sensible amendment during the Committee stage. ACC says it wants to achieve a margin of only 11 percent. I was being conservative; as a National member I feel apologetic towards my colleagues for saying that ACC might get it wrong so we should give it a 9 percent additional margin. 
 So my amendment is to bring down the employers’ account to a 20 percent margin and still allow ACC a 9 percent leeway which means that employers should be entitled to a $500 million rebate—which is their money. At the same time that sensible amendment would have meant that self-employed people would not be penalised for the additional $100 million. 
I want to acknowledge Mr Gordon Copeland and the whole United Future party. They at least came to this Parliament to stand up for their supporters hard-working self-employed people. They support that sensible amendment. 
The other sensible amendment that I have moved is to defer the passage of this bill until April 2009 for a very good reason. New Zealand would then have a National Government which would have a Minister like myself who would not make apologies for ACC and who would make that State monopoly agency work for the people—not like the Minister says hold on to confiscate and steal those surpluses so that ACC can feel comfortable in case it gets the calculation wrong. That is why my diligent and intelligent colleague Dr Paul Hutchison also asked why ACC cannot subject itself to an independent team to look at the way it arrives at those levies. After all the corporation has a history of building up those reserves. The difference between National and Labour is that we are on the side of hard-working New Zealanders and we oppose the passage of this bill. 
SUE BRADFORD (Green) 
: 
 I will take just a short call this afternoon to confirm that the Green Party welcomes the return of this bill to the House for its third reading and that we continue to offer our support to this and all other Government efforts to work towards a fair and sustainable accident compensation system for this country. There is still much that needs to be done but every constructive step along the way helps. 
The most important part of the bill we are dealing with today is the merger of the accident compensation employers’ account with the self-employed work account. The Green Party believes it is only sensible and equitable that people should not be discriminated against on the basis of their business structure when their injury risks are the same. These kinds of historical inequities arose from the National Party’s unfortunate privatisation project in the late 1990s and it is just a pity that we have had to wait 7 years to see this particular discrepancy put right. 
I would now like to take a couple of moments to explain briefly why the Green Party did not support Pansy Wong’s amendment yesterday in relation to the merger of the accounts. The issues that the National member was trying to address are covered already in clause 8 through a new section that permits the Government to make regulations to cover a transitional period until the 2009 tax year. That change allows the Accident Compensation Corporation (ACC) to deal with the problems that Ms Wong rightfully raised and the Government has indicated that $100 million will be set aside for that purpose. This money will in effect act as a rebate for employers but will be assessed with reference to their business activity risk and to maintaining the stability of levies. Pansy Wong wanted to leave this new clause intact but also to rebate in with no defined mechanism in 2007-08 an additional 20 percent across the board to employers. The cost of this would have been a further $100 million. 
Essentially she was recommending an arbitrary one-off gift of $100 million to be made by ACC to employers making it a final total extra cost to the corporation of $200 million given that she was seeking to leave the Government’s proposed transitional mechanism intact. The Green Party therefore voted against the National Party amendment as we believe that although we acknowledge that historical anomalies exist it is better to start with a clean slate by simply merging the two accounts as encapsulated in the bill. 
Merging the employers’ account and the self-employed work account into a single account will be a big help in equalising and lowering the cost burden for the self-employed who will also still have the option of taking out the CoverPlus Extra insurance if they want to. The Green Party welcomes the third reading of this bill and looks forward to further improvements to our accident compensation system—perhaps of a more substantial nature next time round. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 The Injury Prevention Rehabilitation and Compensation Amendment Bill is a very unfortunate bill in that it cements in the dull monopoly of the State’s Accident Compensation Corporation (ACC) which unfortunately is becoming less and less efficient as we go on. We have heard the Minister speak about the changes in 1998 that galvanised the ACC monopoly into action. Privatisation was associated with a rapid number of changes which included early rehabilitation much better safety procedures and efforts within the workforce a lowering of the levies and more important than anything else a lowering of accidents in the workplace. The changes galvanised the ACC and it has benefited from them over the last 5 to 6 years. It is only now that we are starting to see the slowing down of ACC and the typical monopoly reactions and this bill absolutely epitomises them. 
In the title debate I suggested that the bill be called “The Labour Government (Defy Commonsense) Bill” which is what it does by rewarding those at high risk and penalising those at low risk. It could also include a grab of over $400 million from employers who paid that money in good faith believing that their account was fully funded and I say that money should be given back. The merging of the accounts is directly the opposite of the basic insurance principle of matching premiums with risks. In this bill the employers’ account which is associated with lower risks lower claims and lower accident rates will be merged with the self-employed work account which is associated with higher accident rates and higher claims. The Labour Government intent on its socialisation of the insurance system is merging those two accounts to the detriment of the efficiency of ACC and to the detriment of the direct signals and incentives to improve behaviour. 
The Labour Government is in complete denial over the value of experience-rating. We heard that the other night when the Hon Mark Gosche was talking about insurance. He just wants it all to be pooled—all with the same sorts of premiums. That is sheer madness in terms of human behaviour and the behaviour that we know— 
Dr Jonathan Coleman 
: Actuarial madness. 
Dr PAUL HUTCHISON 
: It is actuarial madness as my colleague Dr Jonathan Coleman calls it; he is absolutely right. One of the particularly concerning things about the last 6 to 7 years under the Labour Government is that moderate and severe accident rates have gone up in this country. There have been hundreds of thousands of accidents and the Labour Government through this bill is sending the wrong signals. It should be doing the direct opposite of what it is doing and making sure that those who are at higher risk do pay higher premiums. That is the particular madness about this bill. 
The other thing that has occurred with the merging of the accounts is that the Labour Government has totally broken faith with employers. They have been paying their levies in good faith thinking that their account would be fully funded and they have accumulated a surplus in the order of $570 million or something like that where the risk margin has risen to 163 percent. I say good on Gordon Copeland from United Future for pointing out how silly the Labour Government has been. ACC itself recommends a risk margin of 111 percent. My colleague Pansy Wong suggested the very sensible amendment that the risk margin should go to 120 percent and that the money grabbed by this Labour Government should be given back to employers—where it came from. But no what is the Government going to do? It is to go ahead with a risk margin that is way over that recommended by ACC itself. That absolutely defies principle and it absolutely defies common sense. I say good on Gordon Copeland for pointing that out. 
There is no doubt that a lot of other things are wrong with this bill but I was prepared to put in two very sensible amendments that would at least have brought transparency into the auditing process of ACC so that both the public and levy payers could understand it. I was glad that the Minister said those amendments were intelligent and constructive but then she turned round and did not support them going into the legislation. At least she has said she will ensure the information is put on the ACC website and we will hold her to account on that. But it shows the contrariness of the Labour Government that when it accepts that an amendment is constructive and intelligent it then turns round and does not vote for it. 
Finally I would like to point out another thing that just cements in how Labour has broken faith with the process one would expect from ACC. In the transitional provisions of this bill the Government has said that the levy consultation process for 2007 and 2008 will be bypassed. That is an absolute travesty. It is ominous and unprecedented and it goes in line with the grab of $468 million that the Government has taken from employers. 
This bill absolutely reflects just how badly the Labour Government understands the basic principle of accident insurance. It reflects that the Government is not prepared to put incentives in place to reduce the number of accidents in New Zealand and it reflects the Government’s inability to be able to stick with the time-honoured process that all levy players expect. It has done away with the consultation process for 2007 and 2008—and that is shocking. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 The bill we are about to pass through its third reading the Injury Prevention Rehabilitation and Compensation Amendment Bill came to the select committee that I chair the Transport and Industrial Relations Committee and I was interested to note some of the strange comments from National speakers last night about the process the select committee used. We had a very limited time—which had been voted on by this House; it was not decided upon by the committee—that meant we were not in a position obviously to open the bill up to the normal public process of submissions. So we chose a very broad range of representative groups of employers unions and other interests to make submissions. They did so very well and they came forward with some interesting views on the matter. It is interesting to note that all of the National members on the select committee agreed with that process; there is no record of National members voting against it. Yet they came into the Chamber and took cheap shots at the select committee chair—myself—last night for a process they had agreed to unanimously. That paints the picture of the standard of Opposition we have—purely sitting there not looking at the realities— 
Peter Brown 
: Pansy Wong was one of them wasn’t she? 
Hon MARK GOSCHE 
: I think Pansy Wong was one of them but I am not sure because they change spokespersons so regularly over on those benches that it is very hard to keep up with who is the spokesperson on accident compensation this week and who will be the spokesperson next week. 
But the fact of the matter is that the members of that party over there were in agreement with the process and they never raised a single vote against it in that committee. That actually illustrates that they approach their job as an Opposition from a fairly lazy viewpoint. I say that they have a fixed position on these matters; logic and rational argument does not actually count with them. That is why not one of them is able to explain why they want to vote against this bill and punish self-employed people. That is supposed to be the party of entrepreneurial spirit the party of capitalism and the party that supports self-employed people who quite often go on to form companies and run larger businesses. But many many people in business in New Zealand start out being self-employed. It is the first step. 
Peter Brown 
: I was one of them. 
Hon MARK GOSCHE 
: Peter Brown indicates that it was his first step into business before he went on to greater things. And that is the case for so many New Zealanders. Why has the National Party turned its back on them? After making the mistake it did back in 1998 or 1999—or whenever it was that it hocked off the Accident Compensation Corporation (ACC) to its mates in the private insurance industry—why does National want to repeat that mistake 15 or 16 years on and show that it has not learnt anything? In fact National is prepared to say to hard-working self-employed people out there that they are on their own as they were when it hocked off ACC last time and set up the separate account. The account is not there for a good reason and the evidence that was presented to the committee in relation to the bill showed that. 
The reason there was a difference between the self-employed work account and the employers’ account was predominantly that the self-employed work in high-risk industries. That is the reason. It is not because of any other reason; it is because self-employed people were in industries like fisheries farming and forestry when they happened to set up as self-employed persons. The risk for those people is the same and we illustrated that last night when Dr Paul Hutchison—strangely—chose professional rugby league players or rugby union players as an example. He tried to argue that if professional rugby league players running out on to Mount Smart Stadium for the Warriors had set up their business affairs and turned themselves into companies—and I am sure that some of them do—they should pay a different levy from the people in the same jerseys running out on to the same field in the same team who were self-employed. We on this side of the House—and on those other two sides because National is the only party voting against this legislation—are still waiting for a rational logical explanation as to why a self-employed rugby league player should pay a different premium from and have a different risk to the one who has set up a company. It is the same for a plumber. 
The select committee heard from a representative of the Seafood Industry Council who was in a cleft stick. He said that he was not taking a position on this bill as the National members wanted him to do because he wanted to be able to live a little longer. If he had said he was for the bill he would have half his membership after his throat and if he had said he was against the bill the other half would be out to get him. On the back of fishing boats that situation may occur—people with exactly the same risk and exactly the same job but operating in a different way in terms of whether they are self-employed or set up under a company structure. 
So the situation is that National is again parading to the nation its desire to return to the failed policy it had back then in the late 1990s of privatising ACC despite all the evidence that where that has happened or where it is the basis of worker compensation around the world the levies for everybody are higher and the services are not as good. In my view we have the best system in the world. It is envied by many and a few have managed to try to copy it. But does the National Party recognise that? No! 
Sitting suspended from 6 p.m. to 7.30 p.m. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 Let me make the New Zealand First position clear from the onset. When we last debated the issue of accident compensation we came down in favour of privatisation. We voted against the bill that did that in 1998 or early 1999 as I recall because we did not think it gave enough lead-in time before the election but we thought the merits of privatisation outweighed a monopoly-type situation. We have not had a debate on it since. 
Hon Maurice Williamson 
: Good man! 
PETER BROWN 
: I thank the member for telling me that but I want to make it clear that we believe that a private scheme or one that allows a degree of competitiveness provides for efficiency innovation and cost-effectiveness whilst if there is a monopoly there is monopoly-type thinking. 
But I want to be fair to the Government—[ 
Interruption 
] I have to say to that member over there that he is so imbalanced that he will fall off his pedestal. But we take a balanced approach; we voted against the 2000 bill to nationalise or reform—whatever it was—the Accident Compensation Corporation (ACC) and we made a few stipulations at the time. On behalf of New Zealand First I personally spoke to two Ministers the Hon Ruth Dyson— 
Hon Maurice Williamson 
: Two Ministers? 
PETER BROWN 
: Yes there were two of them at one time. It was overpowering—just me against two Ministers and both of them women. So members can see that I was at a huge disadvantage. But I spoke to them and outlined our concerns. Over the years—we have to be fair—they have addressed many of those concerns. They have not got them all yet but the last one was to incorporate medical misadventure into the accident compensation regime. Up until a few months ago—I think it was a few months ago; let us say it was a year ago—a person subject to medical misadventure had to prove his or her case. We said that was totally wrong from the word go. The Government has accepted that and has incorporated it under the accident compensation banner. They now want to change the term from medical misadventure account to treatment injury account. We do not like that; it does not reflect what it is all about. But nobody has come and said anything about it at all—the public have not the National Party Opposition just accepts it— 
Hon Maurice Williamson 
: Didn’t know until tonight! 
PETER BROWN 
: They did not know it—the member sits on the committee! So we are not going to pull the Injury Prevention Rehabilitation and Compensation Amendment Bill down for that but I am registering tonight that we are not happy with it. 
We are happy that the employers’ account and the self-employed work account are being combined into one account. After my managerial role as a stevedore I started my own little business. I was self-employed. 
Hon Maurice Williamson 
: Really? 
PETER BROWN 
: I was self-employed yes. Then I took on people. I took on a partner— 
Simon Power 
: Sure? 
PETER BROWN 
: I am absolutely positive I say to Mr Power. I had quite an enterprising little company and I was doing quite well. But I paid the same levy—as I recall—as I did when I was self-employed. It did not occur to me that there should be a difference. I was doing exactly the same job and I should pay the same levy. That is what this legislation is all about. I heard National Party members saying the self-employed should be paying more. In actual fact that is not true. It is the higher risk occupation where more should be paid and where the organisation or the individual is not prepared to address the risk potential more should be paid. This bill brings them all together and therefore the levy is paid on the risk. 
Now we have the situation of whether the levy structure is correct. I listened to Pansy Wong in the select committee and she made an impact on me. I thought she had a point. [ 
Interruption 
] I listened to her—and she will verify this—and I asked her to get me some details. She gave me some very loose details. Then I asked her whether she would give me further details that she was going to present to the House. If I could convince the Minister and the Government of this would National support it? She said oh no National opposed it anyway. So I thought it was going a little bit beyond— 
Hon Maurice Williamson 
: She would have said that if it’s good legislation we would have supported it. 
PETER BROWN 
: No I do not think she was saying that at all. I then heard we should be paying the money back to the employers because there is too much money in the account. I listened to Gordon Copeland last night. He was outraged. He was actually tearing his hair out with anger and frustration because the money should be paid back to the employers because there is too much in the account. 
Simon Power 
: Gordon Copeland being self-righteous? No! 
PETER BROWN 
: I can tell members that he was sitting behind me and with the hot air coming off him I nearly floated off. But I am sure that when Judy Turner gets the opportunity she will explain exactly about this. Let me tell members that when they look into the practicalities of paying the money back to the employers they will see that it is downright impossible. Some employers last through the whole period some start up and some fall over. It is impossible to calculate who should get what. The rebate could be cut or the rebate that the Minister is saying will occur in the fullness of time could be increased. 
But let me say to the House with some sincerity that today I had a letter from a guy who started out his life as a fitter some years ago—[ 
Interruption 
]—I ask the member to listen to this because this is important. He started out and he worked on a number of projects that involved asbestos. Now he has asbestitis— 
Hon Member 
: Asbestosis. 
PETER BROWN 
: I thank the member for correcting me. That is what he has. He has been diagnosed he has been told it is a dreadful disease and he has been told it is terminal. He has gone to ACC and asked for a payout of a lump-sum compensation so that he can live the rest of his life in comfort. They have given him a pittance of an independence allowance and have told him that if he had put the claim in a few months after he did he would have got a lump-sum compensation. I tell members that his letter makes one’s heart bleed. It makes one cry. 
I ask the Government to look at these sorts of things. If there is money in the employers’ account that has to go anywhere the Government should think of extending the claim time. It should think of the people that this legislation is all about. We are insuring here under a monopoly organisation virtually all the workers of New Zealand. Some of those workers—mature people—are finding that they have been subjected to some sort of affliction that they did not know they had. It is emerging in their older age and they are now finding that they are entitled to peanuts when really we should be saying that there is money in the account—as National has been saying all afternoon and I think to some degree Labour has recognised that—and that instead of paying it back and giving greater rebates we should be extending the claims back a year or two or three so that these people can spend their lives in some sort of dignity. 
That is the New Zealand First message to this Parliament and that is the message we are asking members to support. We will support this bill and we will pressurise this Government to address the real issues. Thank you Madam Speaker. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak in support of the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. I express at the beginning United Future’s concern that the Committee of the whole House failed to support the Supplementary Order Paper in the name of Pansy Wong that would have allowed a rebate to New Zealand employers. Her colleague Simon Power suggested that my colleague Gordon Copeland was self-righteous in his efforts to back Pansy Wong’s amendment which I find a little difficult to understand. Maybe he jumped in before he had all the facts. 
The Supplementary Order Paper that Pansy Wong was keen to get through last night talked about the risk ratio that the Accident Compensation Corporation itself has set. It believes that its assets should be 111 percent of its liabilities yet the current figure of the employers account is 163 percent. Its assets are 163 percent against its liabilities. My colleague Gordon Copeland figured out that that represents $468 million of overpayment to the employers’ account and he suggested that before the two accounts are joined and reconciled that money should be divvied back out to the people who had overpaid in the first place. We are disappointed that people did not see the vision of that last night so that that move could go ahead. 
I want also to correct something that the New Zealand First speaker has just mentioned. He talked with some apprehension about the new account called the treatment injury account and he was concerned that this was some sort of new provision. I say to Mr Brown that all that it does is reflect that we changed the terminology in an earlier amendment bill. We changed—as he rightly said—the fact that when people receive an injury due to a medical misadventure of some kind historically they had to prove that the medical misadventure had taken place before they could receive compensation. An earlier amendment bill changed that and in changing it we changed the terminology. So we no longer refer to “medical misadventure” under the accident compensation legislation. 
We now call it “treatment injury” because people no longer have to prove that there was negligence on the part of the practitioner from whom they received the treatment. If they have an injury and it is the result of the treatment then they receive compensation. So calling the account the treatment injury account is purely to reflect the new language and provisions of an earlier amendment bill. So it is nothing sinister; it has been in the legislation for some time now. In relation to medical misadventure if some fault is found on the part of a medical practitioner it is still the domain of the practitioner’s regulatory complaints authority. The medical practitioner can be put under disciplinary measures if that is deemed to be helpful to the situation. 
United Future supports the overall intention of this amendment bill. It does seem ludicrous that if people are doing the same job with the same level of risk they should be paying separate amounts depending on their employment arrangements—whether they are self-employed or employees. We think that is a nonsense and we are happy to see that issue resolved with this bill. We are very happy with the work that the Transport and Industrial Relations Committee did to bring the bill back to the House. 
I will reiterate that we are very disappointed that the Committee of the whole House failed to see the picture suggested by the Supplementary Order Paper that Pansy Wong was putting forward. I think it would have made a huge improvement to the outcome. I notice that the Green member Sue Bradford felt that the bill did cover that because regulation-making powers were mentioned in one of the clauses. I took it from what she suggested that she meant if we wanted to pay it back there is the potential to do it. I think it is an important issue. It is a lot of money and I think when those two accounts are blended we will lose sight of who is owed what and the matter will just be ignored. In fact what will happen is that surplus will end up propping up the new joint account and I think that is an unfair provision. However aside from that Supplementary Order Paper not being agreed to we are happy to support the third reading. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
Tena koe Madam Assistant Speaker kia ora tatou. The Maori Party comes to the Injury Prevention Rehabilitation and Compensation Amendment Bill aware of the responsibilities of the Accident Compensation Corporation (ACC) under the Injury Prevention Rehabilitation and Compensation Act of 2001. I understand that section 3 of that Act charges the corporation with “providing for a fair and sustainable scheme for managing personal injury that has as its overriding goals minimising both the overall incidence of injury in the community …”. 
As a consequence of the proposals that have come before the House during the passage of this legislation all employees self-employed people and private and domestic workers will pay levies into the work account with entitlements funded out of it also. The drive to create a fair and sustainable scheme has been complicated in the case of the self-employed work account by the fact that this account is often volatile due to the small number of earners and the potential claimant base. The incentive behind the bill is therefore to merge the employers’ account and the self-employed work account into a single work account. 
The Maori Party supports any initiatives that seek to address inequities and instability in the current system and to make compliance comparatively hassle free. The intention of the 2001 Act was to provide a level playing field for claimants whether self-employed in high-risk industries or in private employment. A level playing field is obviously something that every member in this House would support as being in keeping with the commonly held view about there being one law for all and due access to justice. 
In this context we were concerned to read reports from the Access Support Services lobby group that ACC is exiting blue-collar workers from the scheme at a faster rate than it is exiting white-collar workers. According to a study of ACC’s own injury statistics in 2005 a plant and machinery operator is twice as likely to be exited from the scheme as a clerk or administrator is. Workers involved in the agricultural and fishing sectors or in trades are also disproportionately more likely to exit the scheme than legislators and administrators or professionals. It would appear that the so-called blue-collar workers are less equipped and supported to be able to negotiate ACC support for their rehabilitation than say their white-collar counterparts. This clearly demonstrates a class bias and I might add a race bias. 
The Maori Party is advised that similar statistics are also likely to be seen for Maori workers as compared with non-Maori workers. However there is some lack of clarity around data collection which we want to raise in the context of this Injury Prevention Rehabilitation and Compensation Amendment Bill. It should be remembered that until 1998 ethnicity data was not collected for accident compensation claims. Ten years ago the ACC Injury Prevention Strategic Plan identified a goal to “substantially reduce serious injuries in ethnic groups overrepresented in injury statistics”. 
It goes without saying of course that even though Maori have a higher injury rate across the board Maori are significantly less likely to make an accident compensation claim and are more likely to be declined cover. In honouring this strategic goal ACC improved the collection of the ethnicity data by establishing the injury profile of Maori and Pacific peoples. Since 1998 ACC claim forms have included ethnicity as an option. However—and here is the catch—as it has not been obligatory it is difficult to relate claims injuries to ethnicity. Despite this what we do know from the information available to us is that the application and take-up rate of accident compensation by Maori is significantly lower than by non-Maori particularly given that Maori are overrepresented in injury statistics across all age groups. 
Let us look at the level playing field in more detail. The data tells us that the proportion of Maori continuing as claimants in a subsequent year is even lower and that Maori have significantly higher chances of being declined ACC support than non-Maori. We also know that Maori aged 25 to 64 years particularly Maori men are more likely to be injured at work than are non-Maori. This reflects the types of occupations that Maori men are overrepresented in such as manual and trade occupations. 
Therefore when we look at the purpose of this bill which proposes the merging of the self-employed and employers’ accounts a very obvious question is how Maori will fare. It is important to note from the outset that Maori and Pasifika people constitute the lowest proportion of self-employed amongst their populations. The ethnic group with the greatest proportion classified as self-employed without employees is the Asian labour market on 14.3 percent and the European labour market on 13.4 percent as compared with the Maori labour market on 6.5 percent and the Pasifika labour market on 4.4 percent. Those Maori who are self-employed are largely involved in the primary sector in particular in agriculture forestry and fishing. Those areas are known as high-risk industries and occupations. 
I am told that the Council of Trade Unions in its submission on this bill endorsed the merger approach as making practical sense in that it would bring clear focus to the areas of injury prevention and health protections across particular industries and enterprises. Therefore we would hope that the high-risk or low-paid industries within which Maori are generally employed—fishing farming and forestry—will benefit from the new emphasis on safety management practices and capacity for weekly compensation cover. In line with this new emphasis we would expect to see increased priority on educating the self-employed about safe working practices and the development and implementation of new measures to ensure that safety standards are adopted. 
During this third reading debate we want to bring to the fore again the previous concerns raised about the impacts of this bill’s proposals on the self-employed. We were aware that because of this bill the levies will almost certainly increase and in some high-risk industries like fishing and forestry levy increases could be quite significant. The table provided in the Government’s briefing paper suggested that there are likely to be increases of between 30 percent and 56 percent across a range of industries as a result of the merger. We would be interested in learning what these implications will be in particular for the employment areas of greatest risk. 
Finally the issues we have canvassed in this speech extend of course outside the coverage of this bill. The gap in claiming accident compensation cover between Maori and non-Maori the lack of awareness of accident compensation entitlements the inequality of outcomes for Maori the increased risk of injury that accompanies industries such as fishing forestry and farming and the serious issues related to the gaps in data collection do of course warrant far greater consideration than we can give in this forum. 
We the Maori Party have appreciated the willingness of the Minister to share with us the strategies that the Accident Compensation Corporation is leading such as the PaeArahi position staffing and general practitioner training in cultural competency and other initiatives related to the Maori access strategy. We support the merger as a way of enhancing the current system and we will therefore support the bill. We are hopeful that the issues we have outlined today will remain a high priority for the Minister and the agency. They will need to be a high priority if we are truly committed to creating an enduring and sustainable accident compensation scheme based on fairness and justice for all. Kia ora tatou. 
JUDITH COLLINS (National—Clevedon) 
: 
 I raise a point of order Madam Speaker. I refer you to Speakers’ ruling 16/5 regarding eating in the Chamber. The Minister on duty in the House tonight for the Government has been eating in the Chamber. She had a full biscuit going there and ate all the way through the speech from the Maori Party. I ask you Madam Assistant Speaker to ask the Minister to refrain from doing that. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I did not see the Minister but if she was doing that she knows there is a rule about it. 
SUE MORONEY (Labour) 
: 
 We are here to discuss the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. It is my privilege and my very great pleasure to rise to speak in support of the third reading of this bill. I have quite a bit of personal interest in this whole area and I want to talk about the world-class system we have in regard to accident compensation which is the envy of many other countries. When we look at some of the issues raised by Te Ururoa Flavell in the speech he has just made where he talked about people’s knowledge of their rights under this system I think we can reflect and see that it is just as well we do not have a system based on people having to know their legal entitlements and having to be able to afford to pay for lawyers in order to get any money back for injury treatment. 
Simon Power 
: It’s lawyer-free—that’s right! It works superbly well! 
SUE MORONEY 
: I know that National members would love to give this whole area over to lawyers and make it an absolute nightmare for working people. They really want to make sure that working people do not have good access to compensation when injured at work. However this Government will not sell our accident compensation system to the legal profession the Insurance Council of New Zealand or any other area like that. Our very fine accident compensation system is very accessible. By world standards it is much more accessible for working people than systems in other countries and we certainly do not want to go down the line of reducing that accessibility. 
This bill clarifies and simplifies the accident compensation system even more because it brings equity into the situation. I want to outline the background as to why we are even here talking about this bill which merges the two accounts of self-employed and employed people. It was an artificial split in the first place. If we go back in time we know that it was never meant to be the case with our wonderful accident compensation system. It was decided purely on the basis of industry and the occupations people were involved in which is how the levies were set traditionally. However in the 1990s the National Government saw fit to split the self-employed off from the employed in an effort to line the system up for privatisation by insurance companies. We are now coming full circle and rectifying the very artificial split that occurred during that time. So what we are now doing is consistent with the aims and objectives of the very collective system we have in place— 
Dr Jonathan Coleman 
: Of the Labour Party. 
SUE MORONEY 
: —yes that is right; the collective responsibility of the Labour Party—that ensures that people are treated equitably. This bill makes sure that despite what National members have tried to argue the scheme does give the right incentives. Of course it does. This bill actually links the injuries to— 
Simon Power 
: Yield to Darien Fenton. At least she’ll say it with passion. 
SUE MORONEY 
: Mr Power might learn something from this because— 
Simon Power 
: I doubt it. 
SUE MORONEY 
: I am sure the member will because when National members argue that this legislation does nothing to link injuries to levies they are completely and utterly wrong. [ 
Interruption 
] I will explain. Jonathan Coleman does not know what I mean by this so I will need to explain it to him. When the levies were split based on the business structure it was nothing to do with the type of industry people were involved it but it was to do with the way their businesses were structured. How did that make the levies appropriate to the injuries sustained in those industries? No one from the National Party has been able to explain that to us yet. 
National members do seem to have a view on the self-employed. I am not sure what they have against the self-employed but they have tried to portray the view that somehow the self-employed take a whole lot of risks with their own personal health and safety that other people would not take. I cannot understand where the National Party is coming from on this issue. Why are National members so against the self-employed? Having been self-employed myself my understanding is that self-employed people rely solely on their ability to perform their jobs. Why on earth would they take greater risks with their health and safety than employed people? There is silence from the Opposition. That is what Opposition members have been trying to portray throughout this debate but they still have not been able to explain why it is that without any evidence they believe self-employed people are sloppier in their work practices or put themselves in harm’s way more than people employed by companies. It is very interesting that Opposition members should be arguing this because they have not been able to come up with a decent argument on it yet. 
But even more interesting is being a member of the Transport and Industrial Relations Committee that considered this bill and observing the National members on that committee. I thank the officials for the wonderful work they did on this bill and the large amount of very precise information they gave the select committee. They were able to put tables before us—quite complicated tables that took a while to work through—that showed exactly what the merger of the two accounts would mean for every industrial group. There were 127 levy risk groups and the officials went through in very fine detail what the levies would mean for each of those groups under both the separated accounts and the merged accounts. 
As I was looking through all those figures I was most interested in observing the National members who went straight to the pages of the businesses they owned and who seemed to be interested in looking only at what it would mean for the dairy farm etc. that they happened to own personally. The questions for the officials that came from National members simply reflected their own personal interests in this field whereas the rest of us—Peter Brown and the others on the Transport and Industrial Relations Committee—were focusing on what the impact would be for the rest of New Zealand. We were not consumed with our own personal interests; we were looking to see what would happen overall. However that was certainly not what was happening from the National Party’s perspective. 
But there was a bit of a dilemma because when the National members did look at what it meant for them personally they discovered that the levies looked pretty damned good under this situation. Under the new bill the levies for those particular members were looking a lot better when the accounts were merged. That was very interesting—I think it was one of those flip-flop moments—because it caused them the ultimate dilemma: “Do we argue for this bill as National Party members because it is personally good for us?”. Out of self-interest I could see them wondering: “Should I actually support this bill because personally it does a lot for me or should I toe the party line and back the Insurance Council position?”. What a dilemma! “Do I go as a National Party member with personal self-interest or do I back the party line to ensure that the party can have good donations from the Insurance Council?”. Well I think at the end of the day— 
Simon Power 
: I raise a point of order Madam Speaker. The member was fine until that last remark and you will know Madam Assistant Speaker that it is completely out of line to suggest that any political party or member of Parliament is under the influence or direction of any outside organisation. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is correct. The member will withdraw that remark. 
SUE MORONEY 
: I withdraw that remark. It was however very interesting to watch the dilemma and the flip-flop that was actually happening before us in the select committee about which line National members would take. 
They have ended up taking the party line but it sounded like opposition for opposition’s sake. I listened very carefully to what Peter Brown said in his speech and in discussions he was having with Pansy Wong looking for the very fine detail and the evidence for Pansy Wong to back up the facts she was asserting about this bill. When those facts and the detail was not forthcoming then that sounded to me as if the Opposition were opposing this for the Opposition’s sake. 
Finally I want to talk about what happens to people. We are talking about statistics and levies here but I want to talk about the impact on people’s lives when they are injured at work because after all behind all the facts and figures we have looked at that is the real point of what we are dealing with here. Certainly in my time of training health and safety representatives in the workplace I know that they were able to tell me very clearly about the impact on the lives of working people when injured at work particularly if workers had had to take time off work due to those injuries. So I want to remind the House that we are talking about significant impacts on people’s lives. That is where these levies go—to ensure that people can have dignity when they have been injured in their working lives. That helps to take the financial pressure off them and it can help the impact on family relationships as well. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 Labour supporters listening to the radio at home are going to be chilled to the marrow by that speech because that was the voice of the Labour Party rejuvenation programme. That dissembling illogical ramble is what Labour is bringing into Parliament and presumably we cannot go much lower than that standard of oratory. 
One of the arguments that we have heard from these Labour members throughout is that insurance premium will be dictated by business structure. Mark Gosche spoke constantly about the example of the rugby league player. He was saying that just because a rugby league player is self-employed rather than having a business structure that player will not be tackled any differently from anybody else. They are saying that people in the same occupation have the same level of business risk. They do not seem to get the point. 
Let us put the issue just a bit more simply. If the members over there cannot understand the idea that people doing the same occupation can have different levels of risk let us put it in terms they may understand such as political risk—who might be here after the next election—and put a risk premium on that. 
Mrs Yates the former member for Hamilton East lost her seat so one could say that she is unlikely to be here at the next election. So that is probably a medium-low risk. Then there is Minister Dyson. She probably will be here because she will have a reasonable list place but then she could explode at any moment. So that is a high level political risk. Then of course there is Mr Peter Brown the deputy leader of New Zealand First over there. He is a relatively safe pair of hands but the reality is there is not a hell of a lot of excitement there either and the final reality is that his party will not be here at the next election. 
So there are three members with three very different sets of circumstances. But under Labour thinking the same risk premium would be put on each one on the chance of them being here after the next election. Now that is a simple example and Labour members should be able to get that. The three members are all doing the same job but there is definitely a different level of risk for all three with regard to their being here after the next election. That is really what this legislation comes down to. 
The Injury Prevention Rehabilitation and Compensation Amendment Bill will pool two pre-existing accounts into one so that the risk is spread across all. But in actuarial terms that is complete madness because under the terms of risk rating there will always be different levels of risk for different individuals doing the same job. The reality is that that needs to be reflected in the premium. What we have here is a Labour Government bill that is driven purely by philosophy and purely by ideology. Labour hates competition. Darien Fenton is a hardbitten unionist and does not like competition. She is going to get up in a few minutes and tell members that. 
Darien Fenton 
: It’s a social contract! 
Dr JONATHAN COLEMAN 
: There she said it. Socialism—that is what she wants. She wants socialism in accident compensation and that is what one will get here. 
But the reality is if members look back through history when accident compensation was put up for competition under the last National Government—as it will be again under the next one—insurance premiums went down and the levels of medium and serious risk declined. It was good for the people; it was good for business. But that party over there is anti-business and anti-employers. I have never heard these members none of whom have ever been self-employed—although one claimed to be before—be so concerned about the rights of the self-employed. 
This bill is a total rort. Labour will combine these two accounts. They will literally be stealing $500 million from the employers’ account and spreading it across the account as a whole. But the real devious part is that Labour will be keeping those premiums low until just about the time of the next election so the issue will be off the political map—it will not be causing any problem. After the next election the levies will go up. Does that cause any surprise about this Government? It is not surprising at all. This Government has done so many dishonest and frankly unethical things to the people of New Zealand—this is just the latest in a long line. 
This Government decided that it would curtail the usual levy period for 2007-08; there was not going to be an adequate period of consultation. The pure reason for that was that the Government thought it could get away with it. It was not going to cause enough electoral damage; the Government would be able to sneak that through and it would not tarnish them. 
There are people listening at home who know all about this Government. They know that this bill is a rort. They know it is bad for New Zealand business. Do members know what the real irony is? Yesterday the National Party announced an historic piece of legislation that will enable businesses to give more to charities. They will get a tax break and it will actually benefit the very people that this craven unethical morally bankrupt party purports to represent. The reality is that the underclass will be better off. We oppose this bill—bottom line. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I raise a point of order Madam Speaker. I draw your attention to Standing Order 106 “Misrepresentation” which states: (1) A member who has spoken to a question may speak again to explain some material part of the member’s speech which has been misquoted misunderstood or misrepresented in the same debate.” I seek to explain that the honourable member who has just resumed his seat referred to me as a “safe pair of hands” and that I would not be here next time because I do not offer the excitement— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No I am sorry— 
PETER BROWN 
: I just point out that his leader got 40-odd percent. He is not here and I still am. 
The ASSISTANT SPEAKER (Ann Hartley) 
: That is not a point of order. The member knows very well that it is a point of debate. 
DARIEN FENTON (Labour) 
: 
 I am pleased to have the opportunity to speak in the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. I thought after the last contribution that we needed a bit of sense in the discussion and a bit of a history lesson. You know unlike the party opposite we actually want to have—and continue to have—a world-leading easy to access no-fault accident compensation scheme. The National Government nearly got away with the destruction of that in the 1990s. 
My perspective—and I am proud of this—is inevitably coloured by the experiences of people and injured workers under the various reforms of the National Government in the 1990s and I have not heard much comment about them. I know that the Opposition does not like us referring to the 1990s but in the absence of any commitments from National—I have not heard any—to maintain the current system of accident compensation and in view of its defence of privatisation that we have heard in this House from members opposite I have no choice but to reflect on the National Government’s past botch-ups. This bill has reminded me just how awful that past was. 
Prior to 1992 New Zealand had an accident compensation scheme that was fundamentally sound and cost-effective. It was held up as a model for other countries to emulate but after National came to power in 1990 Bill Birch—remember him—the then Minister in charge of the accident compensation scheme moved quickly to establish a committee to review the scheme. Interestingly the committee included a former Treasury secretary a former National Party leader and a senior manager from Shell Oil none of whom had had any significant involvement in accident compensation. This committee recommended a four-stage programme towards ultimate privatisation of accident compensation. 
In 1992 the Accident Rehabilitation and Compensation Insurance Act implemented stage one which transferred the cost of workers’ non-work non – motor-vehicle accidents from the employers’ levy to a new levy imposed on workers by way of a payroll tax. Although many campaigned against the 1992 Act the severe negative impact of its provisions particularly on severely injured people galvanised a number of groups into action prior to the 1993 election. This group called the Coalition on Accident Compensation included the New Zealand Council of Trade Unions the Disabled Persons Assembly the Women’s Division Federated Farmers Grey Power and other disability and community organisations. This campaign highlighted the significant number of cases where the injured person had been disadvantaged by the severity and inflexibility of the new approach to accident compensation under National. One such case highlighted how a tetraplegic 13-year-old boy was prevented from moving from hospital to his home because the new regulations denied the Accident Compensation Corporation any discretionary power to contribute to the cost of his necessary home care. 
Dr Jonathan Coleman 
: What’s that got to do with the merging of the accounts? 
DARIEN FENTON 
: I will get there. National made specific commitments during the 1993 and 1996 general elections that accident compensation insurance would not be privatised but it broke that promise—surprise surprise! The Accident Rehabilitation and Insurance Compensation Amendment Bill was introduced into Parliament in September 1998. That bill came about because of major lobbying from the Business Roundtable the Employers Federation and the Insurance Council of New Zealand with lobbyists from Australian insurance companies such as HIH Insurance and FAI working almost full time in Wellington during that period—and it does appear that the Insurance Council was at it again during the last election. 
Dr Jonathan Coleman 
: What about the SFWU? 
DARIEN FENTON 
: That union opposed it in case the member is interested. This bill created a work injury insurance market with compulsory private insurance statutory suspension of the common law right to sue and statutory limits on workers’ entitlements. The bill was promoted as providing choice—and we hear about that quite a lot from the National Opposition when it comes to talking about workers’ rights health and education and other social services. But you know the only choice was for employers who could choose between insurers competing for business. There was no choice for injured workers. Their legal right to sue which New Zealanders had traded off in the social contract in 1974—the enacting of the original accident compensation scheme—remained suspended by law. Workers were dependent on an insurance contract between their employer and an insurer which they were not even party to. 
What happened? Well the inevitable happened. The profit incentives of privatisation changed everything. There were arguments about which workers were covered and how. Workers were caught between one insurer and another because they had two jobs. There were many instances of spurious rejections where workers had to jump through hoops again and again. Many had huge battles getting the insurer to take their claim at all. Frustrated doctors had to deal with a plethora of insurance companies many of whom would not accept injury claims. There was a review process but it was a farce because it was conducted by a person appointed and paid for by the employer’s insurance company. It was a process based on a narrow interpretation of legal issues. People who lost—and it was very hard to win—were forced into the social welfare system but lost money in the change-over period with dreadful stand-downs. Many with injuries that took longer than a couple of weeks to heal were simply sacked and also forced on to the welfare system often with stand-downs and no money to feed their families. The entitlements were miserable injury prevention was not improved and rehabilitation was undermined. Injured workers became angry and depressed. I came across many cases where workers could have been rehabilitated but because of the battle they were having with insurers they simply lost hope. The market approach to injury prevention was based on the claim that employers would respond to the prospect of reduced future premiums by investing in injury prevention and health protection—and are we not hearing that again today? 
Well it did not happen. As I said we still hear arguments about it—that money somehow is a motivator for employers to provide decent prevention and rehabilitation. That ignores the fact that today’s workplaces are very different and the causes of accidents and occupational disease are complex and diverse. We can add to that the changes National made to health and safety laws and other deregulations of the labour market and see that National members created the conditions that not only failed to prevent accidents but allowed them to happen. Shame on them! National took away the right of workers to refuse unsafe work deprived the Occupational Safety and Health Service of resources and prevented workers and their unions from prosecuting unsafe employers. 
Labour has restored a modern social insurance scheme firmly founded on the principles of the Woodhouse commission in 1967 and this bill is part of it. It does seem necessary to explain to some of the members opposite the notion of the social contract—and there has been a lot of derision about those words—that was entered into by the people of New Zealand all those years ago and which New Zealand people still believe in. New Zealanders gave up the right to sue—we have to look only to America to see how good a decision that was—in return for a no-fault accident compensation scheme. Justice Woodhouse described the scheme’s objective as “the restoration of the [injured person] to the fullest physical mental social vocational and economic usefulness of which they are capable.” 
Thank goodness this Labour-led Government has acted to restore that social contract not least because HIH one of the insurance companies that was active in lobbying National for privatisation collapsed not long after in Australia in one of the biggest corporate failures that country had ever seen leaving thousands of workers without protection. Indeed a former Australian Minister of Small Business and Tourism Joe Hockey has repeatedly called for Australia to consider again the New Zealand accident compensation model. New Zealand’s accident compensation scheme has the cheapest cover of schemes in any comparable country in the world. Just across the Tasman employers are paying several times more. 
Demands for reserves to be paid back to employers are ridiculous. This has happened in the past and if members knew their history they would know that it has resulted in the near bankruptcy of the employers’ account. The money is not the employers’ money; it is a payroll tax and workers have shared the burden of that with employers so it does not belong just to employers. 
I used to dread accident compensation claims for workers because they were so hard to resolve under National’s changes. Today electorate office staff tell me that disputes over accident insurance used to be one of the biggest complaints they had during the 1990s. But that has all changed. That simply does not happen these days; the claims are few and far between. The mediation service this Government has introduced has been a resounding success. It enables people to be heard and issues to be resolved in a constructive way. 
This bill fixes an anomaly that needed to be fixed. It also builds on the commitment of this Labour-led Government to restore the social contract New Zealanders entered into in 1974 and have never voted to change. I commend the bill to the House. 
A party vote was called for on the question  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill be now read a third time. 
Ayes 71 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1; Independent: Field. 
Noes 48 
New Zealand National 48. 
Bill read a third time. 
Customs and Excise Amendment Bill (No 2) 
Third Reading 
Hon NANAIA MAHUTA (Minister of Customs) 
: 
 I move  
That the Customs and Excise Amendment Bill (No 2) be now read a third time 
. I would like to thank the members of the Foreign Affairs Defence and Trade Committee for their thorough and thoughtful consideration of the bill. The fact that there continues to be cross-party support for the bill further highlights the recognition given to the New Zealand Customs Service and the high regard that is held for the way its important work is carried out as it continues to protect our country and facilitate the safe transition of goods craft and people across our borders. I would also like to thank the clerk of the committee staff and officials for providing the support and advice necessary to progress the bill. 
This bill strengthens New Zealand’s border security measures and it provides for more effective and integrated border management. I made the point during the second reading of this bill that it recognises the fact that New Zealand’s trade and travel landscape is continuing to change and that we must change in order to keep pace with it. Increasing threats to our communities through terrorism international organised crime drugs identity fraud and other issues mean our legislation must provide clarity and it must be effective and flexible enough to respond to increased demand and ensure that our activities at the border can be conducted effectively in a rapidly changing environment. That also includes continuing to meet our international obligations as part of the wider border control community in order to improve safety and security for travellers goods and craft when crossing our borders. 
The bill has been drafted to take account of both Government and community interests in effective border management and of the right of people to travel and conduct legitimate trade across our border. The fact that the select committee generally agreed with the provisions in the bill as drafted and that only amendments of a technical nature were made is a positive indication albeit a rare one that the right balance was struck in its drafting. It is important that I also acknowledge the support of all parties in backing this bill. It is worth noting—to use the words of my colleague Dianne Yates—that this bill is not about party politics but about “New Zealand Ltd” and about keeping our borders secure. The support of all political parties in being able to look at the bigger picture is welcomed in that regard. 
To reiterate the key principles of the bill are to contribute to the Government’s commitment to protecting our communities and our country from threats such as drugs and transnational crime; to recognise that the Customs Service is the first point of contact at the border for people goods and craft and that it needs to have the legislative ability to refer to other agencies such as the police and the Ministry of Agriculture and Forestry people and goods that are of interest to them; and to address current limitations in border powers to provide more effective integration and stronger links between the agencies that work at the border to ensure that people or goods that pose a threat do not slip through the gaps. This bill also consolidates border security - related amendments made to the Customs and Excise Act 1996 in 2004 through the Border Security Bill which was designed to help counter continuing and increasing border-related threats. 
The particular aspects of this bill will allow the Customs Service to strengthen its activities across three key areas which I would like to highlight. The first of those relates to the limitations on the use of electronic communications devices—for example cellphones palm pilots and other handheld electronic devices—in designated border control areas such as the primary processing area at the airport. Many people will be aware that the use of cellphones and other modern technology devices can thwart law enforcement activity at the border. For example drug couriers who are stopped for questioning or people who are engaged in smuggling activity may attempt to use their phone to alert associates at or beyond the arrival gates. The potential to do that has now been removed by the bill. 
Secondly there is also a provision to detain persons arriving at or departing from New Zealand for up to 4 hours in cases requiring investigation for public health or law enforcement purposes. That addresses the practical reality that the Customs Service on occasion needs to refer a person to another agency or for further processing. The provision clarifies the law in that regard while allowing for the more effective assessment and management of potential risks. 
Finally the bill contains a section relating to prohibited exports and the ability to impose export controls in respect of catch-all goods. That provision keeps us apace with the relevant international obligations that New Zealand has signed up to. It also reinforces best-practice standards which continue to build confidence in New Zealand as a trading partner as we move to implement those controls. The provision in the bill provides the ability to impose controls on the export of catch-all goods that could be used in an everyday context for civilian purposes but that when combined with other products or compounds could be used for an undesirable strategic purpose—for example in the manufacture of weapons of mass destruction or in a chemical weapons programme. 
Briefly in response to issues raised by the Opposition spokesperson on customs matters Shane Ardern I say that the only change this bill imposes regarding the indexation of the excise duty on alcohol relates to the date on which it occurs. That was done in response to submissions to the select committee from the industries affected and in fact it will make it easier for them to manage those adjustments while also reducing compliance costs. The member should note that those minor annual adjustments have been occurring since the 1990s when a National Government was last in power. So they are by no means a new tax as was wrongly implied in his speech. 
In conclusion the Customs and Excise Amendment Bill (No 2) is important legislation that supports a whole-of-Government approach to better border management and affirms this Government’s commitment to a vibrant economy to strong and safe communities and to protection of our national identity and way of life. I commend the bill to the House. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I know that when we are totally in support of a bill—as the National Party is in this case—and when we have to do the work of the Queen’s honourable Opposition and we are able to do it to the extent that the Minister Nanaia Mahuta feels the need to respond to it in her address then clearly we have been successful particularly when it is damn difficult to find something to pick holes in. 
I say at the outset that National does totally support the moves within this bill. I thank the Minister for the explanation she gave earlier on. But I ask the Minister whether during the process when the bill was brought to the Foreign Affairs Defence and Trade Committee on 1 August last year and when officials were giving advice to the committee proper consideration was given to the fact that there has been massive growth in this country not only in trade in the conventional sense but also in tourism by a whole range of different vehicles. 
I can do no better than to hold up an article in the  
New Zealand Herald 
 on 12 February headlined “Cruise ships to bring in $9 million in a week” which stated that the number of cruise ships arriving in New Zealand in one go will put enormous pressure on our customs staff at the borders. I hasten to add that customs staff do a brilliant job. I congratulate all of those who may be listening tonight on the work they do. But this will put enormous pressure on them. One cannot help but wonder whether under this Government customs staff will be adequately resourced to carry out that work. Certainly there is plenty of anecdotal evidence that at both the Auckland port and Auckland airport those resources are severely under pressure. One only needs to look at the statistics to see that 239 new incursions in biosecurity have come into this country over the last 5 years. One can soon understand that those resources are being severely stretched. 
So I say to the Minister of Customs: yes this is a whole of Parliament issue; no it is not a political football. Certainly it represents “New Zealand Incorporated” and a whole-of-border approach should be widely supported by the Parliament. But have the Minister and the Labour Government taken full advantage of the opportunity that was presented to them? I suspect not. I say to my colleagues I am sure that is not the case. 
I welcome the opportunity to discuss the fact that cellphones and text messages and such like will no longer be allowed at the borders—particularly as they have been used in drug trafficking which we know has been a growth area for our border control in recent years. I also welcome the fact that those who are suspected can be detained for a longer period of time. If it is a potential medical issue that length of time will hopefully be long enough to establish how big a threat they are to the country. If they are deemed to be a threat then they can be detained for a longer period of time. I thank the officials for the work they have done on that. 
The amendment in clause 8 in regard to prohibited goods is clearly a sound move. There is a lot of activity now in tradable goods that are hard to identify amongst normal trading goods as potential ingredients for weapons of mass destruction or drug manufacture. So that is a good move. 
The Queen’s honourable Opposition can find no more to criticise the Government on in this bill so on that I will finish my speech. I congratulate those involved in the select committee process and welcome the bill to the House. 
DIANNE YATES (Labour) 
: 
 I rise to speak on the third reading of the Customs and Excise Amendment Bill (No 2). I thank Mr Ardern and the National Party for their support of this bill. I am pleased that over the several readings of the bill the Opposition spokesperson on customs has actually become more informed about the bill and the content of it. Mr Ardern has noted the growth in trade under a Labour Government and I am pleased he has acknowledged that along with the growth in tourism. As he has discussed the cruise ships coming into Auckland he will also have noted that the media particularly took notice of the way that the Customs Service speedily dealt with people on those ships. He will also have noted that new recruits are channelled towards Auckland as part of their training because of the greater bulk of work that comes through there. 
While we are dealing with the third reading of this bill I praise in particular the Minister of Customs the Hon Nanaia Mahuta for the work that she has done and also the New Zealand Customs Service. In previous readings both sides of the House have praised the Customs Service for the work it does on our borders protecting us. I said before this is not about party politics; this is about “New Zealand Limited”. The Customs Service has had some very successful hits on drug imports into New Zealand as well as on an amazing variety of things such as detecting false qualifications false stamps and false passports coming into New Zealand. For a small country I think the Customs Service staff do an exceedingly good job. 
Some of us as members of the Foreign Affairs Defence and Trade Committee were very impressed when we looked at the work that the Customs Service did at the Auckland airport and the sea port. We were also very impressed that even the poor old dogs work very hard walking up and down all day trying to detect drugs. We have a very effective Customs Service in New Zealand—perhaps one of the most effective of our services in New Zealand. It does an excellent job. This bill is about making sure that Customs Service staff have the power to do what their job is—that they have the time to apprehend people. 
I note that Mr Shane Ardern who is the National spokesperson on customs came on board a little more and that he understands what the excise provision in the bill is about. I am pleased that obviously Mr John Hayes of the National Party explained it to him at the Committee stage of the bill. I thank Mr Hayes for his contribution in the Committee and his contribution to the debate. I also thank Tim Groser for his contribution. 
What is really sad is that those two very effective people are on our Foreign Affairs Defence and Trade Committee and as people would have noticed in the media neither is included in John Key’s thinktank on foreign affairs. I think that is rather disappointing. They are very competent and experienced people—as we have seen in the House—who know about these areas but neither of them is the spokesperson on what they know about nor are they members of the National Party thinktank. The leader of the National Party is not utilising his own team and I think that is probably typical of what we have in the National Party at the moment. We noticed that Mr Ardern repeated his error on two readings of the bill but I am glad that Mr Hayes has actually put him right on those particular issues. 
Shane Ardern 
: It’s more taxes going up and up. 
DIANNE YATES 
: It is no more taxes. What has happened is a rationalising around the date of the collection of the excise tax. [ 
Interruption 
] I am sorry that Mr Ardern did not take up his full time in this debate and is constantly heckling from the other side of the Chamber. I remind Mr Ardern that he did have 10 minutes to make his points and there is no point in his shouting now about matters he could have spoken about during the debate. 
Once again I thank all those who have been involved in this bill. I also point out as we have said the work of the Custom Service staff and its excellent chief executive officer—as Customs Service officers and on this bill in particular. I thank the submitters on the bill—particularly the New Zealand Law Society which pointed out some amendments that would make the bill more workable. 
As I have said I thank the select committee members who worked very well with the officials to work out whether periods of detainment were long enough. It was not just about the amount of time to process; it was also about the geographical distances that staff might have to travel in order to apprehend people. As we in New Zealand know the coast of New Zealand is around the same size as the eastern seaboard of the United States. It is extremely difficult to protect. We were very concerned when working through this bill whether Customs Service people would have the time in the 4-hour detention period provided for in the bill to actually travel wherever they needed to go. 
As has been noted there were issues around cellphones and their use at the point of entry. We have had experience of people being able to phone ahead about nefarious acts. That prohibition on the use of cellphones is a very good measure contained within the bill. 
Once again I thank the select committee members. I thank the Minister the staff the select committee staff and everybody who has worked on a bill that is basically a technical bill that keeps New Zealand up to date and our borders and country safe. I am pleased that the bill is going to proceed and thank the Opposition for its support. 
JOHN HAYES (National—Wairarapa) 
: 
 Thank you Madam Assistant Speaker for allowing me to speak in support of the Customs and Excise Amendment Bill (No 2) on behalf of the National Party. The preceding speaker Dianne Yates was until 18 months ago the electorate member for Hamilton East. I leave the people of New Zealand to judge the quality of her representation for those people—of course they demonstrated that through the ballot box. That member is soon to be New Zealand’s ambassador to Madrid if she can pass the Spanish test that she is busy studying for. She will do far better in Spain than she has ever done for the people of New Zealand or for the people of Hamilton East. Really she does not have a clue as to what this bill is about beyond covering three minor points that had been previously covered by the “Minister of Dog Chipping” Nanaia Mahuta. I am not sure what competence she has to discuss the protection of our border but I suggest to the Minister that her next year’s effort before moving on to the Opposition benches which is becoming more certain by the hour might involve coming up with a policy of chipping every New Zealander—in fact every person in the world—so that when they cross our border they can automatically register with a piece of machinery somewhere so that— 
Darren Hughes 
: Is that National Party policy? 
JOHN HAYES 
: No I am suggesting that this would be something that the “Minister of Dog Chipping” could inflict upon our population in the same way that Labour is inflicting an excise tax on this country of ours particularly on the winegrowers. I have just come from the Beehive where a very very impressive function is being held that was organised by my colleagues from Hawke’s Bay Chris Tremain and Craig Foss. 
Russell Fairbrother 
: They don’t do anything else do they? 
JOHN HAYES 
: The former member for Napier might well say that. I am not sure that he will be doing very much in a few months’ time either after the next election. These people have shown initiative they have shown creativity and they have brought at least 50 companies from Napier and Hawke’s Bay down to Wellington with a couple of hundred people—an outstanding effort. They have brought in councillors from the various councils and they are promoting the food and the excellent wine from the Hawke’s Bay area. They have been doing a fantastic job. 
Meanwhile on the Government benches the leeches of Labour are flat out sucking out a tax that requires winegrowers through this bill to front up at the beginning of their financial year and pay tax in advance on their wine production before they get any income from it. This is a huge burden on our economy and the winegrowers will let the Government know at the next election just what they think of this plan. 
It is a wonderful arrangement that people can be detained for 4 hours at the border—coming in or departing—and it is just a pity that Mr Zaoui was not picked up because that would have saved us a lot of money down the track. 
Darren Hughes 
: That wasn’t Don Brash’s opinion. 
JOHN HAYES 
: Well it is my opinion. I am sorry for the member for Otaki. Is he still the member? Yes he has a very small margin but he is the member at the moment. 
Darren Hughes 
: Don’t talk about your problems. 
JOHN HAYES 
: I am not talking about my problems sunshine. I saw the member down in Cuba Street the other night with someone on the back of his bike. We know what he is up to. We need an export control on the member. 
I do not believe that this Government is treating our winegrowers fairly and I say in all seriousness that we should get rid of this excise tax because it is penalising productive people in this country who are already being penalised by an unsatisfactory exchange rate—an outrageous exchange rate. 
Darren Hughes 
: Whose fault is that? 
JOHN HAYES 
: It is the member’s fault. He is on the Government benches and he is calling the shots. He is making these policies and my people in my electorate are suffering and they have suffered enough from the excessive stealing of Labour through its tax system. 
The only thing that is making this bill worthy of our support is the department officials who have done a brilliant job—no thanks to the Labour members on the select committee and the members sitting opposite. Certainly the chief executive of the Customs Service and his team are doing a really wonderful job and it is our delight to support this bill and the changes they have been putting in it. It has been a pleasure for us to support this bill. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I intended to take a short call—I do not think that it would have been of any length. But I found the speech of the member who has just resumed his seat John Hayes very interesting. I am not sure that he actually touched on the bill at all. He spoke about the problems in the Hamilton East electorate—I do not doubt there are problems in that electorate but I cannot find any reference to them in the Customs and Excise Amendment Bill (No 2). He spoke about the potential for the next ambassador to Spain who is hopeful of learning Spanish in time for the appointment. He spoke at some length about a function in the Beehive that was put on by National members—one has to conclude that he was at that function for some little while. He spoke briefly about tax on winegrowers and I thought: “Ah! He is getting to the bill.” So I furiously looked through the bill for information about the excise tax and there is some reference to it. But there was not even one word of protest about that tax by the National member who is on the Foreign Affairs Defence and Trade Committee. 
He then moved on to the subject of Zaoui. I personally would like to expound my opinion on Zaoui—and it would take quite a long time—but I do not think it would be appropriate to do so in this debate on the Customs and Excise Amendment Bill (No 2). We then got on to the subject of the member sitting in Cuba Street—and I found this most unusual—spying on bike riders. I have to say that the mind boggles as to what he saw and why he was doing that. Then he moved back on to the subject of tax on winegrowers. Again I thought he was talking on the bill because somewhere there is a clause in the bill that deals with the indexation of rates of excise duty on alcohol and tobacco. I thought he was going to get to that clause but he moved on again. He made the categoric statement that National supported the bill because of the wonderful officials. I have no doubt that the officials are wonderful but I have to say that I have never heard that as a reason for supporting the bill. 
New Zealand First supports this bill. We were not on the select committee. We are happy with the purpose of the bill and we are happy with the bill as it is written. We note that there were four submissions only one of which came before the select committee. The Foreign Affairs Defence and Trade Committee received advice from the New Zealand Customs Service and the Ministry of Foreign Affairs and Trade. I can tell members that a Minister like the Rt Hon Winston Peters would have given the committee very very good advice so it is no wonder that the select committee got this legislation correct. It also received advice from the Regulations Review Committee and the Parliamentary Counsel Office. 
We need to support the customs people in this country. I note that the select committee did not get the bill quite correct. The Minister had to bring in a Supplementary Order Paper to tighten it up in terms of the Customs Service people having the authority to hold people a bit longer than the bill provided for. I think this bill should go through the House speedily and with the support of every political party. New Zealand First is most definitely in support of this legislation. 
KEITH LOCKE (Green) 
: 
 The Green Party also supports the Customs and Excise Amendment Bill (No 2). In particular we like the way that it firms up the ban on strategic exports—that is exports that can assist repressive forces in other countries. We think that New Zealand should be a beacon of peace in the world and it is inconsistent with that aim for us to be exporting military equipment that can be used against innocent people. 
 There is a clear ban in the bill on the export of components for nuclear biological and chemical weapons and there is a ban on the export of many other military items. With many of the military goods and their export it is a question of which countries they are to be sent to. This can be a little loose in terms of definitions. The bill states that exports can be banned where it is “… contrary to New Zealand’s interests” and of course that can sometimes be a matter of debate. This definition is filled out somewhat in the criteria of the Ministry of Foreign Affairs and Trade for the assessment of export applications which says that exports should not contribute to a regional conflict and should take account of the recipient’s record on international humanitarian law. 
On that second ground we should be careful perhaps of exporting to the United States military which clearly violates international humanitarian law in Iraq in Afghanistan and at its detention centre in Guantanamo Bay. However our Government would probably think that that would be a step too far. Winston Peters would probably define that as anti-Americanism even though that would only get us offside with the Bush administration not with the American people who are quite critical of that administration on issues of war and peace. 
It is certainly good that in 2004 the Ministry of Foreign Affairs and Trade turned down an application by a New Zealand firm Oscmar International to export a man-worn laser detection harness to the Israeli defence force presumably because it would have violated one of the ministry’s criteria—that is not to contribute to a regional conflict. However there is subsequent information that Oscmar effectively exported the technology for this device to Israel via the United States by exporting the technology via the Internet. So it is good that a new category relating to the export of electronic goods is now in the legislation. 
The harness that Oscmar exported was also exported around that time to other countries. The ministry approved 30 other export applications for the device. We do not know which countries these harnesses went to and for all we know they may have gone to some countries with a repressive Government or some countries involved in regional conflicts. We do not know this because the information was withheld as it was deemed “commercial in confidence”. In some ways there is even less openness now. 
Last October the Foreign Affairs Defence and Trade Committee asked: “Which strategic goods have been stopped from being exported from New Zealand in the last financial year? Please list the name of the item and the country it was intended to be exported to and the New Zealand Company involved.” One item had been refused permission to be exported by a company but the select committee was refused the particular information requested “to protect this information which has been provided in confidence.” This leaves a huge hole in the accountability of the whole system. It means that we are simply supposed to trust the ministry to get it right which is not the way things are supposed to operate in a democracy. Surely other New Zealand exporters would get a few clues on what to do and what not to do by being able to find out from the public record which items had been declined for export and to which countries they were going to be sent. 
This is particularly true in that additional category included in the bill—electronic goods. Electronic goods can be even more difficult to define in terms of whether they are strategic or whether they should be exported to this or that country. For example the crystal oscillators produced in New Zealand by Rakon were ruled out as being strategic goods by the military because they were also used in civilian goods. 
There were two problems from the Greens’ point of view in terms of whether these crystal oscillators would be deemed to be strategic goods. Firstly it is clear that they were dual-use goods and dual-use goods are covered by the legislation. There is an argument that their export to the US military should have been prevented because they were to be used in guidance systems for smart bombs and missiles which clearly are being used today to worsen regional conflicts particularly in the Middle East. However it is worse than that because Rakon clearly received a lot of funding—tens of thousands of dollars—from a major US military contractor Rockwell Collins to develop the crystal oscillators to a military specification not a civilian specification. Rakon’s words were that they had to be developed to be “radiation hardened” and “shock hardened” for use in these missiles. 
There is another tricky area with strategic goods. One successful software exporter in New Zealand is Right Hemisphere which produces 3-D display software working up displays for both civilian purposes and military purposes. What do we do in that situation? Are they covered by this bill? It is not an easy situation. What we find in business and in Government is that military uses are often overlooked if companies are big enough and exporting enough. 
We can all recall how the US and British Governments were quite happy to export military equipment to Saddam Hussein in Iraq in the 1980s when they were getting a lot of money out of it. They are a bit embarrassed now about how they exported bits for Saddam’s chemical weapons to gas the Kurds. At the time those same Western Governments tried to cover up the fact that Saddam had gassed the Kurds because Britain and America under their presidents thought that Iraq under Saddam was an ally against their main antagonist as they saw it at the time Iran. 
We can also look at the problem of export of strategic goods from the other end—perhaps in the light of a recent Green effort headed by our co-leader Russel Norman to stop the Superannuation Fund investing in companies that produce nuclear weapons and cluster bombs. One of the arguments used by the Government to counter our concern was that when we are dealing with big firms like Boeing they are so big that they are in all kinds of ventures both civilian and military and it is wrong to stop investing in them purely because they have some military products even if as in the case of Boeing these products are powerful enough to blow up the world. 
I think our Government has a duty in things like the Superannuation Fund or what we export to provide an example to the world. It does not mean to say we abandon all military exports but it does mean that we should not really see our future as a major arms exporter. We do not want our economy geared to any significant extent around the business of war. 
One of the problems we see in the United States is that so much of its economy is devoted to producing the machinery of killing that even many Congress people owe their elections to donations from big arms producers. Over $400 billion of the American Budget is devoted to military expenditure—and much of that to producing arms. Companies in New Zealand that produce military weapons for export should not be the favoured recipient of grants from public agencies the way that Oscmar has been in recent times. 
Hopefully the bill which I reiterate we support will be a step towards a more moral and more pro-peace export policy. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora tatou katoa iteneipo. I do not know whether members know but this morning the Race Relations Commissioner announced a range of initiatives that are supposedly making a positive contribution to race relations in Aotearoa. One of these initiatives is a peace treaty created by a person by the name of Jason Kerehi. It was launched on Waitangi Day in Masterton and the people of the Wairarapa were given the opportunity to sign a treaty that calls for a peaceful tolerant and inclusive community. The peace treaty provides an opportunity for people of all cultures to sign up to its intentions. All ages are embraced and the peace treaty is now touring Wairarapa schools and libraries to gather more signatures before it is placed in the Wairarapa Archive. 
I wanted to refer to this initiative in speaking to the Customs and Excise Amendment Bill (No 2) because so often in the House we tend to focus on system failures policy glitches and the regulatory weaknesses that require legislative tweaking. Meanwhile we overlook the impressive contributions that are made every day by New Zealanders in their commitment to this issue of harmony and peace in the world. This bill is on a much bigger scale obviously but it is driven by the same goals that inspire Jason Kerehi—that is the quest to promote peace and safety. 
This bill aims to protect the well-being of New Zealanders by restricting possibilities for terrorist intrusion or safety threats. We welcome the broad definition of “safety threat” as encompassing suspicion related to infectious diseases and including biological or chemical weapons. 
Hon Tau Henare 
: What’s it got to do with the bill? 
TE URUROA FLAVELL 
: So this legislation against the question that was asked by Mr Henare would probably have been very useful in fact 167 years ago when tangata whenua were introduced to a host of infectious diseases that accompanied the arrival of the settlers. The onslaught of infectious diseases was rampant as we know and impacted negatively on the Maori population to a level where it was thought the extinction of tangata whenua was a real possibility. At that time our people lacked the immunity required to fight even common bacterial and viral infections. The population suffered from a disastrous decline from the introduction of infectious diseases alongside the impact of weaponry drugs and foodstuffs to which Maori people were unaccustomed. 
In the Mohaka ki Ahuriri Report 2004 of the Waitangi Tribunal Professor Ian Pool is cited as attributing the 19th century Maori population decline as being largely due to infectious diseases brought by Europeans. He and other scholars such as Professor Mason Durie do however also acknowledge the connection between infectious diseases such as dysentery influenza and tuberculosis and the socio-economic conditions including land alienation. These so-called diseases of poverty served to decimate the Maori population right until the mid-20th century. So the increased capacity of the customs officers under this bill to detain a person under a suspicion of a perceived threat to endanger the lives of others is welcome. We can never overlook the impact of our shared history on our future. 
The Maori Party is also pleased to endorse the fact that the bill ties in with the New Zealand Nuclear Free Zone Disarmament and Arms Control Act 1987 in prohibiting the import and export of strategic goods relating to nuclear weapons. Strategic use as interpreted in the strategic goods list currently kept by the Ministry of Foreign Affairs and Trade is defined to include the development production or deployment of nuclear explosive devices biological weapons chemical weapons or military goods. 
In an interesting twist of fate it should be noted by this House that some 49 years ago today—28 February 1958—the Campaign for Nuclear Disarmament was founded in London by the philosopher Bertrand Russell amongst others. It is our hope that by the time we commemorate 50 years of that campaign this bill will well and truly be established among our statutes and our borders will be benefiting from tighter scrutiny of areas of concern with a particular relationship to nuclear threats. 
Of course we cannot address this third reading of the bill without pointing out again the very real danger of racist ideologies that threaten the security of Aotearoa for tangata whenua. I want to acknowledge at this point the recommendations of the National Council of Women of New Zealand which like the Maori Party was concerned at what could be seen as an unchecked licence of new powers for customs officers. I am advised that the National Council of Women suggested in its submission to the Foreign Affairs Defence and Trade Committee that there should be a requirement to document and report annually on the frequency and circumstances of incidents that necessitated the use of new powers. 
The Peace Foundation likewise was concerned at the suggestion of the unbridled powers of seizure and detainment. In fact it was at the foundation’s suggestion that the select committee I am told introduced new section 175B to insert the word “reasonable” before the words “cause to suspect”. At the second reading of this bill we focused extensively on the subjective interpretation of the concept of “reasonable”. My colleague Mr Hone Harawira explained that on at least 16 different occasions in the bill the test of reasonableness is proposed as a basis of judgment. Interpretations of reasonableness are required in order to understand the nature of “reasonable force” to detain someone the seizure of anything that officers consider they have “reasonable cause” to suspect as evidence or the capacity to detain a person if officers consider they have “reasonable grounds” to believe that the person poses a threat. 
So I return again to the concept of racist ideologies and the ability of officers to be able to identify accurately and indeed to understand whether the ideologies are reasonable and whether the ideologies are racist. We register here our concern that those officers responsible for border security and the measures around that are equipped to be able to understand the impact of racism. 
Hon Tau Henare 
: What do you mean? 
TE URUROA FLAVELL 
: I am talking here about institutional racism which the Te Puao-o-Te-Atatu report described as “… a bias in our social and administrative institutions that automatically benefits the dominant race or culture while penalising minority or subordinate groups.” The Maori Party wishes to remind this House that the New Zealand Customs Service has in the past fallen into the context of exercising such bias through the actions of its officers. 
In 1981 the New Zealand Security Intelligence Service was criticised for drawing up a list of twenty “subversives” who participated in protests against the 1981 Springbok Tour. That singled out certain individuals as being subversives and it was deemed by many to be a violation of the right to protest Government decisions. It was also deemed to be an act of racism against those who were determined to speak out about the adverse effects and the impact of the apartheid policy. 
I am not suggesting by any means that the practice we saw in 1981 would be replicated in 2007 but one would hope that in the implementation of this new Customs and Excise Amendment Bill (No 2) the agency and the officials involved will pay particular caution towards preventing such targeted surveillance from occurring again. 
Hon Tau Henare 
: Tell us what you really think. 
TE URUROA FLAVELL 
: Finally in response to that comment I say that the Maori Party will support the bill at its third reading and we urge the Minister and the New Zealand Customs Service—Te Mana Arai o Aotearoa—to ensure that the service truly lives up to its name and protects the authority and the rangatiratanga of tangata whenua alongside all other New Zealanders. 
JILL PETTIS (Labour) 
: 
 I am pleased to join the debate this evening and I was privileged to sit on the Foreign Affairs Defence and Trade Committee when this bill was being considered. I pay tribute to the Customs Service as have other speakers before me this evening and I acknowledge the very important role it plays in New Zealand society. Fifteen percent of the revenue this country earns is collected by the Customs Service. We all know that the Customs Service is a very historic service and has played a strategically important role in New Zealand society. In all developed nations customs services historically have played and currently play a very important role. I with other members of the select committee have visited the Customs Service and looked at its operations at the Port of Auckland the Auckland Mail Centre and Auckland International Airport. 
Our Customs Service fulfils a wide variety of roles and it has many many responsibilities. We do not always pay tribute to and have cognisance of the role it plays in maintaining strict biosecurity in New Zealand and the very important role it plays in keeping our borders safe. I think it worthy to note also that Customs Service staff are fairly representative of New Zealand society as a whole. The service draws its staff from right across a large majority of the groups that are represented amongst the New Zealand people and I commend it for that. 
The nature of border management has changed considerably in more recent years as we see the continuous increase in the volumes of trade and travel. Many of us in this House travel internationally more often than do some sectors of society as we go to international fora and meetings. We all know first hand how incredibly busy airports are. I know I often wonder just where all those people are going. So border security has changed and heightened considerably in just the last decade. 
There are increasingly varied sources and natures of risks. Terrorism is a word that unfortunately we are all too familiar with. The increase in import of drugs and transportation of drugs throughout the world is a problem that has grown over recent years and sadly I have to say we do not see any end to that at the moment so vigilance and detection are critically important in that area. Weapon proliferation unfortunately has also increased and identity fraud is growing as well. As a consequence of those four items I have mentioned there is increased international emphasis on trade and travel security. So this bill really is an investment in the future security of all New Zealanders and in my opinion it is a very wise investment. 
The Customs Service has seen a lot of developments since 2001. The Act was amended in 2004 following the events on 11 September 2001 in America and there has been increased focus on travel and supply chain security law enforcement and immigration matters throughout the world. Since 2004 further areas have been identified to enhance border security and integrated border management practices which has led to the current bill. The key provisions in the bill refer to the use of electronic devices to border processing obligations to an extension of the export control regime to searching persons for dangerous items and to the ability to deal with unlawful travel documents. When we visited the Customs Service in Auckland we saw many of the forged documents that had been detected by the very skilled staff. The bill also refers to the detention of risk goods and to information-matching for benefit purposes as well. 
Earlier on tonight members talked about the service’s ability now through this bill to require somebody who has been detained not to use an electronic device such as a mobile phone when he or she could be in the process of thwarting enforcement activity. That is a very important and essential measure given the increased technology that is available to very ordinary people—people who may look ordinary but who are up to nefarious and clearly illegal activities. 
This bill clarifies the Customs Service’s border management role. Importantly it also builds more interoperability between agencies that have a very real interest in border-related matters. It builds on the existing powers the Customs Service has and provides a very measured response to border management that quite appropriately balances the State’s border requirements and the protection of the rights of individuals. Importantly it protects the rights of law-abiding people who are travelling for legal purposes so that they may travel in as unimpeded a way as possible. 
This is an important bill and it is being broadly supported across the House. I think as responsible members of Parliament we realise how important this bill is to individuals’ safety and the safety of our borders. I thank other members who were on the Foreign Affairs Defence and Trade Committee for the cooperative way in which the committee worked. I close by reiterating my support and that of my colleagues on this side of the House for the Customs Service and all of the staff. 
Bill read a third time. 
Births Deaths Marriages and Relationships Registration Amendment Bill 
First Reading 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 I move  
That the Births Deaths Marriages and Relationships Registration Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Government Administration Committee. This bill amends the Births Deaths and Marriages Registration Act 1995 which as the name suggests provides for the registration of information about births deaths and marriages. Information on adoptions changes of name sexual assignment and reassignment and civil unions are also registered under the Act. The Act provides for access to the registered information. These functions are administered by the Registrar-General of Births Deaths and Marriages. 
This bill has three main objectives. Firstly the bill defines the purposes of the registers held under the Act and introduces a new framework for providing access to the information that is consistent with those purposes. This new framework incorporates privacy safeguards and sanctions but also recognises that there are a range of legitimate reasons why people want to access the information. Secondly the bill enhances the registrar-general’s ability to ensure that registered information is accurate complete and meets the purposes for which it is collated. Thirdly the bill modernises the Act to take into account the new functions that the Births Deaths and Marriages registry performs and other social and technological changes that impact on the registry’s work. In recognition of the extension of the registry’s functions the bill will change the name of the Act to the Births Deaths Marriages and Relationships Registration Act 1995. 
Information about births deaths and marriages in New Zealand has been officially registered for nearly 160 years. During this time the nature of the information collected about those life events has increased. In addition new registers such as the register of donors and donor offspring under the Human Assisted Reproductive Technology Act and the civil union register have recently been created. Clause 13 of the bill creates a new register of name changes by overseas-born people who are New Zealand citizens or permanent residents and provides for certificates of those name changes to be issued. People must be able to access and obtain evidence of information that supports their identity and family history. It is vital therefore that people can trust that their personal information is being held securely and that it is being used only for purposes that are consistent with those for which it was collated. Clause 6 of the bill sets out the purposes of the registers. They are a source of information about demographics health mortality and other matters important for Government as well as an official record of events both for evidential and research purposes. 
Clause 26 is a key provision that establishes the main aspect of the new access framework. In general terms individuals will be able to access their own records and those of their immediate family members and they will be able to authorise access by other people—for example genealogists. Access requests made by other people will have to be for legitimate purposes such as for administering estates. Clause 38 creates an offence of making a false statement in order to obtain access to information to which a person is not entitled. Open public access will still be available for historical records. These include records of births that occurred at least 100 years ago marriages and civil unions that occurred at least 80 years ago and deaths where the deceased person died at least 50 years ago or was born at least 80 years ago. 
This graduated approach to death records means that when a person has died later in life the death record will be available to the public at an earlier stage than that of a record of a person who died at a younger age. This recognises that death records contain information about the deceased person’s spouse or partner and parents who may still be alive and that the records contain information such as the cause of death that can be sensitive for family members. 
Clause 30 enables the registrar-general to provide Internet access for those historical records. This facility will be particularly useful for family history research. Similar access provisions exist in Australia Canada and many states of the United States of America. By allowing general public access to historical records only there will be less risk that people will be able to use the information relating to living or dead individuals for fraudulent purposes. 
Of course that in itself will not prevent identity crime; personal information is available from many other sources. Nor will it remove the need for organisations to have robust processes for verifying the identity of people with whom they do business. A birth certificate is not after all proof of the holder’s identity. It is only proof that a birth took place. However the bill will make it more difficult for fraudsters to obtain information that could be used for illegal purposes. This is reinforced in clause 38 which provides for increased penalties for offences involving the misuse of information. 
Clause 26 repeals the Act’s provision relating to the maintenance and production of indexes to the registers. Indexes were designed to facilitate the researching of paper-based records and are no longer necessary as the registry’s records are now computerised. Individuals and organisations that have already purchased indexes will still be able to use them for their own purposes but clause 30 creates the offence of publishing that information on the Internet. This will also help to limit the opportunity for the information to be misused. Death information is currently obtained by some non-Government organisations in order to remove the names of deceased individuals from databases and mailing lists—a practice that avoids the pain caused to family members if correspondence is sent to a deceased person—and clause 26 enables this practice to continue but only on strict terms relating to the way the information can be used and prohibiting publication of the information. The processes for supplying this information are similar to the Act’s current information-matching provisions applying to Government departments. 
Several of the bill’s provisions enhance the registrar-general’s ability to ensure that there are complete and accurate records in the event that they are registered under the Act. Clause 30 provides for the registrar-general to be able to obtain address information from the Ministry of Social Development to help to locate the mothers of children whose births remain unregistered after a lengthy amount of time. This clause also enables the registrar-general to share name change and death information with overseas counterparts. This will help reduce identity crimes by ensuring that birth records are notated with the fact of a name change or death that occurred in another country. Clause 35 provides that the Ministry of Health can give the registrar-general information about a birth or death that has not been registered or that has been registered incorrectly. 
This clause also enables the registrar-general to update records held under the Human Assisted Reproductive Technology Act by using information such as name change or death information held by other registers. This will help to ensure that donors and donor offspring can identify each other with the most up-to-date information. 
The bill amends the Act to give better recognition of de facto relationships. Clause 10 for example requires both parents to sign their child’s birth registration form regardless of their relationship status unless it would be impossible or inappropriate to require both parents to do so. This will help improve the accuracy of the information provided and will reduce claims that a person has been wrongly named as a parent. Enhancements are also made in the bill to improve the registrar-general’s ability to collect and disclose information by electronic means. 
This bill is relatively predictable but important. It covers a number of matters that will enhance the functions of the Births Deaths and Marriages registry. It will ensure that the registry continues to be the trusted custodian of the life event records held by it. I commend this bill to the House. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am very pleased to speak on National’s behalf on the Births Deaths Marriages and Relationships Registration Amendment Bill. I commend some of the very sensible changes being put forward in it but I also have to express some grave concern about the bill. The Minister Rick Barker is quite right; this is a very very serious bill. 
What is happening here among some of the very sensible changes is the fact that the changing of the purpose of the legislation being amended the Births Deaths and Marriages Registration Act is being glossed over quite considerably. If we look at the original Act we see that there are only three parts to its purpose comprising paragraphs (a) (b) and (c). Paragraph (a) is about the fact that information is recorded—that is fine; that stays the same. Paragraph (b) is about access to information. The current Act allows for the ready access of information by the New Zealand public and that is as it should be. That has been a time-honoured tradition in this country. Paragraph (c) is for the provision and effect of information. So that is a very sensible purpose which is already in the current Act. 
But what is happening in this bill is that the purpose is being modified considerably. The bill now states that access will be regulated and that the provision and effect of information will also be regulated. This has very serious consequences for the public who will be absolutely dismayed by such a consequence. I am surprised that the Minister is now looking at regulating access to information and the provision of that information when the Minister’s own department states that its strategy includes the introduction of new technologies that allow greater access by applicants through the Internet. 
But that is not happening in this bill because if we look at clause 26 we see it substitutes sections 73 74 and 75 of the principal Act. In fact it will preclude all of those thousands of members of the New Zealand public who want access to information from birth death and marriage certificates which are historical records. They will not be able to access readily that historical information. Under clause 26 the changes being made to sections 73 74 and 75 of the Act are such that it will make it virtually impossible for anybody to have that ready access. 
That is the crux of what this bill is about. It is turning on its head the public’s understanding of their access to the information on birth death and marriage certificates. They will no longer have that ready access. The New Zealand public needs to wake up and to make themselves very aware of what is behind the introduction of this amendment bill. That is in spite of the fact that the Minister’s own department stated that the public would have greater access through the Internet as a result of changes being made in his department. 
I can tell members about some excerpts indicating that the New Zealand public reckon that the records are the records of the people and that the Government is merely the custodian of those records. The New Zealand Parliament has its foundation based on the Westminster system. England has a record of its ancestry that is second to none through its careful retention of its historical records and the recordings made and kept by its citizens. England has to make public records available to the people at a reasonable cost so that they have the opportunity to research freely their past and that of others. That access is freely available to them. 
I know there are some outstanding contributions to be made by my colleagues so at this point I will be happy just to declare that National will be opposing this bill on the grounds I have mentioned. 
DARIEN FENTON (Labour) 
: 
 I am pleased to speak on the first reading of the Births Deaths Marriages and Relationships Registration Amendment Bill and I look forward to the Government Administration Committee of which I am a member considering the bill and reporting it back to the House in due course. 
Identity is an important issue for New Zealanders. It is about who we are and what we are and our histories and our families. Records of identity are important to us because they provide the basis for determining individual entitlements and help us trace our lineage and establish our identity. We want to know that identity information is being used responsibly that it is up to date that it is accessible and that it is accurate. We need trusted records that are up to date and modern. 
Sandra Goudie 
: What’s been the problem to date? There’s been no problem to date. What a load of rubbish. 
DARIEN FENTON 
: I listened to the member’s speech and I ask her to do me the courtesy of doing the same. In its statement of intent for 2006-09 the Department of Internal Affairs told the Government Administration Committee that it currently registers over 102000 births deaths and civil unions. It issues over 200000 birth death marriage and civil union certificates and printouts. That is a big job and we need up-to-date legislation to ensure that these records continue to be the best they can be. 
Many of us in this House have been involved in tracing our family history—even the member opposite I am sure. Sometimes that has surprising results and some of us discover family backgrounds we knew nothing about. I am sure we can all tell a story about a skeleton in our closet we did not know about or someone we recently found out we were related to. We may not have known about that person and we may not be so comfortable about it. Of course in New Zealand it is not hard to find lost relatives. At a 50th wedding anniversary over the weekend of a distant cousin on my Irish side I found hundreds of whanau I have never met before. I am sure they are all registered somewhere and it is very interesting. 
Some stories are really heartbreaking. For example we found out that my grandmother on my husband’s side had changed her name from Burkheimer to Burke during the First World War to hide her German ancestry because of the antagonism towards New Zealand citizens who could be identified as having German blood. Many of us will have dealt with Pacific Island citizens and citizens of other countries who have had terrible trouble accessing their records at home. Sometimes those records had been kept in one place and were blown away by a hurricane or destroyed in a civil war and so on. That means those people are not able to access simple things like pensions. 
It is amazing how those records have an impact on our personal decisions. When my son was born I was living in a de facto relationship with my partner John. We discovered when we went to register our son’s birth in Whangarei that because we were not married his birth certificate would record that he was illegitimate. That was not so long ago. Members know what it is like with children they grow up fast and my son is now 27 years old. We were shocked that that societal judgment would continue forever more on our son’s record. We decided to get married because we could not predict how such a thing would be viewed by future generations. We got married at the Whangarei registry office when my boy was just 6 weeks old and he had what was then the fairly unusual experience of attending his parents’ own wedding. He was not a witness of course; he was too young. 
Of course if I could have looked forward to the 21st century I would see that the word “illegitimate” would become obsolete that we could enter into a civil union rather than a marriage and that society would judge neither us nor our son. In fact if I could have looked forward to this Labour-led Government I would be able to see that life would be very very different. However let me put on record that my marriage has lasted 27 years and my son has grown into an intelligent hard-working citizen with a strong social conscience so I have no regrets. May I add he earns more than his mother so he is making his contribution. 
Another issue that many of us have become aware of recently is the increasing use of identity fraud or identify theft. This makes it even more essential that we have up-to-date relevant and modern systems of information collection. At the moment any member of the public can obtain the registered information of almost anyone else and that is not acceptable. Even in New Zealand we have heard the sad stories of the names of babies being collected from gravestones and used for identity fraud. Our identity and personal information are valuable. Criminals can find out our personal details and use them for their own ends to open bank accounts and to get credit cards loans State benefits and documents such as passports and drivers’ licences in our name. 
In the United States and Canada for example many people have reported that unauthorised persons have taken funds out of their bank or financial accounts or in the worst cases have taken over their identities altogether. Can members imagine someone else pretending they were them running up vast debts and committing crimes while using their names. In many cases victims’ losses may include not only out-of-pocket financial losses but substantial additional financial costs associated with trying to restore their reputation in the community and correcting erroneous information for which the criminal is responsible—for example never being able to access a loan again. 
In one notorious case of identity theft the criminal—a convicted felon—not only incurred more than $100000 of credit card debt but also obtained a federal home loan and bought homes motorcycles and handguns in the victim’s name. He also called his victim to taunt him saying he could continue to pose as the victim for as long as he wanted because identity theft was not a federal crime at that time before filing for bankruptcy also in the victim’s name. While the victim and his wife spent more than 4 years and more than $15000 of their own money to restore their credit and reputation the criminal served a brief sentence for making a false statement to procure a firearm but made no restitution to his victim for any of the harm he had caused. We want to avoid that as much as we can in New Zealand. We have not seen this on any great scale; let us not go there. 
This legislation introduces measures to protect individual privacy and reduce the likelihood of identity fraud. It amends the Births Deaths and Marriages Registration Act 1995 and proposes changes especially concerning public access to the births deaths and marriages registry information. This means that people will be able to access only their own records or those of their immediate family or those of other people only with their consent. It will be an offence to try to obtain information by falsely claiming to be authorised to access a person’s record. The new access provision will preserve open access to historical information and any restriction on records will not apply to those over 100 years old. 
Changes in new technology provide us with many opportunities and this bill reflects this by enabling the registrar-general to provide Internet access to historical records. This will make it easier for those on a quest for family information but the graduated approach to death records recognises that some sensitive information such as that of a spouse or partner who may still be alive or the cause of death may be sensitive for family members. 
I am particularly pleased given my experiences that I have related to this House as a young mother that the bill removes discrimination against people in de facto relationships and includes a provision that requires both parents to sign the child’s birth registration form regardless of the relationship. 
The bill is technical but important. It reflects the privacy and security needs of the 21st century. We have made significant security enhancements to the New Zealand passport and citizen application processes and this bill builds on that. I look forward to receiving submissions in select committee and working with the other members—including the member opposite—on the Government Administration Committee to return this bill to the House for its second reading. 
MARK BLUMSKY (National) 
: 
 In the interest of facilitating business through the House I will save most of my comments—if the Births Deaths Marriages and Relationships Registration Amendment Bill does go forward tonight—for the second reading Committee stage and so on. Before I start I want to— 
Hon Member 
: Is this going to be the highlight of your career in Parliament? 
MARK BLUMSKY 
: Absolutely this is where I am going to make a difference. The previous member who just spoke Darien Fenton mentioned the length of marriage. I take the opportunity to congratulate the member on the length of her marriage and also to congratulate her husband on his courage bravery and the sacrifice that he has made. 
Darien Fenton 
: I raise a point of order Mr Speaker. The member referred to courage and that is not acceptable in this House as I understand it. 
Mr DEPUTY SPEAKER 
: The usage was not in the manner that we have banned in this House. 
MARK BLUMSKY 
: The word was used in admiration for her husband Mr Speaker. 
Mr DEPUTY SPEAKER 
: I know. 
MARK BLUMSKY 
: National is opposing this legislation for a number of reasons which I will very quickly allude to. There is some good in this bill. I think the fact that the name of the bill has been changed and the word “relationships” has been brought in is a plus. The fact that 6000 births are not registered is an issue that needs to be addressed. Mind you feedback today indicated that an education process needs to be undertaken for Polynesians and maybe that will get thrashed out in the select committee process. 
Issues that have created concern for me just reading through the bill are issues with business compliance costs. It states quite clearly in the explanatory note that business compliance costs will be involved. There is neither scope nor feel for what those will be but it is yet another cost that will be put on private sector organisations that want to be involved. 
Secondly another of the issues I have is that when one looks at the consultation undertaken one sees that the notes make it very clearly known that there has been a lot of consultation with “Government agencies”. But the line that worried me the most was “Public consultation has not been undertaken.” So there has been no discussion about this bill none at all with anyone other than Government agencies. 
I took an opportunity this afternoon to talk to the New Zealand Society of Genealogists and asked whether it had any issues before the bill before the House. I can assure members now that that the society has issues—issues that it has put on a note to me—which need to be brought to the fore and which will certainly tidy up this bill. I will take the opportunity in the further processes of the bill if it passes this first reading to bring up those issues that the society has raised. Thank you for the opportunity. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I listened with interest to the member who has just resumed his seat Mark Blumsky. He raised in a vague sort of way some concerns but said that National would not be supporting the Births Deaths Marriages and Relationships Registration Amendment Bill. I thought if there are concerns it would pay to address the bill tidy the thing up and then possibly support it. 
Mark Blumsky 
: And we may do that. 
PETER BROWN 
: Well the member is going to vote against the bill tonight knowing that there are concerns about it. 
If one is in doubt about what a bill stands for and what it is meant to do one should perhaps always read the purpose clause and I will read it. It states: “The purposes of this Act are—(a) to require the recording and verification of information relating to births deaths marriages civil unions name changes adoptions and sexual assignments and reassignments … ”. 
Now I do not know really what it means by “sexual assignments”. I certainly do not know what “reassignments” are. I could only conclude going back to the customs legislation that when one of the National Party members Mr John Hayes said that from time to time he goes down Cuba Street spying on bike riders that that is a sexual assignment. Is it a sexual assignment if he is sent there by his leader? It would not necessarily be a sexual assignment if he was doing that as a hobby. I know that the member who has just resumed his seat has a sort of inkling to go to Cuba Street from time to time. 
Mark Blumsky 
: I live in Cuba Street. 
PETER BROWN 
: He lives in Cuba Street well there you are! That is the reason. But I am at a loss to understand and I say this very seriously what this bill means by “sexual assignments”. 
Mark Blumsky 
: Are you going to oppose it as well? 
PETER BROWN 
: No I am going to support this bill because I want to find out what this is all about. I think one of those members on the Government side will stand up and tell me. But there are a number of concerns that need to be addressed. 
 I have some notes here and I understand from my reading of this bill that for example both parents will have to sign a birth certificate. That makes sense to New Zealand First for a number of reasons and this bill will provide the law that compels people to do that. 
The bill tells me that a register will be created to record name changes by people born overseas who are New Zealand citizens or who are permanent residents. Those people will be issued with certificates rather than copies of the declaration form as currently occurs and that seems to be a worthwhile step. 
Another point is that individuals will be able to access their own records and those of their immediate family. They will also be able to authorise other people to access these records for genealogy purposes. Currently I am told a person can generally access anyone’s registered information. I find it appalling that people’s records can be accessed by just anybody. That matter needs to be tightened up. 
The bill addresses a number of other issues but there is another worrying concern that I have on behalf of New Zealand First. It is the definition of “immediate family member” in clause 7(3). It reads: “in relation to a person—(a) means the person’s mother father son daughter sister brother grandparent grandchild spouse civil union partner or de facto partner; and (b)”—and I have real concerns with this—“to avoid doubt does not include—(i) a stepparent stepchild stepgrandparent stepgrandchild or stepsibling of the person;”. It then goes on to list former spouse civil union partner or de facto partner of the person. 
I say to the House with some seriousness now that I know of a situation where the father of a young daughter lost his wife. He married again—a young woman—and he and his new wife are looking after the daughter as their own. The daughter is a terrific young girl and the mother and the father are terrific people. To say by law that they are not immediate family members does not sit comfortably with me. That is totally wrong and I want this bill to go to the select committee so that that issue on its own can be addressed because if that is the way this country is going then it is going the wrong way. 
Chris Auchinvole 
: That’s right! 
PETER BROWN 
: Well I’m glad the member over there is awake; I thought he was snoozing. I ask him to help me get this right because although there is some good this bill will do we are not going into this sort of garbage. New Zealand First will support this bill going to the select committee but we will be looking to fine-tune some of the detail. Thank you. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 The world of Maori is rich with metaphor and allusion as to the connections between birth and death and everything in between. We have many ways of saying “As one day ends another one starts”: Ka to he ra ka rere he ra—“When a sun sets another rises”. Although this is literally applied to the setting of the sun and the rising of the moon it also refers to the cycles of life. And then of course there is a more familiar whakatauaki: “Hinga mai ra he tete kura ara mai ra he tete kura”—“As a dead frond falls off the fern a young shoot uncoils.” This is taken to mean in Maori: “As one chief falls another rises.” 
As we come then to the Births Deaths Marriages and Relationships Registration Amendment Bill it makes perfect sense to us the Maori Party to be discussing it in the context of cycles of life and the interconnectedness of people land and ancestors. These matters of life and heritage of mana tupuna and of whakapapa are utterly central to any understanding of what it is to be Maori. 
 Our identity in 2007 is intimately and regularly connected through to those from whom we are descended and with that our obligations to those who come after us. Our people treasure the capacity to recite whakapapa genealogy tracing descent from Te Kore te Po and eventually through to Ki Te Ao Marama. 
In such a world view issues of identity are incredibly complex and it is debatable whether any legislation will be able to deal adequately with the delicate nature of real-life situations. Take for example the broadened powers for the Registrar-General to obtain evidence that a registrable event has occurred and that accuracy must be verified. 
In the situation of birth the bill stipulates in the new section 9 that both parents must notify a birth unless there are exemptions. These exemptions include that the other parent is unavailable or that requiring the other parent to sign the register would cause unwarranted distress. Unwarranted distress is an interesting concept. What sort of unwarranted distress could one imagine a child who does not know one of his or her birth parents goes through? How does one weigh up whether the unwarranted distress of getting an unwilling parent to sign a form is worth incurring if it prevents the unwarranted distress of a child who believes he or she is parentless? 
Another definition that stood out is that pertaining to the interpretation of a child having only one parent at law. This is further explained as a child being born as a result of an assisted reproduction procedure such as donor insemination. It becomes even more complicated if the other parent is deceased or missing which again justifies grounds for an exemption. Surely a deceased or missing parent does not cancel out that parent’s whakapapa or connection to his or her child nor the child’s need to name and claim that parent as his or her own. 
These are very complex issues. Exempting parents from the signing of birth registrations will in effect deny the child’s entitlement to his or her own whakapapa. Is this in the best interests of the child or is it in the best interests of the adults involved? Although we can appreciate the many variables introduced as exemptions in this bill we cannot allow discussion of this bill to take place without emphasising the sacred significance of one’s genealogical blueprint. 
Yet it is because of the unique status of one’s whakapapa that we will be supporting the bill through the first reading to enable privacy safeguards to be established which is the stated purpose of the bill. The rapidly increasing problem of identity crime identity fraud and identity theft is being demonstrated in the gaining of money goods drugs and other benefits through the use of false identity. A recent fraud report from KPMG describes identity crime as being one of the most pervasive developments occurring in Aotearoa in recent years. Indeed it is so pervasive that the security index survey commissioned by information technology company Unisys found that more than half of New Zealand respondents were most concerned about identity theft and about people getting hold of their credit card details and misusing them. 
Modern technology allows people to more easily create sophisticated alter identities faster and online. As was discussed last night for the Unsolicited Electronic Messages Bill it has become a simple matter to falsify documents over the phone or on the Internet. The Maori Party is always willing to upskill and share our new knowledge accordingly. In researching the background to this bill I uncovered a whole new phenomenon called phishing—with a “ph” not an “f”. Phishing websites trick people into giving out personal information. According to Visa the number of such websites has tripled over the past year. Phishing attempts—emails purporting to be from banks or auction sites in order to steal people’s identify information—are reaching about 15000 a month across the world. 
True to our number 8 wire mentality New Zealanders up and down the motu are doing what they can to avoid being victims of identity crime. According to Baycorp Advantage—now Veda Advantage—three in four people now take steps to protect themselves from identity crime and the ideas are nothing if not innovative. New Zealanders are locking their letterboxes using shredders to dismantle household paperwork before it is chucked in the bin or simply guarding their purses and wallets with more vigilance. In fact the sale of shredders by the Warehouse has been rising by 25 percent each year with the intensified need to chop precious papers into tiny flecks. 
The key issue behind identity fraud is of course the corruption and offensive nature of the crime. It is a crime that is extremely costly both in terms of invading one’s personal identity and on a purely financial level. In 2006 respondents to a KPMG fraud survey reported some 546 cases of fraud by loans gained through falsified identity. All in all these cases totalled a value of $2.8 million. 
I started this call tonight referring to the intrinsic value of identity as the jewel in the record of whakapapa. Conversely to abuse and misuse identity through fraud and identity crime is a breach against whakapapa. We absolutely support the need for full information to be available at the time of the registration of births deaths marriages and relationships. We believe it is critical that Maori are able to access information about whakapapa and would hope that in the bill the notion of whanau—in the sense Peter Brown mentioned—can sit alongside that of “immediate family” for this purpose. 
We also want to place on record the importance of being able to access such information for family historical research and genealogical study. We will therefore vote in support of this bill and in doing so hope that the very sensitive and complex issues we have raised about the tracing of whakapapa and the due access to records will be given sufficient attention before the bill returns to this House. Thank you. 
RUSSELL FAIRBROTHER (Labour) 
: 
 I too speak in relation to clause 10 of the Births Deaths Marriages and Relationships Registration Amendment Bill which deals with the need to register the names of both parents at birth. I take a slightly different angle from that of my friend who just spoke for the Maori Party Dr Sharples. I accept entirely what he said but my experience as a lawyer is dealing with adopted children and the parents of adopted children. Although the stress for a parent to adopt out a child is unremitting and never able to be fully eased the distress for a child who has been adopted is perhaps even more painful. 
I can remember making a journey on behalf of a client to a town a way from Napier with a client who had accessed her Department of Social Welfare file and ascertained as well as anyone could from that the name and the address of the mother. With this client we approached the mother. The physical characteristics were the same. We confronted this woman and my client said that she thought she was her daughter. The woman—and all characteristics indicated she was the mother but she had been in denial since the birth—said that she had never had any children. The impact on the adult child seeking to identify who her genealogical forebears were when the woman—who all objective evidence pointed to as the mother—stood in front of her and said that she had never had a child was totally devastating. So I accept that clause 10 of this bill which makes the parents of a child primarily responsible for registering the birth is very important. 
I take up the point made by Dr Sharples about what is unwarranted distress and I ask him just to read that against the provisions of subsection (2) of new section 9. The whole of clause 10—particularly new section 9—sets a very high standard. So any Family Court on appeal when considering what is undue distress would take a very high threshold to be satisfied there was unwarranted distress. We are not talking about embarrassment; we are not talking about inconvenience. We are talking about the absolute top element of distress having to be established. 
Debate interrupted. 
The House adjourned at 10 p.m.