Volume 707 Week 24 - Thursday 13 August 2015Text is incorporated into the Bound VolumeVolume 707 Week 24 - Thursday 13 August 2015[Sitting date: 13 August 2015. Volume:707;Page:5783. Text is incorporated into the Bound Volume.]Thursday 13 August 2015Mr Speaker took the Chair at 2 p.m.Prayers.Business StatementHon GERRY BROWNLEE (Leader of the House): When the House resumes on Tuesday 18 August the Government will look to make progress on the Health and Safety Reform Bill and the Appropriation (2015/16 Estimates) Bill.Ministerial StatementsSolid Energy—Voluntary AdministrationHon TODD McCLAY (Minister for State Owned Enterprises): I wish to make a ministerial statement under Standing Order 356 in relation to Solid Energy going into voluntary administration. Today the board of Solid Energy has placed the company into voluntary administration. This follows months of negotiation with key stakeholders who have agreed to put a proposal to creditors that provides for an orderly sell down of assets over the next 2½ years.This decision to place the company into voluntary administration was made after it became clear that even with significant operational improvements the falling international coal price means there is no prospect of Solid Energy being in a position to repay or refinance its bank debt. Solid Energy owes $320 million in bank debt some falling due in September of 2016 and overall has exposure of close to half a billion dollars. As a result of the considerable efforts of its board and management officials and lenders Solid Energy is certainly a much more efficient and effective business today than it was 2 years ago. But the reality is that there is still no prospect of the company being in a position to repay or refinance its debt or access the capital that it would require to invest for the future.An orderly sales process of Solid Energy gives the best chance that parts of the business can continue to operate under different ownership in the future. If the creditors agree to the proposal the company will remain solvent during the process and can continue to carry on its normal business under its existing board of directors. Payment of employees and trade creditors will continue on a business-as-usual basis and customers will continue to have access to coal. Under the terms of the restructure existing Crown indemnities for site rehabilitation costs are being restructured to assist the sales process and to provide certainty for affected local authorities. Solid Energy is currently exiting and rehabilitating the Pike River mine site. Once it completes this process the land will be returned to the Department of Conservation. Through the voluntary administration process Solid Energy remains committed to this work.The Government has provided intensive support to the company in an attempt to make it viable in a highly challenging international coal market. Over the past 2 years directors management banks and the Government have restructured the company’s finances and its operations. This has included commitments of taxpayer support totalling more than $250 million. In 2013 the Government negotiated a financial restructure package that saw Solid Energy’s banks contribute $75 million in equity to the company. The bank also contributed $25 million in equity and offered $130 million in low-risk secure loans for the company to use. In 2014 remediation liabilities totalling $103 million were transferred from the company to the Crown which strengthened the company’s balance sheet so it could continue trading.However the international coal price has fallen from over US$320 per tonne in 2011 to around US$85 a tonne this week. Forecast recoveries of the coal price have repeatedly failed to eventuate. This low price coupled with the significant levels of debt means that the company is no longer sustainable. The Government was prepared to provide further support for the company if there was a reasonable chance it could be made viable. We have worked intensively with the company and its bankers on a number of options for the company to continue operating but unfortunately none of these proved feasible. The Government’s focus will continue to be to invest in our core business of public services which we believe is the best way for us to achieve our goal of higher living standards for New Zealanders. The Government has been in talks with affected councils over the past month and I have this morning spoken to the mayors of these districts to thank them for the constructive way that they have worked through and supported this proposal. This voluntary administration offers the best chance for trade creditors to be paid and for employees of Solid Energy to continue employment in these regions.CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order Mr Speaker. I would like to draw your attention to Standing Order 356(2) which states pretty clearly that if a Minister is going to make a statement the copy of the statement should if possible be delivered to the leader of each party before it is made. To my knowledge that did not happened and I would like to seek some assurance first of all from the Government that that will happen in the future when these statements are going to be made as has always been the practice of the House and secondly from you that for any consideration that you may be giving after question time to other debate on this matter you will take that into consideration and will not be affected by the fact that the Government has made this statement without giving any notice of it to the Opposition.Hon TODD McCLAY (Minister for State Owned Enterprises): My office did deliver copiesof the statement that I have read in the House to the best of my knowledge just after 1.30 p.m. today.Hon Member: Point of order.Mr SPEAKER: Is it in relation to this matter? Let me just rule on this matter. I would certainly anticipate that the Government would have sent such copies of this statement. That is not a requirement of the Standing Orders but it certainly says that it is possible to do so. I can assure the member that decisions that I make subsequent to question time are made quite independently of what happens with regard to ministerial statements.Hon Gerry Brownlee: Mr Speaker—Mr SPEAKER: Is it in relation to this matter?Hon GERRY BROWNLEE (Leader of the House): I raise a point of order Mr Speaker. Well yes it is because the shadow Leader of the House did say that he was seeking some assurance. I think the comment that has been made by the Minister concerned is reassuring. It is always our practice to comply as much as possible as the Standing Orders require of us. I hope that he accepts also that I have tried very much in the time that I have been in my current role as Leader of the House to ensure that parliamentary procedure is as inclusive as is possible of all those who are a part of it. So this is a bit disappointing. It now appears that perhaps some other communication might not have occurred that should have. In any event I hope that the House accepts that we are not trying to be in any way obfuscating our responsibilities. Indeed that is why we are having a ministerial statement.Hon CLAYTON COSGROVE (Labour): This is indeed a very very sad day and I start by saying this: I hope Tony Ryall the former Minister for State Owned Enterprises wherever he may be is listening very very—Hon Gerry Brownlee: Mr Nasty.Hon CLAYTON COSGROVE: —carefully to this. No no Mr Brownlee says “Mr Nasty”. The Mr Nasty in this piece is a Government that rammed this company into the ground—rammed this company into the ground.Between 1999 and 2008 Solid Energy was an award-winning export company delivering hundreds of millions of dollars to the taxpayer. In 2009 the Government’s first act by the then Minister for State Owned Enterprises was to write to that company and demand more dividends. As a result of that it took $164 million worth of dividends from that company. The Government expected the company in that letter which will be tabled later today to ratchet up its debt level which it did to around I think $313 million. And then when the coal price moved and its own scoping consultants who were in there to scope Solid Energy for sale reported back in 2009-10 that the ship was heading for the rocks the Government did nothing. It did absolutely nothing. The alibi to the New Zealand people for hundreds of millions of dollars of waste and for probably further hundreds of workers losing their jobs is: “Oh! The coal price devalued.”Well that is true. The coal price devalued the markets dried up. Any village idiot on that side of the House could have read that in the paper. The question before the New Zealand people that the Government has never answered is a simple one: why when it saw that happen did it not react? Why did it do absolutely nothing—absolutely nothing? There was the photo of course of Mr English allowing outlandish expenditure opening the lignite path; sexy coal from Mr Brownlee—that is an oxymoron—allowing outlandish expenditure where management spent until it dropped where management and executives particularly the then chief executive officer was allowed to get a massive golden handshake for sitting at home. Why did the company not react? Other coal companies around the world reacted.I have worked in the minerals industry. I have worked there. I know what happens. I know what happens when the commodity price moves and companies react within days. Coal companies around the world reacted at the same time within days and they are surviving and they are profitable today. These people were derelict in their duty.On 5 June 2012 Minister English and then Minister Ryall put the company under month-to-month close watch and still they did nothing. There is a pile of papers metres high that the Government itself released from Treasury and other agencies warning since 2010 that this company was heading for the rocks. It has never ever told the New Zealand people why unlike its international counterparts it did not react. It blocked every parliamentary inquiry. The only person who has been able to have a quick look at this was the Auditor-General. Yet Mr Brownlee interjecting and Mr English and then Mr Ryall and today Mr McClay have never given an explanation as to why they did nothing. No Minister has been accountable. No one resigned. No one was sacked. No one on the board was sacked. No one in management was disciplined.Hon Gerry Brownlee: That’s not true.Hon CLAYTON COSGROVE: That is absolutely true. They resigned and they ran as the ship sank. No one was required to go. But the people who paid the price and who are paying today are the hundreds of staff on the coalface literally who keep the show on the road—West Coast miners. The company could have reacted.What could the Government have done? It could have called in the management and the board and said “Where’s your B plan?” like every other coal company around the world did and survived. If the board had said no the Government could have sacked the board. No it did nothing. Or it could have changed the statement of corporate intent and then put some direction in. These were the tools that this Government could have used.As Mr Brownlee grins away and as people worry about their jobs and other people on the West Coast are looking for jobs as a result of his Government’s inaction they will note that down. I say to the Government: come clean. I say to the Government: for once since taking office in 2008 explain to the New Zealand people why you took no action—why you refused to intervene on the board why you allowed the outlandish expenditure and why no one from the Government the board or management has ever been held accountable for this. The Government members sit there as they wasted $389 million of taxpayers’ money and point the finger at everybody else. Well the buck stops with them. They should get up and the Minister of Finance should make a ministerial explanation today and explain why he sat there with Tony Ryall the Government and the Prime Minister and let Solid Energy be run into the ground.GARETH HUGHES (Green): I would like to start by saying that the Greens’ sentiments and our thoughts are with the workers their families and the communities on the West Coast and in Huntly. They are facing a time of unease and of great uncertainty and our thoughts are with them. I would also like to start by acknowledging the local communities—the councils the mayors the Amalgamated Engineering Printing and Manufacturing Union and hard-working local MPs like Kevin Hague and Damien O’Connor. What we have seen is—Hon Members: Ha ha!GARETH HUGHES: It is not really a time for laughing guys. What we have seen already is that 500 workers in the Buller region are to lose their jobs and what has the National Government done? It has not lifted a finger for the 500 workers who have already lost their jobs. Yet today what we see under this decision is a short-term band-aid with no long-term solutions for the region.What the people of the West Coast of the Waikato and of all of New Zealand want to see us do is work together for solutions. They want to know what the future is for those communities post coal. I remember growing up in Gisborne and seeing the hundreds of men laid off at the freezing works where my father worked. I know a little bit about the pain the suffering and the uncertainty it brings to small provincial communities and this is what the West Coast is going through today.Obviously the problem is the price of coal. Having sat on the Commerce Committee and having followed this issue for many years it has been like viewing a slow-moving train wreck. What we have seen is Ministers who have been overconfident about Solid Energy who have overvalued it overgeared the debt ratio and taken out too many dividends. What we saw unfortunately was a State-owned enterprise taken to the brink. It was part of coal. We have seen consumption decline in the US in China and across the world. Coal and the price was always the problem yet it always seems to have been the Government’s only answer to that same problem. To paraphrase the old saying: if you find yourself in a hole it is time to stop digging—yet the only answer has been more digging. Last year once again more was invested internationally in renewables and clean energy—$150 billion invested last year alone—yet the answer has always been more coal.Obviously the Government needs to take responsibility. We saw the debt-gearing issue which was outside the bounds of typical coalmining companies internationally. We saw the dividends taken out to generate cash. We still never got an answer as to why the Ministers did not require a halt to the culture of excess at Solid Energy. We saw a headquarters known as “the Palace”. We saw $23 million in bonuses paid out while the company was going belly up. We saw this company spend $64 million on a coalmine that it closed only a month after it purchased it. The Government waited until the absolute last moment to lay off and replace the board of directors and then we saw the grandiose house of sand plans of the former Dr Don Elder.The sum of $230 million dollars was borrowed and spent on fossil fuel non-coal alternatives. We saw the lignite mining for which we saw the finance Minister turn the first sod and which the Prime Minister supported in this House. This Government is complicit in the absolute waste of taxpayers’ money with some of the most polluting fossil fuel types of coal and the support for lignite and for underground coal gasification. After all of this the Government still refused an independent inquiry.So today we see the deal which hopefully will act as a short-term reprieve. I understand that redundancies have been guaranteed for at least 5 weeks for those 540 staff and 200 contractors. It is good to hear that those workers are protected and provided with some certainty. It is a short-term solution though with no long-term certainties.This is where the Government needs to look. We have reached out to the Government to work together. Together we can develop solutions for the West Coast economy and greater job security for the locals. It starts with making sure there is a proper economic development agency on the coast. The Government can speed up the roll-out of ultra-fast broadband on the coast. We can be investing more in skills and trades training on the West Coast and in Huntly. The Government can look to the future and to what the economic trends are. It is areas like clean energy. It is areas like home insulation. It is areas like greater science innovation and research and development spending.We want to see people in work on the West Coast and today even though the Government has not taken the opportunity with all the financial mess we have seen in that State-owned enterprise over the preceding years to start a just transition and to prepare those communities for the future jobs in the modern economy now is the time we can start. Let us work together and support the West Coast.RICHARD PROSSER (NZ First): Just last week we were told a man in Dubai prevented lifeguards from going to the assistance of his daughter who was drowning. He did say it was because of his ideological beliefs. To us that seems incomprehensible: that a parent would let their own child die rather than break the protocols of a belief system that they have chosen to adhere to based on nothing more than their unproven faith in a particular ideology. It is incomprehensible.By the same token it is incomprehensible that a Government could stand by and watch while a business entity owned by the State is allowed to effectively drown in a sea of debt because its own adherence made by choice to an ideology based on faith in a failed system of non-intervention prevents it from doing so. It is madness. It is economic madness to allow a business to fail a business that is based around the extraction of a valuable resource—a resource that belongs to the nation and its people a resource that costs us nothing a resource for which we are not required to pay anybody else a royalty and a resource that is valuable and for which there is a ready world market. It is economic madness for the Government to allow any such business to fail simply because stepping in to shore it up flies in the face of its own chosen ideology.People’s lives are dependent on the viability of Solid Energy—the workers the contractors the suppliers the communities based around the mines and the regions where those mines and communities are located. I think National simply does not care. Government members might make all the right noises. They will stand in this House and spout platitudes. They will make unending references to their fine economic management and their skills in business and how the Opposition does not understand these things and so on. We have heard it all before and I am hearing it all again today but the truth is the Government has an agenda as far as Solid Energy is concerned. It had one right from the start and now it has found a way of bringing it to fruition.Solid Energy’s own statement of corporate intent from July 2013 states: “In February 2013 Solid Energy entered a support agreement with its major lenders following a sustained downturn in international coal markets with the resultant impact on profitability cashflow and balance sheet which threatened the company’s banking covenants.” So as far back as 2½ years ago it was obvious that Solid Energy was not going to be in any fit state to be flogged off with the rest of the assets this Government was putting up for sale. The Government had always intended that it be put on the block along with the power companies and anything else that was worth a buck and was not nailed down but the downturn in world coal prices put the kibosh on that.So instead of planning to ensure Solid Energy’s future this Government decided it could wait for the next opportunity to come along and it seems it has found that opportunity. Solid Energy’s press release from this morning in point 1 of the bullet-pointed list proclaims as the first of its key terms of its proposal: “Solid Energy will engage an investment bank and undertake an orderly managed sale of its assets over the next two-and-a-half years.” So the Government gets its sale through a fail. This Government never had any intention of saving Solid Energy. It never wanted to. It always planned to sell it off and now that is what is going to happen.It does not need to of course as was pointed out by New Zealand First only a few days ago. Air New Zealand proves that Solid Energy can be saved. Solid Energy is teetering on the brink of becoming the largest-ever State-owned enterprise to fail. Air New Zealand’s recovery proves that the business can be turned round. It is only in the mess that it is in because of incompetence by Treasury’s commercial operations group and National’s hands-off approach. We are very lucky that National was not in Government when Air New Zealand nearly went to the wall because now it is one of the most profitable in the world. It took a Government prepared to invest in new management to effect a turn-round.Coal is central to steel production and we have not yet touched the potential of underground coal gasification. Clean coal technologies with hundreds of years of proven lignite reserves in Southland will make us independent in terms of urea—or to be turned into diesel. The lack of Government oversight allowed a pile of debts to be built up. If the Government was serious about the regions it would get off its backside and lift that debt burden so that Solid Energy under sane management could prosper just the same way that Air New Zealand has. But the Government is pressing on regardless hell-bent on flicking off this gem of an asset to its mates overseas which highlights the absolute farce of this Government’s ideological positioning.If we break it down it works like this. Solid Energy engages an investment bank and undertakes an orderly managed sale of its assets over the next 2½ years. So that means someone will buy them. Who? People with money and that means foreigners of course. Why will they buy those assets? Because they can make money out of them because they are profitable. No one buys a coalmine with the intention of closing it down. They buy a coalmine because there is a market for coal and that coal can be mined and sold at a profit. And if the foreign buyer can mine the coal and sell it and make a profit why can the State as owner not do the same thing?Hon TODD McCLAY (Minister for State Owned Enterprises): I thank my colleagues for their comments and I have welcomed this debate.The Government has intensively been involved with the Solid Energy board over an extended period of time but the reality is that a previous board made investment decisions at a time when the coal price was very high—indeed when that price was at the top of the market. That price has gone from $220 a tonne down to $85 a tonne this week.With the debts and the price forecast this is no longer sustainable but indeed this is a worldwide problem. There is coal on the seas on ships at the moment that people do not want to buy. A year or so ago a coalmine in Australia was bought by an American company for $1 billion. Last week that company was sold for $1.These districts are resilient. The proposed agreement means that the businesses will be paid and they continue to trade. It also means that employees will be able to go to work tomorrow. But I would caution the House that over the next 5-week period if the creditors do not agree to the proposal then there are very few options left available to the Solid Energy board.MotionsSilver Ferns—2015 Netball World CupHon LOUISE UPSTON (Minister for Women): I seek leave to move a motion without notice and without debate to congratulate the Silver Ferns on their success at the Netball World Cup to date.Mr SPEAKER: Leave is sought for that purpose. Is there any objection? There is none.Hon LOUISE UPSTON: I move That the House congratulate the Silver Ferns on their success at the Netball World Cup to dateand wish them well for the remainder of the competition while noting that the New Zealand parliamentary netball team co-captained by myself and Louisa Wall will travel to Australia this week to support the World Cup tournament and to play an inaugural game against Australian counterparts in recognition of the WW100 ANZAC events.Motion agreed to.Points of OrderWorld War II and Victory in Japan—Leave to Move Motion Without NoticeRON MARK (Deputy Leader—NZ First): I raise a point of order Mr Speaker. I seek leave to move a motion without notice regarding the 70th anniversary of victory in Japan and the end of the Second World War which will fall this Saturday this weekend.Mr SPEAKER: Before I put the leave can I just clarify that this is a debatable motion that the member is seeking.RON MARK: Yes.Mr SPEAKER: Leave is sought for that particular purpose. Is there any objection? There is objection.RON MARK (Deputy Leader—NZ First): I raise a point of order Mr Speaker. I take it the Hansard will record that the Minister of Defence objected?Mr SPEAKER: Order! That is not a point of order. Any member can object. It is not then appropriate for the member to rise and identify the member. That creates disorder in this House and frankly the member knows it.Questions to MinistersTrans-Pacific Partnership—Investor-State Dispute Settlement Provisions1.Dr RUSSEL NORMAN (Green) to the Minister of Trade: Does he stand by his statement that the $6.2 billion investor-state dispute settlement action initiated by the Swedish power company Vattenfall “is not in fact an attempt by the company to stop a democratically elected German Government from shifting its policy on nuclear power; it is about the financial implications of that decision”; if so why?Hon TIM GROSER (Minister of Trade): Yes because I have no new information that changes my understanding of the case.Dr Russel Norman: Does he believe that John Key would agree to implement any policy that would cost New Zealand taxpayers $6.2 billion as a result of the Minister of Trade giving multinational companies the right to sue the New Zealand Government as is happening in Germany?Hon TIM GROSER: No.Dr Russel Norman: Therefore does it not follow from his answer that the $6.2 billion case by Vattenfall in this case would put pressure on a democratically elected Government not to make a decision such as phasing out nuclear power?Hon TIM GROSER: This is stretching the limits of hypothetical questions to ludicrous extremes. We do not have a policy of wishing to encourage nuclear power and the provisions that we would agree to would be quite different from the provisions in this agreement.Dr Russel Norman: Does he agree that these investor-State dispute settlement clauses can have a chilling effect on the willingness of a Government to regulate and make decisions by hanging over them a billion-dollar threat that if the Government makes this decision it will have to make a massive payout to the multinational company negatively affected?Hon TIM GROSER: It may assist members if I explain that I have received advice from our international trade lawyers who given their track record are as good as anybody’s in the world that the agreements that are pursuant to the energy charter under which this case is proceeding are in their view old-fashioned very poorly drafted and not the types of provisions that they would recommend to any New Zealand Government to adopt.Dr Russel Norman: I raise a point of order Mr Speaker. I would ask the Minister if he is reading from an official document that in that case he table that document.Mr SPEAKER: Well that is very easily resolved. Was the Minister quoting from an official document?Hon TIM GROSER: No.Dr Russel Norman: Has the Government done any analysis on the financial implications to the Government from investor-State dispute settlement provisions in light of the statements from the Australian Productivity Commission just in June when it said investor-State dispute settlement provisions create “potentially large unfunded contingent liabilities which are dependent on decisions by international arbitration panels.”?Hon TIM GROSER: The Government will be producing a national interest analysis in conformity with existing practice at the end of the negotiation when we know exactly what type of an agreement we are looking at. A number of factors will go into that equation but we will do that at the right time.Dr Russel Norman: Is it not the case that the purpose of investor-State dispute settlement clauses or corporate sovereignty clauses is to restrict the space in which democratically elected Governments can regulate and that is why the United States is forcing them into every single one of the agreements that it is currently negotiating: the Trans-Pacific Partnership the Transatlantic Trade and Investment Partnership and the General Agreement on Trade in Services?Hon TIM GROSER: Well that is certainly not my interpretation of the purpose of the agreement. The purpose of the agreement is to protect legitimate foreign investors from actions that might undermine entirely their property rights and at the same time to ensure that we preserve adequate space for democratically elected Governments—well any Government actually—to regulate in the public interest.Economy—Reports2.DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What reports has he received on the resilience of the New Zealand economy?Hon BILL ENGLISH (Minister of Finance): I have seen a recent report from Fitch Ratings—one of the three ratings agencies—which says that the New Zealand “economy and banking sector are relatively well positioned to weather a cyclical downturn in the dairy market”. Fitch Ratings does not expect lower milk prices in the short term to affect the ratings of the New Zealand Crown or the major banks. Although the dairy downturn is of concern there is a reasonably significant headwind to the economy. The Fitch report suggests that the New Zealand economy is well positioned to manage supporting a broadly positive medium-term outlook. It says there are risks for the economy in bank balance sheets should the dairy market downturn persist through to 2016. However the consensus expectations that it refers to are for milk prices to find a floor and recover later in this season.David Bennett: What does Fitch Ratings say are the potential consequences of the dairy price fall for the New Zealand banking sector?Hon BILL ENGLISH: Fitch Ratings says New Zealand banks are in a relatively healthy position and should be able to manage this decline without an impact on their credit rating. It says that since 2008-09 banks have underwritten better-quality business. Their exposures are well covered by collateral exposures above 70 percent loan-to-value ratios appear manageable and because of regulatory activity by the Reserve Bank capitalisation has improved significantly since the last downturn. So the banks according to this analysis are well placed and we welcome the positive steps that the banks are taking alongside Fonterra to support dairy farmers.David Bennett: What are the consequences of the recent devaluation of the Chinese yuan for the New Zealand economy?Hon BILL ENGLISH: There is always going to be volatility in the currencies of the countries New Zealand trades with and in the New Zealand dollar which has of course fallen 25 percent against the US dollar in the last year. China’s recent devaluation shows its ongoing commitment to gradually liberalising its financial markets and that is positive for the long-term growth outlook of China although of course a devaluation in the shorter term appears to be a response to softening in the economic outlook for China. Of course that will pose some small extra challenge for the competitiveness of our exports to China.David Bennett: What reports has he received on the performance in other sectors of the economy?Hon BILL ENGLISH: Of course New Zealand has a range of sectors and activities across its economy besides the dairy sector. Earlier today BNZ released the performance of manufacturing index. The performance of manufacturing index for July was 53.5. Readings above 50 indicate expansion. So it is lower by 1.6 points than in June but it still continues a run of moderately strong results. The New Zealand manufacturing sector has now been in expansion for 34 consecutive months. The indication is that that expansion is likely to continue. BusinessNZ says the fall in the New Zealand dollar is now driving positive sentiment in the manufacturing sector which is leaning against the negative impact of lower dairy prices. Today’s performance of manufacturing index result indicates support for future growth although at a more moderate level than the economy was previously running.Dr David Clark: Why are exports dropping and why are they borrowing so much money?Mr SPEAKER: Order! Supplementary—Grant Robertson: We could have that one; I don’t mind.Mr SPEAKER: I will have this one. Grant Robertson—supplementary question.Grant Robertson: Now that 75 percent of major company chief executive officers have joined well-known left-wingers Cameron Bagrie and Federated Farmers in calling for a plan B for the New Zealand economy will he now concede that plan A is not working?Hon BILL ENGLISH: No and I might note that although many of them called for a plan B not one of them was able to say what plan B should be which in that respect is not a lot different from the finance spokesman for the Labour Party. But nevertheless most of those chief executive officersare of course all running adaptable flexible businesses which is consistent with plan A for the New Zealand economy—an economy that can deal with fluctuations in commodity prices and still deliver more jobs and higher incomes to its households.Workplace Health and Safety—Health and Safety Reform Bill3.IAIN LEES-GALLOWAY (Labour—Palmerston North) to the Minister for Workplace Relations and Safety: Will all New Zealand workers have the right to have a health and safety representative when they request one under the Health and Safety Reform Bill?Hon STEVEN JOYCE (Minister for Economic Development) on behalf of theMinister for Workplace Relations and Safety: All employers must ensure that workers are involved in health and safety in their workplace and there will be no exceptions but the bill does improve the flexibility of the worker participation provisions. Not all businesses will be required to have an official health and safety representative.Iain Lees-Galloway: Will agriculture be defined as a high-risk industry for the purposes of the bill?Hon STEVEN JOYCE: The Minister has made it clear that he will be talking further about the high-risk sectors and who will be in the high-risk sectors before the bill is passed finally through the House.Iain Lees-Galloway: Given that of the nearly 300 people killed at work in the last 5 years 101 of those—one in three—were agricultural workers why is he even considering not defining agriculture as high risk?Hon STEVEN JOYCE: The Minister is giving consideration to a number of matters including the fact as I am sure the member will be aware that agriculture is one of New Zealand’s biggest industries but that it has had a tally level that is unacceptable most of it around quad bikes. The New Zealand Government and WorkSafe are working very closely with the agricultural sector which knows that this issue has to be changed in regard to quad bikes.Clayton Mitchell: Will this Government help small and medium sized businesses with their ever-increasing compliance costs by funding health and safety representative training for small and medium sized businesses?Hon STEVEN JOYCE: I think it is important to note that one of the core roles of an employer is providing health and safety training for its workers. I think that most employers including small businesses would recognise that. But the member will know that the Government is being very careful to make sure that the administrative burden on small businesses is not excessive as a result of this bill and is in fact where possible reduced.Iain Lees-Galloway: Is his failure to make a decision about whether or not agriculture is high risk because of the pressure he is under from Federated Farmers and members of the National Party caucus to turn a blind eye to agriculture’s appalling safety record?Hon STEVEN JOYCE: No and I reject the assertions in his question.Iain Lees-Galloway: Does he think that refusing to give a straight answer is good enough for people like Linda Sewell who just wants decent First World health and safety laws after her 21-year-old son Tom was killed on his first day of orchard work when the quad bike he was riding but had not been trained to use crashed into a ditch?Hon STEVEN JOYCE: Obviously we are very concerned about any workplace issues with injury and death and our condolences go to that family and many others which is why in fact the Government and this House are spending so much time on modernising and developing new workplace safety legislation and the accompanying regulations. I appreciate that the member wants to force the Minister’s hand in terms of what industries are defined as high risk but he is taking his time to work through it carefully and will report to the House in due course.Investment—New Zealand Investment Attraction Strategy and Other Initiatives4.Dr PARMJEET PARMAR (National) to the Minister for Economic Development: What is the Government doing to encourage more investment throughout New Zealand?Hon STEVEN JOYCE (Minister for Economic Development): There have been very significant investment flows recently both internally and through international investment into New Zealand businesses which help grow jobs and incomes. Last month I announced the creation of a new strategy to attract more international business investment. The New Zealand Investment Attraction Strategy is being led by a team from New Zealand Trade and Enterprise the Ministry of Business Innovation and Employment the Ministry of Foreign Affairs and Trade Callaghan Innovation and Treasury. They are working with the private sector to create a pipeline of strong investable opportunities and to promote them. Attracting more investment will enhance our export markets and international linkages introduce new technologies and processes create more skilled jobs and increase regional economic activity.Dr Parmjeet Parmar: What are some recent examples of investment in New Zealand?Hon STEVEN JOYCE: There has been a substantial amount of new investment in New Zealand in just the past couple of years both domestically and from international sources. For example last year in the forestry processing industry Oji Holdings of Japan made a billion-dollar investment in Carter Holt Harvey’s pulp paper and packaging holdings adding to its interests in Pan Pac Forest Products in Napier and it is investing in developing those. In the dairy industry we are seeing around $2 billion worth of new investment in the value-added section of manufacturing—for example Westland Milk Product’s construction of a new $102 million dryer for nutritionals in Hokitika and a UHT plant in Rolleston and new investments by Fonterra in areas such as cream cheese UHT and mozzarella cheese. Filipino company Universal Robina Corporation has invested nearly three-quarters of a billion dollars through its purchase of Griffin’s and it is investing further in that plant. It is these sorts of investors that help economic growth across New Zealand.Dr Parmjeet Parmar: What other measures is the Government taking to encourage more New Zealand businesses to invest and grow?Hon STEVEN JOYCE: With the likes of Tait Communications Wynyard Group and Gallagher Group we are seeing a number of innovative Kiwi companies competing successfully on a world stage for Government contracts and that is set to grow with New Zealand today acceding to the World Trade Organization’s Agreement on Government Procurement. That will guarantee New Zealand companies access to bid for around $1.7 trillion in annual overseas Government contracts across 43 member countries including the US Canada Japan and the European Union. This is a very significant agreement and along with our other trade agreements is an important part of the Government’s goal of growing investment and growth in New Zealand companies.Dr Parmjeet Parmar: What reports has he seen of other potential policy approaches to international investment?Hon STEVEN JOYCE: I have seen a number of reports. Interestingly they all come from the same source and all on the same day but say different things. The first report stated that the last thing we needed was more foreign ownership. That was followed up in record time less than an hour later by a report saying that the country was built on foreign investment and that we needed more of it. Sadly this is the sort of high-speed flip-flopping that we are starting to—Mr SPEAKER: Order! I have heard enough of that answer.Dr David Clark: After 7 years does he consider that investment in New Zealand has been successful when exports as a percentage of GDP have dropped since his Government took office and are projected to drop further still?Hon STEVEN JOYCE: Firstly one of the reasons why they have dropped is the statistical change from Statistics New Zealand which has equally affected the member’s party’s performance when they were in office as well because it actually applies I think to just about every year since 1995. The good news for the member is that we have set a target for 2025. That requires around $160 billion to $200 billion worth of additional investment in our export sectors. This Government is committed to achieving this. The Opposition as we found out yesterday has no idea what it thinks about international investment.Dr David Clark: In respect of his 2025 growth target does he accept the Hon Bill English’s statement that growth would need to double to reach it; if so what is he doing about that that is not already in his Business Growth Agenda because that does not seem to be working?Hon STEVEN JOYCE: I suggest that the member actually listen to the first three answers to the question this afternoon because I have just announced an investment attraction strategy that we are working on together to increase the already growing pace of international investment. [Interruption] Of course Mr Clark does not listen because he is too busy yelling out something like “He’s the worst MP in 50 years.”Trade Agreements—Saudi Agri-hub and Ministerial Involvement5.Hon DAVID PARKER (Labour) to the Minister of Foreign Affairs: When the Ministry of Foreign Affairs and Trade stated on 19 April 2012 that they were “finding an appropriate mechanism to meet Al Khalaf’s concern for ‘compensation’ (possibly through the joint venture)” did ‘compensation’ mean compensation or have some other meaning like “not compensation”?Hon TIM GROSER (Acting Minister of Foreign Affairs): I am very glad that the member asked the question in very precise terms because he is in fact quoting the words used by Mr Al Khalaf not Mr McCully. Mr McCully hasmade it clear right throughout this whole negotiation that the New Zealand Government was not prepared to enter into a compensation agreement but was seeking a broader partnership agreement and that is the net effect.Hon Damien O’Connor: Then does he agree with the Prime Minister who told New Zealanders yesterday on Radio New Zealand National: “the deal was never about compensation.”?Hon TIM GROSER: Yes.Hon David Parker: Was the Auditor-General provided with prior to the payments to Al Khalaf being made copies of the document referred to in the substantive question and the 5 March 2012 briefing note of what the Minister said when the Minister noted that he would not want any financial contribution to be treated as compensation as this would involve a plethora of lawyers and bureaucrats?Hon TIM GROSER: My understanding is that the Auditor-General when she became involved asked a series of questions that were entirely correct and legitimate. They were provided with answers and at the end of the process the Auditor-General said that she was satisfied with the legality of the export with the fact that it was within appropriations and that the business case was improved.Hon David Parker: Can he assure the House and the public that Treasury was provided with all relevant documents relating to the $4 million cash payment prior to it being paid?Hon TIM GROSER: All the information that I am sure Treasury was asked for was provided. I would just like to quote to you from the final communication from the New Zealand Treasury to the Ministry of Foreign Affairs and Tradewhich is in the papers: “We are now generally comfortable with the business case.” It is dated 3 December 2013.Hon David Parker: I seek leave to table the Treasury document which is on the day of the noting of the $4 million payment to Mr Khalaf where Treasury says that it has not been supplied with the business case from Deloitte.Mr SPEAKER: The member is seeking to table a page of the Treasury report. I am just unsure it is—Hon David Parker: It is the pre-Cabinet briefing from Treasury dated 18 February.Mr SPEAKER: Leave is sought to table the pre-Cabinet briefing from Treasury dated as the member just said. Is there any objection to that being tabled? There is not. It can be tabled.Document by leave laid on the Table of the House.Hon David Parker: Does he believe that the control agencies of Government including Treasury and the Auditor-General were properly informed about the true nature of these payments?Hon TIM GROSER: I am sure that the Minister and his officials went through all the necessary channels.Fletcher Tabuteau: Was the Minister informed of the meeting between Mr George Assaf and the former Minister of Agriculture the Hon David Carter on 21 January 2009; if not why not?Hon TIM GROSER: I am not privy to precisely when the Minister was informed of which conversations but most certainly the Minister was informed of the general position of the Ministers in the new incoming Government and worked his way through the issues as matters progressed.Hon David Parker: When the Minister of Foreign Affairs approved the Ministry of Foreign Affairs and Trade providing compensation possibly through the joint venture does that not prove that the joint venture documents are a sham designed to cover the true nature of those payments?Hon TIM GROSER: I would have to listen very carefully to the way the phrase was used but I think from the way that the member put the question that the answer would have to be that I reject theassertion. The Minister has been completely consistent throughout: that we were seeking a partnership. We were not prepared to enter into a compensation agreement. Mr Al-Khalaf who is the most important meat trader in the Middle East is very important to this country and I am confident that this partnership will in the long run prove to be of considerable benefit to our country.Trade—International Agreements6.MARK MITCHELL (National—Rodney) to the Minister of Trade: What is the Government doing to reduce what some commentators are saying is an overdependence on trade with China?Hon TIM GROSER (Minister of Trade): The Government is doing numerous things. Mr Joyce has just announced one such measure. Another measure was announced by me in my capacity as Minister of Trade about the information technology agreement in Geneva that will cover tariff elimination on over a billion dollars of exports. We are negotiating numerous agreements including the ASEAN Regional Comprehensive Economic Partnership agreement which I will be going up to in the week after next. We are negotiating the Trans-Pacific Partnership agreement which is $28 trillion of GDP. I look forward to the entire House supporting the passage of the Korea free-trade agreement which will provide additional options to China for our great exporting community.Mark Mitchell: What reports has he seen on the benefits of our current trade agreements?Hon TIM GROSER: Numerous but I will just pick the most recent which is the agreement with Taiwan. It is interesting that when the analysis of what this would do came out with a figure of $78 million of tariffs which is the narrowest measure of trade benefits it said that that would occur at the end of the full phase-in of the trade agreement which goes as far as 12 years from memory. We exceeded that in trade growth in the first 10 months of the agreement. That is how beneficial free-trade agreements are to New Zealand.Mark Mitchell: What other trade agreements is the Government pursuing to lift New Zealand exports?Hon TIM GROSER: In addition to the ones that I have instanced in the Asia-Pacific we are also hopeful—it will be difficult to achieve—that we will establish the beginning of a negotiation with the EU for a free-trade agreement. The Government has prioritised the Pacific alliance—this very new and interesting group in Latin America. So the Government is moving ahead on literally multiple fronts.Solid Energy—Financial Position7.Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: What was Solid Energy’s debt in 2008/09 and what was it in the latest annual report?Hon TODD McCLAY (Minister for State Owned Enterprises): As at 30 June 2009 the company held $50 million of bank debt on its balance sheet. Currently it has bank debt of $320 million but its full exposure is closer to $0.5 billion. The falling international coal price means that Solid Energy is not viable in its current form and there is no prospect of it being able to be in a position to repay or refinance this bank debt.Hon Clayton Cosgrove: Will the Government now admit that it was wrong in 2009 when it wrote to Solid Energy demanding higher dividends which eventually totalled $164 million and forced Solid Energy to raise its debt levels by hundreds of millions of dollars when international best practice for coal companies is to have near zero debt?Hon TODD McCLAY: No I do not accept that. Indeed for Solid Energy it has been quite some period of time since it did not have debt at all. This is a very challenging industry. It has been for a period of time. A previous board made investment decisions at a time when the coal price was much higher than it is today. Indeed it was at the top of the price then and since then successively year by year that price has come down. Unfortunately this company with the changing circumstance of coal prices is no longer sustainable in its current form.Hon Clayton Cosgrove: I seek leave to table a letter dated 28 May 2009 from the then Minister for State Owned Enterprises which notes the Government wanting Solid Energy—Mr SPEAKER: Order! [Interruption] The document has been described. Leave is sought to table that particular letter dated 20 May 2009. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Richard Prosser: Given those answers does he have faith in Treasury’s oversight group the Crown Ownership Monitoring Unit; if so why?Hon TODD McCLAY: Yes I do and that group and others in Treasury have gone under a reform over a period of time. Certainly this Government is more focused on State-owned enterprises than any Government has been previously. The reason for this is that we expect them to be well managed to be low risk to focus on their core responsibilities and activities and to return a fair dividend for the taxpayer. There are State-owned enterprises however that have not focused on their core activity responsibilities. That is one of the challenges we faced with Solid Energy.Hon Clayton Cosgrove: Given that the fall in coal prices impacted companies around the world and they have survived by focusing on their core business why did the Government which was receiving monthly reports on the state of Solid Energy from 5 June 2012 cheer it on as it burnt through money on risky ventures and racked up an unsustainable level of debt and then block all parliamentary inquiries into what went wrong?Hon TODD McCLAY: Solid Energy is not the only coal company in the world in its current situation. Indeed there is a company in Australia that was bought by an American group a few years ago for close to $1 billion. Two weeks ago it was sold for $1. All over the world coal companies are facing similar challenges to Solid Energy’s. The announcement that has been made by the board today gives a greater opportunity for those people employed by Solid Energy to keep their jobs and for trade suppliers to Solid Energy to continue to be paid and for them to continue their business activity.Hon Clayton Cosgrove: I seek leave to table an Australian Mining report of 12 August 2015 which is entitled—Mr SPEAKER: Order! I just need the source of the document—[Interruption] Order! I just need the source of the document.Hon Clayton Cosgrove: The Australian Mining newsletter: “Coal exports breaking records in”—Mr SPEAKER: On the basis that it may not be freely available—[Interruption] Order! It is a simple question that I have put to the Hon Clayton Cosgrove. Is it easily obtainable by members if they wish to seek it?Hon Clayton Cosgrove: I found it. I do not know whether it is easily obtainable—Mr SPEAKER: Then it is easily obtainable. I will not be putting the leave.Hon Clayton Cosgrove: Why has no one been held accountable for Solid Energy’s unprecedented collapse in that no Minister has resigned or been sacked for being asleep at the wheel and taking no action despite years of repeated warnings from their own officials; none of the then board were fired for a complete lack of governance; and no members of senior management were removed or disciplined despite outlandish spending and reckless decision-making—in fact the only people who lost their jobs were the men and women at the coalface?Hon TODD McCLAY: The member is simplifying a very complicated situation with Solid Energy. Indeed the current board is a different board from the one he was speaking of. It made investment decisions around Solid Energy that have created some of these challenges. Also the senior management team at Solid Energy is different. They have been working as hard as they can over the last 2 years to ensure that this company has a future and to ensure that people can go to work tomorrow and it is a very challenging situation. They have worked hard really to recognise the hard work not only of that team but of the people who work for Solid Energy in all regions of New Zealand.Hon Damien O’Connor: Having destroyed over $1.7 billion of company value accrued $320 million worth of debt—Mr SPEAKER: Order! Can I have the question please? [Interruption] Order! The question.Hon Damien O’Connor: —injected $128 million of taxpayers’ money and destroyed the jobs of over—Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. I have called for the question. The member continues to outline information that may be—[Interruption]—facts if the member wants to call them that. That is not necessary for the question. It is creating disorder. I have two choices: either to stop now and not allow the question or to give the member one chance to rise and ask his question. I will do that but if it is going to be supplemented with a whole lot of information that the member thinks is relevant and I do not he risks the question being ruled out of order.Hon Damien O’Connor: Can I start again?Mr SPEAKER: Yes the member can start again but if I do not hear the question very quickly it will be ruled out of order and we will be proceeding.Hon Damien O’Connor: In light of all those facts is the Minister now comforted—[Interruption] He cannot hear it.Hon Gerry Brownlee: I raise a point of order Mr Speaker. You cannot say “Can I start again?” and then refer to a question that has been ruled out of order.Mr SPEAKER: Order! I had not ruled it out of order. The member is getting to his question—“is the Minister”—and then he got interrupted. Would the member please proceed with his question.Hon Damien O’Connor: In light of all the facts laid down in the House this afternoon is the Minister comforted by the fact that his Government’s asset sales programme is now back on track?Hon TODD McCLAY: No those are not the facts but I do agree with the member and recognise his concern for coal mining workers in the area he represents as the Government is. What I would say to him and others who are listening is that the proposal announced today is the very best opportunity for people in these regions to keep their jobs. However over the next 5 weeks the administrator must engage with creditors around the country. They will be asked to vote on this proposal. Should they vote on it then there is a future for some of these assets. If they vote against it then the only alternative is likely to be liquidation and that is not something that the Government is hopeful for and I know that member is not on behalf of his constituents.Sports Coverage—Free-to-air Broadcasts8.CLAYTON MITCHELL (NZ First) to the Minister of Broadcasting: Does she stand by all her statements?Hon AMY ADAMS (Minister of Broadcasting): Yes.Clayton Mitchell: Given that the Minister stated yesterday that rugby is our national sport why will this Government not support New Zealand First’s policy of free-to-air live coverage of games of national significance?Hon AMY ADAMS: Because only the most infantile analysis would not understand that that would come with significant negative consequences for New Zealand.Clayton Mitchell: In light of the Minister’s answer does she think it is fair that Kiwis are behind the eight ball compared with Australia and Britain which guarantee their sports fans under law free live coverage of games of national significance?Hon AMY ADAMS: Mr Speaker—Mr SPEAKER: Order! No I am just waiting for New Zealand First to settle.Hon AMY ADAMS: You will be waiting a long time. The New Zealand market is very different from that of Australia and Great Britain. I do not think New Zealanders would want to see our national sports teams reduced to a situation of such poverty that they would be made up only of people who could not get contracts overseas.Clayton Mitchell: Why when New Zealand taxpayers already fork out $2.9 million to support netball and $3 million for rugby must they then pay again to watch their national teams in both world cups?Hon AMY ADAMS: The member is simply wrong. New Zealanders can watch it for free on Prime and they can watch it live at a number of venues.Clayton Mitchell: Given that the Prime Minister wants to see the silver fern on the flag why has he not already allowed New Zealanders to see our Silver Ferns for free on our State-owned TV for the Netball World Cup?Hon AMY ADAMS: New Zealanders can see it for free on free-to-air television.Energy Sector—Energy in New Zealand 20159.BRETT HUDSON (National) to the Minister of Energy and Resources: What recent reports has he received on energy trends and growth in New Zealand?Hon SIMON BRIDGES (Minister of Energy and Resources): Yesterday the annual review of the energy sector Energy in New Zealand 2015 was released. It shows that in 2014 renewable energy made up nearly 40 percent of New Zealand’s total primary energy supply. This is a record high and places us third in the world behind only Iceland and Norway. Also in 2014 renewable electricity generation hit just under 80 percent the highest level since 1996. These are fantastic results showing that we are making real gains transitioning to a lower carbon energy future and making the most of our country’s renewable advantage.Brett Hudson: What insights does Energy in New Zealand 2015 reveal about resource development last year?Hon SIMON BRIDGES: Energy in New Zealand 2015—the report that I have been referring to—shows that oil and gas exploration was up in 2014 with over $2 billion spent here by operators; the highest ever level of expenditure in this country. This is a great result and shows that the Government’s approach to encouraging exploration and development is a real success. Energy diversity is the key to achieving energy security affordability and sustainability which is why we take a long-term view with a mixed and a balanced approach pursuing opportunities in both renewable and non-renewable energy.Overseas Investment—Outcomes of Overseas Ownership of New Zealand Land10.STUART NASH (Labour—Napier) to the Minister for Land Information: Has she received information from the Overseas Investment Office which confirms the statement of the Minister of Economic Development that “We have not been as effective as other countries in ensuring that overseas investment into New Zealand has provided the additional benefits”?Hon LOUISE UPSTON (Minister for Land Information): I agree with the Minister for Economic Development’s statement that there has been lower overseas investment in comparable countries and there will be many things that we can learn from how those countries are attracting overseas investment. However any application for sensitive land that comes through the Overseas Investment Office must provide examples of substantial and identifiable benefits to New Zealand. The Overseas Investment Act strikes an important balance between ensuring sensitive New Zealand assets are adequately protected while facilitating foreign investment that provides benefits to New Zealand. We cannot be Fortress New Zealand if we want an economy that is internationally competitive and better placed to deliver higher incomes and better services to New Zealand.Stuart Nash: Can she confirm that since the start of 2012 to the end of 2014 the Overseas Investment Office has approved 296 consents for the sale of sensitive land to foreign investors and turned down exactly zero?Hon LOUISE UPSTON: I am not going to confirm the exact statistics that the member has discerned but what I would say is to explain that there is a process for the receipt of Overseas Investment Office applications. Not all of them are then put forward for assessment. So there is a pre-assessment process that ensures only high-quality applications are considered. Once accepted for assessment applications go through a rigorous assessment process as the Overseas Investment Office assesses the applications against the criteria. In recent times three have been declined.Stuart Nash: I would like to table a document that shows since the beginning—Mr SPEAKER: Order! I know what it will show. We just need the source of the document.Stuart Nash: The Parliamentary Library.Mr SPEAKER: No. That is available to all members.Stuart Nash: How many jobs have been created by the 716 successful foreign investors in sensitive New Zealand land who promised to create jobs as part of their consent application or does the Overseas Investment Office not keep statistics on this?Hon LOUISE UPSTON: Each individual application is considered according to the criteria that are set out in the Overseas Investment Act. Actually this side of the House strengthened those requirements in 2010 with the ministerial directive. In addition to that in 2012 the High Court counterfactual test ensured that New Zealand receives benefits.Stuart Nash: I raise a point of order Mr Speaker. You probably know what it is about. It is a very clear question. How many jobs—Mr SPEAKER: And I think the way forward is for the question to be repeated for the benefit of the Minister.Stuart Nash: Sure I am happy to do that. How many jobs have been created by the 716 successful foreign investors in sensitive New Zealand land who promised to create jobs as part of their consent application or does the Overseas Investment Office not keep statistics on this?Hon LOUISE UPSTON: Although the Overseas Investment Office does not aggregate data on the lists of benefits successful applications will have for New Zealand every single application has to show measurable and identifiable benefits to New Zealand. This includes the number of jobs.Stuart Nash: What is the value of increased export receipts promised by the 358 successful overseas investors in sensitive New Zealand land who promised to increase export receipts as part of their consent application or does the Overseas Investment Office not keep statistics on this?Hon LOUISE UPSTON: I am more than happy to take the House’s time going through some of the answers that have already been provided to that member through written questions. As I said before the Overseas Investment Office does not aggregate data. There is an assessment on every individual application to make sure that any approvals provide benefits whether that is exports or jobs to New Zealand.Stuart Nash: In light of those answers why does this Government not think that it is important or seem to care about the value or lack of it created by the sale of New Zealand farmland to foreign investors?Hon LOUISE UPSTON: I did make it very clear in my opening answer to the first question that there is a high test and we have also said that in the ministerial directive letter we put tougher measures in place. There is an important balance here that this Government is very conscious about. Foreign investment is vital to New Zealand as Minister Joyce pointed out in his earlier answer today but equally in terms of any approvals of any sensitive assets including land New Zealanders want us to make sure that there are substantial and identifiable benefits for them.Benefits—Sanctions and Impact on Children11.JAN LOGIE (Green) to the Minister for Social Development: What actions if any has the Ministry of Social Development taken to ensure the well-being of children in families subjected to benefit sanctions given that sanctions of sole parents have increased by 19.98 percent in the last year?Hon ANNE TOLLEY (Minister for Social Development): I am not sure where that member is getting her figures from or her maths but they certainly do not match any of the figures that I have received from the Ministry of Social Development. Sole parents are expected to be available for and looking for work to care for their children and to keep Work and Income updated on their progress. Beneficiaries receive a number of notifications before a sanction is even put in place. Beneficiaries with children can never be sanctioned for more than 50 percent of their main benefit and they continue to receive the full amount of any supplementary assistance. In fact under this Government fewer people are having their benefit stopped because of sanctions and there has been a 34 percent reduction in suspensions and cancellations since 2011.Jan Logie: I raise a point of order Mr Speaker. This was a question on notice that was authenticated in the response to—Mr SPEAKER: Order! [Interruption] Order! It is quite appropriate for a Minister to then dispute the figures that the member has provided as authentication for that question to be accepted—quite acceptable.Jan Logie: So what if anything is the Minister doing to address the fact that two-thirds of sanctions have been for missing one appointment which then halves a family’s income throwing children’s lives into chaos as parents struggle to pay for rent and power?Hon ANNE TOLLEY: Well in fact that is not true. That is not correct and there is no way that a sanction of that nature would be applied for missing one appointment. In fact the member is correct that the most common reason for a sanction is missing appointments but it is not too difficult to expect people to turn up for a pre-arranged appointment. If they cannot make it Work and Income people do go out and meet people in their own homes. A telephone call will actually avoid any further action.Jan Logie: Does the Minister believe children’s warmth and security of housing should ever be put at risk due to their parent missing an appointment because Work and Income had not processed their paperwork they missed a bus or there was a death in their family?Hon ANNE TOLLEY: What I can assure that member is that if any of those issues are raised with Work and Income by the applicant they will be taken into account. Work and Income is there to support those solo parents and to make sure that their children get the very best start they could possibly get in life.Jan Logie: I raise a point of order Mr Speaker.Metiria Turei: I raise a point of order Mr Speaker.Mr SPEAKER: Who wants to go first?Metiria Turei: It is pretty clear from the question that the Minister was asked whether she believes a child should ever be put at risk—Mr SPEAKER: Order! Can I just have the point of order.Metiria Turei: —and that was not addressed in her answer.Mr SPEAKER: If the member is referring to the last supplementary question that was asked it was very clearly addressed. The member took the opportunity of quoting three reasons why a sanction may be imposed and the Minister took the opportunity of saying that if Work and Income knew of those three reasons it would not impose the sanction. The question has definitely been addressed. [Interruption] Order! If the member wants to stay and continue her line of questioning she had better adhere to the Standing Orders.Jan Logie: Is the Minister still hoping to achieve her Better Public Services target of a 25 percent reduction in the number of people receiving a main benefit despite the stormy economy ahead by making life so stressful and precarious that people are coming off benefits even if they have no job to move into?Hon ANNE TOLLEY: This Government is determined to ensure that all New Zealanders have the opportunity to live full and successful lives. That includes people who are reliant on a benefit and the children in those homes. We know that the best way out of poverty for those parents and children is through work. So we are definitely focused on achieving that 25 percent reduction and helping those people live better lives.Jan Logie: Why is the Minister intent on holding the line that getting people off a benefit will improve child poverty when the household income survey released today shows that despite a drop in the number of children in beneficiary households there are now an additional 45000 New Zealand children living in poverty?Hon ANNE TOLLEY: I would absolutely dispute the last statement that that member made. It is a gross and serious misrepresentation of the report that was released today.Primary Sector—Agricultural Compounds and Veterinary Medicines Amendment Bill12.TODD BARCLAY (National—Clutha-Southland) to the Minister for Food Safety: What announcements has the Government made that will help our primary sector have greater access to the latest technologies and agricultural products?Hon JO GOODHEW (Minister for Food Safety): This week the Agricultural Compounds and Veterinary Medicines Amendment Bill was introduced to the House. The bill will increase the data protection period for companies registering innovative agricultural products. It means that our primary sector will have better access to the new products that it needs in order to manage plant and animal pests and to keep farm animals healthy.Todd Barclay: How will this bill increase New Zealand’s access to agricultural products?Hon JO GOODHEW: The New Zealand market is a small one and suppliers need time to recover their product development costs before their data can be accessed by competitors. This bill will encourage overseas suppliers to register new products while still allowing for robust competition in the New Zealand market place.Urgent Debates DeclinedSolid Energy—Voluntary AdministrationMr SPEAKER: I have received letters from Richard Prosser the Hon Clayton Cosgrove and Gareth Hughes seeking to debate under Standing Order 389 the announcement today that Solid Energy has been placed in voluntary administration. This is a particular case of recent occurrence involving ministerial responsibility. The announcement makes it clear that Solid Energy has been placed into temporary voluntary administration and that in the meantime it will continue to operate normally under its existing board of directors. It has been reported that there are no plans for redundancies during the period of administration. Although being placed in voluntary administration is significant the longer-term outcome of that decision is not yet known.The business of the House should not be set aside just because an announcement has been made even though it may be important. There must be such an element of urgency that the matter must take precedence over other business. In this instance I am not persuaded that there is an element of urgency that warrants the setting aside of the business of the House. The application is therefore declined.Estimates DebateIn CommitteeDebate resumed from 11 August on the Appropriation (2015/16 Estimates) Bill.Social Development and Housing Sector (continued)The CHAIRPERSON (Hon Trevor Mallard): The Chamber is in Committee for consideration of the Appropriation (2015/16 Estimates) Bill. Members when we were last progressing the estimates debate we were debating the votes for the social development and housing sector—volume B.5 and volume 10—Vote Building and Housing and Vote Social Development. Poto Williams had the call and she has 1 minute remaining.POTO WILLIAMS (Labour—Christchurch East): Just to round off my last call I want to say that the estimates debate is all about transparency it is all about openness and it is all about accountability. In the case of moving over $15 million from the Christchurch Housing Accord for affordable housing without telling the people of Christchurch or even its own partner the Christchurch City Council this fails to meet any test of accountability.I would ask the Minister for Building and Housing to come to the Chamber and tell us why he chose to do that without suitable notification to not even the people of Christchurch or the Christchurch City Council. This fails to meet any test of accountability of transparency or of openness and I suggest that the Minister be held to account for that.METIRIA TUREI (Co-Leader—Green): Last night Philippa Howden-Chapman and Graeme Beattie spoke at the Speaker’s Science Forum about their respective research on housing and health. Their point was to talk with MPs about the evidence on which we as a community of MPs could build both cost-effective and health-effective policy in housing. This is an issue that was dealt with by the Social Services Committee in looking at the estimates and there has been some Budget provision for some part of some policy around home insulation but it is weak and will not prove to be as effective as it could be because this Government simply will not prioritise this level of evidence-based policy detail. We have seen today in the 2015 report on household incomes more evidence about the state of housing for families which should be driving urgency in this policy.In general the information presented last night was not particularly new to MPs. New Zealand homes are poorly built—The CHAIRPERSON (Hon Trevor Mallard): Order!METIRIA TUREI: Mr Chair?The CHAIRPERSON (Hon Trevor Mallard): No—sorry. The people behind you should know better. Thank you—keep going.METIRIA TUREI: Thank you Mr Chair. New Zealand homes are poorly built for our climate and for the use of families. They are damp and they are cold and this means of course that families spend an excessive amount on their power bills and too many especially the elderly and children get sick from the effects of this poor housing. According to the evidence Warm Up New Zealand the home insulation programme of the Greens and Labour and then the Greens and National has a cost-benefit ratio for grown-ups of nearly 4:1 and for children a cost-benefit ratio of 6:1 showing that there is enormous economic value in investing and warming up with good insulation and good heating in New Zealand homes for grown-ups and for kids. And yet we are still in the situation the evidence shows where 1600 New Zealanders die each winter. We have 1600 winter-related deaths—avoidable housing-related deaths—every year. We have 1600 people dead because of poor housing—that is what the evidence that was presented last night showed—and a very large proportion of them are of children.We all know what the solutions are and the evidence showed us that again last night. First improve the building standards on insulation heating and ventilation to remove condensation and improve heat retention. Secondly require rental properties to have and meet a set of warrant of fitness criteria to improve the safety of those homes. The study last night showed that there was a nearly 40 percent reduction in injuries based on home modifications and subsequently there was a significant decrease in the cost of ACC which is a major cost to all of us. Thirdly provide home insulation and heating subsidies to increase take-up across all households—not a select few but across all households. The evidence of that shows that hospitalisations fell by 27 percent in the first 12 months and by 61 percent for the most intensive insulation and heating interventions. These are three straightforward well-known well-costed well-thought-out policies that are well-understood and the evidence shows that they would be very very effective.The household income report that came out today shows that the number of low-income families with excessive housing costs remain at a historic high—50 percent of people getting the accommodation supplement are paying more than 50 percent of their income in housing. Of those families in households that reported major problems with dampness and mould 70 percent were on the lowest incomes so the lowest-income families are the most likely to suffer from the poor quality of New Zealand homes. And of course the evidence from this report today shows that housing is increasingly expensive degraded and unsafe for New Zealand families.At the dinner last night one MP noted that “Surely if MPs in the House knew that 1600 people die a year from poor housing - related illnesses we would be up in arms and do everything that we could to fix it.” but the fact is that we do know this. We have known this for years and no there is not an urgent drive to fix New Zealand’s housing quality. There is no urgent drive to increase the home insulation and heating subsidies or to make sure that there is a warrant of fitness for rental properties.Hon JO GOODHEW (Associate Minister for Social Development): Thank you for the opportunity to contribute to this estimates debate. I want to add to the debate an element of the measures that the Government is currently taking to support students. I am going to do so at a time when we are hearing quite a lot of debate about what students do with the money that the Government sends their way for support of their tertiary education. So I would like to talk a little bit about my responsibilities within the social development portfolio for student loans.We have made changes to the student support. It has allowed us to free up money that we can invest in improving the quality of the tertiary education we provide. Back in 2011 we passed legislation to make sure benefit and student allowances increase every year along with inflation. That lines up very nicely with the same changes that we made to give some certainty for increases to other welfare payments as well. Interestingly that was not an action taken by the previous Labour Government along with its partner-in-arms at the time the Green Party.Each year the rates and thresholds for a range of Work and Income assistance and StudyLink assistance will rise to keep up with increasing living costs and back on 1 April this year we saw the annual general adjustment go up by 0.51 percent which of course was indexed at the time. So we are supporting students. We are retaining the student loan repayment threshold at $19084 until April 2017 and increasing the student allowance rates for families with children by $25 a week which will kick in on 1 April next year. We are retaining the student allowance parental income threshold at $55027.96.There is another thing that we are doing for students. Let us face it a lot of what we hear about students is that they are time poor—they are very busy studying. They are very busy in many cases with some part-time work to support their study. This year more than 130000 students have benefited from the improvements that we have made to student loan and allowance application processes. These make it easier in the following ways. They allow for a pre-filled online application process which saves about 30 minutes for every student getting on there. The one other thing that does is it saves money for the taxpayer because the taxpayer is not spending more time with these students getting the answers from these students in order to fill in the necessary forms to apply for things. So in fact we are in that same way getting better bang for the buck for our taxpayers as well. There is also a digital repository called Connect which allows students and parents to scan the necessary documents the evidence that they need to apply to StudyLink.You know there are some amazing statistics that demonstrate how well this is going. Unanswered calls have been slashed from 800000 unanswered calls back in 2013 to fewer than 8000 this year. That means again a saving for the taxpayer because there is a 22.5 percent drop in foot traffic at the StudyLink offices. So this is yet another example of this Government being careful with the money that the taxpayers are entrusting to us. It has been said in the Chamber this afternoon—and I am going to say it again because we cannot say it often enough—that the way for families to help themselves if they are dependent on a welfare benefit is wherever possible for the Government to assist them into work. That is how their children their lives their health and their welfare indeed are bettered. Therefore this Government is going to many lengths—extreme lengths in some cases—to assist families to benefit from having work and having an income coming into their household.We have heard sanctions debated here today and it is reprehensible to hear members of this Committee misrepresent the obligations we place on people and the way that sanctions are applied. We know at the heart of this that if sanctions are applied that means quite a drop in income. That is never done without good cause and if there are reasons for that person to have failed an appointment then all they have to do is say so. But we also know that having an excuse repeatedly time after time after time again might indicate an inability to really show commitment towards going to appointments to undertaking training and therefore no commitment to bettering their own lives.PHIL TWYFORD (Labour—Te Atatū): Earlier in this estimates debate we talked about the Prime Minister’s cynical comment that Auckland homeowners are happy about becoming wealthier because of skyrocketing house prices. It is so clear from those comments that that is the reason why this Government has done nothing substantive or serious about the Auckland housing crisis. All we get are public relations - driven half measures. We talked about the spectacular failure of Nick Smith over the last few years to do anything about increasing the supply of housing in Auckland to the extent that the housing shortage is getting worse to the tune of 5000 houses every year and the Productivity Commission is projecting a shortfall of 60000 by 2020.But there is so much more to talk about in the housing area. After the Government has denied for years that the rampant property speculation in Auckland has anything to do with the fact that house prices are going up on average by $500 a day we saw just before the recent Budget what this Government so often does: deny deny deny there is a problem and when the focus groups start to show up a bit of public concern it wheels out a grudging half measure. And that is exactly what the Budget announcement on the so-called 2-year test and the brightline test to try to catch a few speculators is.That policy is basically like hunting speculators with a very small butterfly net and John Shewan one of the Government’s most respected tax advisers came out within days of that announcement to say it will not do anything to rein in house prices in Auckland and it certainly will not catch very many property speculators. Meanwhile this Government is completely at sea on the question of a foreign buyers’ register. We have had four different statements—from the Prime Minister from Nick Smith from Louise Upston and from Steven Joyce—all saying different things. In fact I think that Louise Upston was the most candid. She said that it is not a foreign buyers’ register it will not be public and it will not tell us the information that is needed for this debate. Well I say good on the Minister for at least being candid with the public because I cannot say the same for her colleagues.This Government is completely in denial about the effect of property speculators including offshore money in the Auckland housing market. It is totally in denial about it in spite of the fact—amazingly for the Government—that the polls say that in the order of 70 percent of New Zealanders want to see a register of foreign buyers. It is good enough for David Cameron who is saying that a fully accessible and searchable register of foreign property buyers is a priority for his Government in the United Kingdom. It is good enough for David Cameron and it is good enough for the centre-right Federal Government in Australia which has the same policy. But this Government will not go near it. All it has done is promise a very weak very diluted attempt to gather a little bit of data on foreign buyers. It is completely in denial.The Australian policy which also happens to be the New Zealand Labour Party policy is a ban on foreign buyers buying existing houses. Foreign buyers are currently responsible for channelling billions of dollars of investment from China into new builds. Apartments in Sydney and Melbourne are being put up like there is no tomorrow and they are almost all funded by offshore money. That policy of a ban on foreign buyers is a sensible policy that is working. Steven Joyce has been going around saying that it is not working and that it has been a failure. He has been flatly contradicted by experts in Australia who have said that actually the Federal Government in Australia is completely committed to the policy and is toughening it up. In the state of Victoria they are jailing foreign buyers who rort the rules. Meanwhile this Government denies it is even a problem.Let us talk about another aspect of housing policy. I want to say what an excellent speech it was by Metiria Turei about warm dry homes. All I want to add really is that the Government’s announcement in this area was yet another grudging half measure. The public want to see mandatory standards for rental accommodation to make sure they are warm and dry. They want to see insulation standards. They want to see heating standards. But what does Nick Smith do? He allows landlords who have avoided taking advantage of the generous taxpayer subsidy for the last few years a 4-year grace period and very weak standards.MATT DOOCEY (National—Waimakariri): Earlier in this estimates debate the Labour member Poto Williams made a comment and a statement and asked a question: “How do people in Canterbury feel about that?”. Well I can tell you how they feel about that. This National Government won the party vote in every electorate in Christchurch and every electorate in Canterbury. The reason was that they believed in us and they trusted us. The first chance we have had to repay them for that trust and that belief is this Budget 2015 the Budget that is working for New Zealand. Budget 2015 is working for Canterbury. Budget 2015 is working for my electorate of Waimakariri.The member Phil Twyford spoke about Housing New Zealand. Well she needs to get out of her office and go and talk to Housing New Zealand. I went to Housing New Zealand to listen to its update on rebuilding and repairing 5000 houses and 700 homes. There was no Opposition member of Parliament at that event. They had not even bothered to turn up. I have listened to the appropriations around social housing and I have met with those at Housing New Zealand. It is great to hear that in “Waimak” we will end up with more Housing New Zealand houses post-earthquake than we had pre-earthquake.In this debate on Vote Building and Housing and Vote Social Development we heard from Darroch Ball. Unfortunately for him and New Zealand First he could not talk about social housing. The reason was that New Zealand First voted down the social housing reforms and those social housing appropriations that will give an extra 3500 New Zealanders access to social housing. Those social housing appropriations and social housing reform will give extra wraparound services to vulnerable Kiwis giving them support around mental health giving them support about alcohol and drugs and giving them support in education training and employment. That is why he could not talk about the social housing appropriation. Also New Zealand First could not talk about the appropriation for children in hardship because it voted down that as well—a package that will give Working for Families an extra $12 a week through that appropriation. It is an appropriation that will give beneficiary families up to $25 a week. New Zealand First members voted that down. They are not putting New Zealand first; they are putting themselves first. Can I congratulate this Government on its appropriations and targeted investment because what we know through allocative efficiency is that if we put money in we can get better results out.I would like to take some time to talk about our youth services. What we know around that social investment approach is that if we put $1 in we will get $2.53 out through reduced future liability. That is what this Budget is about. We know that Vote Social Development 2015 is one of the biggest expenditures in this vote at about 25 percent at about $25 billion. It is right that this Government is taking a social investment approach. We know that with the Youth Service we are putting $1 in and getting $2.53 out. This is a group of vulnerable New Zealanders: 38 percent of them are victims of domestic violence 76 percent of them have been victims of emotional neglect and 5 percent of them have been homeless and victims of sexual abuse. So it is right with this appropriation that we are investing in services that are making a difference in New Zealanders’ lives. That is what this Government is doing. We are listening to New Zealanders. We are working hard for them. We are the party for the working people. If we look at youth services we know through research that 86.5 percent of participants are engaged in education training and employment. When we are talking about Vote Social Development 2015 the reason we can invest $25 billion is that we have a got a strong economy we have got strong economic management—METIRIA TUREI (Co-Leader—Green): This House does know the seriousness of the problem with housing quality and affordability in this country. This House also knows that 1600 people die every winter in this country because of poor-quality housing. MPs in this House have heard me ask questions of Bill English about one of those 1600 Emma-Lita Bourne a baby who died last year from housing-related illnesses. So it is impossible to say that we do not know and we do not know what to do. We do know and we do know what to do. Although the politicians particularly the Government Ministers are ignoring the evidence and even the faces of the people who are affected by poor-quality housing the ministerial officials do seem to be taking it into account.I want to identify two areas where the officials have been listening to the evidence and putting to the Ministers solutions to help these kids and help these families. Here is one solution they proposed before the Budget: an integrated healthy homes service for families of children with housing-related health risks—this is from the Government’s own ministerial papers; this is from Treasury to the Prime Minister—like Emma-Lita had. It was a $2 million a year fund—not very much money—for 3000 children who have already been admitted to hospital for respiratory and infectious diseases. These children the officials say can be identified as being at risk of serious health problems like rheumatic fever. It was a $2 million fund for 3000 identifiable sick kids and what does the Government do? It said: “No it is not in the Budget.” No it’s not a solution that it is prepared to consider. Then we have people like Anne Tolley saying that children’s health and well-being is the Government’s priority. Well where is the plan to deal with the threat to children’s health from poor housing? Where are the Children’s Teams that are heading out to these families’ homes to insulate ventilate and put in place good heating?Why are these 3000 identifiable babies not worth this Government’s attention and a measly $2 million a year? When did these kids’ lives suddenly become optional?Here is another example: assistance with winter energy costs. It is in the Treasury paper to the Prime Minister Bill English and other Ministers. It is assistance with winter energy costs called the “winter warm-up payment” of $300 a year going to the parents of children with a child aged under 1. It would be a great start for a low-income family with a little baby to get a winter warm-up payment to help them to pay for their winter power bill. It is about $4 million a year—a bit bigger than the other one. What did the Government say to that option? “No—big ‘X’. No we are not going to provide low-income families with little babies just a little bit of extra money to help them get through this winter.” The Government could have done it—the officials said that it was possible to do it this year—but it decided not to do it. There is no justification for the Government saying that it cannot do anything about these 1600 deaths about the babies who are getting sick and being hospitalised or the babies who never come home—no excuse at all. It has the money it has the policy and it has the officials who support it. It could roll it out under existing services and it chooses not to. We can never accept a Government that is prepared to put the lives of babies at risk like this for nothing.There is not even any ideological reason for it to say no to this. What is wrong with the Ministers that we have in place? They cannot look at genuine proposals or ways to help the most vulnerable families and the sickest babies to make sure that we have fewer babies getting sick fewer babies going to hospital and maybe more babies at least coming home. The families that these options were directed towards are seeing their babies going into hospital and they are not coming out. Where is the Government in making sure that these families have what they need? The Government will make a claim about the $25 in increased benefits but everyone knows that the families will be lucky if they get to see $20 of that. It does not come in until next year and it is a farce.DAVID SEYMOUR (Leader—ACT): It is nice to be here. I want to respond to some of the comments by the previous Labour speaker Phil Twyford. He was correct in identifying that there is a trade-off in the Budget; in fact trade-offs are inherent in Budgets. When that money is spent on housing one of the key parameters that determines how much benefit can be provided to the citizens of New Zealand at the expense of taxpayers is the underlying cost of housing. Housing is the block in the cost structure for the Government’s provision of social housing.We have to accept—and I think it was lost on the previous speaker Metiria Turei—that there is an element of scarcity in this. The question is: how do we expand the overall amount of resource available for New Zealanders to consume? That is why there is no point in simply deciding that a foreign buyers’ register and knowing who owns the homes in some nominal sense is going to increase the overall amount of economic resource available in New Zealand to be consumed.Denis O’Rourke: It’ll help. It’ll help.DAVID SEYMOUR: It is fundamentally flawed to believe that that could help as the member is trying to say.In truth and the really dirty reality of that register is that what it seeks to do is identify the ethnicity and the nationality of the person who owns the beneficial interest in a piece of property. That is the reality of what the New Zealand First members’ register—their dirty little secret—attempts to do. They don’t like it up ’em but that is the truth and it was a disgraceful political move to make.They then say in a related sense that the limit in the availability of housing that we are going to spend on in this Budget is due to so-called speculation. Well the fact is we know that the level of speculation is inversely proportional to the elasticity of supply of housing. It all comes back—Phil Twyford: So do something about it then.DAVID SEYMOUR: —we will come to that Mr Twyford—to the amount of resource available to be spent.Phil Twyford: You’re supporting a Government that’s done nothing.DAVID SEYMOUR: But as Mr Twyford truly knows—he truly knows with all his feigned outrage and anger—that the real issue is the regulatory environment and the supply of buildable land. And he goes on and on with publicity stunts. He goes on and on trying to blame this person that person and the other and saying that a tax will help even though it has not helped in any other jurisdiction and nobody has ever built a house in order to pay more tax. What he is unable to bring himself to do is to reach across the aisle and be constructive.You see people on this side of the Chamber know that the Resource Management Act is one of the greatest constraints on the supply of housing and therefore puts pressure on this Budget. People on this side of the Chamber would like to reform it and increase that elasticity of supply to address the concerns raised by Mr Twyford.Phil Twyford: You’ve had 7 years and you’ve done nothing.DAVID SEYMOUR: If he objects to 7 years what about the previous 9? He could fix this problem. If he had any magnanimity and if he had any maturity he could reach across the aisle and say: “Here is a set of Resource Management Act reforms the Labour Party will support.” But have we seen anything like that in this Chamber ever?Hon Members: Yes we have.DAVID SEYMOUR: No we have not. The problem is that the ones that he would like to support—and he knows it—would be completely impotent and ineffectual because they are asinine.Phil Twyford: Read my press release David.DAVID SEYMOUR: Here we have it: policy making from the Labour Party comes down to a press release. The fact of the matter is that the kind of Resource Management Act reform that would increase the elasticity of supply of housing that would solve the problems with registers being called for and with speculation and that would actually increase the amount of economic resource available to be allocated in this Budget would mean changing the fundamental principles of the Act.It would mean changing the principle sections sections 5 6 and 7. That is what it means. It means taking a Resource Management Act that has 156 mentions of inappropriate subdivision and reducing that number. But will the Labour Party reach across the aisle and support substantial Resource Management Act reform? I think if it was prepared to do that we could actually solve a big problem for all New Zealanders.Phil Twyford: David you’re an idiot. Don’t embarrass yourself.DAVID SEYMOUR: I raise a point of order Mr Chairperson. The member just said that you are an idiot bringing the Chair into the debate. I think that is quite inappropriate.The CHAIRPERSON (Hon Trevor Mallard): I did not hear him but the member’s time has now expired.IAIN LEES-GALLOWAY (Labour—Palmerston North): I welcome the challenge from David Seymour to the Labour Party to reach across the Chamber to try to find concord on the Resource Management Act because he is too late; we have already done it. Labour has repeatedly told National and the other parties in Government that we would be more than happy to work with them on the Resource Management Act but the National Government keeps saying: “No. It’s our way or the highway. No Labour we’re not prepared to work with you.” So thank you David Seymour for reiterating the challenge to the Labour Party because we are more than welcoming of it. I want to hear the same challenge made to the National Government to encourage it to reach across the Chamber and work in a cross-party manner with parties of the Opposition so that we can actually deal with some of the real issues in the Resource Management Act—some of which do indeed relate to housing. We would welcome that challenge. We would love to have that so good on David Seymour for laying down the challenge. At least he does something useful when he actually shows up in the Chamber.I want to talk about what is really happening on the ground with housing for people because there is a lot of rhetoric being spouted in here. The Government is trying to tell us the various plans and initiatives that it has got but I want to talk about the real experience of people in my electorate of Palmerston North. The real experience in Palmerston North is that where there used to be State houses there is now acres and acres of empty land and some of that land has remained empty for years. Finally after 7 years in some cases the Government does have a plan for that land. The plan is to sell it off. That would be fine if the plan was to use the money from the sale of those houses to build more houses in Palmerston North but that is not the plan at all. The Government has been quite clear about this: it is reducing the number of State houses. It is reducing the provision of social housing in Palmerston North just as it is doing in regions right across the country. So that is a fact. That is what is actually happening if we cut through the rhetoric—if we cut through all the noise. We just have to look around us in our own communities especially those of us who live in the regions to see that actually National’s plan is to reduce the provision of State and social housing.National members argue that there is actually no need for social housing. Well if they genuinely believe that there is no need for it I have a recommendation for them: go along to your local Salvation Army go along to your local Women’s Refuge go along and talk to any number of the organisations that represent people with disabilities and ask them whether there is a need for social housing—because the answer will be resoundingly: “Oh yes. Yes we are desperately short of housing for people who are the most vulnerable—the people who are in need.” What is happening as a result of this is that Work and Income is now telling people to go and see the Salvation Armybecause they cannot get on to the waiting list for a State house—the Salvation Army that has had to get rid of its women’s hostel in Palmerston North because of a lack of funding because it lost contracts with the Government and whose men’s hostel is now under extreme pressure and has been taking people whom it is probably not fit to take which because the Salvation Army does not get the appropriate funding from the Government to house those people adequately has been raising the ire of the people who live around that men’s hostel.Women’s Refuge has had to close one of its facilities because it has lost funding from the Government and it is now having people referred to it by Work and Income. Any woman with children who goes to Work and Income and tries to get on the Housing New Zealand list and is denied is told to go to Women’s Refuge whether or not they actually qualify for the services that Women’s Refuge provides. Women’s Refuge is there to provide support for women who are trying to escape domestic violence. So now Women’s Refuge is having to waste its own resources screening women in order to determine whether or not they actually fit its criteria. Work and Income cannot do its job properly and actually ensure that those people who are in need are able to get supportive accommodation. That is the real thing. Whatever the Government tells us—whatever spin and lines it has for us—those are the facts. That is what is really happening in our regions.JONO NAYLOR (National): I realise that the time is about to expire on this debate but I just want to get in a few quick points before this debate does conclude. This is the end of the Committee of the whole House stage on the appropriations. We are focusing on the social aspects of them today. I still want to reiterate at the end of this that this Budget that provided these appropriations provided these estimates of what is going to be spent over the next little while will be transformational for New Zealand. It will be transformational for those people who are the most vulnerable in New Zealand. For the first time in so many years—so many years—families who are on benefits and who have children living in their homes are going to see a rise in their benefits. It is this Government that is bringing this into place.It is this Government that is helping to support our teen parents. We saw some legislation go through just the other day to extend the age for the young people who are at a high risk of staying on benefits for long periods of time and also for teen parents. What we know is that these people who find themselves in a position where they are on a benefit either as a teen parent or with other high-risk factors around them will spend on average up to 13 years on benefits. This Government is absolutely aspirational for those people. It aspires to see them achieve so much more.The CHAIRPERSON (Hon Trevor Mallard): The time for this debate has expired.CHRIS HIPKINS (Senior Whip—Labour): When the Business Committee discussed the new format for this debate an agreed allocation of calls within the time frame for the debate was established. I am aware that as the debate has progressed that time frame has slipped. I therefore seek the leave of the Committee for the number of calls allocated to each party to be completed before the debate is ended.The CHAIRPERSON (Hon Trevor Mallard): I am prepared to put the leave but I just want to express some doubt about whether it is something that we will get a proper ruling on as I have a feeling the leave is unlikely to be granted. But I am not sure about the ability of the Committee to overrule an agreement that has already been entered into in the House. The question is that leave is sought for the allocation of calls that were agreed to by the Business Committee albeit within this limited time to be completed. Is there any objection? There is objection.A party vote was called for on the question That Vote Building and Housing and Vote Social Development be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Votes agreed to.A party vote was called for on the question That clauses 1 to 10 and schedules 1 to 5be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clauses 1 to 10 and schedules 1 to 5 agreed to.Bill reported without amendment.Report adopted.New Zealand Flag Referendums BillThird ReadingHon BILL ENGLISH (Deputy Prime Minister): I move That the New Zealand Flag Referendums Bill be now read a third time. This bill will give New Zealanders the opportunity for the first time ever to vote on the flag that represents them and their country. We made a commitment as a Government ahead of the last election and this bill delivers on that commitment for a referendum on the flag.The first of two postal referendums will soon be held over a 3-week period from late November and into December. I just remind the House about the process that was put in place of which this legislation is part. Early on the Government with the assistance of a cross-party group of MPs set up the Flag Consideration Panel. It was resourced by the Government but in every other respect it has been operating independently and has now through a process of public engagement particularly through its website produced a long list of 40 flags.The members of the cross-party group took quite an interest in the legislation and made a number of comments during the Committee stage questioning whether officials had acted properly in the advice that they gave to the cross-party group. I just want to put on the record that I have no concerns about the roles that officials have played. Cabinet made a decision in October 2014 about the process and the budget for this project. The decisions were announced publicly at the time and the Cabinet paper and minute were made immediately available online. So the process has at all times stressed the independence of the Flag Consideration Panel and the transparency of any decision making around it. I want to thank the cross-party group for their contribution to this bill.Consensus recommendations of the cross-party group are determining the planned referendum dates the preferential voting system used in the first referendum the number of alternative flags on the first referendum voting paper and the approach to regulating referendum advertising. The bill contains the measures required for the referendum process to progress. This includes setting out the postal voting processes of the two referendums and a promoter statement requirement for those who are publishing referendum advertising. The bill also has measures for implementing the new flag if voters decide to change the flag and they are separate and parallel to the work the Flag Consideration Panel has been operating.The panel has now released a long list of alternative flag designs and we look forward to them accomplishing what must be a difficult task of selecting from those 40 flags four flags for the purposes of the first referendum. Now that the process for underpinning the referendums—the passage of this bill—will be complete I think that the public debate over the flag is likely to rise a few notches in intensity but also in relevance to what the flag is about. Up until now it has been dominated to some extent at least by criticism about the amount of money that is being spent. There has been quite a bit of expression of views by people who have every right to oppose any change whatsoever and oppose the opportunity for the public to make a choice which seems a bit odd given that that opposition has come mainly from the most populist party in Parliament New Zealand First which in every other respect believes we should have referendums on everything. But apparently on this when it comes to putting New Zealand first New Zealand First members do not believe that New Zealanders are capable of exercising a choice about the flag. It is almost as bizarre as the Labour Party position which is to support a change in the flag but oppose a referendum and not vote in it.Clearly we are heading out of those swirling political waters fortunately to the sunny uplands where New Zealanders will get to decide what kind of symbol they regard stands best for their country and their own sense of identity. I look forward to a robust debate in that respect because as the Flag Consideration Panel found out there is a wide range of associations that New Zealanders have between the name of their country and their flag and the values that they think it represents. I would imagine that the discussion about the choice of the flag will represent that wide range of associations. And then there is the sheer difficulty of understanding the intuitive connections. If you think New Zealand is about equality or fairness or freedom what does that look like on a flag? Of course there will be extensive debate about the balance of representation of our history rich as it is and our future aspirational as that is.In my capacity as a member of the House I want to acknowledge the role the Prime Minister has played in bringing about this legislation and in fact the referendum. Leadership is always challenging and there is no doubt that he has been challenged in his desire to see this debate occur. But I have absolutely no doubt that in pushing this issue forward he is showing the qualities of leadership and a fundamental belief that New Zealanders should have this opportunity. The logic is pretty simple: New Zealanders have gained in confidence about their economic capacity and about their place in the world. It is a hard-won confidence through various controversies and recessions and internal political debate and there is a unique opportunity now for people to choose how that confidence should be expressed.The Prime Minister was at the time he raised this issue almost uniquely aware of the need for that opportunity. But the debate that we will see from here I think will see many New Zealanders grasp that opportunity with two hands and express their views. I would counsel the Leader of the Opposition to change his position—he does not usually have much difficulty in doing that—on not voting in the referendum. Even if he is opposed to change there is a fundamental legitimacy about a referendum as a way of deciding it. Opting out seems to me to be the worst response to the challenge. Get in and argue—have a different point of view try to persuade others. But for a political leader to say “Well I’m not going to participate.” is actually letting down his party and letting down his role.I look forward to the expression of the will of the people even if the New Zealand First Party fears it. I think it will be good for New Zealand to have this debate and who knows—if the alternative is good enough many of us just might vote for it.Hon TREVOR MALLARD (Labour—Hutt South): I want to start where the Deputy Prime Minister nearly left off and that is with the role of the Prime Minister in this vanity project. I am an old-fashioned parliamentarian and I think the role of the Prime Minister is to stand up in this Parliament and to state his views. I waited through the first reading of this legislation I waited through the second reading of this legislation and I waited through the Committee stage for John Key to get on his feet and to give his views. I was waiting for the Prime Minister to give his views as part of this debate and what did I see? He decided to contribute to this debate in the House by way of Twitter. He got the timing wrong because he did not anticipate Solid Energy but he would not stand up on his hind legs in this Parliament and give his views. For a Prime Minister of a country who has a pet project it shows to me a lack of commitment—Grant Robertson: Thrown Bill under the busHon TREVOR MALLARD: —no I cannot say that—to a parliamentary democracy.I do want to make a few other points. I think what many members do not realise and what John Key certainly does not realise is that this is a very serious matter for a lot of people. It is not just you know “Shall we have five or six bottles of champagne with our dinner at the barbie in Hawaii?”. It is not something like you know “Shall we buy another Mercedes or another Porsche?”. It is a matter that is a symbol of New Zealand and important to a lot of people. I think Twitter does make some pretty good contributions in the area and the one that I saw yesterday that likened changing the flag to an individual getting a tattoo is something that is pretty accurate. It is something that is a serious long-lasting decision and one around which the process should be good and where the timing is also important.Over the last couple of years and the next few years the Government and communities around New Zealand are spending over $100 million commemorating the First World War. The symbol under which New Zealand soldiers fought and died was the New Zealand flag. Their representatives the RSA had some very strong views—one about the change but in particular about the destruction or the possible destruction of that symbol during that period of commemoration. Those representatives of the RSAs around New Zealand were treated disgracefully by the Justice and Electoral Committee which was considering this bill. Ten minutes was given to the national organisationto be heard—10 minutes only. And what happened? Over the 3 weeks of adjournment—3 weeks of adjournment—Jacqui Dean refused to call the committee together to hear the submissions and to give people more time to be heard. Jacqui Dean assisted by Alfred Ngaro Jono Naylor and Chris Bishop denied 747 people who had made an application to be heard by the select committee their ability—[Interruption] Now Jacqui Dean is trying to blame Louise Upston. Sorry I—Jacqui Dean: You forgot about Louise—so mean.Hon TREVOR MALLARD: No I do not think she was there on the day I was there. So we will just leave it. The other ones were the nasty ones. They were particularly nasty to the 747 mainly returned servicemen who used the Facebook page circulated by the RSA to put their submission in—Jono Naylor: By the Labour Party.Hon TREVOR MALLARD: Well yes—the Labour Party helped develop it. That is right. [Interruption] Members opposite laugh at returned soldiers because they used Facebook to put in submissions.Brett Hudson: We’re laughing at Trevor Mallard.Hon TREVOR MALLARD: No not via me—directly to the committee Brett Hudson; directly to the committee. They were not allowed to be heard and those members made that decision and that is a disgrace. It is an absolute disgrace that that member went on holiday for 3 weeks instead of convening the select committee during the select committee sitting period.I want to make a few other points—first of all about the cross-party committee. I have said previously that the Labour Party—and I will take responsibility because I gave advice on the matter—made a mistake going into that process. We trusted the National Party members when they said that they would be straightforward and above board. And they were not. There were about three tasks. One of them involved giving advice on the shape of the referendum. At the meeting that considered it every single party other than the National Party said that there should be a yes/no vote at the first referendum. Every single party that was present there was of that view. The shape of the referendum as recommended by the cross-party committee was rejected by the National Government Cabinet and that is a disgrace. The committee put forward a group of fine New Zealanders as a suggested oversight group and what happened? Some of the best people—Hon Bill English: Most of them got through.Hon TREVOR MALLARD: Oh most of them got through but a group of them were knocked out and replaced by National Party hacks—people like Julie Christie. Julie Christie was responsible for the part of the programme that spent $2300 getting people to meetings. For every single person who got to a meeting—the part that Julie Christie was in charge of—$2300 was spent to get each individual there. Rod Drury of course was someone who—it is no secret—was agreed on by the wider committee. The online campaign has been fantastic. The work of the chair has been I think highly ethical given the very difficult task that he was given but the confidence in the group was destroyed by the fact that Cabinet rejected the nominations of the cross-party group.People have different views as to whether to vote or whether not to vote in the first referendum. I have heard my leader say that he basically cannot be bothered and that he will consider it later. I actually have a different view. I used to think we should change the flag. I think now is an inappropriate time to do it. I am going to pick the least popular option—the one that I think is most likely to be rejected by the people of New Zealand. I will put that at No. 1 and the one that is most likely to be accepted at No. 4 because I think that is what I can do to reinforce the fact that this is not a time for change.And as a final point we are yet to get from Bill English the cost of the change process if it goes forward and the cost to the Crown. Will it be $100 million $200 million $300 million or $400 million? How much is it going to cost the Crown? How much is it going to cost to change every crest in the country? Every Government crest in the country includes the flag and in the part of the bill that says what the crest is it says “the New Zealand flag.” So all the crests have to be changed and that does not include private sector spending. This bill is a dog. It should be rejected. I know it is not going to be and in a funny way John Key losing is going to be fun.ALFRED NGARO (National): It is an honour to speak on this bill the New Zealand Flag Referendums Bill but it is disappointing to see that a member who has probably been here for over a hundred years and has served this Parliament for such a long time—he has been here for many years—has come to a point where he knows and he has agreed. In fact at the Justice and Electoral Committee he told us that he agrees with the changing of the flag. It is in the Hansard. He said that changing the flag is actually the right thing to do yet today in this House openly to the public of New Zealand he is opposing the bill out of spite—only out of spite. He knows that it is the right thing to do. He knows that it is the right thing to do but he is choosing not to vote for it out of spite. It is a sad day when a member who has been here for that long and who has made a contribution can get to that point and out of spite vote against the legislation.That member also made commentsabout the 740 form submissions that wanted to make an oral submission and he has been going on about it in his all of his speeches even in the Committee stage. That member knows because he has been here long enough that form submissions are taken as one submission and as a whole. He has sat on select committees he has been a backbencher he has been chair of a select committee and he has been a Minister. That member knows that a form submission is taken as one submission. So to get up here and tell us that we did not allow the democratic right of 740 form submissions is not true and is not correct at all. Again it is an act of spite—an act of spite. Instead we heard the submissions that came forward from people who took the time to write their submissions and who took the time to say: “Yes I would like to come before the select committee and be able to present my submission.”In the speeches that we have heard on this flag referendums bill we have heard people talk about this possibly being a vanity bill for the Prime Minister. I want to sort of contest this point. In fact Carmel Sepuloni made this point just the other day when she said that the title of the legislation could be “The Prime Minister’s Vanity Bill”. Well let me just remind that member. In 1970 when the then National Minister of Internal Affairs  Allan Highet actually put a petition forward was that vanity? No it was not because he was challenging the fact that there should be change. In 1988 former Labour MP and Minister of Foreign Affairs Russell Marshall—and I know the honourable member over there Trevor Mallard will probably know him—was that vanity? Was it vanity when he said that there was a point of change that was needed? In 1989 the Listener had a magazine article in which it actually had a competition and there were over 600 entries and seven finalists. The current flag of 1902 was the winner only by a minority and the people said: “Actually this dispels the myth that this is the time for change.” Was that vanity? No it was not.Let us get to February 1992 when the late Hon Matiu Rata former Minister of Māori Affairs for the Labour Government and the founder of Mana Māori Motuhake called for a redesign to re-establish a national flag. Was that a vanity project? No it was not. Why? Because even Mr Mallard knows that it was the right thing to do. This is what he said; it is in the Hansard. He said: “Yes the current flag of 1902 represents our history and our heritage but does it represent our future? No it does not.”That was his challenge.Denis O’Rourke: It does—it does.ALFRED NGARO: At that point in time—and listen up Mr O’Rourke—the RSA had challenged and contested every single petition to change the flag. In 1992 the RSA conceded and said this: “This will not go away. The issue of change is going to be coming from one generation to the next.” [Interruption] So they said this Mr O’Rourke and Mr Mark: “If there is to be a change let it be by referendum.” In other words let the people choose—let the people choose—and that is exactly what this bill is about. It is letting the people choose to have their day here.We know that many people right up and down the country have turned round and said that this is something we should look at. This is what the bill is doing. It is saying: “Let the people choose.” So what have we got here? We have had 10290 alternative designs—10290 alternative designs have come forward—and 26000 New Zealanders have shared what they stand for. In other words they have been asked this question: what are the values that are important to us if we were to redesign the flag? And I know that Mr Mallard would say that that is the right process: let the people choose. What are the values that are reflected in this flag? What is the narrative behind the design? That is what has been asked of our people.There were 2.7 million viewsof the flag gallery. That is what has happened. There were more than 8500 online visits and 6000 visits to the workshops and information stands. What does this say? In other words the people are saying this: “Let us choose. Let the people choose.” Mr Mallard knows that this is the right process. The members of New Zealand First know that this is the right process. They are confused. As my good friend Jono Naylor said they are so confused that they have had to write it down—in fact I think they have squiggled it out now. On that little sticker it said “New Zealand—why?” because even they were confused; they thought that it was an Australian flag right?Denis O’Rourke: Nonsense.ALFRED NGARO: I think Mr O’Rourke has got his little blue marker out and he has squiggled it all out. That is right—he has taken it away. Even he knew that he was confused about what that flag was. So in order to allow that confusion to be dispelled and in order for the nation to choose we believe that this bill is the right bill. We are simply saying this: let the people choose as they have asked to do. As the RSA has said let it be by referendum.My final point is about this talk about the fact that—it is like MMP—we went out and asked the people this: do you want it or not? Let us remember that we had had years of talk about MMP so people understood it. You cannot ask people for a decision on something they do not know about. What we have asked people is this: let us put out the designs; let us make sure that people have a view on what that alternative could look like; let us know what the narrative is not only about our history and our heritage but also as the late Matiu Rata said in this placeeven in front of Mr Mallard “Let’s choose a flag that represents our future.” That is what this referendum is doing and the people will choose that. I commend this bill to the House.GRANT ROBERTSON (Labour—Wellington Central): It is not often that I disagree with my good friend the member for Hutt South Trevor Mallard.Alastair Scott: Oh yes it is.GRANT ROBERTSON: No no. You would be surprised actually on the other side of the House.Hon Trevor Mallard: I get on with the right-wingers OK.GRANT ROBERTSON: Oh yes we can take that up later Mr Mallard. His depiction of his thought process around the flag—he was a person who wanted to see it change and then he has come to believe over time that it should stay the same—is not a position I agree with. I am one of the members of the Labour Party who thinks that there is a place for a new flag for New Zealand but I am equally a member of the New Zealand public who is angry with John Key for turning a process—Jacqui Dean: You’re always angry with John Key—doesn’t count.GRANT ROBERTSON: No no. Jacqui Dean contributes meaningfully yet again from the back row there. I along with a lot of other New Zealanders am angry with John Key that a discussion about this and a discussion about our national identity has become a vanity project for him. There is absolutely no doubt that that is what has happened.Ironically as Mr Mallard says the vanity does not extend to coming to Parliament to actually talk about the flag change. But in terms of the way this entire discussion has now played out in the New Zealand public it has played out as being about John Key and his desperate desire for a legacy and his desperate desire to leave something here in a flawed process that actually does not as Alfred Ngaro would have it give New Zealanders a say in the way that it should on this. A flawed process is the actual legacy that John Key has left New Zealanders on this matter.I have a feeling that two things are going to happen with this referendum. The first of those—Ron Mark: Oh yeah you’ve got your crystal ball.GRANT ROBERTSON: That is right I have. I will see if Mr Mark agrees with these. I have a feeling there are two things that are going to happen with this referendum. The first of those is that the turnout in this referendum will be disappointing. The turnout in this referendum will not reflect what the National Party says to us is such a significant thing and a once in a lifetime opportunity. I think we will find the turnout will be low in part because of matters that were discussed during the Committee stages of the debate around the way that the referendum has been held the technology that has been used and all of those things. So I think that is the first thing that I would say.The second is that I suspect that the ridiculous order in which this referendum is taking place will come home to haunt National because by not asking New Zealanders the question of whether or not they wanted to keep the flag first it put in place a process that will undermine National’s own argument in my view. Government members are not being straight up with New Zealanders. They are not going into this conversation with New Zealanders saying: “Do you want this change?”. It has been raised in this House several times before.If you were to spend thousands and thousands of dollars driving all around the countryside looking at different houses to try to decide whether or not you wanted to buy a house and you had not even worked out whether you had enough money to do it how ridiculous would that be?Ron Mark: It’s going to cost more than $25 million.GRANT ROBERTSON: Exactly. How ridiculous would that be? And that is the problem with this process. The complete failure to treat New Zealanders with respect and actually look at this in a way that is a sensible and logical order is ridiculous.The Labour Party in the Committee stages of the debate proposed two amendments. The first of those was to defer the referendum for 5 years. I think that was a sensible suggestion. I agree with other Labour speakers that at this time in New Zealand’s economic situation and in this time in New Zealand’s social situation the time is right to push that back. To my mind I would like to see New Zealand have a conversation about our identity and about our nationhood that encompasses not only a symbol like the flag which is important but also the future of our constitutional arrangements.To me that is the thing that John Key wants to avoid. He wants to avoid the discussion about our overall constitutional arrangements which should be happening at the same time. I am deeply disappointed that it is the vanity of John Key rather than the substantive issue of what kind of arrangements we should have in New Zealand. How can we be having a conversation like this about our flag without the deeper conversation about whether we are a republic whether we are a constitutional monarchy—Hon Nanaia Mahuta: What does sovereignty mean?GRANT ROBERTSON: Yeah exactly. As my colleague Nanaia Mahuta says what sovereignty means today in New Zealand in the 21st century. But we are not having that conversation because the Prime Minister wants to diminish it and reduce it down to his vanity project and his attempt at a legacy because real leadership would be taking on that bigger challenge. Real leadership would be saying: “Let’s engage all New Zealanders in a conversation about how our country should be run and what values are important to us and what arrangements reflect those values in our constitutional arrangements.” But that is not what we have got. What we have got is an ill-thought-out two-stage referendum process that is round the wrong way.The first of our considerations was to defer for 5 years to be able to take on some of those ideas. The second proposal that we put forward was to cancel the second referendum if 50 percent of eligible voters do not vote in the first. And this really is a serious question: if the National Party really believe that the flag is this significant and this important why not adopt that? Why not adopt the idea that actually it is important enough that at least half of New Zealanders have a say? But that was not picked up and we know from the debate in the Committee stages that that is because National MPs are just not confident. They are not confident that people will participate to that level.It is time for the National Party to front up to New Zealanders and to stop being so out of touch with what they must hearing in their electorates and around the country about this flawed referendum process. That is actually in my view why John Key has not participated in the debate because he is worried about it. He is worried that it is going to go down and that it is going to tarnish “Brand Key”. Well he should front up to New Zealanders and he should accept that at least 50 percent of them should participate in the first referendum in order for the second one to occur. Unfortunately both of those proposals by the Labour Party were rejected in the Committee stages.I want to refer just before I come towards the end of my contribution to the select committee process because I think it does sum up what has gone wrong here. For committee members—and Alfred Ngaro did this when he stood up before—to say to 747 people who were as Trevor Mallard says largely returned service people who got together and decided that they want to put forward their views and National members of the committee outright rejected—Hon Trevor Mallard: 15000 did it.GRANT ROBERTSON: Yeah but 747 on that page. But 747 wanted to be heard and were rejected on that side of the House. And again I ask: if they truly believe this is significant and if they truly believe this is the big change that they want to do in terms of national identity how dare they not give those people the right to be heard? How dare they deny those people who have got so much history with the flag the right to be heard? So I am deeply disappointed that we have reached this point.As I said at the start of my contribution I still believe that there is a place for a change in the flag but it comes as part of a wider process and anything other than that wider process of consideration of our future constitutional arrangements makes this tokenism. It makes this process a vanity project. It is a huge lost opportunity for New Zealand to truly reflect on who we are in the 21st century. Instead we are subjected to a political process for John Key to be able to give his so-called legacy to New Zealand. I think that is wrong and that is why I oppose this bill.JACQUI DEAN (National—Waitaki): Labour members have found themselves in an invidious position over the consideration of this bill because they actually want to change the flag. And that is a problem for them because they campaigned on wanting to change the flag—in fact they campaigned on having a referendum to change the flag—and they have found themselves wrong-footed somewhat by the fact that this Government which also campaigned on changing the flag has actually done what it said it would do. Having found themselves wrong-footed over the process they are having to cast around for reasons to oppose the bill. It has been a little bit like dancing on the head of a pin because you raise one foot and you just about topple off. It has been like that the whole way through this process. It seems to me that when the Labour Opposition finds itself trying to advance an argument that it does not actually believe in it then starts attacking the process. That has been very apparent also throughout this consideration of the flag bill.I want to dwell a little bit on the select committee stage of this bill and talk about how the Justice and Electoral Committee made certain decisions about the hearing of submissions. Those of us who are backbenchers and who spend a lot of time in committee rooms will know that a committee will have a discussion at the start of the process in order to decide those mundane things like time frames—how long we are going to invite people to speak for; what the conditions are that they come in. When committees are faced with some pragmatic decisions which is what this committee did we make—Hon Trevor Mallard: The member went on holiday. She didn’t sit during the recess week. It’s an outrage. She voted not to sit during the recess week.JACQUI DEAN: They make those decisions as a committee. And so what happened in the consideration of this bill—and for those people sitting at home or listening on the radio they will hear a bit of noise in the background. That is Trevor Mallard. That is Trevor Mallard losing the argument yet again because Trevor Mallard has got no argument to make and so in the absence of any argument he is making a lot of noise. [Interruption]The ASSISTANT SPEAKER (Lindsay Tisch): Order!JACQUI DEAN: Some of the decisions that the committee made were about how long we were going to invite people to speak for and about how many people we were going to hear. It was a committee decision; it was not a National Government decision. In fact was it not the Green Party that voted with the Government on this? Yes it did. So the majority of the committee voted that it would consider as form submissions a number of submissions coming into the committee.Form submissions are a normal part of select committee practice and it does surprise me that the Assistant Speaker of the House who is also the person making the most noise over this and who should know his Standing Orders does not know his Standing Orders or does not purport to know his Standing Orders in this case. Normal select committee practice is that the committee can decide to group as form submissions a number of similar or identical submissions treat them as if they were a petition and consider them in that way. That is what the committee decided to do.Hon Trevor Mallard: The member never read them.JACQUI DEAN: Trevor Mallard is making that noise again because he is losing the argument again.I just want to go into those form submissions a little bit more because the question then becomes: “How did those submissions come to the committee?”. Well it might surprise some members of the public to know that those submissions came to the committee via the Labour Party website. Those form submissions came to the committee via the Labour Party website where submitters clicked on to the Labour Party website and were given a tick box to tick. So all that people had to do—and they were having their say absolutely—was say: “No I disagree.” Well that is fine but when you get a whole lot of those submissions with the same people making absolutely the same point—and it would have been a sizable pile—I would contend that grouping them together with a sample on the top that reflects everything that lay beneath should be treated as a form submission.So when Trevor Mallard gets to this House—and every time he does he loses the argument just a little bit more—what he is doing is he is wilfully ignoring what he should know about parliamentary process. I will tell the House about the select committee—and at this point I want to thank the members for their consideration of this bill—it was a lively debate as a select committee debate should be. We heard very carefully the submissions that were made to the committee and we made a couple of changes as a result of our select committee consideration.I am not going to make a terribly long contribution to this debate. I think that this bill is relatively simple. It sets out the framework by which New Zealanders can have a say on whether or not they wish to change the flag. The final point that I want to make about the process and about some of the Opposition contributions—mostly in the name of Trevor Mallard—as they lose the debate is that this is not about the select committee process actually. This is not about what the Prime Minister may or may not have had in his heart when he generated this debate although we are pretty sure that it was in the best interests of New Zealand. It is not about that actually. What this is about is enabling New Zealanders to have their say on what represents them by way of a flag.Dr KENNEDY GRAHAM (Green): With this third reading we the representatives of the New Zealand people have delivered ourselves of our collective wisdom on the issue of the New Zealand flag debate. We are about to conclude our part of the exercise. We have been voting and will no doubt vote again—today perhaps—by 63 to 58 to proceed with the two referendums on the basis of the piece of legislation that is in front of us.We have expended a quantum of hot air on this issue on both sides of the House on behalf of the people we represent. The 63 members who are about to support the legislation have argued that the original idea was a good one that the dual process for the national decision is appropriate that the cross-party panel is legitimately empowered to decide the four options and that the expenditure is worthwhile.The 58 members about to oppose the legislation have argued different things. New Zealand First opposes the fundamental idea of any change to the New Zealand flag. The people should not be offered a choice. Labour supported the idea of potential change but although many members among them cheerfully indicated they would support a new flag they rejected the process and proposed a different one. Individual members of that party have felt the need to convey to the public their personal views.We in the Green Party maintain that changing the flag is in itself an insufficiently important constitutional thing to be pursued by itself alone. It is we have said essentially a matter of optics and not worth proceeding with unless it were accompanied by other far-reaching constitutional reform.In the first reading I identified the inconsistencies as we saw them on the part of the Prime Minister in personally proposing the process for a change of flag. He claimed there was a mandate for change offered an unsolicited personal view in favour of change and then acknowledged there was a need for a public debate and that there was no presumption of change. So the public could be forgiven for being a trifle confused. With all of this flying around on both sides of the debate it is no surprise that party politics has subsumed the substantive issue of the debate following the Canadians half a century later and altering—should we decide as a people to do so—the emblem of who we are and what we stand for.Meanwhile the panel has worked with professionalism and the designers have worked with creativity and passion. We have some 40 options and will soon have just four from which to choose and I believe that the panel will make an informed judgment as to the final four. It remains then simply for the people to speak and having spoken—by definition infallibly—we can move on to the truly important constitutional issues confronting the Realm of New Zealand that continue to cry out for attention.DENIS O’ROURKE (NZ First): There should be I think at least three categories of consideration for a flag change. The first is that there needs to be an appropriate context for it. Such a context could be for example a proposal for a republic or at least a debate on a wide range of real constitutional questions such as Māori seats a written constitution the size of Parliament the size and number of electorates the length of the parliamentary term Māori electoral options and participation and the role of the Treaty of Waitangi. But there is no such context for this bill. That context is missing altogether. Therefore there is little or nothing to inform the reason for the change of a flag on this occasion which might in turn have informed the kind of flag that could be needed if indeed there was to be any change at all. Of course New Zealand First denies that.Secondly the process for this kind of change needs to be driven from the bottom-up not the top-down. This proposal is out of the blue from John Key—just his latest big idea and as usual his bad idea. It risks as it has done already in this case undue politicisation and therefore divisiveness when we really need efforts to encourage unity in this country. But Mr Key is not interested in that. No doubt the PM has his own agenda. We are all expected to dance to his tune. But the consultation process has shown no public pressure for change. The roadshow that toured the country has been extremely poorly supported with a very modest response online as well. The third category is that the process needs to be fair understandable and uncomplicated but this process is none of those things. The process is not fair because the first flag referendum effectively disenfranchises people who want the current 1902 flag. But they cannot express those feelings in the first referendum; therefore the turnout is bound to be pretty low. I predict it will be lower than 25 percent. And there will also be many spoilt votes because the process is essentially undemocratic for the reason I just gave.Also the process is not understandable. Some may well think that the first referendum is the only referendum on the flag and that they must choose a new flag because the current one of course is not there at all. They will think that the current one is to be dumped whatever they want. This lack of understandability is caused by the unnecessary complexity of the two-referendum system one of which is totally back to front. One referendum would have been enough either by asking first whether a flag change is wanted at all—which a normal common-sense person would have done but not this Government—or at least adding the current flag to the first referendum as one of the choices thereby making the second referendum completely redundant.It is now perfectly clear that the vast majority of New Zealanders are asking why we would even consider a new flag especially now in a year when we are remembering those who fought under the current flag at Gallipoli 100 years ago. One hundred years ago this month was the battle of Chunuk Bair. It is the efforts of brave Kiwis at that battle that have defined New Zealand as a truly independent nation. I want to read some excerpts from a recent newspaper article about that. The first says this: “The commander of the Wellington battalion Colonel William Malone never received the acknowledgment he was owed for his role. He cared deeply for his men and when his British commanders ordered him to attack Chunuk Bair in daylight he defied them saying: ‘We are not taking orders from you people. My men are not going to commit suicide.’ ” Further on in another article it is stated: “Chunuk Bair is also seen as [key to] … the development of a distinct New Zealand identity not least because of the perception that Kiwis and Australians were treated as cannon fodder by bumbling British officers.” Later in the same articles it says: “And when it comes to Gallipoli there’s the added significance that this was the first time New Zealanders had been deployed … [as] distinct from Britain … ‘It was foundational in the development of our national identity.’ ”This very month is the moment that John Key the ever-silent Prime Minister on this issue and in this debate and his worn-out National Government have chosen to push a new flag on New Zealanders. This is the moment he chooses to do that. How grossly insensitive to the men who died at Chunuk Bair. How deeply disrespectful to the flag they fought under. How totally badly timed in terms of context to be parading the incredibly awful long list of new flag designs we have seen recently—those gaudy ugly dull designs most of which look more like logos for a pound of butter than they do a flag of the stature of New Zealand. One of them—the one with a white fern on a black flag which I understand the Prime Minister favours—looks more like the Jolly Roger from a pirate ship. It is totally totally inappropriate and out of touch with our rich Māori Pacific and British heritage.The current flag is not out of date as those members opposite would have us believe. It is as appropriate today as it was in 1902 when officially adopted. It represents through the Union Jack in the corner the British heritage of New Zealand—the Scottish the Irish and the English heritage—the English language legal system and culture and the Westminster system of Government. All of those things are our heritage and are just as much the Kiwi heritage as they are the British heritage and that is why that flag should stay in the corner of the New Zealand flag. But the flag also represents our Pacific and Māori heritage through the Southern Cross which tells of the amazing feats of navigation and resilience by ancient Māori people finding their way across the vast Pacific Ocean and settling Aotearoa and who are now the tāngata whenua of the land.There is in New Zealand First’s view only one appropriate response to the first flag referendum for anyone who respects the current flag and who wants to keep the current flag. Either those people and they are going to be the majority should not vote at all—they should stay away. Or alternatively they may draw a vote but not choose any of the four alternatives shown and return a blank vote. That would be proper. Or if they wish they could write “I want the current flag.” across the ballot paper choose none of the alternatives and put that in the ballot box. That would be appropriate as well. Given the gerrymandered and inappropriate nature of this non-referendum this failed and flawed process New Zealand First calls on Kiwis to do any one of those things to show their disgust not just at the timing and the process for this referendum but the gerrymandered nature of it. The fact is that they want to keep the current flag just as New Zealand First wants to.JONO NAYLOR (National): It is a pleasure to rise and take a call in this third reading of the New Zealand Flag Referendums Bill. The third reading is a great opportunity to reflect on some of the arguments that have been made in the first reading the second reading the Committee of the whole House and the Justice and Electoral Committee and on what has already been said at the third reading. For a start I have got to pick up on the last comment that Mr O’Rourke made in the previous speech when he was inciting I guess civil disobedience in some way shape or form by encouraging people to spoil voting papers or not to vote at all. I hope that he does remember to tell them to make sure they vote in the second referendumif they are not going to vote in the first one.There have been some really interesting arguments put forward as to why people should vote this down and I want to reflect on some of them. The first one which has been brought up a lot has been the order of the questions with people suggesting that we should have a yes/no vote first. This was put forward in the Committee of the whole House by a number of members but possibly most eloquently by Kris Faafoithe other day who likened choosing a new flag to having a new car. His argument was that if you are going to get another car you should decide whether or not you want another car before deciding what kind you want. I was reflecting on this and I was thinking of my wife’s Suzuki Swift. If somebody said to her “Do you want another car?” she might say: “Well yes. But it would depend on what it is.” Because if somebody was offering her a brand new Lamborghini the answer might be yes; if someone was offering her a 1972 Ford Cortina the answer might be no. So I think it is really important that we do get these questions in the right order and this is the right order to have them in. It is the most logical.By having the referendum split across two referendums and by putting them in this order it is allowing absolutely everybody to participate. If you do not want a change to the New Zealand flag you can still choose a potential alternativein the first referendum—or you can choose not to vote if that is what you want to do. Then the second referendum will decide which of those flags you want. If you definitely want change you get to participate. If you definitely do not want change you get to participate. But if you ask the yes/no question first all of those people who are saying that it depends on what the options are will be excluded from the debate. Mr O’Rourke says that he wants everyone to participate. Everyone will get to participate and if they choose to participate in only the second referendum that is OK—that is their business—because the first referendum is subservient to the second referendum.The other thing that has been said and Mr O’Rourke mentioned it a number of times in the Committee of the whole House is how gormless the alternatives are. He used the words “gaudy” and “ugly” today and he said that the alternatives were all in this category. I find this a little bit disturbing because one of the arguments that has been put forward is that the current flag is the flag that New Zealand soldiers died and fought under. Actually a whole heap of those alternative designs that have been put forward have got the silver fern on them. I can tell Mr O’Rourke that actually if you want to have a sense of right dealings with people who have died for New Zealand—if you have a look at every New Zealand war grave you will see that there is a silver fern on it—referring to the silver fern as “gormless” “gaudy” or “ugly” is I think a whole lot more disrespectful than whatever else has been talked about in this argument as we have gone through it.The other thing that has been really interesting is to observe the Labour Party’s approach to this debate. At least it was quite good in the Committee of the whole House the other day. Mr Lees-Galloway finally—because not many Labour members have been willing to do it—admitted that it was the Labour Party policyto change the flag going into the last election. We did invite him to read out what the policy said but he declined so I will do so for the House right now. It says this: “Labour will: review the design of the New Zealand flag involving flag design experts and with full public consultation and involvement.” So that is OK. The Labour Party was talking about that and that is all right. But the argument that he put forward and it has been put forward again by Mr Robertson today saying to defer it for 5 years—Mr Mallard was suggesting that perhaps we defer it further—is kind of interesting because if you read the next line in the Labour Party policy it says: “We believe that the time has come for a change…”. It does not say: “We believe that in 5 years’ time the time might come.” The Labour Party policy says: “We believe that the time has come for a change…”. I think that is kind of fascinating.The other thing that Labour members keep saying too is that this is a vanity project—a vanity project of the Prime Minister. They say: “Oh it’s vanity. Oh it’s all down to the vanity of the Prime Minister as to why we are doing this now.” As I said the other day when somebody put this in the Labour Party policy whose vanity was it then? Because that is what those members are telling us: it is all about vanity—it is all about vanity. It was in the Labour Party policy and so whose vanity was it then? The other thing that has been really interesting is that during the 2014 election campaign Labour’s then leader—I keep losing track—Mr David Cunliffe kept accusing the National Party of stealing Labour Party policies. We have a bill before us right now that is absolutely in black and white—or red and white if you print it in colour—Labour Party policy and Labour wants to vote against it. I do not understand it. There is no logic but that is the Labour Party for you.What we have heard from Mr O’Rourke already and what we have heard from the Labour Party again today is that the Prime Minister has got it wrong. He said that this will be the end of the Prime Minister—that he is forcing something on the people that they do not want. Well I would say that nominally what those members are saying is: “We don’t like the Prime Minister and want to see him fall over.” If you are so convinced that this is a bad idea and if you want to get rid of the National Party and you want to get rid of the Prime Minister then I dare you to vote for this bill because what you are saying is completely illogical. So get behind it and vote for it if you are so convinced this is a bad idea and that it will be the undoing of the National Party.What is this bill about? We have had three flags before. They have all been chosen by the Government of the day or by others but for the first time in New Zealand’s history New Zealanders will get to choose what their national emblem is—what the New Zealand flag is. They will get to choose. They may well choose the 1902 flag—the flag that we have now—and that will be their democratic right but this party the National Party of New Zealand is absolutely keen to ensure that New Zealanders have their say and that they get to decide what is important to them. I am looking forward to passing this bill so that we can take this out of the political domain of this House and put it into the hands of the people of New Zealand where it belongs.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. I call Dr Russel Norman.Dr RUSSEL NORMAN (Green): I rise on behalf of the Green Party to speak on the New Zealand Flag Referendums Bill. This bill of course is a classic form over substance bill. The form of course is what the actual pattern is on the flag—the flag that flies out in front of Parliament the flag that is on all of the New Zealand First benches in here today the flag that is here there and everywhere.But you know at the end of the day a flag is a pattern. So really it is about saying that some people want to change the pattern. But the reason why the pattern of a flag matters is that it actually refers to a deeper substance and the deeper substance that it refers to is about the constitutional arrangements of the country. That is the thing that really matters.Part of the reason why I guess New Zealand First is pretty agitated about it is that it sees the Union Jack in the corner of the flag as representing the monarchy and the links to the monarchy—and fair enough. You know I can understand that but if you believe in independence and democracy and you want to cut the links to the monarchy to actually have a proper republican democracy involving the Treaty of Waitangi then of course you do not particularly want the Union Jack on the flag.What the Government is proposing to do is to change the pattern without changing any of the substance. So it is having this big kind of hoopla and saying “Oh we’re doing something really substantive. We’re doing something very important. We’re doing something big. This is big; this is visionary. We’re changing the flag.” as if something underneath were changing. But of course nothing whatsoever is changing underneath. The Prime Minister awarded Prince Philip an Order of New Zealand for goodness’ sake just like Tony Abbott did. Basically it has been years since we have had such a fawning Prime Minister over the British monarchy. I mean I have never seen anything like it. So in terms of the substance underneath it nothing changes.If you wanted a referendum that actually had real substance the asset sales referendum was a referendum about real substance: should we privatise these assets? People voted not to privatise the assets; the Government completely ignored them of course. What it really wants is a show and so we are going to have the flag debate show which is really what the Government wants rather than discussing the true substance.At this very moment we are having a debate about the Trans-Pacific Partnership which changes the constitutional arrangements of New Zealand in a very fundamental way through the investor-State dispute settlement clauses. As the former Director-General of the World Trade Organization said they are writing a new constitution for a new world order. So that fundamentally changes the New Zealand constitution by setting up a judicial system outside of New Zealand. At the same time as we are having this show called the flag debate all about what the pattern on this flag should be over here the Government is actually fundamentally really altering the constitution to take away the democratic right of decision making over Government policy. That of course is the reality of what is going on. So the show goes on over here: a show about the flag and what should be printed on the flag.Over here the reality goes on: power is being taken away from ordinary New Zealanders and assets are being sold. Those are the real issues. In terms of the relationship with the British Crown and the ridiculous idea that the head of State should be determined by birth—ha ha! What a ridiculous idea. Let us have the head of State determined by birth—you know what if someone came up with that? “Oh we’re going to let them be chosen by birth.” What a great way to choose the head of State! So instead of having a debate about something real and substantive—whether the head of State should be chosen by the Parliament or by the people through an election something like that; an actual substantive thing—we are going to have the flag show. We are going to have the flag show and the Prime Minister will say that this is his thing. This is his great vision of independence for the country.At the same time he is actually selling out our independence and our real democracy and the things that really matter: the ability to determine what kinds of regulation we have about the environment and about health care. They are stripping away through the Trans-Pacific Partnership and other kinds of deals like that the right of people to actually determine the issues that really matter to people—about environmental protection; well you name it.So one of the real issues for the Greens in this is that we are having this debate around this pattern which is all about optics and the Prime Minister’s vision so that it looks like he has a long-term vision for this country while at the same time the real issues that really matter—another 45000 children living in poverty as we discovered today—are being swept under the carpet and actually swept under the carpet behind the light show that is the Prime Minister’s flag show.The ASSISTANT SPEAKER (Lindsay Tisch): I call Marama Fox—5 minutes.MARAMA FOX (Co-Leader—Māori Party):I rise to take a call on this very important discussion. I think it is an important discussion because I absolutely agree with a lot of the objections about why we are doing this. But actually I absolutely agree that I would like to see a change in the flag because I would like to see something that does symbolise our duality of nationhood. Should we be spending this amount of money on doing it? I would like to think not. Should we have put a constitutional change in first before we put a flag change in? I absolutely agree with that. I would love to see us talk about the constitution in very real ways which is why the Māori Party wanted to have the constitutional review—and that is what has happened—based on the Treaty of Waitangi. A constitution that sees us into our young adulthood as a nation that brings us forward into our future with a symbol of our new nationhood our independence our forward-thinking nation built on a constitution of partnership with the Treaty at its base—I think that would be amazing.But we do not have that opportunity. Right now we have this big debate about how much it costs about whether we are disrespecting our fallen soldiers about all of those things and really we are missing the opportunity to talk about this symbol that encapsulates who we are as a nation. Should it have been round the other way? I absolutely agree. It should have been. But I do not worry about what other people’s agendas are. I want to know what our people think. If we get caught up in talking about everything else we will miss the opportunity to pick a symbol to choose something that truly represents us.I have listened to Mr O’Rourke’s comments about our fallen warriors and the flag and what it represents. I actually disagree. I do not think that our soldiers fought for a flag. They fought under a flag yes they did but they fought for each other and they fought for their families and they fought for the right to be free and to express our freedoms. Our warriors our Māori Battalion our Hokowhitu-a-Tū went to that same war those same battles and gave their lives under a flag that actually at the time did not recognise their right to be free people. Under that flag they came home and were not treated in the same way. They were not given land. They were not given an allowance. They were disrespected under that flag. When they went to war they were not even given a weapon. So actually I say: they fought for what? For the price of citizenship under a flag that did not recognise their greatness. We do now—we do now.So let us move forward. Let us move forward as a nation and take the opportunity to have the discussion because if we get caught up in the discussion that is only about the money and all of those things then we will miss the opportunity.Hon Trevor Mallard: Who’s disrespecting them now?MARAMA FOX: I do not think it is disrespecting them. You can still fly the Union Jack this flag that is proudly represented on the benches over here. You can still fly that flag if you want to but I think it is time to move us forward into a new generation that represents the duality of our nationhood where I can proudly see myself as a Māori citizen of this country. My ancestors fought for the right just to speak their own language in this country. My ancestors fought for the right to live on their own land to practise their own culture and I want to see a flag that represents their struggle. I do not see that in this flag right now. I would like to take the opportunity for our people to come together to have that discussion and really think about what the symbol is that encapsulates our desire as a nation to stand together and be united recognising our duality of nationhood our united history our Māori history and our non-Māori history—whatever culture that is—and have it reflected in a flag as a symbol of unity for our country.I quite like the red black and white flag with the fern but I would not mind seeing the Matariki stars on it. We talk about navigation. There are a few stars that are missing. That is why we are going to support this referendum and I proudly do so. Kia ora.CHRIS BISHOP (National): There are at least two parties in this Parliament that are in favour of a referendum on changing the New Zealand flag. There is the Government party—the National Party; we are in favour of a referendum on changing the flag—and the Labour Party. Labour members are in favour of a referendum on changing the flag. They just do not have the guts to turn up in this House—Hon Trevor Mallard: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): I know what the member is going to bring up. I would ask the member to withdraw that comment. This is a seemly debate and comments like that do not add any value. Just withdraw the comment and then carry on.CHRIS BISHOP: I withdraw. They do not have the intestinal fortitude—Hon Trevor Mallard: I raise a point of order Mr Speaker. That has been ruled out many times. This is now repeated offending. [Interruption]The ASSISTANT SPEAKER (Lindsay Tisch): I am on my feet. I will ask the member to withdraw that comment. We will not have any more of those sorts of comments.CHRIS BISHOP: I withdraw. It is a real shame that the Labour Party is voting against this bill. It is the official policy of the Labour Party to have a flag referendum to have a referendum on changing the flag. The leader of the Labour Party wants to change the flag or at least he wants to consider changing the flag and he wants to do it in a deliberative and consultative fashion. We know that because he told the National Business Review and he told a commenter in the “Ask Me Anything” section in the National Business Review. We know that most Labour Party MPs I believe are in favour of a flag referendum. Probably Labour Party members ordinary grassroots members of the Labour Party—as few as they are—are in favour of a referendum on changing the flag. So it is a real shame that this is not a bipartisan bill.This bill is fundamentally about a conversation about who we are as people. It is a conversation and it is a discussion about what New Zealand is in the 21st century. Symbols do matter. The flag does matter. Do we want the Union Jack on the flag? In 21st century New Zealand with our multiplicity of ethnicities and peoples who exist for the most part harmoniously in this country do we really want the symbol or the message on our flag to be that we are a vassal of mother Britain of the mother country? Do we really want that in the 21st century with New Zealand today with all of its complexitywith all of its diversity and quite frankly without the links back to the United Kingdom? So symbols do matter. That is what this bill is about.Also this bill is about a democratic process to choose the design of a potential or putative new New Zealand flag. The Government could have legislated for a new New Zealand flag. We could have done that. We could have put it in the National Party manifesto before the last election that we would legislate for a new New Zealand flag. Other countries have done that. When Canada changed its flag that is essentially what they did. We could have done that. But no the Government chose not to do that. What the Government chose to do was involve the people. I believe that is the right thing to do. I believe the right thing to do is to ask the people what sort of flag they want because as I mentioned this is about a conversation with the New Zealand people as to what New Zealand represents what New Zealand is in the 21st century. So it is right that we ask the people.The great thing about the process so far is that New Zealanders want that conversation to happen—they do. If you look at the New Zealand Herald polls and at the designs that have been submitted and you look at the number of people who are getting involved online and talking about it at the water coolers every single day that goes by more and more people are having those conversations. They are getting a coffee and they are talking about it. I hear it when I go into cafes. I hear people grabbing a drink and talking about it. I hear it in pubs and clubs. I hear people talking about what the change should be. People are talking about whether they want the blue and red design with the silver fern or whether it would be better to have a blue and black design. Is it appropriate to have a Southern Cross on it or not? Should we go for something completely different? The 40 flags that have come down on to the long list are really provoking debate out there. So this is about a democratic process to choose the design. We are not just legislating for a change of flag; we are legislating for a process.If after the second referendum New Zealanders do not want a change of flag well that would be the people’s say; that would be the people’s verdict. But I reckon people are actually getting pretty excited about this process and I reckon we are going to see good participation in both referenda and I think that is good.I want to run through some of the arguments that have been raised by the Labour Party members and other people about why this bill should fail. Firstly they say this is not the right time. Well I mean really? Is any time ever the right time? People have been trying to change the flag since the 1970s. This was first raised in the 1970s. You can make that argument about any time. The Labour Party says: “Oh well let’s do it in 5 years.” Why 5 years? That is totally arbitrary. Why not 10? Why not 7? Why not in 2 years? It is just bizarre.Hon Simon Bridges: It’s politicking.CHRIS BISHOP: It is just bizarre and it is just politicking as my colleague points out and it is a real shame. It would have been nice for this to be bipartisan. I do not accept the argument that now is not the right time.Then we have this absurd argument that nobody wants a change of flag. Why? Oh because we looked at the opinion polls. Well actually we are going to have a giant opinion poll about it; it is called the referendum on changing the flag. Everyone will get to have a say and it will not be a cursory show of public opinion before we have had the proper debate before people have managed to see the options before people have managed to make up their own mind. We are going to have a giant opinion poll; it is called a referendum and it is going to be next year.So this absurd argument that we can just take a slice of public opinion from the New Zealand Herald online poll at a particular point or something and say that therefore we should not go through with a referendum is a silly argument. On the same basis we would have taken a slice of public opinion on 19 September before the last election and gone “Oh well National’s on 54 percent; the Labour Party’s on 18 percent.”—or something like that—“and we won’t bother with the election.” No we do not govern like that in this country. We put it to the people.Thirdly we had this argument that there are other priorities. There is this ridiculous argument that as a Government you can do only one thing at one time in this country; you cannot do two things at once. There are other priorities. The nadir of this argument was Andrew Little’s ridiculous claim this week. This is the potential future Prime Minister of this country.Hon Michael Woodhouse: Unlikely.CHRIS BISHOP:Very unlikely my colleague Michael Woodhouse points out. His claim is this ridiculous comment that he is not even going to bother to vote in the first referendum. He is not even going to bother. The potential future Prime Minister of this country whose own party has a policy of having a referendum on the flag is not even going to bother to vote. Well how ridiculous! The reality of Government is amazingly in the grown-up world on the side of the Government not “Planet Labour” that you can do two things at once. We can improve the economy we can improve social housing we can focus on the least well-off in society and we can do that contemporaneously by having a referendum on a flag. We are grown-ups on this side of the House not children in the sandpit like members opposite.Fourthly we have the silly argument that this disrespects veterans and this is allied to the argument that was raised by I think the member for New Zealand First that people fight for the flag. Well actually I put it respectfully that the people who have fought for this country do not fight for a piece of cloth; they fought and they do fight for the values that underlie the flag. I have been to Gallipoli and I have seen the memorials and I have seen the graves and it is not the New Zealand flag that exists now that is on those memorials—it is not—it is the silver fern. So I do not buy the argument that this disrespects veterans and it disrespects the sacrifice that they have made. I do not.Then we hear that this is a waste of money. This is also a silly argument. In the grand scheme of Government spending $26 million is not a large sum of money. We did not hear the Labour Party members complaining about a waste of public money when we had a referendum on asset sales. They did not make that argument at the time so I also do not buy the argument that this is a waste of money.Then finally we had the argument that we need an up or down yes or no vote in the first referendum. This was an argument that was put by Trevor Mallard in his petition and by Labour members of the Justice and Electoral Committee. The official advice that we received as a select committee was that this would not be a good idea—that we should not have a yes or no vote in the first referendum. Why? Because quite rightly people want to know what they are voting for before they vote for whether or not they want to change the flag. That is a legitimate point of view. People have a right to know in a binary sense what the options are and that is why Government members do not accept that.This is an important bill about an important part of New Zealand’s future. It is a shame that the Labour Party is voting against this bill not because it does not agree with it not because members do not potentially want a change of flag but because they are based only on spite and jealousy.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Jenny Salesa—5 minutes.JENNY SALESA (Labour—Manukau East): I rise to take this call on this very costly and wasteful bill the New Zealand Flag Referendums Bill. The New Zealand flag is significant to many of us. It is an emotional point of connection for all New Zealanders and it can be a rallying point a unifying icon and a brand that is of benefit to Aotearoa New Zealand.However there are an increasing number of New Zealanders who have joined the Labour Party in opposing this bill and the expensive flag referendums process that we are just undergoing. Many do not support the process or the spending of millions of dollars on the flag referendums. I would also like to point out that the decision of what four designs will actually be put through on the referendum will not necessarily be from the consultation process. It is a decision that Cabinet will actually make.People know what is actually important to them. In the last few weeks the Labour Party MPs called together a lot of people in my electorate in Ōtara in Manukau East for a housing meeting. Over 120 people came to that meeting on a cold freezing rainy Saturday afternoon in the middle of winter. Contrast that to one of the other meetings which was a flag referendum meeting held in the same electorate at Ōtāhuhu where only 34 people attended. Lest it be said that Manukau East is an anomaly here I would like to point out that at the very first flag referendum meeting held in Takapuna only 13 people could be bothered to attend that meeting. There has been a total of only about 700 people across New Zealand who have actually turned out to public meetings on the flag project and this is at a cost on average of about $550 per person. However when you take into account the exorbitant fees of the panel members and venue hire this amount rises to a shocking $2300 per person.Hon Trevor Mallard: How much?JENNY SALESA: It is $2300 when you include the price of advertising.The people of South Auckland and elsewhere have shown this Government what is actually important to them by attending the forums on issues that matter to them and their families. They attended the meeting on housing in South Auckland because they are desperate to have maintenance issues on their houses fixed—their houses that are leaky damp and mouldy—and they also attended because the rent is becoming way way too expensive in our electorate. Housing is what matters to our families not this wasteful vanity project on a flag referendum. What is the Government’s solution to the housing crisis? That is right: it is proposing to sell thousands of our State houses. I can assure you that it did not cost $2300 per person to run our South Auckland meeting on housing; in fact it cost the Government nothing at all because the hall was free—it was a church hall—and the organisers of the meeting brought the refreshments for the meeting.The engagement with the public on the flag has been very poor: 747 Kiwis wanted to be heardat the Justice and Electoral Committee but their request to be heard was refused; 43000 people signed a petition asking for a yes/no vote on the flag and they were also ignored.Already we have spent $8.4 million on this process. We should not be contemplating spending an additional $17.3 million to distract Kiwis from the Serco scandals the appalling mis-administration of charter schools and the continuing job losses in important industries to name but a few.I also want to address what the members Jono Naylor and Chris Bishop on the opposite side of the House said who actually stated what Labour’s policy on the flag referendumis. May I just say that we are focused on actually addressing issues that matter for our people. The questions that I ask are: can we afford this expensive $26 million on a flag at this time? Has this current Government produced the Budget surplus that it has promised? Well the answer is no not yet.The ASSISTANT SPEAKER (Lindsay Tisch): The Hon Nanaia Mahuta—5 minutes.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): If this was a vote based purely on choosing a symbol I think it would be quite easy but it is not. Symbols do matter. Flags of a country and nation matter. What Labour is saying is that what sits behind the flag—the constitutional arrangements—is so important. Yet this particular bill has reduced the debate down to process not principles and priorities.My colleagues have been absolutely right in pointing out the inefficiencies of this particular process. The Government is treating Kiwis with contempt about significant questions affecting them. It is not simply good enough to say “Let’s choose a flag.” and then the issue of the national anthem will come up and then: “Let’s discuss that and then maybe the Governor-General.” That is constitutional creep; it is not constitutional reform with a purpose that takes New Zealand confidently into the future. The Prime Minister is treating Kiwis with contempt because those significant issues are not being put in front of this very important issue which is the question of what symbol should best represent us as a nation.I heard the impassioned contribution made by the Māori Party. In part there are lots of members in this House who would agree with that sentiment. However I think that choosing a symbol before the very legitimate debate about what our constitutional arrangements and the place of the Treaty should be is in advance of a very important type of consideration. I predict that the New Zealand flag will be changed but I also predict that should this bill go ahead in the way that the Government is promoting very soon we will see in pockets of New Zealand a number of communities that affiliate with a particular flag flying their own flag. Is that thesymbolfor the country? I think not. Is that the type of New Zealand we want to see—where people will have an affinity with different types of flagand fly them because they cannot have an attachment to the outcome of this referendum? I think that is the worst outcome of all.What I am really fearful of is that because of the way that this particular referendum is constructed it will be a flagfor the 1 percent—$25.7 million spent on a process to deliver a flag for 1 percent is not good enough.Out in simple communities where people want to make a living they are saying: a flag or feed children; a flag or warm homes; a flag or provide houses in our community for people who need them. That is the type of consideration that people are weighing up when they are listening to this particular debate—$25.7 million on this exercise.Asking a question in advance of some significant weighty issues around what the constitution of this country represents and what the symbol of identity represents is I think a farce in itself. People who know me know that I have no particular affinity with the New Zealand flag but I will defend it for what it represents for this country. The history of my own particular area is that we have a particular flagfor our iwi but we will defend the New Zealand flag because we understand that it represents an evolving sense of identity that we can hold on to that holds the Crown accountable for its commitment to tangata whenua to Māori.The member Alfred Ngaroraised the issue of Mat Rata. Mat said a number of things in his history. When he made that particular comment it was just before the fisheries settlement. The fisheries settlement was the first pan-Māori settlement where the Government attempted to do something in I believe a quite progressive way. Underpinning his comments I believe was his understanding that the Treaty had a place in the future of New Zealand. He established the Waitangi Tribunal. He led the challenge for this pan-Māori settlement which could transform the nation. Just on Wednesday we had numerous debates about how Treaty of Waitangi settlements have transformed the national identity of our nation.Well the world has moved on and New Zealand has moved on. Our national identity is progressing; however underpinning the choice of a flagmust be the constitutional arrangements of this country. That is why I stand in support of my colleagues in the Labour Party who are opposing this based on process but more fundamentally based on principle. Any symbol of this country must give all Kiwis confidence that it is something that we can all hold on to. This one does not.TIM MACINDOE (National—Hamilton West): I feel very proud of what we are on the cusp of doing tonight and that is giving the people of New Zealand an opportunity to do exactly what three out of four people voted to be able to do less than 12 months ago.I always listen to the Hon Nanaia Mahuta with respect and she knows I hold her in high regard. I have listened carefully to her arguments and I acknowledge some of them but I ask her to look around her colleagues and to think carefully about some of the arguments that they have advanced. She must be ashamed of some of the contributions that Labour members have made to this debate and of the fact that a party would put aside principle to go for short-term populist interests because they seem at the moment to resonate with the public because there is a certain mood out there. She needs to reflect again on the fact that the Labour Party went to the 2014 election less than 12 months ago saying that it had a policy that aims to “enhance knowledge appreciation and pride in New Zealand’s identity history biculturalism multiculturalism and other diversity community resilience distinctiveness… through a review of the design of the New Zealand flag involving flag design experts and with full public consultation and involvement.”—in other words exactly what we have just had and what we are continuing to do.I want to commend all 40 of those designs that have been short-listed. Some of them of course are by the same designer but there are a large number of designers whose work is represented there. They reflect a variety of symbols that give us choice and I have to say I would be very proud for a large number of those to be the New Zealand flag but I am going to put on record that along with many people I personally opt for the Kyle Lockwood red and blue fern with a Southern cross flag and I will explain why in a moment.I am absolutely appalled at the claptrap we have had to listen to particularly from the Labour Party but also from its friends in the Greens. There is absolutely no doubt that the vast majority of members of both of those parties want change in this area. They must be astonished that their representatives in this House have come here and are suddenly arguing for no change on an issue that they have all talked about for a very long time in many cases for many generations.When I spoke in the second reading of this debate I explained why it is quite a personal issue for me. We have heard a lot about what our military men and women may feel on this issue. I made the point that I am the great grandson the grandson the son and the nephew of men who fought in the New Zealand Army in the great conflicts of the late 19th and the 20th centuries: the Boer War the First World War and the Second World War. My uncle Ken was killed in action right at the end of the Second World War and he is buried in southern Italy. Along with all of those who could tell a similar story of being the descendants of people who fought for our country they would all acknowledge that the thing those men and in some cases women have in common is that they are buried with a symbol that is not the New Zealand flag—Su’a William Sio: Smile Tim. Smile.TIM MACINDOE: It is not the New Zealand flag Mr Sio; it is the silver fern.Su’a William Sio: Smile.TIM MACINDOE: I will smile if you would like me to because I am proud of what we are doing. I would say to Mr Sio that rather than treating this issue like a village idiot he too should turn to his colleagues and say: “This is serious and we are letting down the people who voted for us.” Those who voted Labour at the last election voted for what we are doing here today and I cannot believe that Labour is turning its back on its own policy less than a year later and trying to pretend that somehow it is doing this on a point of principle.I agreed with Marama Fox when she said earlier that the New Zealand men and women who have fought for this country fought for freedom they fought for values and they fought to maintain the way of life that we hold dear. Some may have had a sense of pride in a flag but they did not fight for that flag; they fought for our country and for those who are allied to us and who share those values and who wanted to supress tyranny and fight back against tyranny. I say to them “Thank you for that service.” and that is why I believe that at this time—far from Mr Mallard’s argument that it is disrespectful to be having this debate now—there is no better time for us to honour the legacy of those men and women than as we mark the centenary of Gallipoli and the 100-year period since World War I of 1914 to 1918.As we look at those who through the ages in New Zealand’s relatively short history have fought for us I believe that the symbol that they would most want to have on our flag is the symbol that is on their graves: the silver fern. It is as simple as that. That is why although I do believe in change in this issue I particularly want the fern on our flag. I am proud of my British heritage and most of us in this House—certainly not all but most of us—have some British heritage. The Union Jack is a fantastic flag. If I were British I would wear it I would fly it and I would proudly display it at all opportunities. But we are not British. We are 12500 miles away and it is a very long time since we were a British colony. The time therefore in my view is right to take that colonial emblem off our flag and to reassert our independence as a modern and progressive nation.I am absolutely sick of having the confusion with the Australian flag constantly thrown at us. When people are overseas and asked to identify the New Zealand flag hardly anyone can. Fifty years ago the Canadians had the same argument because they had a similar flag—it was just predominantly red instead of the blue that we have got. They had the same issue they changed to a symbol that they all identified with the maple leaf and which one of them would go back to that old flag now? Not one of them because they all now feel incredibly proud of that emblem that they wear and they fly and they display on their backpacks that says unashamedly: “We are Canadian. Well I want something that says: “We’re New Zealanders and let’s be recognised as New Zealanders right around the world.” The silver fern will do that but I also want to retain the stars of the Southern Cross. That is why I like that Kyle Lockwood design because of the Southern Cross with the stars that guided our Māori ancestors to this land. To my mind that is a wonderful way of honouring that legacy of the tangata whenua of this land while also putting something on the flag that we all embrace as New Zealanders of a modern era.As I said I am absolutely appalled by the duplicity and the populist hypocrisy of the 2015 version of the Labour Party which cannot even honour its own 2014 election policy. What an abuse of trust. For the leader of the Labour Party this year to say that he will not even vote in an election when last year he went on record and said that this is absolutely the right thing that this is what we should be doing and that this is the way to go about it is absolutely abominable.This is a once-in-a-lifetime opportunity. If New Zealanders do not vote to change the flag this time most of us will not see the opportunity come again in our lifetime—maybe some of the younger members will but most of us will not—and here we are being told that the cost is an issue. Well it is the first time that New Zealanders have been given a chance—all of them—to say: “This is the flag I want.” What price democracy? It is an important decision to be made and I would suggest to you that it is money that is worth spending and it is worth doing the process correctly.I cannot believe that there are some who would argue that because there are other things we could spend the money on—and of course there always will be—we should not do it. Well that argument will apply next year and the year after and in 5 years’ time. That will never change. At some point we have to spend the money and I believe spending the money on having a truly democratic decision on this particular issue is really important.I will go back to the other issue that Mr Mallard raised earlier about going to tell the RSA what I think. I will accept an invitation from any RSA around the country to go and have this discussion because I find when I talk to returned servicemen and women that they do understand the argument when it is put. I repeat that I believe that we are honouring them their service and particularly those of their comrades who paid the ultimate sacrifice by having the symbol that is on the tombstones across Western Europe put on to their graves. I am as I said at the outset of this speech incredibly proud of the opportunity that we are delivering to the country. I am incredibly proud as a National MP that we are honouring the commitment that we took to the country last year and that we are standing by the policy that we campaigned on and I remind everybody listening that nearly three in every four people who voted in last year’s election voted for this. So let us get on and do what they voted for.A party vote was called for on the question That the New Zealand Flag Referendums Bill be now read a third time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 56New Zealand Labour 32; Green Party 12; New Zealand First 12.Bill read a third time.Sittings of the HouseJOANNE HAYES (Third Whip—National): The House has made good progress this week. I seek leave for the House to rise early.The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for the House to rise early. Is there any objection? There is no objection.The House adjourned at 5.49 p.m.