Volume 696 Week 65 - Tuesday 18 February 2014Text is incorporated into the Bound VolumeVolume 696 Week 65 - Tuesday 18 February 2014[Sitting date: 18 February 2014. Volume:696;Page:15971. Text is incorporated into the Bound Volume.]Tuesday 18 February 2014Mr Speaker took the Chair at 2 p.m.Prayers.VisitorsRepublic of Korea—Speaker National AssemblyMr SPEAKER: Honourable members I have much pleasure in informing the House that a delegation from the National Assembly of the Republic of Korea led by His Excellency Speaker Kang Chang-hee is in the precincts of the Chamber. I am sure that members would wish that he be accorded a seat to the left of the Chair and that the delegation in the Speaker’s gallery be welcomed.His Excellency Kang Chang-hee accompanied by the Assistant Speaker Lindsay Tisch entered the Chamber and took a seat on the left of the Chair.MotionsCricket Triple Century—Brendon McCullumHon DAVID CUNLIFFE (Leader of the Opposition): I seek leave to move a motion without notice and without debate to congratulate Brendon McCullum on his achievements today.Mr SPEAKER: Leave is sought for that purpose. Is there any objection? There is none.Hon DAVID CUNLIFFE: I moveThat this House congratulate Brendon McCullum on being the first New Zealander to score a triple century in a test match. Well done Brendon and the Black Caps.Motion agreed to.Questions to MinistersJobs—Availability and Unemployment Rate1.Hon DAVID CUNLIFFE (Leader of the Opposition) to thePrime Minister: Does he stand by his statement that there are “plenty of jobs out there for people if they look really hard”?Rt Hon JOHN KEY (Prime Minister): Yes. For example there is a chief of staff position in the Leader of the Opposition’s office a senior adviser’s position in the same office and a senior Television New Zealand executive position which was formerly occupied by someone who wants to be a candidate of the Labour Party.Hon David Cunliffe: It is all in the name of good sport. More seriously will the Prime Minister assure all 125 skilled people losing jobs at Fitzroy Yachts and the 19 skilled tradesmen at engineering firm Tenix—both in New Plymouth—that they will find another job in New Plymouth “if they look really hard’?Rt Hon JOHN KEY: The first thing I would say is that those people live in a part of New Zealand with one of the strongest growth rates and one of the lowest unemployment rates. That is in principle because this Government is supportive of what is driving the local economy there—namely agriculture and also oil and gas exploration. What I would say to those people is that some of the policies that the Government has brought in over the course of the last 5 years like the 90-day probationary periods like reform to our planning process—all of these things willactually help support them to find employment. I say this last thing to those members because I and others have been to Fitzroy Yachts and it is simply that if they for one moment vote for Labour or the Greens they will be voting for no jobs and for a low-growth economy.Hon David Cunliffe: Will the 120 sacked mill workers at the Tachikawa Forest Products sawmill in Rotorua or the 200 workers sacked at Independent Fisheries in Christchurch be rehired in their community “if they look really hard”?Rt Hon JOHN KEY: People make decisions all the time on their employment but this is one thing that is important.Iain Lees-Galloway: They chose to! They chose to lose their jobs!Rt Hon JOHN KEY: Many of them probably will but firstly it is very important to understand the following. The labour markets are very dynamic in New Zealand. In any one 3-month period 100000 to 200000 jobs are lost and 100000 to 200000 jobs are created. Under a National-led Government actually there have been a huge number of jobs created which is why we have the 12th lowest unemployment rate out of 34 in the OECD. It is why our unemployment rate is falling and the unemployment rate in Australia is rising. And if anyone wants proof of what happens when you have a Labour-Greens Government and what it does to jobs—Grant Robertson: I raise a point of order Mr Speaker.Mr SPEAKER: Order! That answer is of sufficient length to address the question.Hon David Cunliffe: Given his answer are women not looking really hard for jobs when there are over 27000 more women unemployed now than when he became Prime Minister?Rt Hon JOHN KEY: Obviously the world has gone through dramatic change but actually New Zealand has come through that much stronger than others. As an example we now have 1500 people a week going off welfare into work. If the member wants to have a serious conversation about which policies will create jobs and which policies will lose the jobs then we are more than happy to have that because those nice people over there whom he wants to coalesce with hate jobs they hate work and they hate growth.Hon David Cunliffe: Is he taking economic advice from Colin Craig and are Māori not looking really hard for jobs as the Māori unemployment rate has increased by 3 percent to almost 13 percent since December 2008?Rt Hon JOHN KEY: Again I go through the issues that have taken place over the course of the last 5 or 6 years. What I do know is that when this Government came in there were predictions that unemployment would rise to over 10 percent. In fact that never occurred. Unemployment topped out at I think 7.2 or 7.3 percent. It has been falling. Under a National-led Government we have the lowest number of people going to Australia in a decade 1500 people a week are leaving welfare to work and 66000 jobs were created over the last 12 months. This Government has been pro-jobs and pro-growth and every time we have stood up to try to do something that would support the workers of New Zealand the Opposition has got up and rejected that. No one David is going to believe that you are pro-jobs because my friend you are not. You are losing people in your staff like no tomorrow and you are not pro-jobs.Hon David Cunliffe: Given that the Prime Minister campaigned on “Wave Goodbye to Higher Taxes”—not including GST—“Not Your Loved Ones.” what does he say to the families of the more than 200000 New Zealanders who have voted with their feet and left the country they love since he became Prime Minister? What does he say to those or is it just the “dynamic labour market” again?Rt Hon JOHN KEY: The first thing I say to them is that we now have the lowest number of people going to Australia in a decade. That is the first thing. The secondthing I say to them is very simple. I would say to them on behalf of the Labour Party that I apologise—Grant Robertson: I raise a point of order Mr Speaker. That is the third or fourth answer that the Prime Minister has given where he has purported to speak on behalf of the Labour Party or the Green Party. That is not within the Standing Orders and it will lead to disorder in the House if the Prime Minister continues to do that.Rt Hon JOHN KEY: Speaking to the point of order—Mr SPEAKER: No I do not need the help. The issue is to be fair that the question was quite a wide-ranging supplementary question which certainly had political connotations. It is going to invite a political answer back. Are there further supplementary questions?Hon Trevor Mallard: I raise a point of order Mr Speaker. I would just like to draw to your attention—[Interruption] That just exemplifies the point I was about to make. I had trouble hearing Mr Robertson’s point of order because the member sitting next to John Hayes and the member sitting next to Chris Auchinvole neither of whom I am really sure I know—Mr SPEAKER: Order! The valid part of the member’s point of order is that there is a high level of noise coming from various parts of this House. It is to be tempered.Infrastructure Investment Programme—National Infrastructure EvidenceBaseReport2.MAGGIE BARRY (National—North Shore) to theMinister of Finance: What progress is the Government making with its multibillion-dollar investment programme in modern infrastructure?Hon BILL ENGLISH (Minister of Finance): Despite the domestic recession and the global financial crisis over the last 5 years the Government has set out a multibillion-dollar investment programme in infrastructure for growth. This includes roads rail ultra-fast broadband rural broadband electricity transmission and rebuilding Christchurch. The programme has added almost $16 billion worth of infrastructure assets to the Government’s books over the past 3 years alone and will certainly assist a growing economy over the next 5 years.Maggie Barry: What recent reports has the Minister received providing a comprehensive analysis of the performance and the condition of New Zealand’s infrastructure networks?Hon BILL ENGLISH: The National Infrastructure Unit today issued its first evidence base report. Up until now policy making on infrastructure has lacked such evidence. Putting it together has involved the participation of Government agencies local government the private sector as well as users of infrastructure. It is the first comprehensive analysis of the condition of New Zealand’s infrastructure networks. In particular the evidence base concludes that good progress has been made in better planning of our national infrastructure investment. TheNational Infrastructure Evidence Base provides the essential information that will allow us to plan more accurately and to make sound investments in the future.Maggie Barry: What does theNational Infrastructure Evidence Base report say about the future challenges New Zealand faces in managing its infrastructure networks better?Hon BILL ENGLISH: The evidence base highlights the need to better understand what drives the future demand for infrastructure and also to look more closely at the options for meeting that demand in a growing economy. Of course some of these challenges relate to technological changes and others to demographic changes. Our traditional ways of spending more and building more infrastructure will need to change if we are going to manage demand effectively and invest carefully. With over $120billion worth of taxpayer infrastructure assets there is plenty of scope to manage existing infrastructure better as well as to improve decisions about new infrastructure.Maggie Barry: What have been some of the Government’s main infrastructure investments over the past few years?Hon BILL ENGLISH: The Government has added around $16 billion worth of infrastructure assets to its balance sheet in recent years. Just some examples are that around $950 million has been or will be spent on the electricity grid; $690 million has been invested in rolling out ultra-fast broadband; the Government is executing a $12 billion National Land Transport Programme the largest ever in New Zealand including very significant expenditure on public transport; around $1 billion has been allocated for the 21st Century School Building Programme in Christchurch; and much more.Point of Order—Tabling of DocumentsHon SHANE JONES (Labour): I raise a point of order Mr Speaker. I seek your forbearance. Last week I tabled a letter to the chairman of the Commerce Commission and after some confusion it was accepted by the House that the letter could be tabled. Later on in the afternoon the Clerk of the House as is her prerogative identified that the letter could not be released by her for fear of becoming embroiled in defamation proceedings. I seek some direction from you given that our ability to function effectively as parliamentarians traceable back to the Bill of Rights 1688 incorporated into British statutory law in 1689—I do not want to overstate the fact but it is a key feature of being a parliamentarian.The final point I would say is that although there is the prospect of defamation proceedings in the mind of the Clerk there is also the ability of parliamentarians to fulfil their obligations on behalf of the broader public interest. I have taken the time to study earlier pronouncements on the matter and indeed not unlike Gerry Brownlee I have come armed withErskine May. But the most important thing is that I feel this has a chilling effect on the ability of parliamentarians to speak truth in the face of adversity. If we do not back down to this type of threatening behaviour I fear it will be no different from the Mongrel Mob mayhem on Manchester Street.Hon GERRY BROWNLEE (Leader of the House): I think the Hon Shane Jones raises a very interesting point which is probably worth some discussion away from the floor of the House today. The point I think he makes is that if a member is tabling something as evidence of a comment that was made under the protection of the House for the rest of the House to be able to verify the reason for the utterance but that apparently cannot be tabled because it might lead to officers of the Parliament in fact being pursued through the courts then that is an unreasonable block on the freedoms that Parliament claims and that you on our behalf claim of the Crown. So I would suggest that this is a matter that is probably not going to be dealt with now but does need some discussion fairly urgently perhaps by the Standing Orders Committee in the next very short while.Mr SPEAKER: This is an important issue and both members raised this point because it has long-term ramifications. Can I refer members to Speaker’s ruling 146/1 and there members will note that as Speaker Wilson ruled in 2007 the general presumption is that documents tabled by leave will be made available on request the House having accepted them but it needs to be clearly understood that it is only where a document is published under the authority of the House that it is protected by parliamentary privilege in respect of any subsequent publication. The tabling of a document does not mean that the House has ordered or authorised the publication of that document. It simply allows for the information contained in the document to be conveyed to members of the House.Publication of the document to persons outside the House is done at the risk of the person who publishes it. In that respect “published” means delivering showing or disclosing it to any other person. Where there is risk of legal liability arising from publication the Clerk will permit members to have access to the copy provided to her but will not disclose it to anyone else. All requests are referred to the member who tabled the document. While this is not a regular occurrence the Clerk does have to be mindful of possible legal risk. The Clerk has informed me of her decision not to publicly release the document. The matter is therefore one where the member must take responsibility for the release of the document. It will be published by the Clerk only if the House were to order or authorise its publication.Rt Hon WINSTON PETERS (Leader—NZ First): I so move—that the House give approval for the publication.Mr SPEAKER: Leave is sought now for a letter that was tabled here last Thursday which at this stage has not been published—[Interruption] Yes I am just making sure that members understand. The leave is sought first for this motion to be moved. Is there any objection to that leave? There is not.Rt Hon WINSTON PETERS: I move That the House give permission for the Clerk of the House to publish to the media and outside interests—Hon Trevor Mallard: To direct—Rt Hon WINSTON PETERS: Pardon?Hon Trevor Mallard: “Direct” not “permission”.Mr SPEAKER: Yes. Can I just—[Interruption] “Authorise”.Rt Hon WINSTON PETERS: Well I will amend it slightly. I move That the House direct the Clerk of the House to distribute the document tabled in the name of Shane Jones about which this discussion—Mr SPEAKER: The question is that the motion be agreed to. Those of that opinion will say Aye—[Interruption] Are you just speaking Mr Brownlee before I put the motion?Hon GERRY BROWNLEE (Leader of the House): It is more of a point of order in fact. No disrespect to Mr Peters. I know what he is trying to achieve but I do not think that Parliament directs the Clerk. I think what happens is that Parliament authorises the publication and I think that would be a far better set of words in the motion. So I do not want to amend the motion. The member might like to consider putting it again. It is slightly semantic. Rather than us directing Parliament would be choosing to authorise publication.Hon Trevor Mallard: Can I speak to that?Mr SPEAKER: This is a very important matter that this House gets right so I am prepared to accept the Hon Trevor Mallard.Hon TREVOR MALLARD (Labour—Hutt South): The reason that I gave some advice to the member moving the motion to make it clear that it was a direction was that an authorisation would in fact still leave the Clerk with a discretion whether or not to make it available. My objective in suggesting that the word “direct’ be used is to make sure that the Clerk of the House is not herself subject to legal action.Mr SPEAKER: I have just sought some advice from the Clerk and the following points before I put the motion may be relevant. The allegations contained in the letter are potentially actionable and run the risk of being seen to in effect repeat statements made in the House by the member last Wednesday. This does have a chilling effect. Such a matter might usefully be considered by the Privileges Committee. However the motion I think now modified is That the House order the publication of the document.Hon SHANE JONES (Labour): I raise a point of order Mr Speaker. I want you to be utterly explicit that in passing this motion the doctrine of absolute privilege will now cover that letter.Mr SPEAKER: My understanding is that if the House is prepared to accept the motion then that is indeed the case.Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order Mr Speaker. The wording that I wish is That this House direct the Clerk of the House to publish the document in question—not authorise it to direct that she do so.Mr SPEAKER: Does not that then fit with the wording that I put here—that the House order the publication of the document?Hon John Banks: I raise a point of order Mr Speaker.Mr SPEAKER: Speaking to the point of order—and then I think we have had enough discussion. The House knows the seriousness of the situation. I will put the motion but before that I will hear from the Hon John Banks.Hon JOHN BANKS (Leader—ACT): A point of clarification. If we follow this track to its conclusion does this mean that this House is open to legal redress from parties outside the House and is not the simple remedy for Mr Jones to take the document out to the steps of Parliament and distribute it to the press if that is what he believes?Mr SPEAKER: Order! The first part of the question asked by the member—if Parliament so moves today then it itself is protected by parliamentary privilege. The motion isThat this House order the publication of the document tabled in the House by the Hon Shane Jones on Thursday 13 February 2014. Those of that opinion will say Aye to the contrary No. The Ayes have it. It will be published.Motion agreed to.Supermarkets—Relationship with Suppliers3.Hon SHANE JONES (Labour) to theMinister of Commerce: Was he made aware of any concerns regarding the behaviour of supermarkets towards suppliers prior to 12 February 2014?Hon CRAIG FOSS (Minister of Commerce): Yes but I was not aware of the specific behaviours raised by that member alleging blackmail extortion and retrospective payments in the New Zealand supermarket sector.Hon Shane Jones: Is he concerned that despite anonymity in this case in terms of an investigation by the Commerce Commission New Zealand - based suppliers are fearful that what they tell the regulator could be passed on to the Australian Woolworths supermarket chain and they could end up being blacklisted off Australian supermarket shelves?Hon CRAIG FOSS: I understand that the Commerce Commission itself has actually issued a press release reinforcing the confidential nature of any complaint. The Commerce Commission as part of its normal business is dealing with sensitive affairs at all times and as in that press release treats matters in confidence and very sensitively.Hon Shane Jones: Is the Minister prepared to release to the public what correspondence he has received in respect of this egregious behaviour by Australian-based supermarkets in the world of New Zealand commerce?Hon CRAIG FOSS: As I noted in the answer to the primary question in regard to the specific allegations of blackmail of extortion and of retrospective payments that the member made I am not aware of receiving any information along those lines.Hon Shane Jones: I raise a point of order Mr Speaker. I did not specify the language used in his response. I invited him to declare to the House that he would release correspondence he has received in respect of egregious supermarket behaviour.Mr SPEAKER: And as I understood the answer the Minister said—he may want to elaborate—that he was unaware of any correspondence to that effect. Does the Minister want to elaborate?Hon CRAIG FOSS: Correspondence that I have had since these allegations were raised I will be treating in confidence and sending to the Commerce Commission.Hon Shane Jones: Will the Minister support my call to broaden the terms of the Commerce Commission inquiry into excess power wielded by the supermarkets especially Australian over suppliers and customers?Hon CRAIG FOSS: This issue has been around for quite some time in regard to the supermarket sector. I note that the former Minister of Commerce the Hon Lianne Dalziel put her mind to this matter way back in 2008. It is ongoing. I think that it is right and appropriate that we wait for the formal proper process of the Commerce Commission to deliver its findings.Hon Shane Jones: Why is it his first instinct to back the Aussie-owned supermarket Countdown rather than to back New Zealand businesses and workers and what telephone lobbying has he received to that end?Hon CRAIG FOSS: I resent that accusation. I am not the one who made allegations of blackmail. If the member has allegations of blackmail he should go to the police. I have faith in the processes of this Government and of this Parliament which have been enduring for quite some time. I back competition in New Zealand which under the Commerce Act allows the best prices for New Zealand consumers to be found over time.Climate Change Policy—Greenhouse Gas Emissions and Renewable Energy4.Dr RUSSEL NORMAN (Co-Leader—Green) to thePrime Minister: Does he stand by all his Government’s policies?Rt Hon JOHN KEY (Prime Minister): Yes.Dr Russel Norman: Why does he stand by his climate change policies when official projections from his own Government show that under his climate change policies New Zealand’s net greenhouse gas emissions will rise 50 percent in the next decade?Rt Hon JOHN KEY: Because I believe them to be appropriate relative to what other countries in the world are doing.Dr Russel Norman: Does he consider that his Government’s climate policies are successful given that Ministry for the Environment projections show that our greenhouse emissions will increase 50 percent in the next decade?Rt Hon JOHN KEY: I believe them to be appropriate. I think it is worth noting for the House that New Zealand’s emissions profile is considerably different from most other countries in the world. Over half of our emissions come from agricultural emissions. The Government is part of a global greenhouse gas alliance that is investing considerably to try to find scientific solutions to that. In relation to other parts of the economy that emit greenhouse gases one of the benefits of having a flexible approach to electricity for instance is that it will allow fossil fuels which currently make up 25 percent of electricity generation in New Zealand to be phased out rather than locked in. I note that the member’s policy in relation to that would do exactly that—lock in a poor-performing high-emitting plant like Huntly over and above a new renewable energy that could be brought on stream.Dr Russel Norman: So with regard to the Government’s electricity policies is he aware that according to the Ministry of Business Innovation and Employment and hisown Government’s statistics—the forecast officially produced by his Government—his Government is not on target to meet its goal of 90 percent renewable generation by 2025?Rt Hon JOHN KEY: Well that is 11 years away. What I can say is that we have policies in place that are promoting renewable energies. We have also got significant policies to insulate homes. We have insulated over 320000 homes in the time that we have been in office including every State house that can be insulated. The Government has led the charge on this. I note that the Green Party wants to lock us into coal-fired power plants and I am surprised the Green Party wants to do that.Dr Russel Norman: Given that his Government’s climate policies are driving up New Zealand’s greenhouse gas emissions and his Government’s own projections show that they will not meet the 90 percent renewable electricity goals by 2025 will he support policies to turn this round including the Green Party’s solar homes policy which is designed to encourage the uptake of distributed renewable generation?Rt Hon JOHN KEY: Firstly I reject the premise of the member’s question. But in relation to solar energy I think there are a few things that would be important. The first is that the member actually needs to be upfront and honest with the New Zealand public and say that when there is a subsidy involved that involves one group of New Zealanders paying another. Secondly the member needs to read the Energy Efficiency and Conservation Authority website which makes it actually quite clear that “these systems will never pay for themselves”. He seems to also forget that solar energy is three times more expensive—Grant Robertson: So grumpy today!Rt Hon JOHN KEY: —than other renewable energies. Actually I am not grumpy. I hear your caucus did not go too well—Mr SPEAKER: Order!Dr Russel Norman: Why is he so opposed to the Green Party’s Solar Homes initiative which will cost the taxpayer virtually nothing and involves no subsidies from the taxpayer yet it will enable tens of thousands of ordinary Kiwi families to generate their own power reduce their power bills and be part of a clean energy future?Rt Hon JOHN KEY: The good news is that this afternoon the member and I have found something we can agree on. He does deal in virtual dollars and that is virtually going to be the cost of the solar energy. If we go and have a look at the Energy Efficiency and Conservation Authority website let me quote for you: “As you will generally be selling excess electricity for significantly less than the retail price most grid-connected systems will never pay for themselves let alone reduce your energy bills or make you money.”; and “Since our grid electricity is very low carbon switching to solar for some of your electricity use won’t reduce your carbon emissions.”; or this fromConsumer which said at length “These things don’t stack up.” The fastest way to increase New Zealand’s renewable energies from the ordinary impressive 75 percent for instance would be to reform the Resource Management Act and allow new hydro new wind and potentially new geothermal capabilities to come online. Those members oppose that. What they want to do is for other taxpayers to subsidise another group to pay for electricity that is three times more expensive than the existing electricity that we can bring on stream. No wonder they want to get together with the Labour Party.Dr Russel Norman: How does he consider that his climate change policies are successful when as a result of his policies New Zealand’s net greenhouse gas emissions according to the Ministry for the Environment will increase 50 percent in a decade? How is that a successful policy that he wants to keep continuing?Rt Hon JOHN KEY: What I said in answer to the question was that I believe that they are appropriate. But actually I appreciate the member raising this question in the House and I hope many New Zealanders will get to see this exchange today. I say that in all sincerity because the reason Dr Norman is raising this issue is he is making sure that New Zealanders are aware that under a Green-led Government there will be a significant increase in the emissions trading scheme and a significant increase in the cost to consumers. We have estimated that to be around about $500 a year per household. So New Zealanders who are looking at this exchange are under absolutely no illusion: if you want to do more in this space it will cost consumers and it will cost jobs. Now that we have sorted that out we can take that to the New Zealand public and see which one they want to vote for.Dr Russel Norman: What does the Prime Minister think will be the result if every country on the planet increases its net greenhouse gas emissions by 50 percent in the next decade which is what this Government is proposing? Does he understand that the result of that will be out of control human-caused climate change and that politicians like him will be responsible for the climate disaster that our children will inherit?Rt Hon JOHN KEY: Firstly I reject the premise of the question. Secondly let us make it quite clear: New Zealand has 0.2 percent of world emissions. So actually I do come from the school of thought that believes for New Zealand to make a difference it also requires those very big emitters around the world—China India the United States and others—to play their part. But as I said earlier—and here is where the rubber literally hits the road—the member is making it quite clear to New Zealanders today that if the Greens are part of a Labour Government there will be a significant increase in costs to consumers. That is fine to have as a policy but let us not shy away from this when we are on the campaign trail because Dr Norman what you are telling New Zealanders is that they will pay at least $500 a year—Mr SPEAKER: Order!Dr Russel Norman: The Prime Minister has disputed the claims so I seek leave to table the documents. There are two documents—Mr SPEAKER: Leave is sought to table documents. I want a description of the documents and the sources.Dr Russel Norman: The first document is the projections on not achieving the 90 percent renewable by 2025—the Ministry of Business Innovation and Employment paper—Mr SPEAKER: Order! That information is very easily available to members.Dr Russel Norman: Well apparently not to the Prime—Mr SPEAKER: Order!Dr Russel Norman: So the other disputed fact—Mr SPEAKER: Order! Can the member resume his seat. [Interruption] Order! If the member wants to seek leave to table a document he needs to rise to his feet and without adding any other words describe the document and then the source and I will consider whether it is worthy to put the leave to the House.Dr Russel Norman: I seek to leave—[Interruption]Mr SPEAKER: Order! And secondly any point of order will be heard in silence.Dr Russel Norman: I seek leave to table the table on page 60 of the Ministry for the Environment’s report—Mr SPEAKER: Order! I do not need to hear any more. Again that information is freely available.Question No. 1 to MinisterHon DAVID CUNLIFFE (Leader of the Opposition): I seek leave to table a data series from the Statistics New Zealand Infoshare series proving that—Mr SPEAKER: Order! Again—[Interruption] Order! The member again is attempting to abuse the privilege of seeking to table a document. New Zealand statistics are freely available. The point of tabling a document is not to further debate the issue; it is a matter of adding information that is valuable to members of the House.GRANT ROBERTSON (Labour—Wellington Central): I raise a point of order Mr Speaker. Earlier in this sitting session you gave a ruling that enabled members of the House to table a document where particularly their word had been questioned. Twice today we have seen—both with Dr Russel Norman and earlier on with David Cunliffe—the Prime Minister questioning the word of a member. The one way of dealing with that is for the member to be able to table a document that shows that what they were saying was true. You did say that there was going to be some licence to do that. Just because an item is in the public arena it does not mean that it does not meet your test.Hon GERRY BROWNLEE (Leader of the House): Mr Speaker I think you are on the right track with the way in which you have described these documents and have therefore taken the approach that has become common in the House over the last 5 years or so. If every time the Prime Minister disagrees with Mr Cunliffe it was seen as not taking him at his word or anything else then there would be no political debate. I think that there is a crossover here between two things. One is that the ability to disagree should prevail as opposed to having to agree for fear of hurt feelings on the part of the Hon David Cunliffe.Hon DAVID CUNLIFFE (Leader of the Opposition): Two points for your consideration Mr Speaker. The first is whether there is a difference in your ruling between a document that has previously been published and something that is in the public domain—the two being different. In this case it is a data series that although contained on the website has had to be extracted for presentation to the House. That is the first question. Secondly I just draw your attention to the fact that you have previously allowed the Prime Minister to table documentary evidence to substantiate an exchange of statistics between us and I just seek the opportunity to do the same in reverse.Mr SPEAKER: I am unaware of the last occasion that the member refers to. In seeking to table documentation if it is some obscure documentation that may well have been published but is not easy for members to find then I think there are occasions when such information is worth putting to the House. I want to also comment on the point raised by Grant Robertson. There will be on occasions an opportunity to table a document when it has become the source of an argument between various politicians. But at most question times one side will lead with one argument and the other side will lead with an alternative argument. That is the nature of political debate. To move this matter forward on this particular occasion I will allow the member to seek his leave and the House will decide. The Hon David Cunliffe is seeking to table an extended list of statistics. Could he just briefly summarise exactly what he is seeking to table?Hon DAVID CUNLIFFE (Leader of the Opposition): The statistics from Statistics New Zealand Infoshare indicate that the lowest level of trans-Tasman migration—Mr SPEAKER: Order! [Interruption] Order! That is enough of an explanation. I have said that leave will be put for that purpose. Is there any objection to that information being tabled? There is.National Certificate of Educational Achievement—2013 Results andAchievement Rate5.TIM MACINDOE (National—Hamilton West) to theMinister of Education: What recent announcement has she made on the increase in students achieving NCEA level 2?Hon HEKIA PARATA (Minister of Education): Yesterday I was pleased to announce the provisional results for 2013 and that the number of students leaving school with a National Certificate of Educational Achievement (NCEA) level 2 qualification has seen a significant lift across the board in 2013. We had a 2.5 percent overall increase in the number of students leaving school with at least NCEA level 2. That is an increase of over 10 percentage points since 2008. What does this mean in real terms? Every year we have around 60000 students leaving school. In 2009 just over 39000 left school with NCEA level 2. Last year it was 46000. In this last year this was an increase of around 1500 school-leavers which is the equivalent for instance of the total population of Bulls Coromandel or Kawakawa or the combined rolls of McAuley High School Henderson High School and Heretaunga College. Those students their teachers and school-leavers deserve to be congratulated on achieving these outstanding results.Tim Macindoe: What was the lift in achievement for Māori and Pasifika students?Hon HEKIA PARATA: Just this year we have seen a lift of 4 percentage points and 7 percentage points amongst Māori and Pasifika students respectively. That means 1000 more Māori and Pasifika students left school with NCEA level 2 in 2013. In 2008 about half of our Pasifika students were getting NCEA level 2 and now almost three-quarters are leaving school with NCEA level 2. In 2008 less than half of our Māori students were getting NCEA level 2 and now it is getting closer to two-thirds. We have maintained the growth in achievement and improved it year on year. What teachers do in the classroom makes a difference and this Government is backing them to win.Tim Macindoe: What approach is the Government taking to lift achievement for all students?Hon HEKIA PARATA: Over the last 5 years we have focused on collecting data so we can see where we need to target resources. Vote Education has gone up to its highest ever at $9.7 billion. We have been able to identify which students need what kind of support through programmes such as Youth Guarantee trades academies Achievement 2013-17 Positive Behaviour for Learning Pasifika Power Up and then to work with particular schools and their communities. We are focused on 85 percent of all 18-year-olds achieving NCEA level 2 or an equivalent in 2017. Although these results are great it is important that now together with parents schools and local communities we all keep up this momentum so that even more young people can achieve educational success.Paid Parental Leave—Potential Changes6.SUE MORONEY (Labour) to thePrime Minister: Does he stand by his statement in regard to proposals to extend paid parental leave “It’s an important time they bond with their children. Everyone acknowledges having more time with their infants would be an important thing to support”?Rt Hon JOHN KEY (Prime Minister): Yes I do stand by that statement. I also went on to say that the Government’s No. 1 priority was getting the books back to surplus because that provides greater strength for families overall. It is not just paid parental leave we support it is Working for Families access to early childhood education and many other initiatives. At the time the member wanted a substantial increase in paid parental leave when at that point the Budget deficit was $9.2 billion.Sue Moroney: Will his party support the second reading of the Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill in my name or will he wait until the third reading to use a financial veto?Rt Hon JOHN KEY: The member will need to wait and see.Sue Moroney: Does he stand by his statement: “I’m not saying it’s not important and I’m not saying there couldn’t be some modest expansion.”; if so could he explain to Kiwi parents exactly what he is saying about paid parental leave?Rt Hon JOHN KEY: With pleasure I am happy to say that to New Zealanders. Currently for the 14 weeks of paid parental leave the Government contribution is $176 million per year. To increase that to 26 weeks would cost an additional $130 million to $140 million a year. Only about 40 percent of New Zealanders get paid parental leave. To pay for this it would effectively require we think along with the other policies that the Labour Party announced an increase in taxes as we saw in the weekend. Actually I do not think New Zealanders do support that in isolation. The Government will have its own contribution over time to this debate but it will be done in a way that is responsible affordable and is set against the other priorities like more cancer drugs more nurses and more support for many other areas in the community.Sue Moroney: What assurance can he give to women like Nicola—whom I met with recently in Hamilton and whose twins are due on 9 July this year—that they can plan for extended paid parental leave for the benefit of their children?Rt Hon JOHN KEY: I can guarantee Nicola that there will be a scheme of 14 weeks or more depending on the outcome of the election and depending on any announcements that we might make. But I can also say this to Nicola and that is—Hon Member: Oh June now.Hon David Cunliffe: There’s a Freudian slip. It’s embarrassing. Never waste a Royal visit.Rt Hon JOHN KEY: Well to be perfectly frank if you want to have it next month I am more than happy to have it.Sue Moroney: To the Prime Minister when he is ready—when he is ready Mr Speaker. What proportion of the additional $1 billion that his Government intends to spend in this year’s Budget is he then prepared to put toward important initiatives for families like extending paid parental leave?Rt Hon JOHN KEY: In the fullness of time the Minister of Finance will read the Budget and New Zealanders will get a sense of where that allocation goes. But the member actually raises a very interesting point. The new Budget spend under this Government for four of the five Budgets has for all intents and purposes been zero. Last year the Minister of Finance was in a position to spend an additional $1 billion. When the Labour Party made the announcements around paid parental leave it agreed that it would commit—Grant Robertson: What responsibility would he have for that?Rt Hon JOHN KEY: —well it is actually germane to the question that she asked—a further $572 million annually. The very point is that if the member is going to be part of a Government that would be fiscally responsible is she really saying that she is going to have all total expenditure at about $450 million? Every New Zealander knows—Sue Moroney: No.Rt Hon JOHN KEY: Yes exactly—no. So the very point that the Labour Party is making is that it is going to spend a lot more money which means taxes are going up which means borrowing is going up which means interest rates—Mr SPEAKER: Order!Grandparents and Other Kin Carers—Financial SupportHon PHIL HEATLEY (National—Whangarei): My question is to the Minister for Social Development and asks what reports has she received about the support the Government is providing to grandparents—[Interruption]Mr SPEAKER: Order! I am going to have to—[Interruption] Order! We need a more sensible and rational approach to announcing an election date. Can we have question No. 7 from the Hon Phil Heatley please.Hon PHIL HEATLEY: Thank you Mr Speaker. My question is to the Minister for Social Development—Hon John Banks: I raise a point of order Mr Speaker. It would be helpful if you could tell Robertson and his crowd over there to shut up because I cannot hear the member Phil Heatley behind me.Mr SPEAKER: The problem on this occasion is that there is a conversation going across both sides of the House. If both members could cease we could then hear the question from the Hon Phil Heatley.7.Hon PHIL HEATLEY (National—Whangarei) to theMinister for Social Development: What reports has she received about the support the Government is providing to grandparents and other family members raising children?Hon PAULA BENNETT (Minister for Social Development): Last year I announced that the Government was providing new financial support to grandparents and wider family members raising children whose parents cannot look after them. I am very pleased to say that I have received a report that shows that nearly 6000 children are already benefiting from the new payments which are worth almost $3 million. One of the payments—the start of the year payment worth up to $550—provides a bit of extra help for items like school uniforms and other costs at the beginning of a school year.Hon Phil Heatley: What other support can these carers access?Hon PAULA BENNETT: Family caregivers do an amazing job by taking on these children and providing them with stability and care which have often been lacking in their lives. It can be expensive to take on a child at first so in addition to the start of the year payment carers receiving the unsupported child’s benefit or orphans benefit can also get a one-off grant of $350 when they first take the child into their home.Hon Phil Heatley: Why is it important to support grandparents and other relatives raising children?Hon PAULA BENNETT: Around 12400 children some of whom have been neglected or abused by their parents are cared for by grandparents and wider family members. These children often need more help than most to reach their potential. I would also like to add that nominations for the start-up payment for the beginning of the year close at the end of the month so if members would like to let any constituents know if they are eligible to apply we would welcome receiving applications from them.Veterans—Pension Applications and Support8.ANDREW WILLIAMS (NZ First) to theMinister of Veterans’ Affairs: Are there any areas where he believes war veterans are not receiving adequate support for their service to our country?Hon MICHAEL WOODHOUSE (Minister of Veterans’ Affairs): Yes. Although I think that veterans are generally very well supported the Law Commission review identified a number of improvements to the level of that support which is why this Government agreed a $60 million package to better support veterans including a complete rewrite of the 60-year-old War Pensions Act. I was pleased to introduce the Veterans’ Support Bill into the House last year. It is before the Social ServicesCommittee and I look forward to its report. I should also add that the Government increased war pensions and surviving spouse pensions by 5 percent over and above the rate of inflation and I think that is a tangible sign of the extra support that this Government is providing.Andrew Williams: Why have almost 7000 veterans’ applications—nearly half of all applications—been declined in the last 3 years often on the grounds that the veterans’ medical records were either incomplete or had been lost or misplaced?Hon MICHAEL WOODHOUSE: The member is referring to a reply to an Official Information Act request provided to him in a letter dated 15 November 2013. I should point out to the member that “Information is unable to be provided in relation to why claims have been declined.” The Secretary for War Pensions then very helpfully provided data on all claims accepted and declined over a 4-year period. That was probably not helpful in understanding the reasons for them nor whether this indicated the number of claimants who were declined. I would be very happy to work with the member to further explain what that table meant.Andrew Williams: Does the Minister know that in 2008 at the Tribute 08 Government apology to Viet Nam veterans the then Chief of Defence Force Jerry Mateparae assured veterans that their medical applications would be given the benefit of the doubt if their medical records were poorly maintained or misplaced by the New Zealand Defence Force and why is this not happening?Hon MICHAEL WOODHOUSE: Yes I am. I am very well aware of the speech that the then Chief of Defence Force gave to Viet Nam veterans in 2008 and of the commitment made. To the degree that there are some service records including medical records missing or incomplete where those claims are made on the basis of the presumptive list of conditions connected with the service the absence of any medical record would not be an impediment to the acceptance of the claim. But I do accept that there have been some tensions around whether that particular commitment has been met and I am very happy to work with the member on any individual cases that he has recognising that I as Minister cannot interfere with the decision-making process.Andrew Williams: In the Minister’s professional opinion having previously also worked in the health sector does he consider the treatment of nuclear veterans and their children as adequate duty of care?Hon MICHAEL WOODHOUSE: Well I do not think my background as a health service manager provides any greater insight into that but I am satisfied that the treatment of nuclear veterans is both evidence-based and presumptive in so far as certain conditions are automatically accepted for those people who were for example involved in Mururoa or Operation Grapple.Andrew Williams: How does he respond to the fact that some veterans at the Mosgiel RSA in his own area of Dunedin can afford to eat only every second day and that the RSA is providing food parcels to those veterans?Hon MICHAEL WOODHOUSE: I would be concerned to the extent that any veteran was not receiving the entitlements that were available to them and that they were eligible for. So if there are any specific concerns I would be very happy to hear them.Public Transport Auckland—City Rail Link Commencement Date9.DARIEN FENTON (Labour) to theMinister of Transport: Why is the construction of the City Rail Link only beginning in 2020?Hon GERRY BROWNLEE (Minister of Transport): That is the Government’s preferred time line. The proposed construction date has been set from our perspective at 2020 even though analysis suggests that this is 5 years before it is required to meetdemand generated from employment and passenger patronage. We are moving forward to that date because we believe in the future of Auckland as a powerhouse of our economy.Darien Fenton: What does he say to Precinct Properties the owner of the Downtown Shopping Centre which is offering to dig part of the tunnel itself so it can get started on the redevelopment of its site and the owners of the $300 million Elliot Tower project which would like to start by 2016 but because of his playing politics with Auckland’s future will be held up by 5 years?Hon GERRY BROWNLEE: There are a couple of points. Firstly there is nothing to stop the Downtown project progressing as the owners have suggested. There is no particular involvement of the rail loop with the other project that is mentioned there. In any event it would be odd for the Government to commit to a $3 billion project for a $200 million project. I think the other point is that this was well signalled in June of last year and there were criteria laid down that were perfectly reasonable. The City Centre Future Access Study suggested that there would be 46 percent growth in employment and up to 20 million passenger movements by 2020. The most recent information we have is that neither of those statistics is likely to be anywhere near achieved and nor are the much lesser and more generous criteria laid down by the Prime Minister—those being 25 percent growth in employment in the central business district and 20 million passenger movements as a trend. Neither of those is happening.Phil Twyford: Why did he deliberately pick the trigger of rail passenger trips exceeding 20 million for the release of funding when he knew full well that rail passenger trips are not projected to reach that target even by 2020 and is this just another example of playing politics with the prosperity and growth of Auckland?Hon GERRY BROWNLEE: No the figure was in fact from the City Centre Future Access Study not cooked up by the Government. We are not playing politics. We have made it clear that we would like to fund the project from 2020. If those two criteria can be met—two criteria that are about half of what the access study claimed would happen—then it could come forward. But there is no trend in the December 2013 analysis to suggest that the time line of 2020 is anything other than reasonable.Darien Fenton: Is he aware that by next year the Britomart station will be at capacity for train movements and that by 2020 morning traffic in Auckland will be so congested that it will have slowed to 7 kilometres per hour?Hon GERRY BROWNLEE: There are two things. Firstly there is the commitment that the Government has made to electrification: $1.6 billion including new electric trains. But once you have got those trains and once you have got the electrified system what is really important to make it work is to have people on it. Although the train stations might be chocker with trains if people are not using them there is little point in investing further.Phil Twyford: Was the Government’s backflip on the City Rail Link a genuine commitment to the project—[Interruption]Mr SPEAKER: Order! Can I ask the member to start again.Phil Twyford: Was the Government’s backflip on the City Rail Link a genuine commitment to the project or an act of political expediency and given that bringing the start date forward to 2015-16 would not cost the taxpayer or the ratepayer an extra cent does his refusal to bring it forward not indicate the latter?Hon GERRY BROWNLEE: The Government has not done a backflip on the City Rail Link. What we have said is that we will fund it from 2020 or sooner if the criteria set down by the Government—much more generous criteria and much more easily achieved than the City Centre Future Access Study suggested—are met. Then it would be brought forward.Criminal History Employment Checks—Reciprocal Information-sharing with Australia10.SCOTT SIMPSON (National—Coromandel) to theMinister of Justice: What progress has been made on criminal history sharing for employment vetting between Australia and New Zealand?Hon JUDITH COLLINS (Minister of Justice): The Attorney-General of Australia Senator George Brandis QC and I have jointly announced the expansion of the successful pilot on sharing criminal history information for the purposes of employment vetting. This means that in future it will be easier for eligible employers in Australia and New Zealand to be able to check criminal backgrounds of potential employees particularly where they are working with children or vulnerable people. With the ease of travel between our two countries it is vital to have systems in place to protect our communities from people who may pose such a risk. The expansion of the trial means all states of Australia will in future participate in the scheme.Scott Simpson: How do employers access that information?Hon JUDITH COLLINS: Eligible organisations are those approved by the police and registered to use the vetting service. They need to establish that their staff care for children older people people with special needs or other vulnerable persons. Applications will be made by the approved agency to the police with the consent of the potential employee for their criminal history. There are approximately 8000 approved agencies in New Zealand such as the Teachers Council schools universities the Ministry of Health and Immigration New Zealand. This is an important scheme to support the free movement of people between two countries while continuing to reduce harm from criminal activity.Andrew Little: What provision has been made in the arrangements with Australia to safeguard the rights of New Zealanders both here and in Australia under the Criminal Records (Clean Slate) Act 2004?Hon JUDITH COLLINS: The clean slate law will apply to potential employees’ histories so that people will be protected.Internal Affairs Minister—Information Security11.Hon TREVOR MALLARD (Labour—Hutt South) to theMinister of Internal Affairs: Does he stand by his answers to all supplementary questions to Oral Questions in the House this year; if so why?Hon PETER DUNNE (Minister of Internal Affairs): Yes because they accord with my ministerial responsibility.Hon Trevor Mallard: Does he accept he has responsibility in this House for the security of Government information; if so will he now make it clear that he is a suitable person for holding that role by stating that he did not make the draft Kitteridge report on the Government Communications Security Bureau (GCSB) available to a Fairfax journalist?Mr SPEAKER: The Hon Peter Dunne—the first part of that question is acceptable.Hon PETER DUNNE: I have answered that question—Hon Trevor Mallard: I raise a point of order Mr Speaker. I think you attempted to edit my question.Mr SPEAKER: I have.Hon Trevor Mallard: Can you—and Mr Speaker—Mr SPEAKER: I have. I can help the member. There were two parts to that supplementary question. The second part of the supplementary question is out of order. The first part of the supplementary question is in order and that one can be answered.Hon Trevor Mallard: Point of order Mr Speaker.Mr SPEAKER: Does the member wish to proceed?Hon Trevor Mallard: I raise a point of order Mr Speaker. I want to refer you to Speaker’s ruling 155/3 which relates to the Prime Minister’s requirements for the suitability of Ministers to hold roles. I am not asking the member whether he leaked the document; what I am asking him is to demonstrate—as is allowed under Speaker’s ruling 155/3—that he is a suitable person for holding a role as a Minister in this House. The question was very—Mr SPEAKER: Order! I can help the member. If the member now rephrases both parts of his question it will be over to the Minister which one he will address. But if the member rephrases the second part of his supplementary question in line with the words he just used that will be in order.Hon Trevor Mallard: Is he prepared to demonstrate to the House today that he is a suitable person for holding the role of security of Government information by directly denying that he made the draft Kitteridge report on the GCSB available to a Fairfax journalist?Mr SPEAKER: The difficulty we have now got to is that the member is not repeating the first part of the question he raised.Hon Gerry Brownlee: I raise a point of order Mr Speaker. Interestingly I think that the first part of the question that the Hon Trevor Mallard asked could stand but then he deviated and was in contravention of Standing Order 377(1)(b). There is clearly a breach of that particular Standing Order.Hon Trevor Mallard: The question was very clear and was whether he is prepared to demonstrate that he is a suitable person by doing X. I have not asked him whether or not he leaked the report on the GCSB to a Fairfax reporter; I am asking him to demonstrate his suitability by denying that in the House. Clearly any person who was a Minister and leaked that report would not be suitable.Hon Gerry Brownlee: If he had put a full stop after “demonstrate” or “demonstrate to the House” that would be fine but to go on and make a requirement that is by any reasonable assessment an imputation an inference or even an argument and quite possibly a discreditable reference it then falls outside the Standing Orders.Hon David Parker: If that was the concern of the Minister in response to a question he would just deny the allegation. It is very proper for the Opposition to try to highlight matters that are disreputable on the part of Ministers. This is an example where we are trying to do that and that is quite within the Standing Orders.Hon Gerry Brownlee: If that were the case then any old question could be asked any old time. There would be no need to have Standing Order 377 “Content of questions”.Mr SPEAKER: I am going to allow the member an opportunity to repeat his question as he first asked it because the question has changed quite substantially. The member has every right to ask the current Minister of Internal Affairs something for which he has been responsible since he was appointed as Minister of Internal Affairs and if the question is along those lines I will rule it in order. If the member then tries to tease it back to occurrences that occurred some time before the Minister was appointed as the Minister of Internal Affairs I will be inclined to rule it out of order and that will be the end of the matter.Hon Trevor Mallard: Is he prepared in the House today to demonstrate today that he is a suitable person to have custody of public information by denying that he made that document available to a Fairfax reporter?Mr SPEAKER: To progress the matter the Minister can answer the question up until the final addition of that information.Hon PETER DUNNE: That question has been asked in a couple of forms on 30 January and 11 February. I stand by the answers given on both of those occasions.Rt Hon Winston Peters: I raise a point of order Mr Speaker. This is a matter that has been well traversed by a select committee and by inquiries inside and outside this House. With respect if the Minister is being asked to demonstrate a present action that is required of him now—a certain fact that relates to his qualifications for the job—that is still a present matter that the House would like to be assured of. It is not therefore a past matter which is the qualification that Mr Brownlee tried to put on it. Frankly if we cannot hear the truth behind this then this is no longer a House of Parliament that gets to the bottom of the matter.Hon Gerry Brownlee: The problem with what Mr Peters is saying is that the question implicitly makes an allegation. Otherwise there would be no need for the use of the word “deny”. That is not within the Standing Orders.Mr SPEAKER: I appreciate the point that the member Mr Peters is raising. My job is to adhere to the Standing Orders. Therefore this is question time where Ministers can be asked questions where they have ministerial responsibility. What the member is attempting to do is devise a system whereby he asks the Minister to deny an action that occurred prior to him being a Minister. The Standing Orders do not allow that to happen in this House.Chris Hipkins: I raise a point of order Mr Speaker. The issue that I want to raise with you goes to the issues around the character of Ministers and whether or not actions prior to their becoming Ministers can be questioned in relation to their character and suitability to hold the roles. I can recall examples—for example Ms Collins questioned previous Ministers in the Labour Government over actions that they took even prior to their being members of Parliament and the implication that that had for their current ministerial roles. What Mr Dunne is being questioned on is something that related to his conduct prior to his holding the current ministerial role but that is no different to Ms Collins’ questions to someone who was not even a member of Parliament when they did the things that she was questioning them on.Hon Trevor Mallard: I would like to draw your attention back to a question earlier today where you allowed Mr Williams to ask a question of the Hon Mr Woodhouse that related to his experience prior to being a member of Parliament and you allowed Mr Woodhouse to answer it. What I am asking for is some consistency.Mr SPEAKER: Yes but I do recall the answer from Mr Woodhouse was that he replied to the effect that that was not relevant to the answer and then proceeded to answer the question. The Minister has now answered the question. If the member still has a further supplementary question I will listen to it. But—Hon David Parker: You wouldn’t let him answer the second part.Mr SPEAKER: Order! I appreciate the assistance from the Hon David Parker but the Minister has answered that question. Does the member have a further supplementary question?Hon Trevor Mallard: I certainly do. In light of his answers last week has he given any assurance to the Prime Minister on the question of his suitability to hold his current role with regard to the security of Government information other than through the media in June last year?Hon PETER DUNNE: Prior to taking up this appointment which actually pre-dates the period of ministerial responsibility the Prime Minister and I discussed the role and what it entailed and the outcome of that was that he offered me the job.Rt Hon John Key: Can the Minister confirm that the actual test of whether someone serves as a Minister is whether they enjoy the confidence of the Prime Minister of theday and can the member confirm whether he believes he has the full confidence of the Prime Minister of the day and can the Minister confirm that—Mr SPEAKER: Order! We have now had—[Interruption] I will hear from the right honourable—[Interruption] Order!Rt Hon Winston Peters: I raise a point of order Mr Speaker. The first question is of the Prime Minister not the Minister—[Interruption] No even though he sought to put it to Mr Dunne it is only the Prime Minister that has the confidence and the second question should have been ruled out because it was a second question.Mr SPEAKER: If anybody wants to ask a supplementary question they should ask a single supplementary question. In my opinion the first supplementary question asked by the Prime Minister was completely in order and the Minister can answer it.Hon Trevor Mallard: In order to help the Prime Minister I seek leave of the House for the full supplementary question of the Prime Minister to be answered by Mr Dunne.Mr SPEAKER: Order! Members must still abide by the Standing Orders.Hon PETER DUNNE: I can only assume that because the Prime Minister offered to appoint me as the Minister of Internal Affairs he has full confidence in my ability to do the job and I intend to reflect that confidence in the way that I carry out this role.Hon Trevor Mallard: Further to the supplementary question asked by the Prime Minister and the Minister’s answer did the Prime Minister then ask him whether he leaked the report?Hon PETER DUNNE: That question was put to the Prime Minister last week and I refer the member to the answer he gave which I am not going to disagree with.Mr SPEAKER: Supplementary—[Interruption] Order! I need to hear the supplementary question.Hon Trevor Mallard: Further to the Prime Minister’s question and the supplementary answer did the Minister give the Prime Minister any information relating to the making available of the Kitteridge report to a reporter other than through the media?Mr SPEAKER: I do not accept that that question has any ministerial responsibility in respect of the current Minister of Internal Affairs.Hon Trevor Mallard: I raise a point of order Mr Speaker. That question has more ministerial responsibility in it than the one that you allowed from the Prime Minister which went to the Prime Minister’s responsibilities.Mr SPEAKER: I will allow the member rather than forfeiting a question to have an attempt at asking a question in line with the current ministerial responsibility of the Minister.Hon David Parker: I raise a point of order Mr Speaker. I am confused—[Interruption]Mr SPEAKER: Order! It is a point of order.Hon David Parker: I am confused as to how a Speaker can find it in order for the Prime Minister to ask a Minister whether he has his confidence but then an Opposition member is not able to ask a question of whether the Prime Minister checked whether the Minister leaked a report before he said he was confident in him.Mr SPEAKER: I do not need assistance. I am here to help the member’s confusion. My duty is to instantly judge how appropriate the question is to the Minister’s current responsibility. I have invited—[Interruption] Order! I have invited the member to attempt to rephrase his question. Otherwise we will simply move on in this matter.Hon Trevor Mallard: Further to the Prime Minister’s question which indicated that he has confidence in Mr Dunne was one of the factors in building that confidence his making clear to the Prime Minister that he did not leak the Kitteridge report to a Fairfax reporter?Hon PETER DUNNE: The discussion we had was wide ranging and dealt with matters relating to the internal affairs portfolio to which the Prime Minister subsequently appointed me.Student Allowances—Changes and Impact on Postgraduate EnrolmentsHOLLY WALKER (Green): My question is to the Minister for Tertiary Education Skills and Employment—[Interruption]Mr SPEAKER: Order! I invite the member to start the question again.12.HOLLY WALKER (Green) to theMinister for Tertiary Education Skills and Employment: Does he share the concerns of the New Zealand Psychological Society and the New Zealand College of Clinical Psychologists that his decision to cut postgraduate student allowances could significantly impact the future psychology workforce in New Zealand?Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment): No for a couple of reasons. Firstly postgraduate psychology students are able to borrow interest-free from the student loan scheme which remains one of the most generous schemes in the world. Secondly like all postgraduate students psychology students earn considerably more once they stop studying and go into the workforce than students who graduate with lower-level qualifications. They are therefore in a much better position to pay back an interest-free student loan.Holly Walker: How are final-year psychology students expected to support themselves without a student allowance when they have to work 32 hours per week in unpaid internships in addition to a full course load?Hon STEVEN JOYCE: I believe that I answered that question in my primary answer by saying that they could borrow from the student loan scheme which provides them with a similar level of living costs to what they would have received from a student allowance. They will have to make a payment back in due course but of course it is interest-free and taxpayers write off about 40 percent of the value of that loan.Holly Walker: How can psychology students expect greater earning power when they have to drop out of their courses during their studies due to the cuts that he has made and is New Zealand facing a shortage of clinical psychologists because of these cuts given that a new survey of undergraduate psychology students found that 75 percent were less likely to continue into postgraduate study?Hon STEVEN JOYCE: In answer to the first part of your question no because—as I have pointed out to the member twice now I think—they have the opportunity to borrow from the student loan scheme so they do not have to drop out. Most Master’s degree - level students are actually earning on average around 75 percent more than the median wage 5 years after they leave university so it is a bit hard to expect those who do not attend university to pay for their allowances at that time. Secondly no I do not believe there will be a shortage. The indications we have had so far in the period this policy has been in place are that there has been no reduction in postgraduate study particularly at Master’s degree level and doctorate level.Holly Walker: Given that demand for clinical psychologists already outstrips supply and psychology remains on New Zealand’s long-term skills shortage list and professional bodies are now worried that these allowance cuts will gut their profession why is he stubbornly refusing to reconsider his short-sighted decision to cut postgraduate student allowances?Hon STEVEN JOYCE: If we strip away the hyperbole from that question the simple reality is that I have had a number of bits of correspondence from the New Zealand Psychological Society and so on and yes they do not like the policy becausethey would rather that their students managed to keep having free student allowances. Well the cost of student allowances was going up dramatically. In 2007-08 it was $385 million per year and in 2010-11 it was $620 million a year as a result of policies under the Labour-Greens Government of that time. It was unaffordable. It remains unaffordable. Postgraduate students get to borrow interest-free from the student loan scheme. I think that most New Zealanders see that as very fair. I appreciate that Mr Grant Robertson does not but he has not seen a student he does not want to throw more money at.Holly Walker: I seek leave to table research by the New Zealand Psychological Society and the New Zealand College of Clinical Psychologists on the effects of the student allowance cuts on their profession.Mr SPEAKER: Leave is sought to table research done by the society. Is there any objection to that research being tabled? There appears to be none. It can be tabled.Document by leave laid on the Table of the House.Holly Walker: I seek leave for the Education (Student Allowances Availability) Amendment Bill a member’s bill in my name to be introduced and set down as members’ order of the day No. 1.Mr SPEAKER: Leave is sought to move forward a member’s bill. There is objection.Points of OrderCommerce (Cartels and Other Matters) Amendment Bill—ProcedureHon CLAYTON COSGROVE (Labour): I raise a point of order Mr Speaker. In light of matters raised by the Hon Shane Jones I seek leave for the Commerce (Cartels and Other Matters) Amendment Bill to be moved to Government order of the day No. 1 and read forthwith.Mr SPEAKER: Leave is so sought. Is there any objection? There is.Taxation (Annual Rates Foreign Superannuation and Remedial Matters) BillIn CommitteePart 1 Annual rates of income taxHon SHANE JONES (Labour): Kia ora Mr Chair and thank you for the opportunity to contribute during the Committee stage of this Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. It is an item of business that has been covered by the Finance and Expenditure Committee. It is something that this party of mine the Labour Party supports but with certain reservations.I want to direct our attention to a portion in the bill. I shall take as read that we are familiar with the purpose of the bill but I just want to isolate a small element pertaining to the rules for Working for Families tax credits. When this policy was introduced it took a while for eligible people to realise the full extent of the policy and like all major policy reforms it has required refinement as time has gone on. It is important that we continually revise the application of such initiatives under our tax system to ensure that the intended recipients are totally aware of their entitlement and so that the information that will eventually flow from these amendments this refinement is put out in such a form that the public realise the extent of their entitlement because unfortunately the public have been sold a line of misinformation recently. We are augmenting this raft of assistance measures to those who require the State to take an active role in lessening the burden of family life and raising children.The changes that are made here are slightly dry but the importance of them is that each time we endeavour to change the provision and access to State largesse for such social good purposes we end up with a system that needs to be simplified. The cost of compliance is always a headache for both I am sure the Inland Revenue Department and those administering it through the various social welfare organisations. It is a constant reminder to us that although we do support this bill and we do claim credit for the architecture surrounding this policy originally simplification is extraordinarily important.I also want to direct our attention to what I think is a very intelligent set of changes designed to deal with the Canterbury earthquake situation. It is useful to note that this bill embraces the notion of an extinction of expiry dates for relief measures. Initially it was not conceived to be necessary. The thing that I return to is that although we support this bill the overarching lens through which I and my colleagues view these things is whether we are simplifying matters. Are we making matters clearer and more lucid? Are we not empowering the accountancy profession to set itself up as high priests so no one can quite understand what is the intent or the extent of such changes? Whatever provision we might be debating or we might be discussing in our deliberations during the Committee stage it is essential that we all members of the Committee bear that in mind. Whether it is the opaque or hellishly complex areas of understanding such as imputation credits—and I will have more to say about Australians tomorrow in the general debate so I will not litter these contributions with further information about the friends of the Prime Minister who are tied up with the Australian supermarkets. That is another matter. The point needs to be made—irrespective of what provision we are focusing on—my plea to us as parliamentarians and the injunction to our professional advisers is to keep it simple and keep it lucid.Dr DAVID CLARK (Labour—Dunedin North): I follow my learned colleague the Hon Shane Jones in supporting this bill the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. However there are some things that ought to be covered in this debate including the introduction of Supplementary Order Paper 413 by the Minister of Revenue which must be regarded as one of the more embarrassing things that we will see in this Parliament this year.The CHAIRPERSON (H V Ross Robertson): Order! Sorry to interrupt the honourable member. I just want to remind members that this debate on Part 1 is about the annual rates of income tax for 2013-14. That is just a general reminder for all members.Dr DAVID CLARK: I am quite happy to come back to that issue in further parts of the debate. I appreciate that there will be opportunities in different parts to raise those issues which are particularly embarrassing for the Government. But there is plenty more to cover in Part 1 that is embarrassing for the Government so I shall concentrate on that as we start off.I guess the embarrassing thing about Part 1 which covers most of the substance of the bill is indeed the fact that it does not cover off those things that would really grow our economy. We see here where the annual rates are set for the taxes and so on and the way in which we agree as a Parliament to continue certain parts of Government business that they are something that can and ought to and should be debated time and again. The Government here has failed to really grasp the nettle. So we fail to see here the Government grasping pro-growth tax reform. Once again the opportunity is slipping by in a tax bill before this Parliament to discuss the opportunities that the OECD would recommend to us that Treasury would recommend to us and in fact that any credible economist around the Western World would recommend to us. In fact mostWestern countries have already adopted instituting pro-growth tax reform in the form of a capital gains tax.A Labour-led Government aims to introduce a capital gains tax to ensure that businesses in New Zealand are assisted in having money that is currently involved in the speculative property sector transferred across into the productive sector. Right now unfortunately there is something of a loophole in our tax system. It does protect the rights of invested capital but what it does not do is use that capital most efficiently in our economy. That loophole very rare in the Western World favours investors in property over investors in the productive sector. Labour regards this as wrong.Of course as I have said the OECD Treasury and other credible Western economists regard this as wrong but this Government has taken no steps to change it. It likes the way it is now. It likes the fact that the very wealthiest New Zealanders do not pay tax. Many of the wealthiest New Zealanders do not pay tax like the rest of us do because they are not on the top tax rate. The Government is not seizing the issue here. It is not addressing the fact that those New Zealanders are not paying tax on every dollar they earn. They treat their income in a different way so that it is not taxed.New Zealanders know that that is not fair. They are seeing fairness and opportunity slip away under this Government as we see in New Zealand inequalities at the widest they have ever been in recorded history in New Zealand. We see in the Gini coefficients and the other measures that economists follow that inequalities in New Zealand are the greatest they have ever been. Here where we set the rates of taxation we are reminded that these were changed—and they are not changed again here. The Government again did not seize the opportunity in the 2010 tax package where against its promise it put up GST taking money off New Zealanders—ordinary New Zealanders going about their business. John Key said he would not put up GST and again almost immediately after the election up it went. We begin to distrust a Government like that say the ordinary citizens of New Zealand.At the same time as that consumption tax was raised the Government sought to give some very big tax cuts to the wealthiest New Zealanders. The top 10 percent of New Zealand earners got 44 percent of the value of those 2010 tax cuts. The bottom 20 percent got just 2 percent of the value of those tax cuts. That was a very unfair tax change as we have seen it from this side of the Chamber. We have seen since then as we start to see here and there signs that the economy is growing that that growth is not being shared fairly amongst New Zealanders. There is no sign of it being shared fairly. Those at the top—the very few at the very top—have been given a big tax cut by this Government and the rest of New Zealand middle New Zealand is struggling. People are not able to get ahead even though they work day in day out. Even though they do those things that are good for our country and good for our future or ought to be they are not able to get ahead for themselves or for their families or for their communities because this Government has set the system through the way it sets up the tax rates in such a fashion that the wealthiest New Zealanders get this big tax break while the rest of New Zealand pays and pays and pays for the services and pays for that tax cut for the wealthiest New Zealanders.This Government is not about fairness and opportunity—those are Labour values the Labour values of fairness and opportunity. This Government is about preserving the interests of the wealthiest. That is why it has not gone near the capital gains tax in this particular bill. That is why it has not helped out New Zealand businesses that are struggling by introducing pro-growth tax reform that would support emerging businesses and that would see money directed towards the productive sector. Instead it is preserving the interests of capital that is already there. It is preserving the big money and big end of town’s interests. That is what we are seeing from this Government timeand time again. We see the echoes of it in the Skycity deal. We see the echoes of it in the handout to Rio Tinto which made record profits. The Government did not ask for any job guarantee and the next day Rio Tinto was cutting jobs. It took the $30 million from the Prime Minister but it carried on with cutting jobs anyway. That is the kind of corporate welfare and the kind of attitude that underpins these tax rates we see here that we reaffirm again today in this Parliament unfortunately. They drive this wedge between rich and poor and undermine the fairness and opportunity that New Zealanders value which are actually what New Zealand values as a culture. This Government is anti - New Zealand with its policy of driving a wedge between those at the very top and the rest of us New Zealanders who are struggling to get ahead despite working hard.It is a great disappointment that that is not being addressed properly in this bill because I think this Government is out of touch in not addressing it. It will in time see the consequences of not addressing it. Ordinary New Zealanders are sick and tired of being neglected and of seeing their hard-earned dollars being transferred to the tax cuts for the wealthiest New Zealanders. So this Government will face a day of reckoning come the next election. We heard from across the House during question time the Prime Minister offering to have the election in a month’s time. It had those echoes ofNineteen Eighty-Four as the Prime Minister off the top of his head said “Well let’s have it next month Sunshine.” I bet he scuttles away from that before too long. He is out of touch but he is probably not out of touch enough to not recognise that that would not go well for him because ordinary New Zealanders are becoming more and more and more concerned about the lack of opportunity and the lack of fairness in our society that is happening under this Government’s watch. They are concerned that the opportunities they had through the schooling system and so on have disappeared. It is now the case that more and more New Zealanders are living in poverty and cannot afford to buy raincoats or shoes for their kids or to feed them so that they can learn in the schooling system.David Bennett: Prove it.Dr DAVID CLARK: They mock across the Chamber. They think that it is a laughing matter that one in four New Zealand kids goes to school hungry. But we on this side of the Chamber think that every New Zealander should have the opportunity to get ahead. We think we should have a fairer tax system where everybody pays their fair share. That includes multinationals and that includes the wealthiest New Zealanders who currently structure their affairs to avoid paying tax. On this side of the Chamber we stand for fairness and opportunity and we think it is a great shame that the Government is not taking the opportunity in this bill to rectify the tax system to make it fairer for all New Zealanders so that they can all reach their aspirations and stay in New Zealand achieve their dreams and educate their children instead of having to take flight to Australia in order to get opportunities.This bill is largely uncontroversial aside from the lack of opportunity it represents and the foreign superannuation changes that colleagues have spoken to.RAYMOND HUO (Labour): Thank you very much Mr Chair.Paul Goldsmith: Really looking forward to this!RAYMOND HUO: Well why not stand up and take a call? Why not? Mr Goldsmith is the chairman of the Finance and Expenditure Committee as I understand. I am very much looking forward to his contribution.Dr Megan Woods: Take a call.RAYMOND HUO: Take a call. OK I will do it quickly and let us look forward to the contribution from the chair of the Finance and Expenditure Committee. Thank you very much Mr Chair for this opportunity to contribute. The Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill has lingered on the Order Paper fora very long time. I believe my learned colleague will correct me if I have got it wrong. I believe that this bill is a result of what has been known for quite a while as a telephone book bill. Labour supports this bill but with some reservations. This bill as my colleague said in her earlier contribution is largely uncontroversial apart from the foreign superannuation changes and I will come to that point later on.Of course changes are needed and these proposals have the great merit of simplicity and should eliminate the uncertainty of treatment which has been a problem since first identified in 2006. The principal issue that was unclear was whether foreign superannuation schemes were subject to the foreign investment fund or the so-called FIF regime and the tax treatment on transfer.The legislation largely follows the proposals set out in the Inland Revenue Department issues paper that was released in July last year but also incorporates some of the submissions made in respect of the issues paper. The new rules will take effect from 1 April 2015 although there are some retrospective clauses in this bill and we will come back to that Supplementary Order Paper later on at some later stage of the Committee of the whole House.Under the proposed legislation interests in non-Australian foreign superannuation schemes will no longer be taxed on an accrual basis under the foreign investment fund regime or if a transfer represents distribution from a company or a trust. In terms of the problems with the foreign superannuation changes the first issue is that it will apply to all transfers even those made into a locked-in scheme such as a KiwiSaver fund. In this case it is proposed to allow the taxpayer to withdraw an amount up to the value of the tax due from their KiwiSaver scheme. This sounds good but it ignores the fact that where the transfer is made from a UK pension fund withdrawing funds would possibly either invalidate the transfer or trigger a 55 percent tax charge in the United Kingdom. Probably Mr Goldsmith could answer that question in his contribution. How can a person who makes a transfer but who cannot access their transferred funds until a later date be said to have somehow derived income—The CHAIRPERSON (H V Ross Robertson): Part 1.RAYMOND HUO: Back to Part 1. The other issue relates to the treatment of transfers made prior to the commencement of the new rules.Paul Goldsmith: He’s got no idea—he’s got the wrong speech.RAYMOND HUO: Take a call Mr Goldsmith. But one thing that I believe Mr Goldsmith will agree with me and with other members on is that this bill as it is presented in its current form represents a huge mismanagement.PAUL GOLDSMITH (National): I am very pleased to be taking this call. I understand we are focusing on Part 1 of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill—this part being discussed relates to the annual rates of income tax—not on Part 2. It is a very important part. It is not a huge part of this bill but it harks back to the single-greatest contribution in the tax area made by this Government. The switch of keeping the income tax rates lower and increasing GST a little bit encourages people to work hard overall in a tax-neutral way in order to reignite the economy in New Zealand by having a tax system that is not hiking tax rates but is ensuring that existing tax bases are applied fairly. Ultimately building a more competitive and productive economy is one of National’s key priorities. Only by lifting our economic performance can we create the jobs boost incomes improve the living standards and provide the world-class public services that Kiwi families need.This bill is the latest piece of tax legislation aimed at making the tax system fairer and simpler and strengthening the economy. An important aspect of fairness in the tax system is that taxpayers must be able to understand and comply with the rules and the necessary tax rules must be cohesive fair and applied consistently. Part 1 of thislegislation here is about the annual rates of income tax for 2013. Only the prudent management of the economy and Government spending by this Government is getting us back to surplus in this year which many people did not believe this Government would achieve. But we will be back in surplus notwithstanding the fact that we have been able to keep the tax rates at relatively low levels and we all aspire to have them lower in the future. Having a strong stable economy run by a sound and sensible Government is the way to go and on that basis I think that this is an excellent piece of legislation.Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call on the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill and discuss Part 1 of this legislation which does refer to the annual income tax rates. The contribution that we have just heard from the opposite member Paul Goldsmith the chair of the Finance and Expenditure Committee showed that there can be no greater evidence about how out of touch this Government is about the lived reality of everyday New Zealanders. We had that member herald the great tax contribution that this Government has made in terms of the great tax switch.Well actually for many New Zealand families this was the great tax swindle. What it meant was that New Zealand borrowed hundreds of millions of dollars in order to give some of the highest-earning New Zealanders tax cuts. Where did this leave everyday New Zealanders trying to make ends meet? Well it left them struggling and the fact that that member can stand up and give the speech that he gave shows the arrogance and how out of touch this Government has become. It does not know what it is like for families who cannot put food on the table who cannot afford to pay their rent and who certainly cannot afford to heat their houses. In my electorate there are houses that have been registered at 9 degrees Celsius overnight in winter with 90 percent humidity. Those people have not benefited from National’s borrowing hundreds of millions of dollars to give tax cuts to some of the highest-earning New Zealanders. This has done nothing to benefit them.We have had from the member who just spoke a recitation of trickle-down economics. He told us that this was going to flow through to ordinary New Zealanders but it has not happened. Members on this side of the Chamber could give you case after case which are sitting on our desks in our offices where we are trying to find some way forward for families who simply cannot make ends meet. For members opposite to claim that this was an achievement of their Government just shows how badly wrong they have gone.As my colleague Dr Clark has talked about not only does this bill not do anything to address the great tax swindle that this Government has pulled on the people of New Zealand but also it completely misses the mark in not having any pro-growth tax policies. My colleague Dr Clark talked about how we actually could have had something that would see our economy be transformed through the introduction of a capital gains tax. But is this Government bold enough? Is this Government brave enough to actually do something that will transform our economy or does it just want to give income tax cuts to the highest-earning New Zealanders? There is a recipe for a growth economy!This bill does nothing to do anything innovative like putting in place research and development tax credits for companies that are there on the cutting edge which are creating the wealth creating the jobs and creating the higher-paying jobs that if the proper skills training is put with it actually could see some of the families in our electorates that we deal with have a better life. But there is nothing in this bill that does that. This is not a tax bill that has anything about sharing the fruits of any recovery that we are seeing fairly it does nothing to set aside the unfair tax structure that thisGovernment put in place and it certainly has nothing that speaks anywhere about having a fair kind of New Zealand where everybody can have opportunity.I look forward to further calls from members of the Government to tell us how their tax policies and the tax that is contained in this bill are going to make life for everyday New Zealanders better. I look forward to members of the Government telling my constituents in Wigram how they are going to pay their power bill this winter and how they are going to pay their rents which they simply cannot afford. I look forward to members of the Government telling my constituents and people all around New Zealand just how they are going to make ends meet because there certainly is not anything in this bill that tells us how to do that.My colleague Raymond Huo has talked about how this bill has lingered on the Order Paper for so long. It simply is another case of this Government not getting legislation before the House in a timely manner to such an extent that we actually have to have a ministerial Supplementary Order Paper revising the implementation date because it has been sitting around gathering dust for so long. Thank you.Dr DAVID CLARK (Labour—Dunedin North): I had a little more to say about pro-growth tax reform the opportunity for which has been missed in the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. I was disappointed that Mr Goldsmith as Finance and Expenditure Committee chair did not have a little more substance to add to the debate. He may be very dry as an economist and he may have written some historically worthy tax books but unfortunately today he was merely spouting the Government line and not really showing the underlying flint and intellect that we have come to expect of him as a promising—one day to be—Minister in a National Government probably decades away after a very long fair and opportune Labour-led Government.That sentiment aside the 2010 tax swindle to which my colleague Megan Woods has referred is really the thing that we are affirming today. I think we need to put it in terms that simple. It is the National Government’s policy to drive a wedge between the very wealthiest New Zealanders and the rest of New Zealand. And it has done it quite successfully. In 2010 the Government put through tax law that drove that wedge hard and here we are today in this bill reaffirming that policy as a Parliament effectively. This Government has not been bold enough to chop down those changes and to say that actually it thinks we need a fairer system and to make sure that we have some way of driving growth in the economy.Let us not forget that we have had a dream run in terms of dairy commodity prices internationally. New Zealand has benefited from the high primary produce prices. We have had trading partners our biggest trading partners which have avoided recession in the likes of China and Australia. New Zealand should be booming. New Zealand should have been booming for the last X number of years. But this Government has squandered that opportunity. It has been so focused on shovelling money towards the wealthiest New Zealanders that middle New Zealand and those who are struggling most have been squashed and pressed and are not able to get ahead. And here it is trying to do it again. Well it is important that we speak out against this and that we speak in favour of fairness and opportunity and in favour of pro-growth tax reform that will actually grow the economy and that can then be shared for the benefit of all New Zealanders.We are also missing in this bill the opportunity for research and development tax credits the likes of which Labour has put forward—the opportunity for businesses to access tax credits for developing ideas that will create a new and innovative economy in this country. That Government opposite seems to have given it all away.One reason we know that this Government has struggled to implement or even propose these changes of course is that the Inland Revenue Department computersystem is simply not up to the task. This Government was told when it came to office 5 years ago that the first computer system the legacy computer system was on its last legs. It was built in 1992. The internet was still in nappies. Google did not exist in 1992 members of the House will know and Facebook was more than a decade away. That is when New Zealand’s tax system was invented and was implemented. The one that we are using today the computer system that is in use in the Inland Revenue Department was put in place in 1992. It has been on its last legs for quite some time and this Government has done very very little about it.Two years ago John Key the Prime Minister said that tax policy was being held back because the computer systems “can’t actually support radical changes from Government.” He said that on Valentine’s Day 2 years ago. The Prime Minister said: “You don’t want to be in a position where Parliament is held hostage to a lack of technology.” He was giving a nod in the direction of sorting this problem out. Two years on two Valentine’s Days have passed and the Prime Minister’s Valentine’s Day promise appears to have been broken. He showered bouquets here and there in an effort to try to remedy this problem with our tax system and $50 million has been spent on international consultants to look at the tax problem. Do you know what conclusion those people have come to? After 2 years and $50 million they have come to the conclusion in principle that the tax system needs fixing. The Government was told 5 years ago by the Inland Revenue Department that the tax system the computer system needed upgrading. It was built in 1992 and 5 years ago this Government was told it needed upgrading and $50 million later and 2 years after the Prime Minister said that you do not want to be held hostage to it—the Government has spent $50 million on consultants—it has agreed in principle that it needs to be fixed. This is a flagrant waste of taxpayer money—a flagrant waste.The Government has gone one step further than agreeing in principle that it should be fixed. It is also now saying that it will build some more business cases—some more business cases. The Government will spend more millions building business cases. This Government is sitting on its hands not repairing the Inland Revenue Department’s broken computer system and therefore it cannot implement the kind of pro-growth tax reform that is necessary to take New Zealand ahead to grow the economy and to share those proceeds fairly. This Government has been sitting on its hands and not doing anything about it. That is a sad indictment on this Government.It is a Government that is so tied up in scandals in dealing with corporate bailouts like that for Skycity for its casino deal the $30 million for Rio Tinto with Chorus looking at deals there and so on that it is not focused on fixing the basics—the tax system that implements the decisions of this Parliament. So we will see when we get to later parts of the bill that other deadlines are being pushed out because this tax computer system is in disrepair. It is long past its due-by date and this Government has done nothing about it—to its shame.That is part of the reason why even if it wanted to make a fairer tax system it cannot. It is clearly not a priority for this Government. It needs a wake-up call. It needs to understand that ordinary New Zealanders do want tax policy that grows the economy and that gives people a chance to get ahead that is fair so that everybody pays their fair share of tax as indeed most countries in the OECD have in place already. New Zealand is a real outlier in not having a comprehensive tax system and by having this loophole for property speculators we sit outside the OECD norm. The OECD tells us this Treasury tells us this and every respectable economist tells us this. But this Government knows better. It is protecting vested interests and that is to its shame. Ordinary New Zealanders middle New Zealand are struggling to get ahead. They are working hard they are doing the right things but they do not feel like they can getahead. This Government is out of touch if it thinks that the current settings we are affirming here today should not be challenged. They certainly should because New Zealanders deserve a fairer deal. Every New Zealander deserves the opportunity to get ahead and that goes for the people down in Dunedin in the wonderful electorate of Dunedin North as I am sure it goes for the people right up in Kaitāia.We are not the only country in the Western World with a tax system. Those people in the Government across the Chamber need to accord fixing it the highest priority and they need to stop spending tens of millions of dollars on international consultants who simply tell them that in principle things need fixing. They have had that message before and they have had that message again now. I look forward to seeing progress on that issue so that we can have tax policy that is fair and that allows all New Zealanders the opportunity to get ahead.I also look forward later in this bill to discussing the delays in child support legislation because it is true that that is an embarrassment for the Government and it is inconveniencing New Zealanders. I look forward to hearing more from the Government as to why it needs to make these delays. It must have excuses but I can assure you they will only be excuses. They will not be things that New Zealanders want to hear. New Zealanders are sick and tired of hearing that they are a low priority for this Government that only the wealthiest have their interests protected and that ordinary New Zealanders should not be afforded the opportunity that everyone else at the very top of the heap is afforded when it comes to getting ahead for themselves for their families and for their communities.When Labour is in Government we will implement a capital gains tax that drives this economy forward that moves money from the speculative sector into the real productive economy that creates jobs that makes sure that economic growth is shared fairly and that reduces the gap between rich and poor which has grown and grown under this Government. We will have an economy that grows and shares the benefits fairly with all New Zealanders so that all New Zealanders have the opportunity to work hard and to get ahead. Thank you.ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. Many good hard-working low and middle income New Zealanders must be looking at legislation such as this and wondering what is in it for them. I guess they would be reflecting on the fact that 3 years ago in 2010 the National Government provided some $2 billion in tax cuts to the wealthiest 10 percent of people in New Zealand. The good average people of New Zealand will be asking why the likes of the Prime Minister received a cut of $1000 a week in the tax he was paying and why the likes of Paul Reynolds the head of Telecom—its chief executive—got a cut of something like $5000 a week in tax on his income. Why is it that this National Government is so intent on helping the rich and its mates but good average working Kiwis are being left out in the cold?Once again this Government is tinkering around the edges. This bill is just sort of fudging the numbers. At the end of the day with taxation in this country there are still those who are benefiting greatly from the whole process while poor families in this country are really struggling. We need a full revision of the tax system in New Zealand not just this tinkering where they bring in these bits of bills here and bits of bills there. We need a full review of the tax system so that there is a fair and equitable system for all and across all areas of the New Zealand economy. At the present time there is still a huge amount of tax evasion estimated to be in the order of $2 million to $3 billion a year—$2 million to $3 billion a year of tax evasion which this Government is simply not getting on top of.In addition to that this Government has put up GST in recent years going up to 15 percent—Dr David Clark: I thought they promised they wouldn’t.ANDREW WILLIAMS: —which it promised it would not do absolutely. Prior to that particular election it promised that it would not increase GST but it did put it up from 12.5 percent to 15 percent. Again the people who hurt the most are those who have to buy everyday goods and services but who cannot afford that extra 2.5 percent of GST.So New Zealand First calls on the Government to have a comprehensive taxation review; to not just help its mates—not just help the wealthy heads of corporates the wealthy financiers and bankers and all that sort of thing—but help good average everyday Kiwis to get on and have a better slice of the cake in the New Zealand economy. We stand for a fair society. We stand for a society where all New Zealanders are put first. We stand for a situation where the Government goes after those who are avoiding paying their dues to the country. There is speculation on so much property and on so many investments in this country and so much in the way of finances and the New Zealand dollar is being speculated on. There are all sorts of other speculative activities that this Government turns a completely blind eye to while large amounts of revenue and profits are being made by rorting the system and taking huge amounts of dollars out of the system particularly for the benefit of that top 10 percent of income earners who are doing very well in this country.The gap is widening between the rich and the poor in this country and this National Government in the 5 sorry years that it has been in power has seen that gap widen. It is time that this Government faced the fact that New Zealand is on a slippery slope in terms of those who cannot afford the daily cost of living: those who are out of work and those who are underemployed. We now have 8 to 9 percent underemployment. These are people who have got only 1 hour or more of work a week. These are people who would dearly love to pay more tax if they had a decent job. But when you are on the minimum wage of $13.75 an hour when you—Maggie Barry: Read the bill.ANDREW WILLIAMS: I am keeping to the bill. This is about taxation. When you are on $13.75 an hour and you are struggling—MAGGIE BARRY (National—North Shore): I moveThat the question be now put.SUE MORONEY (Labour): Thank you so much for the opportunity to take a call on Part 1 of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. Of course Part 1 actually deals with the annual rates part which is really what most New Zealanders come into contact with when they come into contact with our taxation system. So Part 1 is a lost opportunity because there was an opportunity for the Government—and goodness knows that it has had long enough because it has had this bill on the Order Paper for such a long time that it has had to bring amendments forward to actually change the start date of this bill because it has been languishing on the Order Paper for so long. So the first thing that we would have to ask is why that is. Why has this bill been so badly mismanaged that the Government has now had it in front of Parliament for so long that the start dates have to be amended? Also why is it that the Government is so stuck in its old ways—the same old mantra that the National Party always has—that it has not taken the opportunity to recognise the opportunity that this bill presents to actually have a fairer tax system than the one we currently have?Part 1 of this bill continues the problem that we have with every single National Government that I have seen in the course of my lifetime and that I imagine most people listening to this debate have also seen in the course of their lifetime. There is—David Bennett: Come on Sue change the record.SUE MORONEY: David Bennett says: “Change the record.” That is exactly what I am saying to the Government. I am saying to the Government “Change the record.” because here is the record of the National Party. A National Government always cuts taxes for those at the top who do not need it. Then it goes about cutting public services because it cries poor about not having enough money to fund public services properly. Then it flogs off State assets. Then it flogs off State assets. It is the same old formula that this Government has followed and that every other National Government has followed.It starts off with what the Government is continuing in Part 1 of this bill and that is the old tax switch as they call it—the old switcheroo of taxation—which the rest of us would call the tax swindle. John Key despite promising that he would not raise GST in one of his first Budgets—well not his first but probably at his instruction Bill English’s—did exactly that. Despite promising that he would not do it he raised GST from 12.5 percent to 15 percent. Remember when GST used to be 10 percent?The CHAIRPERSON (Eric Roy): Order! This is an income tax bill. It has not got a lot about GST. I appreciate that the member can talk about GST but you have to make it relevant to Part 1 or schedule 1.SUE MORONEY: Thank you Mr Chair. The reason why this debate is relevant to Part 1 is that not only did Mr Goldsmith the chairperson of the Finance and Expenditure Committee raise the issue of GST in his Part 1 debate but also it is the entire package around the whole way in which the National Government has shaped up its taxation.David Bennett: It’s waffle. She’s got no idea.SUE MORONEY: Mr Bennett says: “It’s waffle.” It is not waffle to those people for whom every single item they bought went up overnight. His leader broke a promise to the electorate and that is what happened. Where people were paying 12.5 percent on GST they suddenly found themselves paying 15 percent and everyone’s living costs went up overnight. Did their wages go up to compensate? No but what did happen—and this is where Part 1 continues to make the mistake—is that the people at the top end of the income scale got huge tax cuts. They got huge walloping tax cuts. We believe—and he has never denied it—that the tax cut that the Prime Minister himself got was in the order of $1000 a week. That was not what he paid; that is what he stopped paying. Every week there was $1000 in the back pocket of the Prime Minister and everyone else’s GST went up to pay for it. That was the tax swindle and not the tax switch.That is what Part 1 continues to keep in place. It keeps in place a taxation regime that saw those at the very top end of income—in the middle of a recession for goodness’ sake—get an absolutely huge benefit. What we know about people at the top end of the tax scale is that they do not spend every cent they earn. Every week they get to save quite a lot of money because they earn more than what it costs most people—DAVID BENNETT (National—Hamilton East): I moveThat the question be now put.The CHAIRPERSON (Eric Roy): I will give Andrew Little a go at debating the topic.ANDREW LITTLE (Labour): We should not take lightly what is really one of the central and core functions of this House which is raising revenue for the Crown so that it can discharge its obligations to the citizens of this fine and fair country. So when we are called upon as a House to either set or confirm what the income tax rates are it is not a matter where we should do so with any sense of jocularity or with any sense of frivolity. It is a matter on which we should proceed with great caution and with due solemnity and seriousness. It is in that spirit that I come here to the Chamber to speakon this bill the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill.My colleagues have drawn the Committee’s attention to really the underlying anxiety that members of the Opposition have about this bill and this provision in this bill which is that the tax rate that was set only a few years ago—it seems like a long time now but apparently it was 5 or so long hard grinding years under this Government—has caused hardship and considerable concern to many people. Nobody won an argument on a public platform in this country by saying: “Quick we need to pay more tax.” but everybody understands the argument that if we want a cohesive society if we want fairness and equity and egalitarianism then the Government of the day needs to be funded to discharge those purposes and objectives that the people need in order to provide the bare minimum for themselves and their families and their communities. So the money raised for hospitals for income support for schools for roading—all those things that actually keep communities together provide opportunities give confidence to investors to invest—all those sorts of things are underpinned by the revenue raised by the Crown to do that and therefore by the money that people pay from what they earn. And whether they earn it by selling their labour their time their skills their talent their intellect; whether they do it through interest earned on their investments; or whether they do it through selling a succession of properties which seems to be increasingly the New Zealand way—all those issues are important when it comes to setting our tax rates.We in Labour say—and we have always stood for this principle—that from those who have done particularly well and who earn the greatest more should be expected. That is the basic principle and it happens to be I say to our Catholic friends opposite a very Catholic principle. It still is and Pope Francis exemplifies it every day he goes about his duties. It is a very important principle. Emulating the lead set by St Francis of Assisi the new Pope Francis stands for greater equality and fairness. The mark of fairness in any Government is the tax system how the Crown gathers its revenue—and not just any form of tax but income tax—and those who do very well because life’s fortunes have smiled upon them and they have acquitted themselves and—Dr David Clark: And they’ve benefited from the infrastructure.ANDREW LITTLE: Well people who take advantage of a good State education system and stand on the shoulders of those who have gone before them—good on them. And if they do very well as a result it is not too much to ask that they put a little bit more back into the kitty to sustain the next generation and to sustain those who have not had the advantages of good fortune and a good life. That is very simple and people understand that.Paul Goldsmith: How much—66 percent 70?ANDREW LITTLE: Paul Goldsmith might not understand that. He might not appreciate it. Not everybody is equipped with the same skill for writing hagiographies as Paul Goldsmith. Some people write serious books and some of them do very well. Eleanor Catton does very well and she will not have to retract what she has written because any character in her book winds up in the dock facing criminal charges. That is the difference between Eleanor Catton who writes good books and Paul Goldsmith who writes fiction.But here is the point. We need to make sure that tax rates that we endorse in this bill are fair and our concern is that when you look at the tax package as a whole the weakness in our tax system is what has happened to income tax. We will address that. We will support this bill for now because it will get us through the next financial period but we will debate these issues and the underlying principles of the income tax system in a few months’ time because New Zealanders are crying out for greater fairness. They are crying out for a better chance and at least a chance to get ahead. Even those who arepaying modest sums of income tax know they are struggling to get ahead not because of the tax rates they are paying but because of the whip hand that has been given to employers to suppress their incomes.Part 1 agreed to.Part 2 Amendments to Income Tax Act 2007The CHAIRPERSON (Eric Roy): This debate is on clauses 4 to 107 and schedules 1 and 2.Dr DAVID CLARK (Labour—Dunedin North): I want to speak about Supplementary Order Paper 413 to start my contribution the amendments to the Child Support Act 1991—Paul Goldsmith: That’s Part 3.Dr DAVID CLARK: —but my colleagues opposite tell me that is Part 3 so I shall despite my eagerness save that for my debate on Part 3. It is something that I do look forward to discussing. It is one of the more embarrassing parts for the Government where it is delaying again child support changes because it is not able to implement them because it has a computer system that is out of date.Within Part 2 though there is plenty to debate here in this Chamber because Part 2 covers a number of elements of amending our tax system that Labour supports. Indeed Labour will support the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill through the House as my colleague Andrew Little alluded to in his recent contribution—because we do need to have some rates set and we need the system to carry on—but we actually also want to ensure that these things are properly debated and that we get to a fairer society in the future. We are not conceding the point that this could be a much fairer bill that this bill could be directed to driving New Zealand’s economy forward and that a future Labour Government will indeed do that. Mr Little quite rightly makes that point and hopefully that will come sooner rather than later. Mr Key’s threat of bringing the election forward to a month away would be good news for New Zealanders because they are getting sick and tired of this arrogant out of touch Government and they are ready to see a new Government with big ideas willing to tackle the real problems that New Zealand has by implementing measures such as pro-growth tax reform in the kind of capital gains tax that would see money shift from the speculative sector into the productive sector and decent KiwiSaver policies. I could go on but I am going to come back to those things that we are supporting in this bill.The reason that Labour is supporting the bill is that there are some sensible things in this bill. Although it may pain me to say that it does have some sensible content in the middle of it: the disposal of emissions units the way in which foreign superannuation withdrawals are treated albeit that we see some difficulty with the anomalies between Australian treatment and the rest of the world. If we say that a set of twins goes on their OE and one goes to England and one goes to Australia the twin who goes to Australia will get much more favourable treatment as they bring their savings back to New Zealand. We see the anomaly in that treatment. But we also see in this bill some definitions around mineral mining that are designed and were debated extensively at the Finance and Expenditure Committee under Mr Goldsmith’s guidance from his position as chair. We looked at the ways in which mining would be treated so that it set the right incentives that massive profits were not raked that the system was fair and that it would work from an industry perspective.We also set some rates to do with damage from the Canterbury earthquakes and we also debated those points in the committee. It is one of those situations where across the Chamber we can have a really constructive discussion to make the law better and fitting for all New Zealanders. It is always a pleasure to be a part of those discussions in selectcommittee and a part of making law better through detailed investigation and through the contributions of many people who came into the select committee gave of their own expertise and advice in order to make the law better and more applicable in the national interest in the best sense of that term. We amended things in terms of the calculation of family credits parental tax and so on—definitions that were changed in the bill in relation to the Canterbury earthquake situation.We looked also at International Financial Reporting Standards financial reporting methods. There were a number of technical aspects that we worked on considered the submissions on and made our own decisions on and agreed as a group that the law could be improved on. So I want to offer my commendations to those I work with on that committee for their efforts in making that part of the law better.But I want to turn to foreign superannuation changes because changes are needed. The proposals do have the merit of simplicity which should eliminate uncertain treatment which has been a problem since it was first identified in 2006 but there are a number of things with which people will be uncomfortable. We have seen in recent days the Minister move a further amendment that pushes out a date so that the legislation does not become retrospective on the basis of those who have already lodged a complaint. Because this legislation is obviously moving slowing through the House it could capture another group who were not intended to be collected on the way through.Withdrawals in the first 4 years after a person becomes a resident will not be taxable in future and this is designed to ensure that things are translated from the Australian system to the New Zealand system in a way that is fair. I have alluded to the double standards where we have different countries adopting different rules and we know that we inch towards fairness. It is good to see the Government making changes based on a principle of fairness in this part of the bill in sharp contrast to the first part where we reaffirmed rates of taxation which we on this side certainly see as unfair—where the wealthiest have benefited and middle New Zealand struggles to get ahead because of that 2010 tax swindle which took so much out of the pockets of ordinary New Zealanders to pay for the wealthiest.I welcome the Minister in the chair Michael Woodhouse and look forward to his contributions on this debate because it is a debate about fairness in our tax system. He was answering questions on fairness in terms of the lot of veterans earlier in question time. I heard a question raised about the RSA in Mosgiel and whether Mr Woodhouse knew that members there were going without meals as a consequence of an unfair system which brings me back to the point about fairness in this bill. That is why I look forward to the member Michael Woodhouse’s contribution on the fairness—or lack thereof—of the overall bill. If you will Mr Chair please allow him that breadth of discussion as we certainly on this side will be prepared to do because we are interested in what he has to say in that particular instance. It is not good to hear that our veterans are going hungry in New Zealand because of an unfair system and particularly in Dunedin a place that I care deeply about.There are problems that do exist with the superannuation changes. The first issue is that it will apply to all transfers even those made into a locked-in scheme such as a KiwiSaver fund. In this case it is proposed to allow the taxpayer to withdraw an amount up to the value of the tax due from the KiwiSaver scheme. It sounds good but it ignores the fact that where the transfer is made from a UK pension fund withdrawing funds could possibly either invalidate the transfer or trigger a 55 percent tax charge in the UK. We know there are ways around this and we know that it is going to be very important that there is a clear education campaign put forward by the Inland Revenue Department and we trust that it will do that in a manner that is comprehensive and competent because largely it is a competent department. Unfortunately it has not always beenguided by competent Ministers and that is probably why it is struggling to keep up in terms of its computer system and in terms of implementing changes that would make a fairer tax system. But we know that the officials who appeared before the Finance and Expenditure Committee have great integrity take away our questions and supply us with full and helpful answers on the committee. I take my hat off to them in passing as we debate these changes put forward in this bill.So I draw my comments on this debate on Part 2 to a conclusion with Labour’s support for the sensible changes it contains to ensure that the taxation of mineral mining is done fairly in a way that does not allow exploitation of the rules and with some reserved support for changes to taxation of foreign superannuation and support for the Canterbury earthquake tax measures. We worked constructively at the select committee across the House and it is a pleasure to be able to support those aspects of the bill that make a difference to our tax law and that make it fairer. We are just disappointed that in terms of the overall picture of our tax system we do not have a system currently where middle New Zealand has the opportunity to get ahead. Those who are struggling and working hard do not have a system that enables them the opportunities to get ahead where cost of living is rising and those at the wealthiest end of the spectrum are reaping the real gains of any economic recovery. Thank you.MAGGIE BARRY (National—North Shore): I rise to take a call on the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. This bill is all about making the tax system simpler and fairer and also strengthening the economy. That is the way we approach this as a Government. We do not choose as the Opposition does with its alien notions just to tax the rich and hike the tax rates up. The Opposition’s more ludicrous recommendation today was to make a Man Booker Prize winner the chair of the Finance and Expenditure Committee. The level of contribution to this debate that has come through from the Opposition is pretty well indicative of the level of intellectual rigour that it brings to many of the debates in this House and it is woeful.I would like to talk mostly about the taxation of foreign superannuation because our moves to make it fairer have in fact benefited from the process of the select committee. We have made several recommendations to improve and to clarify the rules. For those of us who have electorates many of us have received complaints either from people who have shifted to New Zealand and have not understood the complexities of the lump-sum payments when they are bringing over their superannuation schemes or from New Zealanders who are moving back. They too are a little unclear about how the system actually works. When you look at the base of what we are doing with foreign superannuation we are trying to make it as clear as possible.The Minister who has proposed this bill the Hon Todd McClay has sought to provide even greater flexibility over foreign superannuation because the people who are needing to make adjustments before this bill goes through in April of 2014 probably need a little bit of time to adjust. So too do the financial advisers I think because the complexities that existed in the old system have not quite been ironed out. But there is as I said earlier a degree of rigour that is bringing a lot of clarity more transparency and greater simplicity to the way we do things.The bill introduces a 15 percent option. That is very important for those who withdrew a lump sum or who made a transfer from their foreign superannuation scheme and did not comply with the rules at the time. A lot of people did comply with the rules and as far as they are concerned they want to see everybody I guess playing on a level playing field. That is why we went to such a lot of trouble and why the Minister intervened—Hon Trevor Mallard: I raise a point of order Mr Chairperson. With all due respect to the member I think she is referring to Part 3 of the bill rather than Part 2. Is the debate not on Part 2 at the moment? The foreign superannuation stuff I understand—the bits that I have found are in Part 3 of the bill.The CHAIRPERSON (Eric Roy): I have to confess that I have not read all 107 clauses that are in the bill.Hon Trevor Mallard: Oh come on! Ross Robertson would have.The CHAIRPERSON (Eric Roy): I take offence—almost—to that comment. The Minister has passed me a schedule of what is in Part 2 and taxation of foreign superannuation is mentioned in a number of clauses.MAGGIE BARRY: Thank you Mr Chair. As I was saying speaking to Part 2 of the bill as I was on foreign superannuation and for those members of the Committee who were not paying attention this is a piece of legislation—and this part in particular—that deals with foreign superannuation. As I indicated many of us have received complaints from people who are in genuine distress. When you are ushering in a piece of legislation that is this comprehensive it is important to make sure that people are not left out and that they are in fact able to make their adjustments.I was talking about the 15 percent rule and I think that when we look at what Todd McClay has proposed there the 15 percent option is a change that will extend the availability of the 15 percent option to those whose funds have not actually been transferred before that date of 1 April 2014. Funds transfers as those of you who either through your constituents or through your own experience know are a very lengthy process. It is a tricky one and this extension is in fact very good news for those who are wanting to take up that option. In fact I think it would have been very difficult for them otherwise.When we look at the way that it used to be the foreign investment fund used to have its rules applying to foreign superannuation interest. It is not going to be involved any more. Instead of that taxpayers will have the option of calculating the actual income earned during their period of residence if they have a defined contribution scheme. That is a very good thing. I think much of the confusion was around the application of the foreign investment fund to a range of foreign investment schemes many of which were in the UK. The Australian one is a little bit different because there is a lump-sum withdrawal or transferring of interest to a New Zealand or Australian scheme still being allowed under these new rules.All in all this is a bill that does aim to make things fairer and simpler and to strengthen the economy. It also from the perspective of individuals makes it a lot more straightforward to iron out the complexities in order to make it easier for older people who want to settle here or for New Zealanders who want to come home to have a very fair approach to the way they are taxed. Therefore their planning for their retirement will be a lot easier. That is why I commend this to the Committee.CAROL BEAUMONT (Labour): It is a great pleasure to rise to speak to the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. As my colleague Dr David Clark has said although Labour is supporting this bill and we think there are some very positive elements in it we have some reservations. He started outlining some of those.This bill was originally introduced of course by the Hon Peter Dunne. Or is he that honourable in fact given that we have had such a terrible time in the House in recent days in trying to get Mr Dunne to actually clarify for us what information he had and whom that information went to? But anyway getting back to Part 2 of this bill this is of course where the substantive part of the bill lies. Part 2 has got numerous provisions actually putting in place most of the major changes that are identified in this bill and isas I have said largely uncontroversial. In fact the new rules will clarify a number of important matters.I thought I would identify some of the key elements in here but before I do that I would like to acknowledge my parliamentary colleagues who were on the Finance and Expenditure Committee which dealt with this because this is clearly a very technical bill and deals with a lot of quite complicated matters around taxation. I think it is a substantive bill obviously and those people some of whom are in the Chamber at the moment have obviously worked very hard to get it to this point.In Part 2 we deal with a number of matters dealing with foreign superannuation withdrawals and taxation related to that as well as matters relating to mining. I just want to outline some of those. Basically Part 2 looks at the mining of specified minerals to make the rules less concessionary and more consistent with those for taxpayers generally. It clarifies the rules for Working for Families tax credits makes remedial technical changes to rules for general and life insurance businesses and makes a number of other changes that are quite technical to many of us but are important. One of the things I did want to comment on is the importance of having a fair taxation system and having a taxation system that works in a way that ensures that those who can afford to pay do pay their fair share and that that is invested into our country.One of the problems we have on this side of the House—and we saw it in the House as recently as today in fact when the Prime Minister was saying: “Oh well as for the extensions to paid parental leave you’ll have to wait and see but really what Labour is proposing with an extension to 26 weeks is unaffordable.” So in other words he is saying that there is not enough income for the Government to pay for that. One of the things that is conveniently forgotten in this House is the fact that that is a deliberate thing. It was deliberately done by the National Government when it first got into power. Basically it cut taxation income tax rates for those on the highest incomes and in fact put some of the burden—quite a significant amount of the burden—on the taxpayers with the lowest incomes. It was supposedly a taxation switch.Paul Goldsmith: What’s this got to do with Part 2?CAROL BEAUMONT: Well we are talking about income tax in this bill Mr Goldsmith. I am really just talking about a well-functioning tax system to which in Part 2 we have a number of changes proposed in various areas including in relation to mining. These changes are to make this fairer and to deal with taxation rates that are applicable to that circumstance—for example in the mining sense—to make them less concessionary and more consistent with those of taxpayers generally.My point is really that this is a Government that has favoured those on very high incomes at the expense of other New Zealanders who are struggling to make ends meet. They have higher costs as a direct result of the so-called taxation switch introduced when this Government first got into power which raised GST. That directly went on to the costs that families face in this country. One of the things that that means is that household incomes are really squeezed. Prices are rising. Incomes are not rising for most New Zealanders—the 40 percent who did not get a pay increase last year.While we are talking about tax I would note that those people are the same New Zealanders who have to pay each and every dollar of taxation that they are required to pay. They cannot escape paying their taxation whereas in fact many others especially those at the big end of town do.Hon SHANE JONES (Labour): Kia ora tātou. I direct our attention to Part 2 of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill and the portion of it dealing with mineral mining. I shall preface my remarks knowing that there are quite polarising views around this type of economic activity. I will definitely avoid worsening any polarisation of that matter but it is one of the two areas I am going tofocus on in this 10-minute call with your support Mr Chairperson. The first area is the question of at what point in time and how does an investor in an area riddled with uncertainty enjoy the opportunity to claim back the entirety of the dough or the capital they are expending? Obviously on one side we want to avoid a situation where an enormous amount of dough is poured into it—John Hayes: Do you mean money?Hon SHANE JONES: Well yes I do mean money. Yes we are supportive of the notion that when the funds in our domestic economy are absent there is nothing wrong—subject to suitable guidelines and legal parameters—with that money coming into our country but those people investing in our country need to abide by whatever the statutory framework is. I will have more to say on the pū and competitiveness framework tomorrow; that is another matter.I am talking about the broader framework that relates to mining as an activity—in particular the period of time over which the spread of money invested can actually be legitimately claimed back. We do not have a capital gains tax in New Zealand so one thing we certainly want to avoid is that if something is spent and the asset—if it does turn into an asset—is sold there is no way for the State to claim back what it is entitled to. It is reasonable that for an investment of this nature there should be some way given that these people are putting money at risk they are paying wages and they are paying exorbitant fees to geologists. I guess a similar thing pertains to lawyers; I only hope I do not fall into that trap myself. What we are saying is that when the expenditure is spread over the life of the project we want to ensure that it is also relevant to the level of production that is secured.This is something we agree with. It is tidying up an area that I suppose you could say is quite a controversial area. Some will say that the tax system should abandon this approach because there is no rightful place in a modern economy for mining. Obviously we say that it is an indelible feature of the modern economy but if there is a way of transitioning our economy into other economic activities then we hope that investors will move us in that direction. Rest assured by the end of the year help will be on the way and we will move with a greater level of alacrity to a more balanced economy; one that generates fewer environmental bads and actually stands for the long-term prospects of less volume and more value in the economy.But we are stuck with the endowment resources that nature has given us and we are stuck with those investors who are putting money into this sector. In my view some of the more responsible investors are not using the tax system to avoid any of their liabilities but this bill clearly outlines that if you are in this particular area there are specific obligations that from now on you will be required to meet. But that does not mean that such investment will be blacklisted or that it will not be regarded as an acceptable part of the modern economy. The challenge of course is to ensure that the surveillance by tax inspectors—I do not even know if we still have tax inspectors—is actually such that these measures are implemented in such a way that the corporate advisers the accountancy advisers and the general counsel of the various firms investing huge amounts of money into mining activity understand what the new regime is and what their obligations are.I know it is a rather odd sensation for members on the other side of the Chamber when we are actually agreeing with some of this. Of course some of these changes are caused by that side of the Chamber playing catch-up rugby. These are things that were adumbrated outlined quite some time ago. I also want to direct our attention—[Bell rung] Mr Chair?The CHAIRPERSON (Eric Roy): Yes the Hon Shane Jones.Jami-Lee Ross: Close call—close call.Hon SHANE JONES: Thank you very much Mr Chairperson. I heard one of the animal kingdom squeak over there. Is there a need to call for first aid? Was that a mole a little noise I might have heard coming from under the earth or was that a butterfly learning to fly—a monarch butterfly? Probably not.I want to direct our attention to one of three other things in respect of Part 2 but I have to say before I settle upon it that the Finance and Expenditure Committee operates quite effectively. On this occasion there was adequate opportunity given to our colleagues from the Green Party—probably far greater than I would have given them had I been in the chair but I am just an Opposition MP. I have to say that they had an opportunity and the submitters had an opportunity.Despite the great effort being expended by the current chair of the Finance and Expenditure Committee Paul Goldsmith he unfortunately did not follow the party tradition that the Finance and Expenditure Committee chair is immediately moved into Cabinet. I have some commiserations in that regard. The chair of the Finance and Expenditure Committee will unfortunately go through his career having never been a Cabinet Minister because by the time 2021 2024 or 2027 arrive he will perhaps be approaching Jim Anderton’s age. It is hardly likely that the party will have a place for him then because that is when that man will be back as a member of a Government. They need to bear in mind that one swallow a spring does not make. Although that poll result over the weekend was difficult for me personally to swallow it is just a small ephemeral passing phase. The flagging fortunes of that member’s party will soon become evident once winter and autumn strike interest rates go up and a host of other woeful things beset us. But help is on the way.Hon Dr Nick Smith: Wishful thinking—wishful thinking.Hon SHANE JONES: We are hearing from a very senior member of Parliament. We are hearing from Dr Smith. Recently I was referred to as someone who along with my matua from Woodstone has suffered a few calamities but has stood again. I am in a kōhanga reo when it comes to comparing my fortunes ebbing or flowing as they may be with those of that particular member. I will tell you one thing though: he does understand the truth. He does understand the truth. So I thought it was rather bizarre that John Banks today should challenge me—I seek a little bit of acquiescence from you Mr Chair—The CHAIRPERSON (Eric Roy): I am not sure you are going to get it. Come back to the part.Hon SHANE JONES: OK OK OK. I am extraordinarily disappointed that there is not the sense of latitude that one would expect commensurate with your not inconsiderable size Mr Chair—a man of girth a man of substantial southern ardour.There are several other portions here not least of which are the almost incomprehensible sections dealing with imputation credits. Each successive Government endeavours to address this particular issue. We stand with our colleagues on the other side of the Chamber and seek those refinements. When I spoke earlier— slightly to the irritation of Mr Chairperson I suppose I would say—I delved into the complex matter of Working for Families and he reminded me that is not in this part. But families are everywhere and I can tell you that when things do not quite work out as families should they can be incredibly expensive. But that is another matter. I do not think that has to do with tax.Dr David Clark: It’s Part 3—that’s Part 3.Hon SHANE JONES: You mean that pleasure awaits me?Dr David Clark: Yes indeed.Hon SHANE JONES: That pleasure awaits me. I only hope that I am on the Māori news or something before Part 3 arrives. But I bring us back to the somewhat technicalsections. They do pertain to the minerals sector. Contrary to what is tossed around about us we do see that sector as being deserving of appropriate tax treatment. There is a fear because of the long-term development rights associated with it and the need to put money into it year by year that the tax system may not fully collect from those investors what it is entitled to. I say that providing people realise that the tax treatment of those investments—it has to be simple it has to be clear and if we do scare away investment—Hon TREVOR MALLARD (Labour—Hutt South): I too want to make a few comments on Part 2 of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. I would like to preface my comments by expressing my disappointment that I am yet to hear a call from either the Minister who introduced the legislation the Hon Peter Dunne or the Minister who is currently in charge of the bill the Hon Todd McClay. This is a matter that is highly technical and with all due respect to the Minister in the chair the Hon Michael Woodhouse I have heard nothing from him either to indicate that he is across what is very important detail in this legislation.Of course if the Minister who introduced the bill had been in the Chamber he would be the subject of interrogation as to the holding of information the importance of the integrity of the taxation system and the way that that relies on people who are involved in it including the Minister not sharing information—obviously except with the Commissioner of Inland Revenue—that they come across when case matters are referred to them. I should say that it is a matter of a lot of concern to the House. Maybe in the end when the backdated inquiry occurs into the comments that Mr Dunne has made and into his making available otherwise confidential information it could well be that we want to ask the question about whether any taxpayers’ information as well as Government Communications Security Bureau (GCSB) information was made available. Of course I am sure that the GST that was due on the GCSB information would have been paid but it is a question of what was made available and whether there was any consideration involved in that. What was the price that Mr Dunne paid other than his ministerial post for a relatively short time? And what has the effect of that been on the revenue? Although I do note that the effect on the revenue through the changes seems to have been positive because there are now more Ministers than there were previously. But the Government’s fiscal position is negative because we are paying extra. We are paying an additional Minister. So the net effect of the change led by Mr Dunne’s forced resignation is in fact something that is negative.I would now like to go to something that is pretty specific and it is around the clauses in Part 2 of the bill that go to classification of mining expenditure and in particular the timing of the deductibility of various aspects. The first point that I would like to focus on is the acquisition of land and the timing of the deductibility of that acquisition. In fact without drawing you into the debate at all Mr Chair I know that those who are well versed in Southland mining issues know that there has been massive acquisition of land in Southland for the purposes of lignite mining. After the mineral rights have been stripped from those titles that land has then been onsold in some cases—not in all cases; in some cases it is a long-term lease. That is clearly an interest in the land and that interest is recognised within this.If one looks at the net position of Solid Energy which is almost certainly the organisation that has done most of it my question is whether that is the type—I do not want the Minister to answer questions about a specific taxpayer even if it is a State-owned enterprise. “Enterprise” is probably the wrong word; “State-owned liability” might be a better expression for Solid Energy the way that it is now.Dr David Clark: It wasn’t under Labour.Hon TREVOR MALLARD: Well under Labour it had a damn good Minister. The question I want to ask the Minister to address is whether it is appropriate to give a deduction to a loss-making mineral organisation—for exploration prospecting and prospectively mining—for the loss of the interest in the land as a result of stripping the mining rights away from the land. Clearly land is bought at one price and is sold at another price which is almost certainly lower than the original price. This recognises the difference in value to the organisation that strips the mineral rights. The question I have is whether the value of the stripped mineral rights is taken into account in deciding the value of the land once it has been sold or whether if a piece of land has been sold minus the rights then the full loss that the organisation makes is deductible. My next question is whether that is fair.I acknowledge that if it is a State-owned enterprise that is doing it then actually the net position of the Crown is unchanged. The core Government position is different but the total position of the Crown is unchanged. What we are preparing here is law for all parties and we are preparing it in a context where organisations may not always be State-owned enterprises. So the relatively simple question that I have for the Minister is about the loss on the acquisition of the land—which is really a loss of disposal that difference between the disposal price and the acquisition price which we know is something that is deductible in the year that it occurs. Even if mining is not going to occur for another 30 or 40 years that is a deduction that occurs in the year of disposal. My question is whether that net loss takes into account the matters that I referred to earlier.Clearly what we do know is that under new Subpart DU 12(3) inserted by clause 35 “Mining development expenditure does not include—(a) the cost of land:”. But what is also clear later on—Paul Goldsmith: It’s not clear at all.Hon TREVOR MALLARD: Sorry?Paul Goldsmith: It’s not clear at all.Hon TREVOR MALLARD: Well no no it is. It is clear. It is on the face of the bill. It says in new Subpart DU 12(3): “Mining development expenditure does not include—(a) the cost of land:”. Was Paul Goldsmith on the committee that considered this bill?Dr David Clark: Yes he was.Hon TREVOR MALLARD: Did he chair it?Hon Shane Jones: Yes.Hon TREVOR MALLARD: Well have we seriously got interjecting now in this Chamber the person who was in charge of the bill through the select committee process and he is not aware of the question of the deductibility of land acquired for mining? I accept that it is not an insubstantial bill but the deductibility of mining expenditure is something that is very important when one is considering the bill. I am just going to toss back at the member that if he has not read the bill well enough either in its introduced form or in the report back then that is shameful. It is absolutely shameful that the National Party has as the Prime Minister’s nominee to chair the Finance and Expenditure Committee someone who cannot be—Paul Goldsmith. Just make sure. We will put a name on him. I do not want to generally slur the members of the Finance and Expenditure Committee because there have been some good ones. But Paul Goldsmith has made it clear in this Committee that he has not read a major part of the bill—really one of the main operative clauses on mining expenditure. We have a chair of a select committee who is so damn lazy. He is working hard to lose an electorate seat. He is working hard to lose an electorate seat.The next question I want to ask goes to the question of mining rehabilitation expenditure and the deductibility of that and what is effectively it appears to me a double deductibility. With due respect to the comments that my colleague Shane Jones has made and even those of David Clark earlier who seemed to indicate that there is a relatively fair regime I wonder whether we are heading into an arrangement now where we have a Crown subsidy for mineral explorers whose projects fail. So again it is an area of relatively simple change and this is one of the areas of amendments made to the legislation by the select committee. The rehabilitation expenditure “means expenditure that a mineral miner incurs … directly in relation to the rehabilitation of land that is the permit area of their mining operations or associated mining operations carried out as a result of”—I am summarising—the permits the Crown Minerals Act access arrangements the Resource Management Act conservation or authority under the Historic Places Act.So what we are saying is that miners get a set of obligations. There is no doubt. The question I have got is whether if they are foolish enough to do prospecting and exploration and make a mess of an area it is really the job of the taxpayer to subsidise their clean-up and rehabilitation costs through what is effectively double deductibility. Is that a good use of taxpayers’ funds to say that miners can destroy a monument and then rebuild it as part of the exercise? I will be interested in the comments of my Green Party colleagues in this area because I have heard the explanations from two of my own colleagues and frankly those and the contribution by Maggie Barry are a little bit wanting. The explanations are a little bit wanting.You know we have the Prime Minister saying in this House today that we are short of funds for paid parental leave but somehow we have money to subsidise miners in their rehabilitation costs. Why is it? Why is it? What are the priorities? What are the priorities of this Government? What are its priorities if it is not prepared to say that it is important for parents—especially mothers—to bond with their kids for 6 months as part of paid parental leave but if you are an overseas miner we will subsidise you through additional deductibility in order to do rehabilitation which is what you have got to do in accordance with the law anyway? Again I am not saying that I will vote against it but I am just asking a question about where this Government’s priorities are as far as particular actions of that sort are concerned.I will be interested in the explanation from the Minister in the chair the Minister of Revenue on the new “Mineral mining” section section EJ 20B(2) inserted by clause 37G(1) which is the spreading rule. I think this is an important part of the legislation. It has come in again as a result of the select committee. There is a question that the Minister has to ask about the establishment of the “ratex value” formula that is in there. I know that unlike Paul Goldsmith Todd McClay will be right across the detail of the legislation and will be able to go to the rate questions and tell us about either the straight line or the diminishing value approaches which are available in new section EJ 20B(4)(a) and (b). The question I have got is—JAMI-LEE ROSS (Junior Whip—National): I moveThat the question be now put.A party vote was called for on the questionThat the question be now put.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.Noes56New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 413 in the name of the Hon Todd McClay to Part 2 be agreed to.Amendments agreed to.Part 2 as amended agreed to.Part 3 Amendments to other ActsDr DAVID CLARK (Labour—Dunedin North): I have been keen to speak about this part of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill right through the debate. Members opposite have held me back on various occasions saying that the place for the debate on the delay of child support legislation is in Part 3 of the bill. I see that the Minister of Revenue who has resumed responsibility in the chair is indeed the Minister currently responsible for the bill. No doubt that is an indication that he is preparing to defend this embarrassing—embarrassing—back-down as the Minister responsible for having backed out of the commitments he made to try to make the tax system fairer for those who deal with the child support system.Those of us in electorate offices already know that the child support system payments and so on cause a great deal of anguish. The anguish of course originates often in very unhappy family situations where relationships have broken down. But often that pain is exacerbated by difficult arrangements or arrangements that have been agreed on but not met and so on. It is the stuff that electorate offices around the country deal with and that members of this House make their best efforts to resolve in a fair manner according to the law. Nobody will ever be entirely pleased with the child support arrangements. There will always be people who are better off or worse off as a result of changes.It is fair to say that when we debated these changes in the select committees that have debated them in recent years in the term of this Parliament we have thought about the issues of what is the fairest way and what is the trade-off with complexity. There is no doubt that the new formula the Government introduced is more complex. It is complex because the Government believes that that is a way to reach a fairer outcome or that is the rhetoric that it has put forward. There is also no doubt that this is a big shift in responsibility on to often the mothers the primary caregivers who are likely in many cases to receive less support in terms of the childcare they give and the funds they are entitled to. But regardless of all of that debate the Government then put forward a proposal to implement a new formula. It acknowledged that along the way there would be a high cost involved in retraining staff in the use of this formula. How it expects ordinary New Zealanders to understand it is not clear but the Government said that it was fairer. It said that it was willing to spend a whole lot more money in the bureaucracy in order to train officials around the country to use the new formula all on the basis that they would implement these changes to our child support systems.Then just a few days short of Christmas we had a press release out of the blue—and “blue” is the right word—from the revenue Minister announcing that the child support overhaul would be delayed. The Minister if I can quote him said: “… Inland Revenue has informed me”—indicating of course that the Minister was unaware of where the legislation soon to be implemented was at this time—“it needs more time to implement the new scheme to the high standard that the government expects”. Well these are wise words. These are high-sounding words. But actually let us not forget that the Minister is responsible for the implementation of this legislation. He is the one who brings this bill to the House and says we need to make changes in this Parliament to make the system whatever he wants to make it—fairer or reasonable or whatever the line is that he is pushing. Parliament spends quite a lot of money effectively—in termsof all the salaries for the support staff and so on in this building—passing law. And then in this case we have a Minister coming back to say: “My department has just informed me that the legislation soon to be introduced cannot be introduced.”It is the second time changes have been delayed. The Finance and Expenditure Committee held back the changes previously and now we have a situation where the Minister is pushing them out yet again. The change affects over 200000 children in New Zealand. Many many families will have taken legal advice on the basis of anticipating these changes as to what it will mean to them. And then on top of that many of them will have taken financial advice—[Bell rung] Mr Chair.The CHAIRPERSON (Lindsay Tisch): Dr David Clark. Part of what you are talking about is in Part 2 and we have already—Dr DAVID CLARK: Sorry this is Part 3.The CHAIRPERSON (Lindsay Tisch): I know.Dr DAVID CLARK: This is expressly Part 3 that I am talking about.The CHAIRPERSON (Lindsay Tisch): Well part of what you have been saying has been on Part 2 so can you be specific on Part 3 and draw my attention to where—Dr DAVID CLARK: Part 3 of the bill is about the Minister’s Supplementary Order Paper 413. I am debating the Minister’s Supplementary Order Paper 413.The CHAIRPERSON (Lindsay Tisch): OK.Dr DAVID CLARK: Thank you Mr Chair. I should have perhaps been more explicit in that regard. You are quite right. So the Minister’s Supplementary Order Paper introduces these delays which will see 210000 children affected. Many families will have taken both legal advice and then subsequently financial advice because their personal circumstances will have changed as a result of the proposed changes to be implemented. Now the Minister announcing a few days before Christmas has told them that they must again seek advice because the changes will not take place now; they will take place later.This affects not only the obvious 210000 children in the kinds of ways that one might expect in terms of primary care arrangement who owes what to whom and so on but also in ways that members of the public may not be aware of unless they are facing the circumstances themselves in terms of whether they are responsible for payments for teenagers attending educational institutions. That has changed from one minute to the next with this announcement from Mr McClay. It is not only embarrassing for the Government that it has passed this legislation and is now rapidly backing out of it because it cannot implement it but also horrific for these families who are often in straitened circumstances dealing with difficult relationships to discover that they now have to rearrange their affairs take further financial advice—which often in many cases they will barely be able to afford—and perhaps additional legal advice in order to rearrange their affairs once again for a delay. This Minister must take responsibility for this embarrassing back-down by the Government this embarrassing change.Of course it was doing it because it wanted to avoid another Novopay-style debacle. This Government has spent $50 million let us not forget on international consultants in trying to get the system right to cope with this change. We have been told in the select committee that $50 million had been spent already on international consultants who have come back with the decision that in principle—in principle—the system needs to be upgraded. We knew that 5 years ago but in principle the system needs to be upgraded so that changes can be made that will affect this kind of legislation which is before the Committee right now and contained in Supplementary Order Paper 413.This is a very germane point because without a system that can cope with these changes we will see more parliamentary time wasted. We will see more embarrassing back-downs by the Minister of Revenue if the system is not up to scratch. The PrimeMinister promised 2 years ago—well he did not promise; he used some clever words. Let me quote him so that I do not quote him out of context. Two years ago on Valentine’s Day the Prime Minister said that tax policy was being held back because the computer systems “can’t actually support radical changes from Government.” He also said: “You don’t want to be in a position where Parliament is held hostage to a lack of technology”.Paul Goldsmith: That’s a voice of thunder!Dr DAVID CLARK: Those are the Prime Minister’s words Mr Goldsmith. Those are the Prime Minister’s words. We should be outraged—it is a voice of thunder because we should be outraged. The Prime Minister said 2 years ago that this situation here should not occur and I am interested to know what the Prime Minister is doing to hold his Minister to account for this kind of embarrassing back-down in the House that costs millions of dollars of taxpayers’ money to correct as we end up debating the issues again and that costs many more millions of dollars I do not doubt in expenses for those who take financial advice around the country—the inconvenience of having to change financial arrangements the personal time that is wasted and the misery that is created by chopping and changing and trying to create a fairer system. Well it is not fair if it messes ordinary New Zealanders about.It goes explicitly against what the Prime Minister said. The Prime Minister has thrown $50 million at the problem but we have got only to the point where we have an in principle agreement that there is a problem and that more business cases will be developed. Well more business cases and more business cases—we can imagine tens more millions being spent telling us that more than in principle it is in actuality that we need to change the system. Well it is blatantly obvious to ordinary New Zealanders. It is blatantly obvious to us on this side of the Chamber that the system needs upgrading. We want the Inland Revenue Department to get on with it. It needs clear direction and clear support from its Minister but clearly it is not getting it because the Minister was not listening to the Inland Revenue Department when it raised this issue with the incoming Minister 5 years ago when National came into Government.This is a Government that is clearly not prioritising these issues. It is clearly not prioritising creating a fairer tax system for New Zealanders and so we have this kind of child support issue which I want to speak a little bit more about the detail of. What we see in new clause 122 referred to in Supplementary Order Paper 413 and covered in Part 3 of this bill is a change in the dates. Effectively all of the way through we see the date pushed out by 1 year—consistently throughout. We have this document which I will hold up for the benefit of those at home. This is the Minister’s Supplementary Order Paper. I have highlighted where it says “Child Support Act 1991” and there are dates—pages and pages of dates—where we have postponement. We have the Government postponing changes that affect over 210000 New Zealand children.I am looking forward to the Minister taking a call to explain this embarrassing back-down to explain to ordinary New Zealanders why they should have to rearrange their financial affairs once again—where their most intimate and difficult arrangements have been settled and made in the interests of their children—and to explain why they should have to revisit them because of his Government’s inaction on a system it was told 5 years ago desperately needed changing. This Minister is relatively new to these responsibilities. I will give him that but I will not give him too much slack because he was the chair of the Finance and Expenditure Committee before that. He knows where these bills come from. He knows their history. He has taken over and he is also a Minister of the Crown and has the responsibility for sorting this out.The Prime Minister made a promise 2 years ago that it would be sorted out and it has not been. This promise that the Prime Minister made needs to be honoured in theinterests of creating a fair tax system that can implement the kinds of changes that give New Zealanders security in their future planning for their support payments for their children for their personal arrangements for their children and for the futures that those children represent in theory and in practice. These are the children who will hopefully go on into the workforce and be earning a better future for New Zealand when those of us sitting in this Chamber are in our dotage. We depend upon these children and they deserve the kind of certainty that this Government ought to be able to deliver.The first system that sits in the Inland Revenue Department the legacy system was built in 1992 as we know. It is not new to the Minister. It cannot be new to the Minister. He has heard these things in the select committee. He knows that the system that we are operating on was designed 10 years before Facebook. It was designed before Google for goodness’ sake! Hardly anybody uses computer software that is that old. This must be a priority and we must get beyond a simple in principle agreement. We must get beyond spending tens of millions of dollars to point out the blatantly obvious. We must get to a point where this is fixed so New Zealanders can have a tax system that is fair and equitable and where we can make other changes that will be in the interests of growing the economy.Pro-growth tax reform is desperately needed. In the Prime Minister’s words you do not want to be in a position where Parliament is held hostage to a lack of technology. We must move on. We are not the only Western country with a tax system. It is not rocket science. It cannot be rocket science. This Minister needs to step up to the plate explain the embarrassing back-down by the Government apologise to those New Zealand families who have been affected—make an apology on behalf of the Government—and lay out a credible plan for fixing this tax system so that we all can have the surety that those things that ordinary Western democracies take for granted like education systems health systems roads and so on will be funded into the future because we have a tax system that can actually collect the tax that is due and a tax system that can implement change that is in the interest of New Zealanders.So I am looking forward to what the Minister has to say. I am looking forward to his apology for this embarrassing back-down but more than that I am looking forward to the Minister outlining a credible plan that details when we can expect a new system to be in place that can cope with changes that can cope with a capital gains tax—which would mean pro-growth tax reform for New Zealand—that can cope with changes to the child support system in a timely manner as and when they are needed and that can cope with creating a better New Zealand which we on this side of the Chamber want to see. It is a New Zealand that is signified by fairness and opportunity for all citizens.The question was put that the amendments set out on Supplementary Order Paper 413 in the name of the Hon Todd McClay to Part 3 be agreed to.Amendments agreed to.Part 3 as amended agreed to.Schedule 1 agreed to.Schedule 2The CHAIRPERSON (Lindsay Tisch): Is this a point of order?Dr David Clark: Sorry Mr Chair. I thought we were at the title and commencement—The CHAIRPERSON (Lindsay Tisch): No we are on the schedules—[Interruption] No no you cannot. The schedules are included in the part. We are just voting on the schedules.Schedule 2agreed to.Clauses 1 and 2Dr DAVID CLARK (Labour—Dunedin North): I am first to express my disappointment that the Minister in the chair the Minister of Revenue did not rise to apologise to the families in New Zealand and the 210000 children affected by the delays in Part 3 of the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. He is a member who often will acknowledge when he has made a mistake but on this occasion he seems unwilling to do that. He seems unwilling to outline a plan for when we will have a computer system in place that will be able to effect in a timely manner without wasting parliamentary time and without wasting the time of ordinary New Zealanders changes that make our tax system fairer and more efficient and effective for growing our economy.I come to the title and commencement clauses. I think that this bill has a very innocuous-sounding name. It is the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. In my view it ought to have a livelier name because I think that would draw ordinary New Zealanders’ attention to just what we are doing here. It is actually quite a significant bill that we are passing through this House. I am looking forward to some contributions in this final debate in the Committee stage from the members opposite—the current chair of the Finance and Expenditure Committee Mr Goldsmith one of his perhaps more erudite contributions would be welcome; and also Mr Ross opposite who often opines on such matters; as well as contributions from my colleague Mr Little and others; and Mr Mallard who I am sure will have something to say about the innocuous-sounding name of this bill and the effect that it will have across New Zealand.In the annual rates section of this bill we are reaffirming the income tax rates that were set down in 2010 in the so-called tax swindle—named politically neutrally as a tax switch—that this Government put into place where 44 percent of the value of the tax cuts went to the wealthiest 10 percent of New Zealanders and the bottom 20 percent got just 2 percent of the value.Paul Goldsmith: Distributionally neutral.Dr DAVID CLARK: Mr Goldsmith says that it was distributionally neutral. I do not think that even Mr Goldsmith believes that judging by the smirk on his face because even though he may represent Epsom I am certain that he knows of people who are struggling and who were impacted on by the GST change that happened at the same time—the GST change that the Prime Minister said he would not make and then made—which harmed New Zealanders at the bottom who spend most of their income on consumption. He knows that those 2010 tax changes have disproportionately affected middle New Zealand and middle New Zealand is struggling. It sees a Government that is out of touch and that is not listening to its concerns any more a Government that was once aspirational for New Zealanders but now seems to have let go in favour of simply transferring money to the most wealthy.We are being asked in this bill to reaffirm the income tax rates. Of course we must do that as a Parliament but we on this side of the Chamber do that part of it very begrudgingly because we do not see any offsetting plan for growth in our economy and we do not see any fairer tax system coming in in terms of the kind of pro-growth tax reform that we on this side of the Chamber would like to see in the shape of a capital gains tax which would shift money from the speculative sector into the productive sector creating more jobs for New Zealanders and creating a wealthier economy that is able to distribute that wealth fairly rather than just sending it all to the top. We knowthat we have the biggest gap between rich and poor in New Zealand that we have ever had.So I would like to see “Annual Rates” in the title renamed. “Taxation (Annual Rates” which is the first part of it—I am going to come to each part in my contribution—I think should say “Taxation (Affirming the Imbalanced Tax Changes of 2010 Without Any Compensatory Measure” and then I will come to my comma and talk about the next part which is “Foreign Superannuation”. I am quite happy for that part of the title to stand because I think the bill does address foreign superannuation. That part of the title is fair. But when we come to “Remedial Matters)” this touches on Part 3 of the bill which we have just debated where we see—Hon Trevor Mallard: We hardly debated it.Dr DAVID CLARK: But only just because the Government did not respond to questions placed on that part of the bill as to why—well I expect an apology actually from Mr McClay for the changes affecting 210000 New Zealand children that were announced just before Christmas. But I would like to see “Embarrassing Back-down)” replace “and Remedial Matters)” because the embarrassing back-down that is represented in the final part of the bill is not only embarrassing for the Government but has a widespread impact on New Zealanders. So as I said at the beginning of my contribution I am wanting to see a livelier title one that is actually more descriptive of the kinds of changes we see in the bill.The embarrassing back-down of course is particularly embarrassing because it goes against what the Prime Minister signalled. I will take those members of the House who have just arrived and are back in their seats who have been having perhaps some useful conversations in the foyer and those people who are watching at home and who have just switched on the television back to Mr Key’s words 2 years ago on Valentine’s Day. The Prime Minister said that tax policy was being held back because of computer systems and “cannot actually support radical changes from Government”. He also said: “You don’t want to be in a position where Parliament is held hostage to a lack of technology.” and that is the embarrassing situation we are in today. We are being asked to back out of legislation affecting 210000 New Zealand kids and their wider families who are already being put in the situation where they are having to share money around in a way that they may not all be entirely comfortable with they are having to share time with their children and they are having to reach arrangements in an uncomfortable situation and Mr McClay is telling them that now they are settled in to making these changes they have got to change them again and go back to where they were before. They will probably seek new financial advice because in the meantime they may have arranged their affairs anticipating these changes and then later on they will have to change them once again when the law actually comes into effect—impacting on them in some cases in 2016.I am sure that this is an embarrassment to Mr McClay. I do hope he has the decency to make an apology in this part of the debate. More important though I would also like to see him outline a credible plan for fixing the Inland Revenue Department’s computer system; $50 million spent on an in principle agreement that the tax system needs fixing is really not music to New Zealanders’ ears. The Minister of Revenue in the incoming National Government was told 5 years ago that the 1992 computer software might need updating. It was not rocket science but it was a pretty clear message in the briefing to the incoming Minister: the computer system needs updating. This Government has sat on its hands because tax reform in the interests of growing the New Zealand economy and creating a fairer tax system just has not been a priority. The Government has been more interested in entrenching wealth that is already there by giving tax breaks to the wealthiest. It is happy it seems to let small business in New Zealand suffer and happyit seems to let middle New Zealand—those who work hard every day and pay income tax on every dollar they earn—suffer.The Government has not been interested in implementing a capital gains tax. We know this because it would have needed to repair update and complete a change in the computer system in order to implement a capital gains tax which would generate that growth in our economy and would be able to cope with the kinds of changes that would not only enable growth but create a fairer tax system for all of us—the kind of tax system that sees money go from the speculative sector into the productive sector creating jobs for New Zealanders—Paul Goldsmith: What’s this got to do with it?Dr DAVID CLARK: —and creating a future that we would like to sign up to. Mr Goldsmith asks what this has got to do with it. That really is an indictment on his contribution to the debate today which has been very limited. These are the kinds of points that illustrate the need for a more informative title for the bill Mr Goldsmith because these are the effects on ordinary New Zealanders of the legislation that we are passing today. It reaffirms the annual rates; the changes—the tax swindle—where the GST took away any gains for most New Zealanders and only the very top were better off; the foreign superannuation changes; and the embarrassing back-down. These are the changes that we are debating here in this bill and the title of the bill if it were more accurate might alert more New Zealanders to the kind of Government that we have.It is the kind of Government that has created the biggest gap between rich and poor in New Zealand’s recorded history—the gap that sees middle New Zealand struggling to get ahead. It sees those New Zealanders who go out and work day after day and who try to save but without decent savings policies without pro-growth tax reform and without the kinds of research and development tax credits that would support our business sector and so on struggling to get ahead. These people want to see some vision from the Government. They do not just want to see $50 million thrown at international consultants to tell them what they already know. That is an outrage. Mr Key really needs to talk to his Minister and ask him to set out a credible plan because Mr Key is swimming here. Two years on his concerns have not been addressed.Hon TREVOR MALLARD (Labour—Hutt South): Thank you Mr Chairperson for giving me a call in this debate on the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill. These clauses—clauses 1 and 2—are particularly important because what we are doing here is effectively confirming the continuation of our taxation system as well as making what is a series of both minor and major adjustments to it.I would like to differentiate myself somewhat from the comments made by my colleague Dr Clark. I am not going to say that the honourable Minister of Revenue Todd McClay should apologise on his own behalf for the cock-ups that occurred in the 5 years that Peter Dunne was running the revenue portfolio and failed to do his job in the development of an appropriate computer system. If one is absolutely fair then it might be that during the last year or two of the Labour Government when Peter Dunne was failing to do his job properly then there might have been some criticism that could have occurred. But what we do know is that from the briefings to the incoming Government in 2008 and in 2011 the briefing that the Minister received in the middle of 2013 and the update that occurred at the end of last year the National-led Government—the John Key - Government—has known that it has not had a fit for purpose information technology system in the Inland Revenue Department.It is not often that I am generous to National Party members but I think we all know that there is within the National Party one person who can get his head around these issues. Going right back to the INCIS project the Hon Maurice Williamson wasrepeatedly on the record—repeatedly on the record—for warning the Bolger Government when he was a Minister in that Government that the approach the police were taking in that particular case would not work. It is probably not fashionable these days with open source and all of the new things that I do not really understand—but which Clare Curran I am sure will explain to me afterwards—but in those days what he said was that if Microsoft could not do it then it was pretty unlikely that the New Zealand Police would be able to develop the system. And that was the case here. The problem—The CHAIRPERSON (Lindsay Tisch): Come back to the bill.Hon TREVOR MALLARD: The point that I am getting to is that in this legislation Mr Chairman we are deferring the implementation of a child support system that can only be fairer than the current one. My challenge is this. Is there a single member of Parliament at least one who has a constituency—and I think that most members who are currently in the Parliament other than Mr Goldsmith do have people coming to see them to discuss taxation. Most members other than Mr Goldsmith who deliberately loses—he is a deliberate loser Mr Goldsmith when it comes to constituency matters—do in fact have people coming to see them who want to discuss taxation issues and most of us at least every month get someone who comes and tells us about the anomalies and the unfairness in the child support system.In fact I see no one in the Parliament who is prepared to defend as fair the current child support system. And so for a number of years at least 5 and probably 7 it was Peter Dunne’s job to work on developing a computer system that inter alia would handle those changes. What has he done? He has spent $50 million. He has spent $50 million mainly on overseas consultants—something that I find particularly suspicious. I find it particularly suspicious that such a large amount of money has been spent on overseas consultants. It is money that has gone offshore and money that ignores the New Zealand information technology industry. Did Government members even go and talk to Jade Software Corporation? No they did not. There are people in New Zealand—[Interruption] Not if you are going to spend what is it $700 million on the change. So $700 million is the current amount and rising.Dr David Clark: Up to $1.5 billionHon TREVOR MALLARD: Up to what?Dr David Clark: Up to $1.5 billion.Hon TREVOR MALLARD: So it is between $700 million and $1.5 billion on upgrading the Inland Revenue Department’s system and what all of us know is that the appropriate way of doing that is to do a bit of a base system and to do the rest of it in chunks—break it down and invite New Zealand firms to bid for it. Keep the money in New Zealand.Is anyone surprised when you spend $50 million on overseas consultants that they recommend an overseas solution? Well I am relatively certain that most of these consultants get matching finance do they not? They get matching finance from the people whose systems they are effectively paid to supply. That is an outrage but unlike Dr Clark I am not ungenerous. I think the Minister who is currently in the chair and who is the Minister responsible the Minister of Revenue should apologise on behalf of the Key Government. But I am not yet assigning him personal responsibility for 7 years of failure on the part of Peter Dunne to do a good job and to convince people. I will blame John Key because John Key could have put Maurice Williamson in charge of the project. He could have got some expertise. John Key could have got someone—we are not in question time so I am allowed to refer to Maurice Williamson’s professional background—who has a professional background in the information technology area and understands how these things work—but not now.The next point that I would like to make is that I do not think I have ever seen a commencement clause that is as ugly as clause 2 of this bill. This commencement clause refers to first of all—and it is outrageous—section 114 coming into force on 24 October. It is not 24 October 2014 but 24 October 2001—2001. It is retrospective taxation of the worst possible form. Is that alone? No section 116B the responsibility of Paul Goldsmith as the chair of the Finance and Expenditure Committee comes in on April Fool’s Day of 2005.I thought taxation was meant to be prospective. I thought we were meant to have clarity going forward. Are we now taxing people for income or not allowing deductions from the periods starting 2001 and 2005? If it is true it is absolutely outrageous. There are a few further minor sins. Sections 14; 16; 29(1) (2) (3) (5) and (9); 31; 57B; 59(1A) and (3); 65; 99; 99B; 102(2); 103(4); (13); (39); (52); 112; 112C; and 117B(a) all come into force on April Fool’s Day 2008.Hon Member: Which clauses?Hon TREVOR MALLARD: I cannot tell you again from memory but what I can tell the Committee is that this bill is entitled the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill 2013. So this is legislation that at its very worst was meant to come into effect last year. What we have got is legislation that is even further outdated.DAVID BENNETT (National—Hamilton East): I moveThat the question be now put.Hon TREVOR MALLARD (Labour—Hutt South): The next point that I would like to make and I am going to refrain from reading them because I think people would go cross-eyed is that there are 10 full lines of numbers starting at section 6 and finishing at section 117 and 117B(b) that come into force on 1 April 2014. What we do have is quite a large section where it is prospective but again I want to—[Interruption] Poor old Paul Goldsmith. He is not allowed to talk in the debate but he is sitting there shaking his head like a little boy in the primers. He is shaking his head like a little boy saying: “No no no.” If I am wrong and if those sections do not come into force then he should take a call and tell me when I am wrong.I am one of the relatively simple members of Parliament who reads the bill and takes Ministers at their word. I know it is an old-fashioned approach but when a bill says that it is a Government bill when it is in the name of a Minister—in this case the Hon Todd McClay—and it says that a few sections come into effect on 1 April 2014 I believe him. If Paul Goldsmith doubts Todd McClay’s word—well we have all heard Paul Goldsmith say that he should have had the job and not Todd McClay so there is no secret about Paul Goldsmith’s opinion of their relative abilities. I am on Todd McClay’s side. Minister I am on your side. I am on your side not Paul Goldsmith’s side. In fact if we got it right Paul Goldsmith would be in the ACT Party and John Banks would be in the National Party because that better fits the economic views of the relative individuals and would probably make things better around corruption and other issues which of course I will not refer to with regard to the Hon John Banks at the moment.The bit that my colleague David Clark has focused on the most as to the timing is in clauses 37BA 52D and 55B. I understand that those are the matters that have to do with child support. Those are the proposed sections that come into play on 1 April 2016. The question I would like to ask the Minister is whether any consideration is being given to families who have looked at the changes watched what the Government promised watched what went into the Finance and Expenditure Committee made submissions took the select committee at its word and made financial arrangements on the basis of the undertakings given by Peter Dunne John Key and Bill English.I am sure all of us will have constituents or people who have approached us in our offices and I do not know anyone who will be totally satisfied with this legislation because no one is ever totally happy with the very matter of child support. It is either too much or not enough depending on whether you are paying or getting it. There is perceived unfairness around whose income counts and which family’s income counts. There are always questions about the timing of the income. But what happens when Government promises change is that people rely on its word. People enter into financial arrangements they buy businesses they buy houses they take out mortgages they make arrangements for their kids they sometimes do schooling arrangements they enter into debt and they do it on the basis of an undertaking from the Government. My question to the Minister and I am looking forward to the Minister taking a call in this debate is whether he is prepared—JAMI-LEE ROSS (Junior Whip—National): I moveThat the question be now put.A party vote was called for on the questionThat the question be now put.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.Noes56New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.Motion agreed to.Clause 1 agreed to.The question was put that the amendments set out on Supplementary Order Paper 413 in the name of the Hon Todd McClay to clause 2 be agreed to.Amendments agreed to.Clause 2 as amended agreed to.Bill to be reported with amendment presently.Student Loan Scheme Amendment Bill (No 3)In CommitteePart 1 Amendments to Student Loan Scheme Act 2011GRANT ROBERTSON (Labour—Wellington Central): In the first of what I suspect will be a number of contributions on Part 1 of this bill the Student Loan Scheme Amendment Bill (No 3) I just want to sketch out where Part 1 takes this Committee. On the Labour Party’s side of the Chamber we would very much like to come to Parliament to support practical measures to ensure that student loans are paid off. On this side of the Chamber we believe that when people borrow from the student loan scheme they do have an obligation to repay those loans. It is within the original loan contracts that students sign that they will make those repayments. What I believe this Committee should then be doing is working out the best and most appropriate way to ensure that repayments come in and that we actually achieve the goal that the taxpayer who has been part of loaning this money to students will see that money returned. That should be the goal of this legislation—what is the best way of making sure that that money comes back into the system.Sadly the reality is that this bill falls well short of actually making meaningful progress on that matter. What this bill does is simply implement a slogan or a gimmicky policy and says that that is the answer to where we are going. Obviously in that regard Iam referring to the matters that are contained within clause 8 of the bill and that is around the question of creating a criminal offence around default of overseas-based repayment obligations and the process through which a person liable under that provision can be arrested. It is quite clear to us on this side of the Chamber that the time has come for a much more comprehensive review of how we ensure that we get timely repayments. This current Government has introduced a number of measures that are designed to try to increase the amount of repayments that are coming back yet the debt overseas has continued to rise during the term of this Government. So it is clear that although there will always be a measure of stick the carrot here is missing or the other kinds of ideas that might be put on the table are missing. I will certainly return to those as we work through the debate.Where I want to start is on the first part of clause 8 which contains the idea that there is now going to be an offence for borrowers who have not made repayments in the way that they are expected to. This is the new offence in new section 162A. I want to refer members to the submission of the Legislation Advisory Committee to the Finance and Expenditure Committee on this particular part of the bill. There is an offence that has been created in clause 8 and I will just read it out briefly. Clause 8 inserts into the bill a new offence for borrowers and it says: “Every person commits an offence who is in default of his or her overseas-based repayment obligation and who having been notified by the Commissioner that he or she is in default knowingly fails … to make reasonable efforts to pay the amount in default or to make arrangements with the Inland Revenue Department to pay the amount in default [by the due date specified in the notification].”We will work through those words but what the Legislation Advisory Committee essentially says is that moving from what is now a civil matter and making it a criminal matter is actually a very significant change. It is actually fundamentally changing the nature of the relationship that student loan borrowers have with the Crown. What the Legislation Advisory Committee said when it was commenting on this bill was: “The [Legislation Advisory Committee] considers that this”—inclusion of the offence—“is an unprincipled basis on which to create an offence.” It is extremely strong language from the Legislation Advisory Committee to say that this is an unprincipled basis on which to include a new offence because the offence is created simply so that the Inland Revenue Department can apply for an arrest warrant. So rather than making a case based around the severity of an offence or the damage incurred to the country or an individual or person—The CHAIRPERSON (Lindsay Tisch): Sorry to interrupt the honourable member but the time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.The CHAIRPERSON (Eric Roy): Members the House in Committee on the Student Loan Scheme Amendment Bill (No 3) is resumed. Before the dinner break we were debating Part 1 and Grant Robertson had the call. He has half a minute remaining.GRANT ROBERTSON: Half a minute hardly seems enough to be able to go through this. As I was saying before the dinner break the Legislation Advisory Committee made a very direct reference to the change that is occurring in new section 162A which effectively takes what is currently a civil matter—the non-repayment of loans—and turns it into a criminal matter. The Legislation Advisory Committee said that it considers that “this is an unprincipled basis on which to create an offence.” That is a very serious thing for the Legislation Advisory Committee to say—that this is an unprincipled basis for creating an offence. What it is referring to is that the only reason the Government is introducing this provision on behalf of the Inland Revenue Department to create this new criminal offence of not repaying your loan is so that itcan do the arrest at the border provisions. It is not based as I said before the dinner break on any particular injury that is occurring to the public any particular set of circumstances that warrant a criminal offence; it is merely so the arrest at the border provision could come into play.I think that we should take the words of the Legislation Advisory Committee and its chair the Hon Justice Sir Grant Hammond seriously here. There is nothing behind this provision that is in the way of principle. It is quite simply a gimmick. It is a gimmick designed to look like the issue of a repayment of student loans is being taken seriously by creating a criminal offence and then a set of arrangements for which people can be arrested at the border but in reality it will make very little difference to the repayment of loans. As I said at the start of my last call on this side of the Chamber we support initiatives that will provide for an increased rate of repayment of student loans. We want to see people pay their loans back both because that is what they signed up to do in the contracts that they signed and also because it is good for the New Zealand taxpayer. But this bill is not it and clause 8 does not provide for this.We know from what we heard in the Finance and Expenditure Committee that although there is a great deal of threat and a great deal of concern among people in terms of the actual number of arrests nobody knows what is going to happen. The police have quite clearly said they do not have the resources to involve themselves in arresting people at the border. We do not actually know other than that there is some indication that the Inland Revenue Department would like to make an example of some people. As I raised in my second reading speech a number of us on this side of the Chamber have been approached by people living overseas who have been perhaps in dispute with the Inland Revenue Department about their loan and who want to come back to New Zealand for a family event—for a wedding for a funeral—and are now in fear that they will not actually be able to do that. So this bill rather than acting as some kind of encouragement to young New Zealanders to come home and to contribute to New Zealand actually will act as a deterrent without achieving the goal that the Government has set itself of increasing the rate of repayment. It is the worst of all worlds to have a bill and in particular clause 8 that creates a criminal offence out of what is essentially a civil matter for no real purpose whatsoever.In the Finance and Expenditure Committee we were challenged by National Party members to say what we would do to help increase the rates of repayment. Well we could start by actually talking to the borrowers concerned and working out a repayment plan that works for them because another clause that I will come back to in this bill is around how it is that the repayment obligations of overseas-based borrowers are calculated. At the moment it is an extremely blunt instrument which simply says that it is a percentage of your loan and you have got to pay it back. It does not matter how much you are earning.If we really were serious as a Parliament about increasing the rate of repayment we would work on arrangements that were actually based on the earnings of people overseas and that gave them an incentive to pay back. It is so big it is so difficult it is so out of proportion to what people are earning overseas they give up and they say: “I can’t be bothered with it. I’m not going to deal with this.” Every year those people stay away from New Zealand every time the Government introduces a gimmicky provision like this means they will be less likely to return to New Zealand and less likely to pay back their loans. We on this side of the Chamber would love to support a bill that came before us that was full of new and good and interesting ideas about how to encourage overseas-based borrowers to repay their loans but this bill is not that.In clause 8—Dr David Clark: The research.GRANT ROBERTSON: We will come to that Dr Clark. In clause 8 the new sections 162A and 162B have been slightly altered by the select committee. I will credit the select committee with removing one of the most egregious elements of this which was in what was the new section 162B(2)(d) which actually allowed the court to apply any order it liked to somebody who was arrested under these provisions—anything at all. The court could have thrown them in jail it could have taken away their assets—it could have done anything. Thankfully that has now been removed but the extent—Dr DAVID CLARK (Labour—Dunedin North): I look forward to making this contribution on the Student Loan Scheme Amendment Bill (No 3). I am pleased to have received the call so soon although I also look forward to hearing what my colleagues around the Chamber have to say and indeed the possibility of the Government defending this particularly indefensible piece of legislation. As Mr Robertson has alluded to this bill is a distasteful gimmick on behalf of the Government which has no real plan to effect any change other than one of perception and even then it is skating on thin ice.We did look at this issue in depth in the Finance and Expenditure Committee. We asked questions about whether overseas payments would increase would be likely to increase and what kinds of estimates the Inland Revenue Department might be able to make about the increase in payments as a result of putting in an arrest at the border clause. It was very very hard to get chunky useful information because of course the department has been put in a very difficult position by the Minister of Revenue with this political posturing. The department to its credit acknowledges that it is very difficult to try to draw any sensible conclusions from this piece of literature we have in front of us in the form of a bill where it talks about the nature of arrest at the border.Specifically we are talking about new sections 162A and 162B inserted by clause 8. The new sections describe how the arrest might happen and what kind of conviction might apply including fines and who might issue such arrest warrants—a District Court judge we read in section 162B. New section 162B(1) states: “A District Court Judge or if a District Court Judge is not available and the case appears to be urgent a Registrar may on an application in writing by the Commissioner issue a warrant for the arrest of a person (the liable person) if the Judge or Registrar (as the case may be) is satisfied that the person has committed the offence in section 162A and is about to leave or attempt to leave New Zealand.”That is where this is activated and we debated vigorously in the select committee whether this was a useful addition to the legislation. I think that the argument was strongly in favour of it not being useful. It really makes no describable change other than giving the commissioner discretion to act presumably at the Minister’s behest for political posturing. That seems unprincipled and without real merit.On this side of the Chamber we are keen to support the notion that people be encouraged in practical ways to repay their debts. We very much support the collection of what is owed in terms of the borrowed money because we believe in paying forward. We understand that those who have benefited from the scheme and have themselves bettered their own lot the lives of their families and communities should be paying back what they owe so that other families and communities can benefit likewise. Unfortunately this Government does not particularly like this scheme and it struggles to come to grips with it and is constantly putting forward such things as this distasteful gimmick.We know that a National Government put in place the loan scheme in the first place. Labour made it interest-free which has benefited a generation of students. Then National sought to introduce punitive fees on top of the interest-free segment calling it an administration fee. You can see which direction the National Government wants totake this. It wants to make it a more punitive scheme and make it less available to people of certain age groups. Here we have punishments designed to create headlines so that people will realise that National is being as stingy as it possibly can be about sharing the love when it comes to the future education of our people.Labour members think that this bill the Student Loan Scheme Amendment Bill (No 3) with its punitive measures should be opposed and so we are opposing it. We are very much distressed that the police also have indicated that they do not think they have the resources necessary to even implement the changes as proposed. This bill is a distasteful gimmick and therefore wasteful because we are using parliamentary time to pass something that is merely posturing and can never be implemented we were told or if it is implemented will be implemented on a purely discretionary basis with few principles outlined or able to be outlined in the select committee process. We got told that it would probably be for more significant cases or cases where the commissioner felt there were other factors involved and so on. It was very difficult to hear through the noise any real principle that lay behind it. It is certainly not going to be effective. It just is political posturing.Meaningful change from improved student loan repayments from overseas borrowers in our view requires looking at options such as repayments based on earnings and negotiated payment agreements including with third-party involvement—parents in particular—but unfortunately the Government is not considering these as part of the legislation. What we have is a situation where some young New Zealanders are effectively exiled as enemies of the State because often they have got themselves into a position where they cannot pay back their loan.If they have been overseas in order to better themselves or to get a view of the world that is broader and they find instead that they have spent some time working in a pub and have not earned the kind of money that might be owed they are stuck overseas. They are stuck overseas; they cannot return. If there is a family funeral or tragic personal circumstances they are now living in fear that they will be that one person who is picked off at the discretion of the commissioner at the beckoning of the Minister in order to make a distasteful example of their situation. It is a kind of draconian measure—an impractical one and an unprincipled one.It is also worth noting that we do not have any real idea—as a select committee we were left none the wiser—as to how much money was likely to be retrieved. There is a lot of information we do not know about overseas borrowers. That is part of the real issue. There are information-sharing provisions that are being looked at. I understand the Privacy Commissioner has had some issues with the sharing of data on compliant borrowers. It seems to be where the focus has gone. The Big Brother approach to things has predominated under this Government and in fact those who are not compliant about whom we know very little are not being captured with this information. We know only that they are going to be more wary about returning to New Zealand to share their skills and to meet with their loved ones.We also know obviously that there are 200000 of them in Australia—over that number since this Government came to office. They are not all students admittedly but they have left this country because this Government has not given them hope. How this bill will give them more hope is very difficult to see. This is a Government that is intent on clamping down politically on anything it sees as an easy target. It is not interested in constructive ways of supporting the betterment of New Zealanders. New Zealanders are recognising more and more that this is a Government that is out of touch and has really not understood the benefits of an interest-free student loan scheme that will accrue to a generation pay forward to a future generation and mean that we have a better tomorrow.I hope that the Minister in the chair the Minister for Primary Industries does take a call to try to explain this populist policy and the benefits that might accrue from it but I fear that instead we will have David Bennett on a rant about how the Labour Party is soft on borrowers and is not constructive and so on and so forth. Look I would hate to steal his thunder but we do support constructive measures to get those loans back and we support the scheme unlike the National members who do it through gritted teeth. We support it wholeheartedly because we see the benefit in education as an investment for future generations for the betterment of this country.So I do look forward to Mr Bennett’s contribution. I hope it is more constructive than what occasionally he is tempted to deliver and more than just a closure motion because these are important issues that New Zealanders need to discuss and need to understand. We want to have a student loan system that works we want people to pay forward we want better education for our children for the next generation and we want a better society and we are saddened to see that this Government is intent on creating a few tragic examples in order to make a political gimmick stick.DAVID BENNETT (National—Hamilton East): It is very disappointing to see that the Labour Party will not support the Student Loan Scheme Amendment Bill (No 3) tonight. This is not a gimmick or anything like that but this really shows the true nature of the Labour Party. It is a party of socialist elite that believes that those who get a tertiary education should be treated differently from anybody else in this country. It is a party of socialist elite that believes that people who go overseas should get a free ride. It is a party of socialist elite that thinks it has the opportunity to tell people what they can do.This bill sets some stringent requirements on those who get a benefit from this country and this Government. Why should they not pay their loan back? What is the difference between a New Zealand borrower who stays in New Zealand and one who leaves New Zealand? If the Labour Party was not just looking after the socialist elite it would be offering those incentives to those who stay not those who leave. The Labour Party talks about negotiation with the parties. The Labour Party talks about having requirements of repayment based on earnings—things it is giving to people who leave this country who take their skills overseas and who build other countries stronger. They are going to get a free ride from the socialist elite that is the Labour Party rather than giving it to the people who stay here work here and make this country strong.What about those young men and women who work in the farms and the factories and who pay for people to go through that education? They do not get that benefit do they? But the socialist elite wants its own people to have the ability to take that money take that benefit not contribute to New Zealand and not even pay it back. That is what the Labour Party stands for. It does not care about the people who really do the hard work. It does not care about the people who want to build New Zealand. It cares only about the people whom it thinks it represents—those people who can afford to have an education and think the way it does rather than the people who understand what this country is built on. The people who want to get an education then stay here and build this country stronger are the people we should be rewarding not the people who take advantage of our system and then leave. Shame on the Labour Party!Look at some of the numbers here. New Zealand - based borrowers make up 84 percent of borrowers; overseas-based borrowers make up 16 percent. If you look at those in default New Zealand - based borrowers are 13 percent; overseas-based borrowers are 71 percent. New Zealand - based borrowers owe $78 million in default; overseas-based borrowers owe $543 million in default. Why do we give those people who owe $543 million a better ride than we give those people who stay here and who go work in our schools go work in our hospitals go work in our industry and go aboutbeing part of building a stronger productive economy for New Zealand? What gives the Labour Party the right to say that those people who stay here and make this country stronger should be worse off than those people who go overseas and work in a pub for 2 years? What gives the socialist elite of the Labour Party the right to say that? Nothing gives it that right. That is why it is out of touch.This is not a gimmick. This is about sending a signal to those young people who go overseas that we expect them to repay their debt to this country. We would love it if they stayed here and paid their debt by working in New Zealand for New Zealand and to the benefit of New Zealand but if they do go overseas they should not forget the debt that they owe the people who are here who have paid for that debt and who are working for that debt—day by day paying the interest on that debt.But that is not the case for Labour Party members. They believe that their sons and daughters—that sort of socialist elite that was born to rule—will be people who can go overseas and not have to do anything about it. It is sickening to see the Labour Party do that—a Labour Party that should stand for fairness for those people who are working in the base industries of New Zealand and that should be looking after those lower-income earners. But in fact it wants to give more to those who can earn more. It wants to give to the rich and take from the poor. That is the Labour Party of old. That is the Labour Party that is coming back. It is great to see the Labour Party show its true colours when it comes to a bill like this.TRACEY MARTIN (NZ First): Kia ora Mr Chairperson. That last speech was fascinating. I think the people of New Zealand have just seen slogan No. 1 for the 2014 election campaign—well at least the one in Hamilton where Mr Bennett will be campaigning. I find it fascinating that Mr Bennett has actually read some of the figures to do with the Student Loan Scheme Amendment Bill (No 3). I think that is great. Thank you very much Mr Bennett; that is an improvement on past performances. Losing the light show that we just had let us go back to the real world and the practicalities of how this bill will affect New Zealanders as opposed to the little bit of electioneering we just saw. I am really pleased that there is a Minister in the chair—the Minister for Primary Industries. I hope the Minister may be able to answer these questions although I am not sure that it is the right Minister who is in the chair.Let us get real. We are talking about new sections 162A and 162B in clause 8. This is the clause in Part 1 that we are going to focus on to start with and it is about arresting citizens at the border. Let us talk practicalities shall we? Let us talk about the fact that as a New Zealand citizen who has an overseas debt comes into the country they swipe their passport. That is no different from when a New Zealand citizen leaves the country and they swipe their passport. I am going to make a huge leap here. I am going to make an assumption here that the passport you swipe coming into the country is exactly the same passport you swipe as you go out of the country. That means that if an alarm can go off on your way out an alarm can go off on your way in.I would ask the Minister to address the question that New Zealand First has. As a previous debt collector I am looking for practical ways for us to actually collect debt from the people whom we are trying to collect it from. If a New Zealand citizen swipes their passport on the way into the country and they have an outstanding debt an alarm will go off—not a physical alarm but a bleep in a computer system somewhere that says to the Customs Service “Uh-oh. We need to actually hold this person for a moment because there is something that the Government wants to talk to them about.” If you do that on the way into the country the person can now possibly provide you with details of bank accounts can now provide you with a third-party contact list and can now actually sit down before they go off to their wedding or their tangi or whatever it is and come to an arrangement.If there is a mistake in the record-keeping of the Inland Revenue Department—and I know that many people think that might be far-fetched but believe me it is true. The Inland Revenue Department does make mistakes. If there is an error in the data from the Inland Revenue Department that says this person owes a debt and yet they do not we have avoided a situation in which that person would then be pulled from a line if they are leaving the country and lose their flight and their family—I am not sure I would leave without my husband and my children if I was leaving the country and he was hauled off by the police because of some debt that apparently he owed the New Zealand Government. If we do that on the way into the country there is no loss of airfares there is the time that there is to actually sort out the problem if there is an error by the Inland Revenue Department and there is time to complete paperwork—all in a practical and very supportive way for a win-win situation.I would like the Minister to answer why the point of exit was chosen as opposed to the point of entry. I would love for the Minister or anybody who was actually on the Finance and Expenditure Committee to tell me whether that was discussed. Was it ever discussed?John Hayes: Why don’t you ask Winston?TRACEY MARTIN: Because I am asking you Mr Hayes. You are the people putting up the bill. If you do not know it then who does? It is the National Government that is putting forward this bill and it is for the National Government to explain to the people of New Zealand why it will arrest them as they leave their country. It is not for me to explain your policies. It is for you to understand why your Government has decided to arrest New Zealanders as they leave as opposed to creating exactly the same system exactly the same amount of cost exactly the same amount of paperwork and yet the possibility of a truly win-win outcome. So I ask the Minister whether he will stand and answer why the concept of actually identifying these people on entry as opposed to exit is not inside this bill. If you can justify it that is brilliant but I am picking from Mr Hayes’ contribution that you cannot actually justify it.Let us go to point No. 2; perhaps the Minister can explain this. What is the rush? What is this rush to force this through the Committee stage and the third reading—to push it through?Joanne Hayes: $2 billion of debt.TRACEY MARTIN: I will tell you what. I know the answer to that same question Mr Hayes but I am quite sure you do not. It is because on the StudyLink website it is already advertised. It is already advertised as being in law that this Government will arrest New Zealanders. So we now have to rush in this House and go into extended hours and so on and so forth to put into place legislation so that what has already been placed on the StudyLink website what is already concerning New Zealand citizens overseas can actually be a law. Right now this is fraudulent. This is fraudulent because it is not law. There is no guarantee it will pass except that this Government is arrogant enough to believe that not one of its minor parties will have the audacity to actually change its view.Let us talk about Mr Bennett talking about hard-working people etc. etc. It is actually not young people whom most of this debt belongs to. Fourteen percent of this particular debt that we are talking about is from borrowers from 1992 so let us not place this on young people again shall we? These are the figures inside the Government’s own report that unfortunately it would appear that the Government has not read. Fourteen percent of the outstanding amount is from borrowers from 1992. What this tells you is that it is unlikely you are going to get that amount of money—and that is 14 percent of the number of borrowers not 14 percent of the amount overdue outstanding.Let us go to the outstanding. Let us go to the fact that—and perhaps the Minister would like to answer this—the Inland Revenue Department recognises debt as overdue debt only when it is 5 years overdue or more. Just recently we changed the repayment holiday for overseas-based borrowers to a 1-year repayment holiday but prior to that it was a 3-year repayment holiday. Why on earth would you not recognise at the end of that 3-year period that this is now an overdue debt? For a debt collector the reality is that the longer you do not make contact with that person the less likelihood there is that they will pay it. So where inside this bill or any legislation or in any discussion is it stated that the Inland Revenue Department has been told to recognise overdue debt in the future as that that is perhaps 14 months old so that it starts making contact in a time frame in which it is possible to collect?The next point is how has the passing of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 affected the ability of borrowers to repay? Has anybody asked? The banks are currently looking at that. The banks are currently looking at the four groups of our citizens that have been disadvantaged by that particular Act—the money-laundering Act. It is an unintended consequence of that Act that if you are overseas and trying to send money back to New Zealand there is now a great deal more paperwork and a great deal more cost to you to do so. So has the Inland Revenue Department or the advisers to the Minister looked at how that 2009 Act has affected the ability of these people to pay? Is it about assisting our citizens to pay or is it as the Labour Party says merely a political ploy for this election?Is it the fact that there is actually nothing else the Government can get tough on with regard to crime—because it does not want to fund police and so on and so forth—so now we are going to just start putting forward sound bites like arresting our citizens at the border for debt? You get situations like with Mr Bennett who stands and rants and raves generally having never read the bill and generally having no concern at all for the New Zealand public or any student anywhere whom I have ever seen. But he stands there and starts to use clichés to try to spin what this bill is so that the New Zealand public thinks the Government is doing something. I can guarantee the New Zealand public—particularly if the Minister does not get up and answer these questions—that this Government is not doing something apart from putting in place another nuance to being able to actually arrest its citizens at the border when it sees fit.That is where we start to tend towards more of a police State. There is more and more and more of this insidious creep I think it is called where this Government starts to chip away and chip away and chip away at things that New Zealanders can do. New Zealand I implore you to listen to people like Mr Bennett listen to him very very carefully and see that there is no content whatsoever to what Mr Bennett said and have a look at what they are chipping away because this will be your son this will be your daughter and this will be your grandchild before you know it.POTO WILLIAMS (Labour—Christchurch East): I rise to take a call on the Student Loan Scheme Amendment Bill (No 3). I want to assist my colleagues on this side of the Chamber to point out something that I find very troubling about this bill—specifically clause 8 in particular new sections 162A and 162B. I speak of course of the criminalising of people who have student loans and of arresting them at the border for a problem if they have defaults on their loans. Although I fully support the taxpayers of this country requiring us to repay what is clearly owed to them for the benefit of having a loan to support our study I think that we should be making it easier for students to repay this loan. It appears to me that we have missed several steps in this process in order to achieve a heavy-handed big-gun populist approach—a gimmick that sounds like it will achieve the objective but really it will achieve very little.Specifically in terms of clause 8 who is going to enforce these arrests at the borders? And I wonder how stretched our border authorities already are. Will it be the police then? Well I hear that they have already stated quite clearly that they do not have the resources to enforce it in the way that this bill is proposing. The bill and this clause in particular is punitive and basically takes what should be a matter for civil jurisdiction and turns it into a criminal matter. But that is not the only point that I want to make.The point I want to make is that this would not be required as an enforcement tool if we looked at intervening in this pathway a lot sooner in the process. If we are serious about ensuring that our students repay their student loans we need to be prepared to facilitate it by making it as easy as possible and without the threats potentially hanging over their heads. What kind of message do we send to our students? The potential for being criminalised for taking advantage of a student loan scheme—an interest-free scheme that I am proud to say was part of a Labour-led initiative and one that despite the fact that the National Party does not really like it National is currently not prepared to ditch because the scheme does a great job of supporting people into education.Many Pacific students have taken advantage of this very scheme. It is vital for our Pacific communities that they have the opportunity to access the student loan scheme and it is a great opportunity for Pacific students to attend higher learning and for those younger Pacific students to see that it is possible to hold tertiary qualifications. However as we have heard spoken about when the provisions are to arrest at the borders and we see Pacific people who are likely to be moving around our borders in that regard does it not then beg the question of who might be potentially most at risk?I worry about the message that we are sending to our students when we say: “If you get into trouble with your loan watch out. You will have to provide security you will have to surrender your travel documents or you will be arrested at the border.” What a massive disincentive to our student population and why would you even consider studying in this environment of threat and retribution? It goes to the very heart of the very Kiwi institution of the great OE whereby many of our young people have taken it directly after their study and travelled overseas. Like many Kiwis they have taken up employment in other countries and as Kiwis have a reputation for being conscientious and hard-working folk innovative and clever so our people are sought after. What do we do with this knowledge and experience that they have picked up in the overseas working environment? Do we bring this knowledge and experience back home to benefit the local businesses the academic institutions and the research organisations? Well we should but only if we welcome our people home rather than disincentivising them to return with their skills and experience. Let us face it. We are not the biggest country in the world and bringing ideas and knowledge home after testing it on the world stage is only going to be good for this country.So we are in effect making refugees of our own people because they are in fact exiled overseas unsupported and are not helped to return home to repay the loans as they should. Do we need any more evidence of a Government that does not understand the needs of its own citizens and that could permit a section of its citizens to become criminals rather than taking a rational approach to the issue?PAUL GOLDSMITH (National): I moveThat the question be now put.CHRIS HIPKINS (Labour—Rimutaka): I am happy to take a call on these amendments to the student loan scheme but I want to start by responding to some of the comments from David Bennett. I just cannot let them go unanswered. I want to start my contribution on the Student Loan Scheme Amendment Bill (No 3) by saying that it is somewhat ironic to be lectured by a Government that has clocked up a bigger Crown debt than any other Government in New Zealand’s history. It is lecturing us about debtrepayment yet it has clocked up a bigger debt than any Government in New Zealand’s history which will take generations—generations—to repay. At the end of this parliamentary term New Zealand will have more debt than we had at the end of Muldoon’s term in Government and that is Bill English’s legacy for New Zealand and John Key’s legacy for New Zealand.David Bennett talked about the people who really do the hard work and then of course excluded anyone with a tertiary education from that definition. He basically said that if you have a tertiary education in New Zealand by definition you are not one of the people who does the hard work and contributes to the New Zealand economy. You are one of the socialist elite if you have a tertiary education. That is just the typical anti-intellectual reverse elitism that we get from the National Government which hates anybody who might have an independent opinion and be able to think for themselves. In fact we do not have even a Prime Minister who can think for himself. He relies on Cameron Slater to tell him what he should think and we know that for a fact because he admitted it the other day.Well actually I think that if more New Zealanders had a tertiary education they would be able to see through the hollow spin that so frequently comes from this National Government and they would know that having a Government that is dictated to by Cameron Slater is not good for the health of the New Zealand democratic system. David Bennett seems to ignore the fact that we all benefit from an educated society. So yes the people who do not get out a student loan because they may get their education through a trade for example still benefit as part of a society from the people who do get a tertiary education.David Bennett: Oh socialist elite—socialism.CHRIS HIPKINS: Oh and this makes me part of the socialist elite! I am part of the socialist elite if I point out that somebody who does not have a tertiary education but might have a trades qualification for example which they got through an apprenticeship—and that is fantastic—still benefits from the contribution to society made by the people who do get a degree or take out a student loan in order to support their study. And of course David Bennett ignores the fact that many tradespeople have student loans as well. Actually many many tradespeople have student loans as well. So I think that David Bennett’s anti-intellectualism does not contribute very much to this debate at all.I want to talk to the specific provisions in the bill and in particular what I would like to do is examine the regulatory impact statement which Treasury helpfully has released. The regulatory impact statement is one of the most useful resources that we get as parliamentarians. It enables us to look at the options that were canvassed by the Government to look at the pros and cons of each option and the reasons why the Government chose one option or the other and to weigh up the legislation before the House in light of the other alternatives available.I was interested to see for example what the pros and cons were for the arrest at the border provisions in this bill. Somewhat helpfully Treasury has redacted all of the analysis of the pros and cons of that particular provision which of course begs the question: what on earth is the point of a regulatory impact statement that is supposed to inform intelligent debate on a bill if it is all redacted and if it is all withheld from the people who are going to be taking part in the debate? It actually means that the regulatory impact statement is worse than useless and we have to ask what the point of it is. So unfortunately I cannot canvass in any great detail really the pros and cons of the alternatives that were considered by the Government because Treasury has not supplied them.It could well be of course that the Government did not consider any alternatives because we know that this is in fact a fairly hollow measure. It is not exactly going to suddenly result in a massive decrease in student loan borrowing or student loan debt. In fact it will have a negligible impact. This is more that the Government wants to be seen to be doing something about something. It fills up the legislative programme and makes the Government look busy. It does not really make a heck of a lot of difference but it makes the Government look busy and makes it look tough on all of those mean nasty people who do not repay their student loans. Of course we know that there are actually very few people in that category.I was very interested in looking at clauses 10 and 11 of this bill which deal with the sharing of borrowers’ contact details that are received from their passport renewals. For example under the current arrangement if somebody applies for a passport the Inland Revenue Department can obtain the contact details that they supply with their passport application only if they are in default on their student loan. This provision extends to everyone even if they are not in default on their student loan.I think that there is a very legitimate question to ask about this provision. Why would the Inland Revenue Department have the right to obtain somebody’s passport application details if they are not in default? If they have not done anything wrong what right does the Inland Revenue Department have to obtain their personal private information? I do not think the department does have the right. I do not think that there is a good reason for doing that. There is no case.I have read the regulatory impact statement. I have read this little document here—the commentary on the bill which Todd McClay the Minister of Revenue has put out. The case has not really been made at all as to why details can be given to the Inland Revenue Department in respect of somebody who has done nothing wrong has made all of the student loan repayments that they are required to make and applies for a passport because they want to go away on holiday. What right does the Government have to give that information which is submitted for a passport application to the Inland Revenue Department for the purposes of student loan administration when that person has done nothing wrong and when their repayments are up to date? There is actually no good reason for that. No case is made for that. This is just a case of the Government sharing people’s information willy-nilly. It may as well give it to the ACC and then everybody could have it.Grant Robertson: Or just give it to Judith Collins.CHRIS HIPKINS: Or just give it to Judith Collins—Grant Robertson: Or Cameron Slater.CHRIS HIPKINS: —or to Cameron Slater and then he could publish it and then John Key would know what everybody is up to of course because we know that that is one of John Key’s main channels of information. Actually no case is made for this information sharing. I think that Government departments should share information where there is good reason to do so. There is no good reason for sharing this information in the cases where people are not in default on their loans. If they are meeting all of their repayment obligations the Government should just leave them alone. And as long as they continue to do so good on them and I do not think that the Government has any right to be delving into their private personal passport applications.I want to come now to the arrest at the border provisions. I think that one of the really important messages that we want to send to student loan borrowers who are living overseas is that we want you to come home.Grant Robertson: Come home.CHRIS HIPKINS: We do want you to come home. We want you to contribute to New Zealand society. You are valued members of New Zealand society and we want to make it as easy as possible for you to come back. But of course what this Government has done is first of all made it more likely for people who are away overseas to get into default in the first place. Previously there was an amnesty or a holiday period from repayments. Those who went away on their OE for example might take 18 months off. That was fine. But this Government has reduced that period. People who go away on an OE might intend to be away for only 1 year but of course things happen. Things happen while people are away on their OE and they extend it. They might extend it to 18 months or 2 years but suddenly without ever having really thought about it before they left home—because they were only ever intending to be away for a year—they will find themselves in default on their student loan repayments.Most graduates go away for a year on their OE and I encourage them to do it because I think that they are better contributors to New Zealand society when they get back and that sense of perspective that somebody gets from travelling is good for New Zealand. So I would encourage them to do that. They go away for 1 year and they do not really think about their student loan and nor should they really need to because if they are away for only 1 year then there are no penalties for non-repayment. But previously that period was 3 years and it did allow for those situations.Of course I do not know what the overall experience of members of the House is but most of the people I know who go away overseas for a period of time are normally back within a couple of years. They go away—they might do a bit of a working holiday they do a bit of an OE—but then they do come back and when they come back they start repaying their student loans. These are the people who are now going to be captured by this Government’s somewhat Draconian and punitive measures. What it does is send a message to them that New Zealand does not want them back. Actually we do want them back. We do want to make it possible for people at the end of their study or at some point—they might have worked for a few years to save some money beforehand—to travel overseas and then we want to make it as easy as possible for them to come back. But not this Government—this Government does not seem to be interested in that.So I think that this bill is window dressing but it is actually sending the wrong messages in its window dressing. Yes people should repay their student loans but simply being punitive about it and threatening to arrest people at the border is not a progressive forward-looking move. It is actually quite retrograde. That is one of the reasons why the Labour Party is opposing this bill.ALFRED NGARO (National): I moveThat the question be now put.Dr MEGAN WOODS (Labour—Wigram): Despite Mr Bennett’s very strange rantings in this Committee tonight nobody on this side of the Chamber disagrees that people who have borrowed money through the student loan scheme should pay back the money that they owe. I do believe that New Zealanders living overseas who have taken out a student loan should make their repayments just like I did just like many of us on this side of the Chamber did. That is not what our opposition to the Student Loan Scheme Amendment Bill (No 3) is about.I suggest that Mr Bennett rather than trying to be a one-man band rewriter of the Crosby/Textor line book by coming up with his new slogans and trying to get some traction on them for 2014 should actually stop and listen to our objections to this bill. Our objection to this bill—and why we are not voting for this piece of legislation—is that it will not work. This bill is a gimmick it is window dressing and it is not going to do what it purports to do which is to increase the rate of repayment of outstanding debt on the student loan book. It just simply is not going to work.There are a number of clauses that I want to look at tonight in Part 1 of this bill. I want to look at clause 4 clause 6 and of course clause 8 which a number of my colleagues have traversed in the course of this debate. The first one that I want to turn to is clause 4. Clause 4 and I think that Tracey Martin alluded to this in her speech is where we have this Government enacting yet another piece of retrospective legislation. It has already put these rules in place. This is legislation playing catch up because it is a Government that is not keeping up with its legislative agenda. This bill has taken a very long time—since Budget 2013—to come to this Committee and yet the Government has already put this into play. So that is one of the things I object to.Then I want to turn our attention to clause 6—which I think Grant Robertson alluded to—which is the very blunt tool that has been put in place around how borrowers who are living overseas are expected to repay their loan. So if you have a loan and you are living in New Zealand then your loan is repaid according to how much you earn but if you are living overseas your repayments are calculated on the balance of your loan. Although previously there was a three-step repayment threshold under this legislation this is now increased out to five steps. It means that if you have a loan of over NZ$60000 you are liable for repayment of NZ$5000 per year no matter what you are earning. If you are earning £150000 and you have got a loan of NZ$61000 you will pay back NZ$5000 on your loan each year. If you are earning £12000 working in a pub somewhere in London and you have got a loan of over NZ$60000 you will also be required to make a repayment of NZ$5000 per year. This is setting people up to fail. This is setting people up to get into trouble with their loan and then you know what? It will be “catch them if you can” because you can arrest them at the borders when they come back in.We are not setting in place a scheme that incentivises and makes it easy for New Zealanders who are living overseas to repay their loans. On this side of the Chamber we have supported it when the Government has put in place measures that we think will work to increase the number of people who repay their loans and make it easier for them to do so. We supported the measure around making it easier to make repayments through the Inland Revenue Department website. We thought that was a good measure and we gave our support to that because it simply was going to improve how people do it.But in increasing the thresholds under clause 6 of this bill in concert with what we have already seen in previous amendments to the Student Loan Scheme Act—I think it was amendment bill No. 2—which was about contracting the repayment holiday that was available for students we are simply setting traps for people to get into trouble. When Labour put in place the interest-free student loan scheme when we were last in Government it was done for several reasons. One was to address the amount of money that people had to pay at the end of their education.JACQUI DEAN (National—Waitaki): I moveThat the question be now put.STEFFAN BROWNING (Green): I rise to speak to the Student Loan Scheme Amendment Bill (No 3). I want to focus on the border aspect as well as on the fantastic bright young people who have moved away for better wages and better conditions and to get a broader experience so that they can come back to New Zealand some time. There is a whole range of scenarios for the people who have left. We know that economics have driven a lot out. It seems to be unusual that here we are putting something up to discourage some young people from coming back—but it is not “we”; it is National. National is discouraging our best and brightest from possibly come back. They will possibly end up paying amounts of money that are just not fair because the ones back here are paying something different—or maybe that is the incentive. It is a little bit hard to work it out.At the same time the elite of National are keeping wages down in New Zealand by making it easy to bring in more and more temporary migrant workers and to keep wages down in order to look after its elitist farms and its elitist businesses to make money and to hold wages down for New Zealanders. It then keeps our brightest young people overseas or makes them pay money in a wholly disproportionate way. It is a damned mess and it keeps—[Interruption]Tracey Martin: Ignore him.STEFFAN BROWNING: —yes—the inequity of repayments for New Zealanders overseas compared with those at home. Then we keep wages right down and conditions right down—disgusting situations. We bring people in by the truckload for our horticulture and our agriculture and we keep our New Zealanders overseas or we penalise them.It is very interesting because this is a gimmick in another way and yet it is holding back a batch of good Kiwis as well. It is holding them down. It is going to be penalising them inappropriately. The figure I am told is that this will target 3.2 percent of the $13 billion student debt. This is all about that 3.2 percent. We will have police acting as debt collectors at the border to discourage or to catch young New Zealanders—and older New Zealanders as well as we have heard.I think this Government needs to have a deep look at itself and ask what it is doing.John Hayes: Oh nonsense.STEFFAN BROWNING: Oh yes! We have seen the big line-up and the multimillionaires splattered across here. They can send their kids overseas. They do not have to worry about student debt. But the others—the real New Zealanders the ones doing the grunt and the work—have to pay bloody heaps of interest. This lot does not. No no—they can send their kids through because they are just all right thanks mate. So that is the issue. That is the issue [Interruption] The members making the noise over here—continual noise—do not have a real idea of what it is like for a lot of people. They do not care because they have got the money. So we need to look at some positive incentives for decent wages and conditions and not use these punitive methods to try to address a very very small amount of the student debt. Thank you.JOHN HAYES (National—Wairarapa): I moveThat the question be now put.GRANT ROBERTSON (Labour—Wellington Central): I raise a point of order Mr Chairperson. I believe that when someone moves a closure motion all that they are allowed to say is: “I move that the question be now put.” After you called John Hayes he said: “Mr Chair I move that the question be now put.” I do not think that that is in the Standing Orders.The CHAIRPERSON (Eric Roy): No it is quite OK. You are allowed to address the Chair.GRANT ROBERTSON: After a member has already been called?The CHAIRPERSON (Eric Roy): Yes. You are allowed to acknowledge the Chair.A party vote was called for on the questionThat the question be now put.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.Noes57New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Motion agreed to.A party vote was called for on the questionThat Part 1 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes60New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Part 1 agreed to.Part 2 Amendments to Student Loan Scheme Amendment Act 2013GRANT ROBERTSON (Labour—Wellington Central): Part 2 of this bill the Student Loan Scheme Amendment Bill (No 3) makes a series of amendments to schedule 3 of the Student Loan Scheme Amendment Act 2013. That is right. The Government has to amend the legislation it passed last year because it got it wrong again when it comes to student loans. Part 2 of this bill amends schedule 3 of the Student Loan Scheme Amendment Act 2013.This is one of the problems that students have with the current Government—its constant tinkering and mucking around with the student loan scheme yet not actually getting to the heart of the issues that lie within it. For instance this part talks about borrowers who are shareholders in close companies those who are involved in trusts and people who have employment benefits—and I will come back to that particular provision in a moment—none of which actually addresses the real issues that are involved in the student loan scheme. The biggest one is that at the moment the living costs component for student loans is $173 a week. Well in Wellington a whole lot of students are arriving in town right now and very few of them will find accommodation that costs them less than $173 a week. If they add in their bills if they add in anything to do with food it is gone. They cannot meet those needs through the current living costs arrangements of student loans.Steven Joyce stood up in Parliament today and said that postgraduate students who have lost their allowance because National abolished it can just borrow from the student loan scheme. Well the reality is that they cannot afford to live on that. Many of those people who got the student allowance—for instance for the clinical psychology course that was raised today—are parents who were earning around $350 a week off the student allowance system to help bring up their children. They are now being asked to live off $173 a week and they cannot so they are giving up their study. That is the impact of the changes that this Government has made to student loans and student allowances.Rather than tinkering around with schedule 3 of the Student Loan Scheme Amendment Act 2013 this Government could be coming to the House with a reform of the student loan and allowance system that actually works in facilitating people into study.Paul Goldsmith: Ah the solution: more money. More money.GRANT ROBERTSON: Well no Mr Goldsmith it does not necessarily have to be more money. More money would be useful. How about this Mr Goldsmith: how about cracking down on the kids of parents who put all their money into trusts so that they get an allowance whereas other people from working families who do not have the money to pay for an accountant do not get a student allowance? How about coming to the House with a bill that does that? How about coming to the House with a bill that actually says to people who have lost their jobs and who happen to be aged over 55: “We are going to support you into retraining.”? But no what this Government did was it said: “People over 55 you are not eligible for the living costs component of studentloans.” I have had people in my electorate office in tears because their ability to retrain and their ability to get a job that will sustain them through to their retirement is gone under this Government.Every step of the way the National Government has undermined the student loan and allowance scheme. It has said: “We don’t want people in tertiary education. We want to limit the number of people who are involved in tertiary education and we are going to use the student loan and allowance schemes to do that.” Well I think that that is just plain wrong. It is short-sighted and it is selling young New Zealanders short. It is selling people who are retraining and those who have lost their jobs short. This bill could have been a bill that said: “Yes we’ll make it easier for people to repay their loans. Yes we will support people through student allowances and through access to student loans so that they can achieve their potential.” Instead Part 2 of this bill is simply tinkering around with schedule 3 of the Student Loan Scheme Amendment Act 2013.One aspect of that is the aspect around the question of income from employment benefits. I will credit Tracey Martin for raising this in her second reading speech because although on the surface it makes it look like we are dealing with a benefit like a motor vehicle that somebody might have as part of their job if part of their job involves travel they often are not recompensed for that beyond a mileage rate perhaps if they are lucky and here we are throwing that in to people’s income. It is already hard enough for people having had the Government increase the repayment rate from 10c in the dollar to 12c in the dollar. It is already hard enough for people who have not had a wage rise under the 5 years of this National Government without imposing these kinds of things on them.The Student Loan Scheme Amendment Bill (No 3) is nothing more than a bunch of window dressing and slogans put together in a bill and now some corrections to a bill that was passed last year. Students all around New Zealand are starting off their courses at universities and polytechs and other training institutions at this time of the year. They are looking at how they are going to finance their way through their studies. If they are over 55 if they are over 40—for student allowances—if they are a postgraduate student or if their parents’ income has shifted at all in the last few years they are worse off under a National Government. It is more difficult for them to study and students end up taking on more and more hours of part-time work in order to just get by. The amount of $172.50 a week is not enough to live on under the living costs component of the student loan scheme so what do students do? They take on more part-time work. What does that do? It has an impact on many students’ study and their ability to actually achieve the results that they should.The interest-free student loan scheme is not a system that the National Government is committed to. We know that. John Key said he did not believe in it and that he was going to oppose it with every bone in his body. As a result of not being able to have the political will to stand up for what National actually believes—that it wants to put interest back on student loans—its answer because it is not prepared to do that and because it does not have the guts to put that before New Zealanders is to tinker around with the system through bills like this which makes it more difficult for New Zealanders to repay their loans if they are overseas. Let us be absolutely honest about this. This bill will make almost no difference to the repayment rate for student loans. In fact the evidence that the Finance and Expenditure Committee saw was that it actually is going to be harder for people to pay back their loans. They will actually pay back less of their loans. They will not come back to New Zealand.So as a bill it does not even achieve the purpose it set out to. It is a bunch of slogans. Part 2 of this bill adds absolutely nothing other than correcting a hopelessmistake of this Government which clearly does not know what it is doing with the student loan scheme.PAUL GOLDSMITH (National): It is my pleasure to follow the previous speaker Grant Robertson. I am intrigued because I hear all the Opposition spokesmen saying that the Opposition is not opposed to the idea of people paying back their loans and being obliged to pay back their loans but it just seems that those members never happen to agree with any of the ideas put forward. The approach of the Labour Party seems to be that if we talk to people and we ask really really nicely then perhaps they might pay back their loans. Well it does not work that way and it has not been working that way and that is why this legislation has been brought in as a very last-ditch measure. If you have one of the 61000 New Zealanders overseas who have got student loans who have left the country and who are not paying back their loans and if you have exhausted all other opportunities to get them to start paying back their loans then this Student Loan Scheme Amendment Bill (No 3) gives us the tools that we need.Do we really think that the hard-working factory workers on modest wages should be paying taxes to pay for highly trained overseas people who have bunked with the cash and are not paying back their loans? Well then I think that is why the Labour Party is a bit out of touch. It was interesting to see also the previous speaker Mr Robertson suggesting that we do something about people hiding their money in trusts so that they could get student allowances. Well you know we actually passed legislation that broadened the definition of income of parents for student allowances and for student loans. We have been doing that and we will continue to work in that area.It is a long slow process because it does take and it will take decades for New Zealanders to wean themselves off this entitlement culture that has developed: the idea that somehow every solution to every problem we have got in this country is that we just need more money. Mr Robertson was a perfect example of that in the previous speech. The solution to the problem is just more money. That is what we need to do: have more money to spend on student allowances and student loans. Well there are not necessarily endless supplies of more money. New Zealand has to fight its way and be competitive in a global world that is competitive. We get to spend resources on education and on tertiary education and on supporting students only if we have a strong economy and we have a strong economy only if we are disciplined about the way that we spend our money. That is why this Government has been successful by having a disciplined approach to spending getting back to surplus and doing a good job and it is why we continue to have the same levels of support that continue. It is why Labour is I think struggling to get attention and traction because it is all about spending more.Just dealing with some aspects of Part 2 that I wanted to draw the attention of the Committee to in terms of the new arrangements in terms of paying back loans previously yes we do have overseas-based borrowers’ repayment obligations—Kris Faafoi: Bring out the formula!PAUL GOLDSMITH: —being based on their loan balance while New Zealand - based borrowers’ obligations are based on income. I do not want to confuse the Opposition by dealing with the mathematics because I am sure that not all of them are so good at mathematics but what I would say is that if there was a perfect way of figuring out what the income of overseas people was then that would be a sensible way of doing it but there is no practical way of doing that so the loan balance is what we are using here. This bill extends that. At the moment a balance of over $30000 has the obligation to pay $3000 a year. Now that obligation for loans of between $45000 and $60000 will be to pay $4000 a year or $5000 a year respectively. If people on the other side think that it is unreasonable to ask New Zealanders who have a loan of morethan $60000 that they have not paid back to their fellow New Zealanders that they start paying back that money then I think they have got a serious problem. Thank you.The CHAIRPERSON (Eric Roy): David Clark.Hon Members: Oh!Dr DAVID CLARK (Labour—Dunedin North): That vote of confidence from my colleagues is welcome. Of course everybody wanted the opportunity to speak after that purler from Mr Goldsmith. There was quite a lot of competition on this side of the Chamber to draw attention—further attention—to the speech that Mr Goldsmith has just made. Mr Goldsmith just told New Zealand students that they need to wean themselves off their entitlement culture. If people at home heard that Mr Goldsmith said that it would take a lot longer than 5 years for them to wean themselves off their entitlement culture. That is Mr Goldsmith’s O-week message to the students of New Zealand. Students need to wean themselves off entitlement culture. [Interruption] What was that?Grant Robertson: It’s an entitlement they have to pay back.Dr DAVID CLARK: It is an entitlement they have to pay back Mr Robertson points out. This of course is a boon to members on this side of the Chamber because it points towards the very difference that we are debating here. We have in this Student Loan Scheme Amendment Bill (No 3) encapsulated National’s punitive approach towards students. Those members do not like the interest-free student loan scheme. They never have. They introduced the scheme with interest and then Labour introduced the interest-free scheme and of course subsequently National introduced some administrative fees as a substitute for an interest charge because it could not get away with putting an interest charge back on.It is O-week so I am hoping that those students at home are not out doing other things like toga parties and the other culturally enriching things that students do during orientation week but are at home reminding themselves of the stance of Mr Goldsmith and that message that students need to wean themselves off entitlement culture.Mr Goldsmith lives in a world where this is in his view free money—this is free money. It is wrong that students are given loans—loans—to better themselves to better their lot and to better the lot for their family and the communities around them. I think we just need to watch Mr Goldsmith’s speech again. I am sure that other colleagues will comment on it as well but I will come back to some material that is actually in the bill. I can see colleagues are wanting to share Mr Goldsmith’s messages on Facebook and I urge students to watch his speech.In a previous life I ran a university college down in Otago. I am very very aware of how much some students struggled to meet the payments that were required of them not just in the college that I was running but in other similar colleges across Otago and that is in a place where the cost of living is somewhat lower than in other areas in the country. The reason they struggled is that the fees that are charged just to live reflect the real cost. Obviously a college can buy in bulk and get some discounts and can do things cheaper perhaps than an ordinary citizen could do them but they still cannot be low enough and affordable enough to meet the kinds of demands that students have placed on them financially. A student who works 40 hours a week for example in a minimum wage job throughout the whole summer holiday is going to really struggle to pay the deposit at the beginning of the year for a hall of residence in New Zealand. That is the way our country is structured. The wages are kept low by this Government. It has had only tiny incremental advances in the minimum wage. It has also got to do with the costs of tertiary education and the lack of generosity in the student loan scheme. This is what Mr Goldsmith calls an entitlement culture: the ability to eke through. The ability to eke through on borrowed money is what Mr Goldsmith is calling an entitlement culture.We on this side of the Chamber view education as an investment in our young people and we note that the changes proposed in Part 2 of the bill really look at the minutiae of how the formula will apply to those who are shareholders in close companies those who use motor vehicles and those who have voting interests. These details are important and they are important to get right to make sure that the system itself is fair but they do not get to the heart of the issue which is about generosity and we do not see that so much covered in Part 2 of the bill. The formula of course is laid out there. Mr Goldsmith seemed to be occupied with Part 1 of the bill and we noticed that he talked about the repayment amounts for those arrested at the border but coming back we see that Part 2 actually has a formula that adjusts for net income in the income year and it is calculated using a formula that looks like a mathematical formula—“a x (b - c)”. That formula is applied in different ways according to the voting interest the nature of the company that is held the dividends paid and so on.These are important details in respect of fairness in the system but I will come back to the point that Mr Goldsmith raised about an entitlement culture. I simply cannot take that comment seriously and I think that few New Zealanders will. Any New Zealanders who have studied will struggle to take that seriously. It might come from someone who ran and lost in Epsom with a particular world view that they were promoting that thought that Margaret Thatcher and Ronald Reagan were good but did not go far enough. It might come from that particular world view that this is an entitlement culture but we on this side of the Chamber view those who borrow to better themselves and who want to repay that loan as doing a good thing for themselves and for society and we believe that this loan scheme is a good thing. That is why Labour introduced the student loan scheme in an interest-free format in the first place—so that we could have this paying forward to each generation this money that would better our society over time.I want to take a minute just as I reach the end of my time speaking to give a special welcome—a shout out—to the students arriving in Dunedin North the finest electorate in the country at the oldest and finest university in the country. Those students are very welcome in Dunedin. It is great to see their energy returning to the city. We are proud on this side of the House to support students to support the interest-free student loan scheme that we introduced and to support more generous allowances over time working towards making education more and more accessible not like the changes that this Government has brought in restricting the number of years that students can study. We see students coming in to my electorate office who are studying medicine but have now had their funding discontinued. They cannot complete their medical degrees for goodness’ sake! We have students who have undertaken a Master’s degree put off drawing down their payments because they have children and were relying on the payment in their last year to get them through who now find that they have used up their allowance availability and who are now stranded unable to complete degrees.We see a Government here that is restricting access to education in every way that it can. It is making sure that its own people are looked after but it does not care about most of New Zealand—the greater part of New Zealand society that is struggling to get ahead under a Government that really does not seem to have a plan to share the benefits of any recovery we are seeing a Government that is out of touch with New Zealand and a Government that does not seem to care about our students. On this side of the House we say: “Welcome students. Welcome to Dunedin. Have a great time. Make the most of your educational opportunities. We support you. We support you with interest-free student loans and student allowances. We on this side of the House support you. Don’t elect those guys again. They are looking for opportunities to take opportunity away from you.” On the other side of the House those members are interested inpreserving the capital the people who have the wealth. They are not interested in seeing people progress up the ladder to make themselves better and to make their families better and to increase their opportunities. Those members are against progress. They are for only entrenched interests. We support ordinary New Zealanders who want to get ahead. That is why we support the student loan scheme in its interest-free form and that is why we support student allowances that are generous. We in the Labour Party say: “Welcome students. Great to have you in town.”TRACEY MARTIN (NZ First): Kia ora Mr Chair. I just acknowledge how great it is to have the author of the Student Loan Scheme Amendment Bill (No 3) in the chair next to you. Hopefully he will have seen my contribution earlier on Part 1 and the questions that I asked and perhaps the Minister of Revenue may actually rise to his feet during Part 2 and answer some of those questions.I also want to address in Part 2 the concept of fixing what was the bill from 2013 and the moving around of some of the parts inside the schedule there. I want to bring this conversation out of the 20 percent of our young people who go to university and actually talk about the 60 percent of our young people who are currently in the workforce or who are trying through education to gain employment. I want to talk about the fact that it actually costs a baker $5000 to do a pre-apprenticeship course and he or she has to gain that through StudyLink. I want to talk about the fact that it costs an animator $10000 a year to actually go and do that at a polytechnic. Let us just go to actually even doing an early childhood education qualification inside the workplace run by a wānanga or one run by another polytech organisation. That will cost you $1800 via StudyLink.What about inserting as we are working around schedule 3 in Part 2 some sort of responsibility on behalf of the lender Minister to make sure that the young people who go to StudyLink understand the repayment obligations? If you go to StudyLink now to the applications web page which I have here for you should you wish it will tell you every way under the sun how to gain a loan and gives not a single comment about your repayment responsibilities at all. There is not a single comment on that front page about the repayment responsibilities of any young New Zealander. It is no wonder we now have outstanding debt. As a debt collector as a Parliament we have put into place or are looking at legislation on loan sharking in South Auckland where we say that a loan shark a lender must make it clear inside the documentation the repayment obligations of any individual who is borrowing money from them. Where inside any of this legislation inside the rewrite of schedule 3 in Part 2 has this been made clear?I meet young people day in and day out in my town. I met a young person the other day who has an $18000 loan to study animation. He had no idea he could not leave the country. He had no idea that he did not have to start repaying his student loan until it was over a certain threshold. He had no idea it was interest-free. He had no idea that if he left the country after 1 year he would get interest on it and that he had to make contact with the Inland Revenue Department. Why did he have no idea? Because there is a multitude of people out there who are signing our young people up to debt and it would appear there is not a single requirement for those people to make sure they know how to repay it. It might be something that the Minister could work on so that it is clear before our young people sign up.I am tired of hearing about the 20 percent at the top. Certainly university students have loans. There is no doubt about it. But so do many of the other young New Zealanders in that 60 percent bracket. They are not the most vulnerable. They are not the ones receiving free support. They are the ones in the middle who are trying to find employment and who are doing what we have asked them to do. They are not getting a degree. They are not getting a Bachelor’s degree or whatever. They are doing a pre-apprenticeship course or whatever. It may be that the Finance and Expenditure Committee is not aware that if you have National Certificate of Educational Achievement level 1 and the majority of New Zealand students interestingly enough do have level 1—it is level 2 that is the target—you cannot gain entry to a Youth Guarantee course. So you must get a loan. You must go in. Only 1 percent of all the people involved in a Youth Guarantee course are allowed to already have level 1. The majority of the level 1 courses do not cover baking do not cover animation and do not cover other things.The reality—and this goes to new section 12A inserted by clause 17 put in in Part 2—is that that includes a car now being incorporated into the salary package of any worker. Again I believe that this provision has been written in there because there is a bias that all the people with these loans are university students or post-university—that they are all doctors and lawyers or whatever and that they are on $110000 a year plus a Mercedes. I brought the case before of a Department of Conservation ranger who I believe can expect to earn between $33000 and $47000 a year depending on approximately 5 years’ worth of experience. Often there is a car involved in that. I do not think anybody sitting in this Chamber is going to say that $33000 plus having a Range Rover or whatever those things are—a Land Rover or whatever it is—to use as you go out to make sure that all the bins in a regional park are clean or whatever makes you a wealthy person.New Zealand First has serious concerns that there has not been a practical eye cast over this bill. This has been written with a bias. It has been written with a bias and when it hits the ground it is once again going to disadvantage all those who are in that low or middle-income area. This is not going to target the people who somehow Mr Paul Goldsmith thinks are the people who need to be pursued like this. It may be that in Mr Goldsmith’s electorate—well not actually the electorate he is the MP for but the electorate that he lives in—they have all got $150000-a-year jobs and drive a company Mercedes. But I can tell Mr Goldsmith that where I live in Rodney which is 46 percent of the land mass of Auckland with social deprivation scores of 8 in two of our townships those young people are getting jobs as Department of Conservation rangers and they are getting jobs at $33000 a year. They have got a car placed at their disposal for them to do their job. They will be penalised further through this new section because it has not been well-thought-out like the majority of the rest of the bill.IAIN LEES-GALLOWAY (Labour—Palmerston North): Earlier in the debate this evening Parliament was subjected to a tirade of very poor sloganeering by the member David Bennett. The thrust of his argument was essentially that Labour supports some intellectual elite—the group of people who actually study and go to university—and National supports somebody else. I am not quite sure who he was trying to say National supports. I do not know—he was trying to do some sort of framing around Labour as being intellectually elite. But I heard somewhere in his tirade something along the lines of: “They’re the real people who pay their taxes like people who work in agriculture.” Well Mr Bennett I want you to know that a large number of the people who live in my electorate in Palmerston North are people who are going to make their living working in agriculture. They are studying getting degrees getting Master’s degrees and doing postgraduate study at Massey University. So a lot of the people whom David Bennett decided to attack this evening—a lot of the people whom David decided to attack this evening—are people who are going to be working in the very industry that those members over there pretend to be the champions of.But do you know what? There is a group whom I want to talk about this evening who have been even more abused by the changes that National brought into the student loan scheme which Part 2 of the Student Loan Scheme Amendment Bill (No 3) attempts totinker around with—that is the eligibility for student allowances. Another group of people who study exclusively at Massey University are vet students. A veterinary degree takes 5 years to complete. That is somewhat more than the 200-week maximum that you can take a student allowance for. So right from the start anyone who embarks on a veterinary degree is not going to be eligible for a student allowance for the whole time that they are studying for a vet degree.But it is worse than that because not only do they have to do about 250 weeks of study or maybe slightly less than that but also they have to work over the summer doing placements that are credited towards their study. Those are absolutely compulsory. There is no way out of doing those placements over the summer. The good news for them is that they can get a student allowance whilst they are doing those placements over the summer but of course that eats into the 200 weeks. So for most vet students they are facing at least a year of their study without the student allowance.But it is even worse than that. These days because the competition to get on to that veterinary course is so intense—the places are so few—a large number of students have actually completed an entire qualification before they start their veterinary degree. So vet students in particular are very heavily penalised by the National Government’s decision to limit the availability of student allowances.Qualified veterinarians are absolutely vital to New Zealand’s primary industries. New Zealand’s agriculture—our dairy industry our beef industry our lamb industry our alpacas; anything you want to name that is an animal that is vital to our economy—absolutely depends on high-quality qualified veterinarians. Yet that is one of the groups that that National Government—of all parties to attack a group that is so important to the primary industries it is the National Party that has made it so difficult to go and get a veterinary qualification. Maybe—maybe—the National Party believes that only the sons and daughters of immensely rich people deserve to be vets. Maybe it believes that if you grow up in South Auckland you do not have a right to be a veterinarian. Maybe that is why it decided to put that barrier up to stop people being able to qualify as a veterinarian.I think that it is rich coming from a member like David Bennett who tries to throw slogans around about what one party or another actually believes when that party comes to Parliament day after day and says that it is the champion of agriculture. It says it is the champion of the primary industries and yet in so many ways it makes it more difficult for the people who are working day in day out on the front line in the primary industries.A party vote was called for on the questionThat Part 2 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes60New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Part 2 agreed to.Clauses 1 to 3GRANT ROBERTSON (Labour—Wellington Central): Clause 1 of course as we know is the title clause and this bill is called the Student Loan Scheme Amendment Bill (No 3). The critical element in that title is the number three because we have been subjected in this House to the National Party’s tinkering with the student loan scheme. The National Government has come to this House repeatedly since it came into officein 2008 to make small incremental changes to the student loan scheme because it did not have the guts to say to New Zealanders the thing that Steven Joyce and John Key believe which is that the interest-free student loan scheme is wrong. They do not like it.National Party members are fully entitled to their view that interest-free student loans are wrong but if that is the view of National Party members then they should have the gumption to come to New Zealanders and to come to this House and say that they are putting interest back on student loans. But they have not done that because they know that it is politically unpopular. So instead Steven Joyce’s approach is to introduce bills with innocuous titles like the Student Loan Scheme Amendment Bill (No 3) and to make the changes that effectively limit the enabling mechanism that is the student loan scheme.So the Student Loan Scheme Amendment Bill (No 3) as we have been traversing tonight is essentially a set of slogans and gimmicks around the arrest at the border provision. It is the latest attempt by the National Government to come to this House and make changes that will restrict people’s ability to get loans and in this case it will actually provide a disincentive to paying them back. From day one it is saying to students that the interest-free student loan scheme will not be available to people who are 55 years old or over when it comes to living costs and is saying to people that the $172.50 that is the living cost component of student loans will not be altered despite the fact that rents are spiralling well ahead of that particularly in Auckland and Wellington. The Government has put on an administration fee which is effectively adding interest because it is an administration fee that has no basis and it has no justification. That has been added in an earlier student loan scheme amendment bill.Little by little the eligibility for these loans has been restricted while at the same time eligibility for the student allowance scheme which is covered in the regulatory impact statement for this bill has also been restricted. If you are over 40 you can have only 3 years of student allowances in your whole lifetime—only 3 years in your whole lifetime. If you are trying to do postgraduate study you cannot have student allowances at all no matter what your circumstances are.These kinds of restrictions and limitations on loans and allowances are limiting the ability of New Zealanders to get a tertiary education. So it is all very well to propose a bill with an innocuous title like this but it is one further step in limiting opportunities for New Zealanders. It is one further step in Steven Joyce’s stated desire in 2010 to dampen the demand for tertiary education and to restrict in other words the number of people receiving tertiary education.We on this side of the Chamber stand for the opposite of that. We stand for investing in tertiary education and investing in New Zealand’s future by encouraging people into study. We are proud of the fact that we expanded eligibility for student allowances and that we made loans interest-free because we wanted to give New Zealanders an opportunity.If you wanted to retitle this bill it could actually be called the “Student Loan Scheme (Denying New Zealanders Opportunity) Amendment Bill” because that is what this bill in effect does. It adds to a litany of decisions around the student loan and student allowance schemes that are actually limiting those opportunities for New Zealanders.The other element of clauses 1 2 and 3 is of course the question of the commencement date. There is a little bit of confusion about this because proposed new section 4 of the bill has a commencement date of 1 April 2012. I might be mistaken but 1 April 2012 was a couple of years ago now—I think that is right is it not? I have not lost those years. It has been a terrible terrible time over the last few years with a National Government and I have tried to block out a number of the years that we have been through under National but I am pretty confident we have been past 1 April 2012.That is because new section 4 effectively covers yet another mistake from this Government when it comes to the student loan scheme having failed to deal with the way in which deductions occur from a borrower’s account. So we have got retrospective legislation within new section 4.Then proposed new section 6 which is the one around the repayment obligations that we have previously covered comes into force on 1 April 2014 and well it might come into force on April Fool’s Day because it is a foolish decision to set such an arbitrary repayment figure for borrowers who are overseas. The decision that has been made there is that effectively no matter what you are earning when you are overseas you are subject to these flat rates. People who are actually meeting their obligations under the loans scheme will not even be able to pay their loans back because of the flat rates. It is called flat-spotting. We went through it as borrowers in New Zealand before we introduced interest-free loans while studying.Dr David Clark: I got flat-spotting.GRANT ROBERTSON: Flat-spotting was another of the things that happened in Dunedin I think Dr Clark but in this case it means people who cannot even meet the interest payments on their loans.What is needed here is some imagination from the National Government to try to come up with a scheme that is based on actual earnings and to actually work with borrowers so that they identify their own earnings and then identify what they can pay. That would be an inventive way of dealing with this but instead new section 6 of the bill in coming into force on April Fool’s Day simply implements an arbitrary repayment regime that I do not believe will improve repayment rates whatsoever.Then proposed new section 7 just to ensure that we do not get ahead of ourselves comes into force we are told in clause 2 on 1 April 2013. So it is back to last year for new section 7 of the bill which is around late payment interest reductions. Here the Government is clearly covering up for yet another mistake that it made in one of its many student loan scheme amendment bills.Clauses 1 and 2 of this bill highlight for me the fact that this Government has not got a clear idea of what it is trying to do with student loans and allowances. All Steven Joyce can see are costs that he wants to cut. He does not see the opportunity to invest in the future of New Zealand and in the potential of New Zealanders. On this side of the Chamber we see student loans and allowances as an opportunity for New Zealanders to get ahead. We will continue to support those.We do need to review the student loans and allowances systems. They have not kept up with the changes in terms of the cost of living for people and too many incremental changes have been made to it so there are now loopholes. There are now places where people can hide money in trusts and get allowances for their children while other people who cannot afford accountants do not get those allowances. Labour is committed to a review of this scheme but it is a review that is about increasing the opportunities for people to study and to be supported while they are studying. We cannot support this bill although we would like to see more legislation that actually helps people pay their loans back and helps people get through tertiary education. This bill is not that.The CHAIRPERSON (Lindsay Tisch): I call Dr David Clark.Dr DAVID CLARK (Labour—Dunedin North): Thank you for the call Mr Chair. I realise that out of the wealth of options you had before you that I should be honoured that you selected me to speak at this point in the debate.The CHAIRPERSON (Lindsay Tisch): I am sure.Dr DAVID CLARK: It is very touching. I rise really to support Mr Robertson’s suggestion that this Student Loan Scheme Amendment Bill (No 3) Bill be renamed the “Denying New Zealanders Opportunity Bill” because I think that does aptly describethe general thrust of the bill. The Tertiary Education Union said in its submission—and this really clarifies the point—that this bill is a poor alternative to making education more affordable and accessible.This bill uses Parliament’s time to refine a few rules in this legislation and primarily to put a gimmick in place that provides the provision to arrest at the border. We know it will see a few New Zealanders victimised at some stage when they are selected from those who owe money when they are perhaps returning to the country to attend a family funeral or a wedding or other significant occasion. It is a distasteful gimmick. The police have said that they do not have the resources to implement it and we know that it is a crazy idea but the Government seems determined to persevere with it and so that is why we are here this evening.This bill moves in the wrong direction. It is designed to make the scheme more punitive. We on this side of the Chamber support a review of student loans and allowances to ensure that they really do support every New Zealander to have the opportunity to make the best of their gifts and talents so that they can contribute to New Zealand in the way that they have the energy to do and in the way that they want to do. We do not think that the original intent of the student loan scheme was to turn New Zealanders in exile into enemies of the State—far from it. On this side of the Chamber we think the intent was to support students and it should be strengthened in that regard rather than working our way through the kind of authoritarian posturing that has been put forward here by the Government members.The one lighter note in all of this of course is the tongue-in-cheek additions and flourishes that the officials have put in there. I think that they really must be commended for their ingenuity. Making the commencement dates in the past and on 1 April really does highlight the point that this bill is a joke. It really does. I would like to tip my hat to the official who proposed these dates. I think that subtle sense of humour is the dignified way in which officials make it known that their political masters have reached the edge of ridiculousness and that is certainly what we see in this bill which is indeed all about denying opportunity.We have heard this from others in the debate. Mr Goldsmith talked about an entitlement culture amongst students essentially asking that students reform themselves stop borrowing money to afford to live and somehow magic their way through university. That was his contribution. We had Mr Bennett stand up and suggest that those who went to university or undertook tertiary education—even trade training—are some kind of socialist elite and essentially some kind of enemy of the State. That was a bizarre contribution but that really has been the sum total of contributions from that side of the Chamber. Government members have not been prepared to stand up and defend this ridiculous notion that we ought to be arresting at the border those who do not have the means to repay their student loans. We on this side of the Chamber would like to see more constructive solutions put forward. Perhaps the Minister responsible—who is the Minister sitting in the chair the Minister of Revenue—will finally take a call to defend this bill because his silence at the moment is very telling and the words of the officials—those clauses coming into effect on 1 April—speak far louder than the Minister’s own contribution in this debate.On this side of the Chamber we would really like to see the Privacy Commissioner’s concerns looked into more—the data-sharing arrangements behind the scenes for those who are in fact compliant borrowers. We would like to see a more generous student support scheme so that more New Zealanders are supported into education that betters their lot and the lot of New Zealand over time. We would like to see a New Zealand that is going forward and where everyone is benefiting and everyone has opportunities to get ahead not just the wealthiest few who can afford to hire accountants to get around thelaws in order to preserve their wealth and access the things that we would all want access to for our society.The bill itself really is all about amending the interest-free student loan scheme which was one of the achievements of the Clark Labour Government. I would like us all to reflect upon that great achievement of making studies more accessible because the punitive and unsustainable interest charges from student loans that were introduced by the National Government were making education less and less accessible in the 1990s. We are seeing here a retread policy from the National Party as its members seek once again to exclude people. This is part of a broader package. We have heard from Mr Lees-Galloway about vets in his electorate who have been punished through this restriction of access to loans and allowances. I have mentioned the medical students in my own electorate who are struggling to get through their studies now that their time has run out. Mature students—in particular those who have taken the time to have a broader education before getting into medicine—are amongst those who are particularly disadvantaged. Master’s degree students and those looking to retrain and make a contribution to society—having taken time off perhaps to raise a family and now returning to study—find themselves punished by this Government.We on this side of the Chamber think that is not right. We think education should be something that is available to more and more New Zealanders not fewer and fewer New Zealanders. We believe that there should be incentives in place for people to get amongst it to do the hard yards to study and to contribute to New Zealand in new ways. We opposed of course the charges that National put in place as administration charges when National members realised that they could not put interest back on to loans—that it was not politically sustainable. Through gritted teeth they are trying to wean us off the loan scheme but they have not got there completely yet.I ask students everywhere in the country to note what is happening here tonight in this bill to note the pattern of this National Government which tries to restrict study and ask themselves whether that is the right thing for our future in New Zealand and to vote in the next election accordingly. This Government has a terrible track record in student support. It does not like supporting students from all backgrounds to get ahead. It does not think that education is something that everyone should have access to in the way that Labour does. Welcome again to the students of my electorate of Dunedin North who are arriving there this week. It is great. I look forward to seeing them tomorrow in Dunedin. It is always great to have students in Dunedin. They bring so much life to our town and I am very glad that they can still access an interest-free student loan despite the wishes of this Government.A party vote was called for on the questionThat clause 1 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes60New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Clause 1 agreed to.The CHAIRPERSON (Lindsay Tisch): Can I just make the point that votes are taken in silence because the noise is a distraction. I can hear the conversations.A party vote was called for on the questionThat clause 2 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes60New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Clause 2 agreed to.A party vote was called for on the questionThat clause 3 be agreed to.Ayes61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes60New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.Clause 3 agreed to.Bill to be reported without amendment presently.Trade (Safeguard Measures) BillIn CommitteeDebate resumed from 29 January.Part 1 Safeguard investigations provisional safeguard duty and safeguard measures(continued)Hon PHIL GOFF (Labour—Mt Roskill): It is unfortunate that a bill dealing with trade which is the lifeblood of our country each time it is debated is relegated to the latest hours of the evening. One might ask whether that is a deliberate strategy of the Government because of its embarrassment regarding the circumstances in which this bill the Trade (Safeguard Measures) Bill has been debated and has been delayed.Dr David Clark: All of the bills are embarrassing.Hon PHIL GOFF: It is just another embarrassment as the member says. Actually Labour supports this bill. It supports the new safeguard measures which are designed to ensure that the trade is fair. It is consistent with the World Trade Organization rules and it promotes a more efficient decision-making process.This bill was introduced in 2008 by Lianne Dalziel when she was Minister of Commerce. Labour supported it then of course—it was in Government—and Labour supported it at the Foreign Affairs Defence and Trade Committee. The real question we have to ask is why it took 5 years—5 years—for this bill to come back to reach this stage of progress in the House. I cannot think of almost any other bill on this Order Paper that has taken 5 years to progress. There were just five submissions. There was support for this bill. It had been well consulted on. Why did the Government hold up this bill? That is the question I would expect the Minister of Commerce to direct himself to.Well I have a couple of theories on why it has taken 5 years. My first theory is this: that the bill for a period of years was in the hands of the Hon John Banks. Now the Hon John Banks had some problems and they were memory problems. You know he could not remember the helicopter ride. He could not remember visiting one of the biggest mansions in the country. He had forgotten all about the oversized German entrepreneur whom he met there—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] Sorry the member’s time has expired. The member must confine the comments in the Committee stage to the content of the bill. Other things are erroneous. [Interruption] Is this a point of order? [Interruption] No I have called Jami-Lee Ross.JAMI-LEE ROSS (Junior Whip—National): I moveThat the question be now put.Hon PHIL GOFF (Labour—Mt Roskill): I raise a point of order Mr Chairperson. This has just reached the Committee stage. We had less than 4 minutes on it at the last session.The CHAIRPERSON (Lindsay Tisch): No no. There have been 19 calls on this part. You have already had three calls yourself.SUE MORONEY (Labour): I raise a point of order Mr Chairperson. I understood that Mr Goff was still partaking in his call when the other member sought the call—The CHAIRPERSON (Lindsay Tisch): No he had finished. [Interruption] Order! I stood because the member’s time had expired because he had 1 minute and 30-odd seconds to speak. The Hon Phil Goff has had three calls on this. The next call went to the Government member. The Government member moved a closure motion. I am putting the closure motion.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 17 in the name of the Hon John Banks and Supplementary Order Paper 409 in the name of the Hon Craig Foss to Part 1 be agreed to.Amendments agreed to.Part 1 as amended agreed to.Part 2 Miscellaneous mattersHon PHIL GOFF (Labour—Mt Roskill): Part 2 of the Trade (Safeguard Measures) Bill deals with miscellaneous matters. It deals with the temporary safeguard authority which is of course abolished under this bill. It is abolished because the responsibilities of the temporary safeguard authorities have been taken over by the Ministry of Business Innovation and Employment. Labour put this in the original bill and it does not object to that because it is a more efficient way of dealing with it. Of course the purpose of this bill was to promote “efficient transparent and objective investigative and decision-making processes.”But I have got to ask the question again. If the purpose of this bill is about transparency and objective investigative processing can we rely on the Government to actually carry out the purpose of this bill? It has been anything but objective and transparent with the investigation of the Minister who was formerly in charge of this bill the Hon John Banks. This was a Minister who was known to have taken two donations of $25000 each—$50000—and omitted to declare those donations—The CHAIRPERSON (Lindsay Tisch): Order!Hon PHIL GOFF: Well it is about whether the Government can be relied upon to be transparent in this way. I have got to say that there has been no transparency in the manner in which this bill has been dealt with and why this bill has been delayed for such a long time.I come back to the point that if there was a general agreement across the floor of the House on this bill can I get the Minister in the chair the Minister of Commerce to stand up and say why it has taken 5 years for this bill to go through. Was it because at least 2 of those wasted years were because John Banks was in charge of the bill and theGovernment did not have confidence in what John Banks did in his oversight of the bill? Or alternatively was it because the Government felt embarrassed by what John Banks represented and did not want him sitting where Mr Foss is sitting because there would be questions about—if this bill was about objective investigation and transparency—whether he could be relied upon to ensure that or whether he would simply be an embarrassment to the Government? He was after all—as clause 4 of the bill sets out—appointed under the authority of the Prime Minister. But why did the Prime Minister leave that Minister in the chair when he was known to have made a donation and not—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] No. Order! I have cautioned the member before. This is a very narrow debate. Part 2 is a very narrow debate and we are dealing with clauses 26 through to 31. It is a very narrow debate and I will ask the member to come back to the provisions of the bill and speak on nothing that is outside the scope of that.Hon PHIL GOFF: Thank you Mr Chairman. The temporary safeguard authorities of course had the right to enforce safeguard measures. Although New Zealand is a country that believes in free trade and believes in not having excessive protectionism there are circumstances where you need to safeguard the trading interests of your country. We need to safeguard that when for example there is a surge in imports those imports could damage our domestic industries and there is a need for a period of time to allow domestic industries to adjust to that. There are circumstances where there may be dumping by another country. Dumping is a process whereby the country of origin of the exports is actually selling the goods in the New Zealand market at a lower cost than what the normal value is of those goods in their own country. That is undesirable. There is another case for having safeguards and that is the need for countervailing duties. In some instances we find that the competition from imported goods is not fair competition at all; it is a lack of competition created by the fact that the Government in the country that is exporting to New Zealand is actually heavily subsidising those goods.So that is why we set up the temporary safeguard authorities. They were set up way back in I think 1987 under a Labour Government. The purpose of those safeguard authorities continued to be relevant. We needed protection where goods were subsidised or where goods were being dumped. Therefore we needed to have a continuation of those functions but the ministry is now in a position where it is able to carry out those functions. I think it is also fair to say that the temporary safeguard authorities were hindered in their work by the fact that they were given only 35 days to consider whether there was a need for safeguards. Frankly 35 days was not a sufficient period of time. This bill allows the ministry that replaces the temporary safeguard authorities to have a period of time of 75 days or in some instances up to 85 days. So I think the provisions that are set out in Part 2 are relevant provisions.I think it is worthwhile mentioning too that a number of the amendments made by the Foreign Affairs Defence and Trade Committee are sensible amendments. They were accepted by both sides of the committee. That is although allowing ministerial discretion in terms of imposing safeguards they narrow the breadth of that discretion in order to increase certainty and to allow where a provisional safeguard was set in place and a final duty was not imposed for that duty to be refunded to the exporter concerned. There were also provisions for countries to be exempted from the provisional safeguards. That is where for example the countries are developing countries and we have obligations under the World Trade Organization that we should not impose safeguards against them. And clearly where we have negotiated specific trade treaties there is a need sometimes to exempt countries from the imposition of safeguard measures. I think that the bill is sensible.We have got a provision here for transition from the old Act and maybe the question has to be raised that we are allowing for transitional provisions but in fact there has already been a 5-year period when this bill has been held in abeyance. People knew that it was there and people knew that it had wide support but they could not understand why the Government had held up the passage of this bill for so long. It is relevant to ask—and the Minister has steadfastly refused to take a call on this—why this bill has been delayed for 5 years. This House is meant to expedite legislation. It is meant to be efficient in the way it passes legislation. Why is it that if this measure is important for the protection of New Zealand industry and for ensuring fair trade we have waited for 5 years? This bill was on the books when the Government was elected in 2008. Why is it Minister that the Government has been embarrassed about bringing this bill back before the House and progressing it?I think the Committee deserves an explanation on that point. I think the country deserves an explanation and most particularly New Zealand industry needs an explanation as to why the Government has delayed this measure. Why was it that his predecessor and the Minister before him for that matter have taken so long? I have heard of transitional provisions and this section deals with transitional provisions; I have never heard of a transition of 5 years when a Government is meant to have passed a piece of legislation but has failed to do so. It is not that it was controversial; I think it is supported by all parties in the Committee.Dr Paul Hutchison: I raise a point of order Mr Chairperson. I understood that the debate on this part of the bill was narrow and I fear that the member is veering away from—The CHAIRPERSON (Lindsay Tisch): I thank the member. I am listening very carefully and I am taking note of what is being said. The member has 53 seconds remaining if he wishes.Hon PHIL GOFF: Thank you. Fifty-three seconds is such a small period of time when you consider that this Government has delayed for 5 years the passage of legislation that it now tells this Committee is important to pass. If the Minister will not take a call on this bill the Committee is entitled to ask why he is not prepared to do so. Does he not know the answer to why the Government has been hopelessly inefficient about passing this bill? Or does he know the answer—and I suspect that the whole Committee knows the answer—as to why this bill has been delayed but is shamed and embarrassed that it has taken so long because of the inadequacies of the previous Minister?Hon MARYAN STREET (Labour): I rise yet again to speak to the Trade (Safeguard Measures) Bill. It has been such a long time between speeches that I have had to haul out myHansards to know what I have said before so that I do not repeat myself. But following on from my colleague the Hon Phil Goff it really is very testing for those of us on this side of the Chamber who support the bill and who have wanted it to go through in a timely way to now find ourselves again at the fag end as T. S. Eliot would say of the evening trying to get this thing through.We are dealing with Part 2 “Miscellaneous matters”. I would like to raise a couple of miscellaneous matters of my own. We dealt with just a few moments ago the Minister of Commerce’s Supplementary Order Paper 409 which amends a number of the existing clauses. I would just like to draw to the Committee’s attention that those of us who never throw anything away can also lay our hands on a Supplementary Order Paper in the name of the Hon John Banks that was dated Thursday 29 March 2012—Thursday 29 March 2012—Supplementary Order Paper 17. It is No. 17 so that is the 17th Supplementary Order Paper in the term of the Parliament post the 2011 election. We dealt with the one I have in front of me currently the Supplementary Order Paper inthe name of the Minister sitting in the chair at the moment the Minister of Commerce which is dated Wednesday 29 January 2014. Its number is No. 409. So somewhere between No. 17 put up by John Banks and No. 409 put up by the Hon Craig Foss the original Minister in charge of the bill forgot to promote this piece of legislation.At the end of the bill as it is before us—Part 2 is barely 2 pages long—right at the end there is a little codicil about the legislative history of the bill. As the Hon Phil Goff said a moment ago this bill was ready to go on 9 September 2008. It was introduced to the House on 9 September 2008. A month or two after that there was a general election which saw the National Party assume the Treasury benches. The point of assuming the Treasury benches—one of the points—is to pick up the legislation that has been left over previously particularly if it is legislation on which there is no disagreement or for which there is at least majority support in the House between Labour and National and to just pump it through. There is no reason why we should be debating Part 2 “Miscellaneous matters” on 18 February 2014. John Banks as I said did have some amendments put up on 29 March 2012 but even then one has to ask oneself why it took from 9 September 2008 to 29 March 2012 for the Minister to realise that there might be some finessing of the bill that needed to happen by way of a Supplementary Order Paper.The other point that is made in the legislative history codicil on page 23 the last page of this bill under Part 2 is that the first reading and the referral of this bill to the Foreign Affairs Defence and Trade Committee happened on 11 March 2009. So the first reading got off the mark fairly promptly given that there was an election in between and the referral to the select committee got off to a reasonable rip and a tear but thereafter the bill began to disappear into the recesses of John Banks’ mind which is a place I would not wish to go to very often for fear of being forgotten and never being able to find my way out.The “Miscellaneous matters” at the end simply refer to the abolition of the temporary safeguard authority and that there is no compensation for those people that there are transitional provisions that there are consequential amendments to the Customs and Excise Act and that there are consequential amendments to the Official Information Act and the Trans-Tasman Mutual Recognition Act. These things are miscellaneous provisions. They are the tidy-up bits that happen in a piece of legislation that is impacted by and in turn impacts on other pieces of legislation. So these are the things that are the mop-up.But I could not let this moment go without referring to the last bit on the last page of the bill which itemises for everybody to see the fact that this Government has dragged its heels since 11 March 2009 when the bill was introduced since 29 March 2012—so 3 years later John Banks decided to put up some amendments by way of Supplementary Order Paper 17—and then we have gone on after that to 29 January 2014 when the current Minister in charge put up additional amendments in Supplementary Order Paper 409. So that would lead me to believe that even the amendments put up by John Banks in 2012—so 2 years ago—were not sufficient and needed tidying up by the Minister. That goes to the competence of the member who was in charge of this bill. It goes to whether or not he is able to remember anything. I am not even going to bother talking about the unmistakable German entrepreneur or the lavish place he lives in or even the helicopter ride.The CHAIRPERSON (Lindsay Tisch): No that is irrelevant.Hon MARYAN STREET: But it does make one wonder what it was that caused the member to lose 2 years in the process. I do not know what he did with those 2 years.In the meantime New Zealand has languished behind the World Trade Organization (WTO) requirements. It has languished behind in terms of having the necessarysafeguards and a modern kind of approach to our trade measures and our trade agreements so that they are in fact consistent with WTO practice as that has moved and changed. So in the 5 years that this Government has had to deal with this piece of legislation the world has moved on. One might apply that particular observation to a number of things that this Government does but I know that the Chairman will bring me to order because I am meant to be talking about Part 2 of this bill.The CHAIRPERSON (Lindsay Tisch): That is right—Part 2.Hon MARYAN STREET: So can I just say that the tardiness of this Government in its approach to this bill has probably left us still behind the requirements of the WTO in terms of the streamlining of the congruence between our legislation and WTO measures. I presume that the Hon Craig Foss has made sure that the amendments that we have just passed which the Minister introduced on 29 January this year—at least it was this year so one must be grateful for small mercies—do in fact cause us to align adequately with WTO conventions and practice.This has been a chapter of errors. This should have been simple. It should have been swift. It should have been a no-brainer. This Government has dragged it out for 5 years—5 long years—for no good purpose. Thank you.DAVID SHEARER (Labour—Mt Albert): I would like to take a brief call on the Trade (Safeguard Measures) Bill. I just want to pick up where the Hon Maryan Street just finished off which is to do with the time it has taken for this bill to come before the House and to be considered here at the Committee stage. We are talking about the transitional measures in this part of the bill Part 2 and the transition that it has taken since 2009.I was looking back overHansardand reflecting on the progress of this bill and saw the name of Simon Power who obviously belonged to a different era of this Parliament. He was a very fine Minister of Justice and gave an outstanding closing speech when he left this Parliament—one of the best that I have ever heard. But it just goes to show how long it has taken for this bill to in fact come to the House and be considered.This bill has got the support of the Labour Party. Of course it has got the support of the Labour Party—we actually devised it. The Hon Lianne Dalziel did that well back in 2008. I will not go on about who has been trying to shepherd this bill through and the unfortunate circumstances in which Mr Banks has delayed this bill being brought forward. But the idea of this bill as it is set out in both clause 1 and clause 2 is to promote efficient transparent and objective investigative and decision-making processes around our imports. It upgrades or updates legislation that dates right back to 1987 during a Labour Government. It has not been updated since then and it is obviously well overdue. It helps us to be compliant with the World Trade Organization’s regulations as well.The current regime as we know is subject to the Temporary Safeguard Authorities Act 1987. That is the Act that I was just talking about. It needed that comprehensive review. I have to say that I acknowledge the good work of the Foreign Affairs Defence and Trade Committee in being able to consider this and for the way that it has been able to come to some consensus around it particularly with the temporary safeguard measures contained in Part 2.There has been a very small number of investigations over that period of time. Remember the whole purpose of this bill and these safeguards is to ensure that we do not see dumping and undermining of our industries. We are a free-trading nation—everybody knows that. We support free trade. It is my honour to be sitting beside Phil Goff who signed the most important free-trade agreement in New Zealand’s history which is the China free-trade agreement. If this Government is able to follow that template we will be well served by free-trade agreements into the future.That free-trade agreement has meant that a $5 billion value of imports into this country from China and a $3 billion value of exports to China just in 2008 have now led to $7 billion each way—$7 billion each way. That is a 100 percent increase and China has become the most important trading nation to New Zealand. So we need to be able to move and ensure that we not only have a free-trade environment but also put in place the protections that enable our industries here to have protection from that uncontrolled dumping and the type of activity that might undermine our industries keeping in mind that we are obviously a free-trading nation as well.So the Temporary Safeguard Authorities Act 1987 needed to be replaced with a modern regime to avoid harm being caused to New Zealand industries from rapid increases in imports in this sort of dumping. The ability to impose separate provisional and final safeguard duties will allow us to do this efficiently and effectively through one Government department which was going to be the Ministry of Economic Development but is contained now within the great “gigantosaurus” of the Ministry of Business Innovation and Employment under Steven Joyce.The current legislation does not contain at the moment any guidance on what constitutes public interest and what sort of impact might constitute a need for action to be taken. The one purpose of this bill contained in Part 1 but which obviously transfers into the second part as well does do that. It gives us a much more clear understanding of the process that we need to follow so that what is contained in the bill is in the public interest. As I said it also shifts the responsibility for undertaking these safeguard investigations from the Ministry of Economic Development and obviously puts them within the context of the Ministry of Business Innovation and Employment. The bill will therefore create a single Government point of contact for all the trade remedy inquiries and I think it will be a plus an advantage for our many commercial concerns and businesses to know that they have one single point of expertise and oversight that will govern this.The bill also extends the time frame for the completion of the safeguard investigation from 30 days to 75 working days or even out to 85 working days. That is a positive step. It means that it falls in line with the World Trade Organization dispute settlement body and it helps to clarify the obligations that must be dealt with before safeguard measures can be imposed. It gives us the time to do a thorough and a good job rather than try to hurry it through and not be able to come to that conclusion properly. I believe that this bill is something that will be of great advantage—The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to report progress.House resumed.The Chairperson reported the Taxation (Annual Rates Foreign Superannuation and Remedial Matters) Bill with amendment the Student Loan Scheme Amendment Bill (No 3) without amendment progress on the Trade (Safeguard Measures) Bill and no progress on the Electoral Amendment Bill.Report adopted.The House adjourned at 9.56 p.m.