Volume 655 Week 18 - Tuesday 21 July 2009 
Volume 655 Week 18 - Tuesday 21 July 2009 
[Volume:655;Page:4925] 
Tuesday 21 July 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Obituaries 
Hon William Lambert Young CMG 
Mr SPEAKER 
: I regret to inform the House of the death on 14 July 2009 of the Hon William (Bill) Lambert Young CMG who represented the electorate of Miramar from 1966 to 1981. He was Minister of Works and Development from 1975 to 1981. I desire on behalf of this House to express our sense of the loss we have sustained and our sympathy with the relatives of the late former member. 
Honourable members stood as a mark of respect. 
Members Sworn 
David James Shearer was presented to the Speaker made the affirmation required by law and took his seat in the House. 
Questions to Ministers 
Budget 2009—Credit Rating Upgrade 
1. Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by his statement that “we have actually delivered a Budget that saw a credit rating upgrade in New Zealand”? 
Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
Hon Phil Goff 
: If a change in outlook by Standard and Poor’s is a credit upgrade as the Prime Minister has claimed is he now admitting that a downwards change in outlook from Fitch Ratings is a downgrade in New Zealand’s credit rating? 
Hon JOHN KEY 
: Yes. 
Chris Tremain 
: What did the Fitch Ratings release say about the New Zealand economy? 
Hon JOHN KEY 
: Fitch Ratings was concerned as is this Government about New Zealand’s persistently large current account deficit and rising foreign debt. The release goes on to say that because of these imbalances the Government needs to rein in spending. The Government outlined a balanced and credible plan to do that in the Budget and Standard and Poor’s backed that up. If the Opposition is worried about a much smaller player Fitch Ratings putting New Zealand on a negative outlook then it should tell us how it intends to make further cuts to Government spending because that is what Fitch Ratings wants to see done. 
Hon Phil Goff 
: Can the Prime Minister explain why Fitch Ratings downgraded New Zealand’s credit rating after analysing the last National Budget and the Prime Minister’s own speech on National’s plans for the future? 
Hon JOHN KEY 
: I can explain one of two things. The thing I can explain is that Fitch Ratings looked at a very large current account deficit which the Labour Opposition of 1996-99 led by Michael Cullen campaigned on doing something about. Labour did; the deficit doubled under its watch when Michael Cullen came into office. What I cannot explain is what was going through Phil Goff’s mind yesterday because at one point it was welfare for millionaires and today it is welfare for nobody. It sounds as though the pixies at the bottom of the garden got swine flu overnight! 
Hon Phil Goff 
: Apropos of the Prime Minister’s last comment does he believe that a person who has been made redundant should get no transitional financial assistance for job search or retraining simply because his or her spouse earns $26000 per year? 
Hon JOHN KEY 
: I do and he or she would already get that assistance from the Ministry of Social Development. [ 
Interruption 
] 
Mr SPEAKER 
: I do want to hear the supplementary question from Chris Tremain. 
Chris Tremain 
: Has the Prime Minister seen any recent reports about a previous Government’s management of our economic imbalances? 
Hon JOHN KEY 
: Funnily enough yes I have. I have seen a report that says: “I do not pretend either that our record was perfect nor deny that there were significant questions unresolved. Our current account deficit [something that Fitch put us on negative outlook for] was stubbornly high and the savings deficit … was unsustainable. Productivity growth was too low …”. That frank and honest assessment came from a recent speech to “Mood of the Boardroom”. It was of course by David Cunliffe. 
Hon Phil Goff 
: Is it the Prime Minister’s intention next year before the Budget is released to show the Budget in advance to Fitch Ratings as well as to Standard and Poor’s if we are going to allow the rating agencies to determine what is in a Budget that is meant to be for New Zealanders? 
Hon JOHN KEY 
: We need to get one thing perfectly right: Fitch Ratings did not put New Zealand on negative outlook because of the Budget. Actually if it had followed a Budget that Labour had written then Moody’s and Standard and Poor’s would have downgraded New Zealand. 
Chris Tremain 
: Has he seen any reports of alternative fiscal strategies and how does he think rating agencies would respond to them? 
Hon JOHN KEY 
: Yes I have seen reports from the Opposition arguing that we should have further tax cuts expand the welfare State bring back large KiwiSaver subsidies reinstate tax credits and spend more on tertiary education early childhood education overseas aid and health. This massive and totally irresponsible increase in Government spending would have set New Zealand on a downgrade by every single rating agency and Phil Goff knows that is the case. 
Hon Phil Goff 
: Is it part of his plan to impress the rating agencies by using proxies such as Mark Weldon and John Whitehead to promote National’s secret privatisation agenda? 
Hon JOHN KEY 
: If John Whitehead is a proxy how come he was Secretary to the Treasury under the last 9 years of the Labour Government? 
Dr Russel Norman 
: Does he agree that one of the central drivers for the imbalance in foreign debt and the current account deficit in the New Zealand economy has been the housing market’s speculative bubble and will his Government support measures that tackle the bubble directly such as a capital gains tax excluding the family home and ring-fencing the losses from investment properties? 
Hon JOHN KEY 
: Yes in answer to the first question. In terms of the latter question the member will be aware that Bob Buckle is leading a tax review. I do not want to prejudge that review because there may be all sorts of things it looks at. But I personally have stated many times and am happy to state again today that I do not support a capital gains tax. 
Hon Phil Goff 
: Is it also the Prime Minister’s attempt to impress credit rating agencies that is the reason he is appointing Don Brash as head of the Productivity Commission notwithstanding that that brings back an agenda that the electorate rejected decisively in 2005? 
Hon JOHN KEY 
: From my memory we lost the 2005 election by only a smidgen so I am not quite sure that is the right assessment. I do not know whether I have missed something but I cannot understand the Leader of the Opposition’s fixation with rating agencies at the moment. When Standard and Poor’s upgraded us apparently it was the guy who got it wrong with regard to Enron and should not be believed. 
Economy—Imbalances 
2.  
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
 to the  
Minister of Finance 
: What reports has he received on economic imbalances inherited by this Government? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I have seen a statement from the Fitch Ratings agency saying that New Zealand’s economy is burdened with severe imbalances as indicated by a persistently large current account deficit and now growing public debt. The deficit ballooned under the previous Government’s decade of economic mismanagement. Labour campaigned on the idea that the current account deficit was too big when it was 5 percent of GDP. By the time Labour had left office it had almost doubled. The Government is addressing these imbalances by implementing policies that promote exports and investment over borrowing and consumption which have been the pillars of economic management for the last 10 years. 
Peseta Sam Lotu-Iiga 
: Has he seen any reports in the last week arguing for large increases in Government spending? 
Hon BILL ENGLISH 
: Despite the warning from a number of ratings agencies that out-of-control Government spending could lead to a downgrade in New Zealand’s credit rating I have seen reports from the Leader of the Opposition who yesterday proposed that everyone should get the dole regardless of the family income and today he is reported as backtracking on his call for the dole. When asked whether it meant everyone should be entitled to the unemployment benefit no matter how wealthy his or her partner he said: “No no that’s not true.” which directly contradicted what he said yesterday. 
Peseta Sam Lotu-Iiga 
: What are the implications of Mr Goff’s proposal to expand the welfare system? 
Mr SPEAKER 
: I think the member might want to rephrase that question because the honourable Minister has no responsibility for the background of the proposal. He can comment only on reports he has seen in that regard. 
Peseta Sam Lotu-Iiga 
: What are the implications of the report that the Minister heard of detailing Mr Goff’s proposal to expand the welfare system? 
Hon BILL ENGLISH 
: It is pretty hard to work out the implications because yesterday Mr Goff promised that anyone who lost his or her job under Labour would get the dole regardless of his or her spouse’s income. Today he has backtracked on it so we are not sure whether he is for it or against it. We suspect that he is not sure either because he is trying to satisfy two contradictory factions in his caucus. 
Hon David Cunliffe 
: Despite the historically low debt low unemployment and higher growth inherited from the previous Labour Government when will the Minister stop whining about the economy he inherited and start formulating some new ideas and a real plan to lift New Zealanders’ incomes or is he happy to hide behind the skirts of the Secretary to the Treasury and the Governor of the Reserve Bank? 
Hon BILL ENGLISH 
: The only whining is coming from Labour members who have yet to understand just how bad the effects of their decade of economic mismanagement have been. For instance in this once-proud exporting nation in the last 5 years we have seen exports in recession. In fact the tradable part of this economy shrank in the last 5 years while the non-tradable part of it grew by 20 percent. 
Hon David Cunliffe 
: In light of Fitch Ratings’ downgrading of New Zealand’s credit rating watch and Alan Bollard’s criticism last week of the lack of saving in New Zealand does the Minister now realise that cancelling the research and development tax credit cutting KiwiSaver contributions and suspending contributions to the Superannuation Fund undermine New Zealand’s performance or does he think that the timing of Fitch Ratings’ downgrade was purely a coincidence after John Key’s speech? 
Hon BILL ENGLISH 
: I think as the Prime Minister pointed out that the continuation of the previous policies of encouraging borrowing over-consumption and reckless Government spending would certainly have led to a downgrade by every ratings agency. 
Unemployment Increase—Government Policies 
3.  
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: What steps is this Government taking to address the growing number of people who are now unemployed? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 We are concentrating on providing a stable economy where employment growth can improve as the recession abates. My focus is on ensuring that those who are in genuine need get the assistance they need to get back into work. 
Hon Annette King 
: Why is the Minister refusing to provide weekly updates of the unemployment benefit figures that she receives? Is it because she does not want Kiwis to know that last week alone 1342 people went on the dole? Why is she trying to hide that fact? 
Hon PAULA BENNETT 
: There is no hiding of the figures; this Government has been presenting them sooner than the previous Government did. There is no doubt about that. In fact that the figure of 1342 is out there is evidence that figures are being reported on a weekly basis. Since we are talking figures I add that last week alone 1557 people went off the benefit and into work. 
Katrina Shanks 
: Has the Minister seen any reports of responses to rising unemployment in previous years when the Budget has been tight? 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I am sorry to raise it after the member’s question but I have been thinking very carefully about the Minister’s reply and I want to take some care here. She said “the benefit” referring to unemployment benefits. She could not possibly have been correct. 
Mr SPEAKER 
: The member must not do that. He must not litigate answers like that in a point of order. The matter can be followed up with further supplementary questions but certainly not by way of—[ 
Interruption 
] Members will not interject while I am on my feet. 
Katrina Shanks 
: Has the Minister seen any reports of responses to rising unemployment in previous years—[ 
Interruption 
] 
Mr SPEAKER 
: I ask members to show a little courtesy to the member asking a supplementary question. She is towards the back of the House and the interjections are flying across the front. I cannot hear her. 
Katrina Shanks 
: Has the Minister seen any reports of responses to rising unemployment in previous years when the Budget has been tight? 
Hon PAULA BENNETT 
: Yes. In fact I have seen a report that states: “In reality there are no quick-fix solutions or easy answers. Unemployment has to be addressed at a number of levels.” and also that benefits in terms of jobs are much longer coming— 
Hon Annette King 
: “A number of levels.” Very good! 
Hon PAULA BENNETT 
: The member who interrupts the Hon Annette King was the author of that report. 
Hon Annette King 
: Is it a measure of the success of her unemployment policy that only 1245 people have benefited from the much-hyped ReStart package which is fewer than the number of people who went on to the dole in 1 week? Is the fact that so few people are getting this assistance an indication that this assistance is not much help at all? 
Hon PAULA BENNETT 
: I am sorry I did not hear the member’s number but just to be clear I say that to date a total of 3690 people have been granted ReStart assistance. Every single one of them is grateful for that assistance over 16 weeks which helps them through a pretty tough time of redundancy. I am quite proud that we have been able to offer that assistance to those people. 
Brendon Burns 
: What does the Minister say when due to a lack of Government response to rising unemployment in Canterbury which is now seeing 4000 people on the unemployment benefit a private initiative has today been launched in the Christchurch  
Press 
 specifically to combat youth joblessness which is soaring? Will her ministry support the Christchurch youth compact? 
Hon PAULA BENNETT 
: Unlike the previous Government we support private initiatives the non-governmental organisation sector stepping up with initiatives and Government initiatives. We are pretty keen to see people taking the initiative in terms of what works best in their communities and we certainly back them to do that. I would be interested in hearing more. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The Minister started her answer in quite a political way but putting that issue to one side the member for Christchurch Central Mr Burns asked the Minister a very specific question about her department and about a specific programme. The answer canvassed all manner of things but did not come back to the point that Mr Burns asked about which was that programme in Christchurch. 
Hon PAULA BENNETT 
: At the beginning he asked about a particular private enterprise that was running in Christchurch and I addressed that. 
Mr SPEAKER 
: I accept that the question asked by the member was a pretty straight question. The only dilemma is that being a supplementary question it is possible the Minister may not have specific information on that particular scheme. But because it was such a straight non-political question if the Minister has any information on the particular Christchurch proposal I ask her to answer that part of the question. 
Hon PAULA BENNETT 
: As I stated I do not think that the Government alone has solutions to what is going on. We support private enterprises and we support non-governmental organisations coming up with initiatives. I have not had a full briefing on that particular initiative but I am certainly happy to listen. 
Katrina Shanks 
: Has the Minister heard of any other sensible ideas to address unemployment? 
Hon PAULA BENNETT 
: I have heard a number of reports this week but no sensible ones from the Opposition—that is for sure. Labour’s big idea to put hundreds of thousands of middle-class people— 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I am sorry to interrupt the Minister but she has no responsibility for what ideas she may have received from the parliamentary Opposition. She has an entire department that she is meant to be responsible for and we have questioned her on those matters. 
Mr SPEAKER 
: I accept the point the honourable member makes. The Minister does not have any responsibility for Opposition policies. I invite the Minister bearing that in mind to answer the question. 
Hon PAULA BENNETT 
: I have been reading the paper and seeing reports that talk about hundreds of thousands of middle-class New Zealanders going on to welfare which we believe is impractical unaffordable and unfair. But a headline today says that “Goff backtracks” because he is not sure whether that is a good policy. So it would be fair to say that I have seen no sensible ideas this week. 
Hon Phil Goff 
: Will the Minister answer the question the Prime Minister did not answer which is: does she believe that if a person is made redundant that person should not be eligible for any financial assistance for job search or retraining if his or her spouse happens to still be earning just $26000 a year? 
Hon PAULA BENNETT 
: I think the Leader of the Opposition does not understand that although that person will not be eligible for a main benefit he or she could be eligible for special grants some training incentives or child support payments—[ 
Interruption 
] Opposition members should calm down; they asked the question and I am just giving the answer. Such people could actually be eligible for other assistance and I suggest they contact Work and Income because we would like to help them if we can. 
Hon Phil Goff 
: You don’t believe it. You don’t believe they deserve any support despite the fact you had it— 
Mr SPEAKER 
: The Leader of the Opposition must not interject “you” did this and “you” did that because the Speaker was not involved. 
Kelvin Davis 
: What initiatives is the Minister implementing in Te Tai Tokerau to address the problem of the dozens of Maori becoming unemployed there each week? 
Hon PAULA BENNETT 
: Unfortunately unemployment numbers are going up throughout the country. There is no doubt about that. But we are still seeing a triage rate happen in those areas. A number of people who are walking into Work and Income offices and expecting to go on a benefit are actually walking out not on one because they are able to secure jobs or further training opportunities through Work and Income. I am proud to say that there are more people on the front line working with the individuals who need it most. 
Grant Robertson 
: Does the Minister agree with Wanganui Work and Income regional commissioner Gloria Campbell that the number of young people going on to the unemployment benefit is of “great concern”; if so what specific initiatives is she taking to get them and the rest of the 3000 people in the Whanganui area on the unemployment benefit back to work? 
Hon PAULA BENNETT 
: Yes. I am pleased to hear that the regional commissioner thinks that is of great concern. It is certainly of concern to this Government as well. For the year ended 30 June we processed a total of 131164 student allowance applications and 249822 student loan applications. This is an increase of 28.6 percent and 14.64 percent respectively on the previous year. I think a number of youth are moving into those training incentives which is where we are supporting them as well. 
Hon Annette King 
: I seek leave to table a letter from the Minister to me in which she refuses to provide the weekly unemployment benefit figures she receives. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Superannuation—Affordability of Current Entitlements 
4.  
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: What reports has he seen on the affordability of current entitlements to New Zealand superannuation? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Budget 2009 fully costed current entitlements to New Zealand superannuation and these were built into the fiscal forecast published with the Budget. Under this Government New Zealand superannuation will be maintained at 66 percent of the average wage for a married couple to be paid from age 65. 
Amy Adams 
: What alternative approaches to providing New Zealand superannuation has the Minister seen? 
Hon BILL ENGLISH 
: I have seen a report of comments made by Labour’s finance spokesperson Mr David Cunliffe who told the “Mood of the Boardroom” meeting in Auckland: “Nor if you listen carefully have I closed the door on re-examining questions of the age of entitlement for example.” Mr Cunliffe should clarify whether he is speaking on behalf of the whole Labour caucus or just himself and should clarify just what Labour’s policy on the age of entitlement now is. 
Hon David Cunliffe 
: Does the Minister share Labour’s commitment to preserve the eligibility age of 65; if he does why did he jeopardise future entitlements— 
Mr SPEAKER 
: I apologise to the honourable member but I cannot hear his question. I think the House owes it to members to at least enable us to hear the question. The member may start again. 
Hon David Cunliffe 
: Does the Minister share Labour’s commitment to preserve the eligibility age of 65; if he does why did he jeopardise future entitlements with his suspension of contributions to the Superannuation Fund a move that Treasury says is an indication that the Government is “seriously considering winding up the fund altogether”? 
Hon BILL ENGLISH 
: I thought we shared Labour’s commitment to the age of entitlement being 65 but if that is the view held by the Labour caucus it is certainly not the view held by its finance spokesman David Cunliffe. 
Amy Adams 
: What economic policies would put the affordability of New Zealand superannuation in jeopardy? 
Hon BILL ENGLISH 
: In the end the affordability of New Zealand superannuation is directly related to the health of the economy. There is no doubt that continuation of the policies of the last 10 years favouring over-consumption too much borrowing and reckless Government spending would certainly be bad for the health of the economy and that would put at risk the affordability of future national superannuation. 
Banking Practices—Interest Rates 
5.  
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement that “We made it clear right through with the banks that with taxpayers supporting them and their depositors and their overseas borrowing we expect that they will give borrowers a fair go.”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. 
Hon David Cunliffe 
: Why then did his Government block its own MPs’ proposal for a Finance and Expenditure Committee inquiry into pass-through of official cash rate cuts to short-term interest rates having simultaneously criticised the major banks for failing to pass through cuts and appealed to the Reserve Bank to take action? 
Hon BILL ENGLISH 
: Our top priority is that banks keep lending because when banks stop lending people lose jobs. In respect of the relationship of the short-term cash rate and the overnight cash rate as we have said many times customers of banks have the opportunity to choose lower rates than the floating rate being the fixed 6-month and 1-year mortgage rates. I might say that when customers make that choice it will have a much bigger effect on the banks than a meeting of Opposition members in a phone box with all their supporters. 
Aaron Gilmore 
: Has the Minister seen any reports about competitive pricing within the banking sector? 
Hon BILL ENGLISH 
: Yes I have. Here is one: “To reduce the cost of mortgages to homeowners on a permanent basis the Government has to deal with the high overexpenditure in level of borrowing of Government.” The second one states: “To reduce interest rates it is necessary to tackle the causes rather than simply to try by regulation to disguise the symptoms.” Both of those statements were made by Phil Goff. 
Hon David Cunliffe 
: Can the Minister confirm whether he has received any correspondence or indications from New Zealand’s major banks that they are reluctant to continue current levels of lending if an inquiry into interest rate pass-through should proceed; if not why does he not now support an open transparent cross-party parliamentary inquiry that will allow New Zealanders the opportunity to voice their concerns and get the facts on the table? 
Hon BILL ENGLISH 
: No I have received no such correspondence. It is a bit rich getting lectured about interest rates by members who were part of a Government that presided over record interest rates in New Zealand at a time when bank margins— 
Hon David Cunliffe 
: It was the Lange Government not the Clark Government. That’s almost as old as Don Brash! 
Hon BILL ENGLISH 
: The member should listen to this. Under Labour bank margins reached record levels. They are currently 30 percent lower than they were when that man was a Minister. 
Hon David Cunliffe 
: Can the Minister tell the House why the Prime Minister has now asked the Reserve Bank to come up with suggestions for his Government and is it the case that after a few months in office he has already run out of ideas when just a couple of weeks ago he was telling the Reserve Bank that it was all its responsibility to fix the mess? 
Hon BILL ENGLISH 
: Most of the things that can be known about banks passing on interest rate cuts are already known. The Reserve Bank did a very thorough and insightful report into the gap between the floating rate and the overnight cash rate. The next question is what can be done about it. The Prime Minister quite reasonably has asked the Reserve Bank for suggestions about what can be done about a well-known set of information. 
Warm Up New Zealand: Heat Smart—Creation of Jobs 
6.  
MICHAEL WOODHOUSE (National) 
 to the  
Minister of Energy and Resources 
: Has he received any reports that the Government’s Warm Up New Zealand home insulation scheme is helping to create jobs? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Yes I have. I have seen a report entitled “Insulation offer cuts dole queue” in yesterday’s  
New Zealand Herald 
. The story outlines a number of firms taking previously unemployed people and training them to install insulation in New Zealand homes. Premier Insulation for example— 
Hon Phil Goff 
: And how many lost over the same day? 
Hon GERRY BROWNLEE 
: The Government has a scheme. It is providing jobs but Phil Goff does not want it; he just wants those workers and their families to take the dole. Premier Insulation has put an extra 80 people into work. Eco Insulation has put an extra 50 into work. All of those people were previously on the dole. Fletcher Building has increased the production of the insulation product from its factories. That has put more people into work for the 24-hour shifts it is now running. This is a very good scheme. The scheme is working well and it is also getting New Zealanders working well. 
Michael Woodhouse 
: How will the Warm Up New Zealand: Heat Smart home insulation scheme help the New Zealand economy in the medium and long term? 
Hon GERRY BROWNLEE 
: The Warm Up New Zealand: Heat Smart scheme will help the New Zealand economy in many ways in the longer term. One way will be through the reduction in health costs because warmer homes are healthier homes. The scheme should lead to fewer people being admitted to hospitals with respiratory illnesses thereby easing pressure on our health system. Warmer Kiwi homes will also ensure that more children go to school and more people stay in work when they might otherwise be sick as a result of their cold home and other living circumstances. Of course there is the ongoing job creation that I have already spoken of. 
Michael Woodhouse 
: What has been the response from the public to the Warm Up New Zealand: Heat Smart scheme? 
Hon GERRY BROWNLEE 
: The response from the public has been overwhelmingly positive. I am advised that since the programme started on 1 July there have been some 9000 calls to the Energy Efficiency and Conservation Authority call centre and over 100000 unique visitors to the website have been making inquiries into how they may access the scheme. It is very pleasing that demand is so high. In fact we are now making sure that there are more providers in order to ensure that people do not have to wait too long for this excellent Government assistance. 
Folic Acid in Bread—Commencement of Mandatory Requirement 
7.  
Hon RUTH DYSON (Labour—Port Hills) 
 to the  
Minister for Food Safety 
: What scientific evidence is she using to support any decision to defer the mandatory addition of folic acid in bread as planned under the joint trans-Tasman food standards? 
Hon KATE WILKINSON (Minister for Food Safety) 
: 
 No such decision has yet been made. Deferring the commencement date is our preferred option but it is certainly not predetermined. We have made a decision to ask the public of New Zealand what they want. The member will be aware that a discussion document is being released tomorrow. It includes the options of the status quo revocation and deferring the commencement date to allow for a considered review. I will be making a decision after considering all the submissions. 
Hon Ruth Dyson 
: Does she agree with the Prime Minister’s chief scientific adviser Professor Peter Gluckman that because of a lack of folate— 
Mr SPEAKER 
: I apologise to the honourable member but again I cannot hear the supplementary question the member is asking. How can I assess whether the question is being answered if I cannot hear it? 
Hon Ruth Dyson 
: Does she agree with the Prime Minister’s chief scientific adviser Professor Peter Gluckman that because of a lack of folate in the diet of pregnant women there were many cases of neural tube defects resulting in abortion and in babies being born dead? 
Hon KATE WILKINSON 
: I think the benefits of added folate in one’s diet are actually known but can I remind the member that Ireland has a voluntary fortification scheme which has resulted in a 30 percent increase in folate in that population. It was voluntary; it did not have to be mandatory. 
Mr SPEAKER 
: I ask both sides of the House to please be reasonable. I realise that today is the first day back and it is always going to be a bit noisier but I do need to be able to hear. 
Dr Paul Hutchison 
: What reports has the Minister seen about the mandatory fortification of bread with folic acid? 
Hon KATE WILKINSON 
: I have seen a report from Annette King calling the standard a “triumph for humanity and common sense” and one from Phil Goff last week stating: “The public is rightly concerned. … Let’s get a review let’s get the information out into the public let’s make an informed decision about it and let’s do it without waiting till they bring it in. … It needs action now. You know if I didn’t know any better I’d say ‘Well what the hell are we doing?’ ”. Finally I saw on Sunday a press release from Ruth Dyson stating: “Deferring the introduction is a cheap cop out.” 
Dr Ashraf Choudhary 
: Does the Minister agree with Professor Gluckman that there is no causal link between folic acid intake at the proposed levels under the food standards and increased rates of cancer in humans? 
Hon KATE WILKINSON 
: I am aware that there is scientific evidence that does indicate it is safe. I have always maintained that I am not a fan of the standard and that I support New Zealanders being able to choose whether their bread has folic acid— 
Mr SPEAKER 
: I realise that this issue creates some emotive involvement but I want to be able to hear the Minister. The question that was asked was a dead straight question—whether the Minister believed the evidence of the chief scientific adviser—and I think the House ought to be interested in the answer to it. [ 
Interruption 
] I do not know who interjected on me then but I would appreciate it if they did not do it further. The Hon Kate Wilkinson may start her answer again if she wishes. 
Hon KATE WILKINSON 
: We are not ignoring the advice of the chief scientific adviser. The safety of folic acid is not the only issue here; the Government understands that New Zealanders want choice and that is something I do not need to consult a scientist about. 
Sue Kedgley 
: Why did the Minister repeatedly claim that New Zealand could not possibly get out of a joint trans-Tasman standard on folic acid fortification when in fact New Zealand opted out of the joint standard some years ago and issued its own separate standard under the New Zealand Food Act to fortify bread not flour as the Australians are proposing to do? 
Hon KATE WILKINSON 
: Our advice was that the window of opportunity to opt out of the standard actually ended 2 years ago in September 2007. The issue has always been about finding a workable solution a workable way to work through the process without jeopardising our food treaty obligations. 
Hon Ruth Dyson 
: Does the Minister agree with Mr Lyall Thurston of the Coalition of Parents of Children with Spina Bifida who said that commercial interests had prevailed over public health in her decision to defer fortification of bread? 
Hon KATE WILKINSON 
: I repeat that the benefits of folic acid are well-known but— 
Mr SPEAKER 
: I apologise to the Minister. I ask the front-bench members on both sides to please show a little courtesy to those members who are asking and answering questions. I am sure the House cannot hear the answer that the Minister is giving. I apologise to the Minister and ask her to please answer the question. 
Hon KATE WILKINSON 
: The benefits of the addition of folic acid to women’s diets before they are pregnant are well-known. But we must look at the example of Ireland where voluntary fortification of bread with folic acid resulted in a 30 percent increase in the uptake. It did not have to be mandatory. 
Banking Practices—Reports 
8.  
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Has he received any advice that would lead him to question that all banks operating in New Zealand are acting responsibly? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I have not received any policy advice in that respect but in dealing with my constituents when I am getting around the country I often do receive quite strong advice from people about their bank not acting responsibly. 
Dr Russel Norman 
: Does the Minister believe that rorting more than $400 million from taxpayers is an example of responsible behaviour which is what the High Court ruled that the Bank of New Zealand has done? 
Hon BILL ENGLISH 
: That is a matter that has been pursued through the courts. I understand there is still some way for the issue to go. It will probably be better for me representing the Government to not comment on that matter in detail. 
Hon Jim Anderton 
: How does the Minister explain that the increase in remittances of profit and interest charges by overseas-owned banks in New Zealand—primarily Australian—to their overseas parents has risen from $4 billion in 2004 to $11.7 billion last year? 
Hon BILL ENGLISH 
: That is a question that the member might like to answer himself given that he was the leader of the previous Government’s economic policy and that he oversaw the banks for the best part of a decade. 
Dr Russel Norman 
: How can the Minister be confident that the banks are behaving responsibly relative to passing on interest rate cuts when we have prima facie evidence that the banks are behaving in a grossly irresponsible way when it comes to tax evasion? 
Mr SPEAKER 
: I caution the member that the Minister of Finance is not responsible for the private sector banks. I will allow the question but I alert him for any further supplementary questions. The Minister needs to be conscious of that when answering the question. 
Hon BILL ENGLISH 
: The behaviour of the banks is determined by the competitive pressures of their customers and by the regulatory regime that applies to them. The current rules under which banks conduct their business were laid down by the previous Government and the Reserve Bank. We are most open to any suggestions about how to improve those rules for the improvement of the competitiveness of the banking system. We asked for suggestions but have not heard any. We do not believe that a meeting of Opposition MPs with their supporters in a phone box will solve any problem. 
Dr Russel Norman 
: Why does the Minister continue to defend the banking industry that is happy to make loans at unusually low interest rates to firms working out of the Cayman Islands when farmers and small-business owners are offered rates here that they cannot possibly afford which is what the Minister referred to from being told during his travels around the country? 
Hon BILL ENGLISH 
: As I have said the behaviour of the industry is nothing in particular to do with my own role. It is dictated by the regulatory regime which is as far as I am aware supported by the whole Parliament. I have not heard any particular suggestions about how that ought to be changed. It is also determined by the law of the land that industry is expected to behave lawfully and if those involved do not behave in that way then the Crown will take action. The Crown has taken a court case against the banks. It is also determined by the behaviour of the banks’ customers and probably the least influential group to the industry is Opposition MPs. 
Public Services—Privatisation 
9.  
GRANT ROBERTSON (Labour—Wellington Central) 
 to the  
Minister of State Services 
: Is it Government policy to privatise the delivery of public services? 
Hon TONY RYALL (Minister of State Services) 
: 
 We want to have a strong and efficient Public Service and we will continue the long-time practice of contracting out in areas where that benefit taxpayers and consumers. 
Grant Robertson 
: Will he rule out the privatisation of key public services in particular in the areas of education health and housing? 
Hon TONY RYALL 
: I think the member is trying to create a picture of a slash-and-burn approach to the Public Service. This is not the approach of this Government but it does surprise me that the member would even broach the question because he is from Labour which while in Government cut the number of Public Service jobs by 33000 between 1985 and 1990 a period when Annette King and Phil Goff were senior members of that Government. 
Grant Robertson 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I ask members to please respect the Standing Orders. A point of order is being called by one of their colleagues. 
Grant Robertson 
: Leaving aside the fact that I was in the third form in 1985 I did actually ask the Minister— 
Mr SPEAKER 
: If the member commences a point of order in that manner it invites disorder as he has just heard. He will not commence points of order in that manner. I will hear his point of order now. 
Grant Robertson 
: I asked the Minister a very straight question. I asked whether he will rule out the privatisation of key public services in the areas of education health and housing. That question was not addressed. 
Mr SPEAKER 
: The member cannot expect a yes or no answer but in relation to a fairly straight question the Minister did launch into a political tirade. I invite the Minister to answer the question. 
Hon TONY RYALL 
: Contracting out is used frequently in the Public Service already and if that can improve public services then this Government will consider it. Contracting out is already used throughout the education service such as with school buses and the development of curriculum resources and early childhood education for example is privately provided. In the health service the care of the elderly is privately provided as are home-care services and laboratory services. The previous Government had the biggest single privatisation in the health service during its term when it sold off the Otago and Southland laboratory services. 
Jacqui Dean 
: What information has he received on Public Service redundancies during times of growing unemployment? 
Hon TONY RYALL 
: Newer members will be shocked to hear that the Public Service was cut by a massive 33000 jobs during the first term of Mr Goff and Mrs King as Cabinet Ministers. Did they slash education jobs? Surely not! They cut 1800 education jobs. In the Iwi Transition Agency 716 jobs were cut. In the Department of Labour did they cut the jobs of people dealing with the unemployed? Surely not! They cut 323 jobs. In transport did they cut the jobs of the people working on roads? They cut 465 jobs. Finally in the New Zealand Forest Service did they cut the jobs of the people dealing with greenhouse gas? They cut 4000 jobs! I repeat— 
Mr SPEAKER 
: We have had quite sufficient an answer. 
Hon Jim Anderton 
: Has the Minister seen the Treasury working paper 99/10 produced while he was a Minister in the then National Government that privatised New Zealand Rail which investigated higher productivity as a result of that privatisation? If so does he agree with the Treasury report that privatising New Zealand Rail was a glittering example of how to raise productivity in the public sector by privatisation? 
Hon TONY RYALL 
: I have not had an opportunity to see that report but I would suggest the member ask that of the people who privatised the Telecom Corporation of New Zealand the New Zealand Post Office the Post Office Savings Bank the Shipping Corporation of New Zealand the Government Printing Office and Government Computing Services—people that he shared being in Government with for 9 years. 
Grant Robertson 
: Does the Minister agree with Bill English who was quoted today as saying: “we are talking about significant and lasting change to the Public Service” or does he agree with the Prime Minister who said last year: “I also want to reassure people … that a new National Government is not going to radically reorganise the structure of the public sector.”? 
Hon TONY RYALL 
: Of course I agree with both of them. I also agree with Phil Goff when he said: “Thousands of jobs in the public sector have now gone because there was no need for them if those organisations were to operate effectively.” That is what Phil Goff said when he and his crowd got rid of 33000 public servants and there are many people in Wellington who do not forget that. 
Grant Robertson 
: Does the Minister agree with the following statement in relation to public services: “Few problems are solved by significant reorganisations—in fact many more tend to be created. It is easy to underestimate the amount of energy and inspiration soaked up by institutional change as well as the loss of personal and institutional knowledge. … there will be no wholesale reorganisation or restructuring across the public sector.”? That was John Key in October last year. 
Hon TONY RYALL 
: Of course I agree with the Prime Minister. I think his comments are completely relevant and would have been just as relevant when Phil Goff and Annette King got rid of 865 public servants at the Ministry of Agriculture and Fisheries 319 at the Department of Conservation and only 35 at Treasury. 
Hon Sir Roger Douglas 
: Would the Minister agree that the incentive structure within the public sector which is often dominated by a monopoly is such that it is vital that Government departments and enterprises face competition; if not why not? 
Hon TONY RYALL 
: I think there is no doubt that there is a greater opportunity available for the use of the contracting out of services and for the smarter use of the private sector in many parts of the Public Service. I know that particularly in the health portfolio we see the private sector as providing a supplementary support to improve the amount of elective surgery in New Zealand because despite a doubling of the health budget over 9 years fewer New Zealanders were getting surgery under the previous Government. 
Hon Sir Roger Douglas 
: Does the Minister agree that bringing internal or external competition to the public health care system could see improvements in productivity of at least 25 percent thereby freeing up billions of dollars for other uses including tax cuts or additional health care; if so when will he turn his back on government by opinion poll? 
Hon TONY RYALL 
: I do not think I have ever been accused of that. I think there are greater opportunities for smarter use of the private sector. In fact the previous Government agreed with that. It undertook the single-biggest privatisation in the history of the health service when it sold the Otago and Southland laboratory services to the private sector. That was a significant multi - tens of millions of dollars sale and I think the members opposite are very happy that they made that sale. 
Hon Jim Anderton 
: To assist the Minister I seek leave to table Treasury working paper 99/10. It says welfare has increased from the privatisation of New Zealand Rail Ltd because of the remarkable improvement in its productivity. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Greenhouse Gas Reduction—Engagement with Public 
10.  
NICKY WAGNER (National) 
 to the  
Minister for Climate Change Issues 
: What effort has the Government made to engage with the public on reducing New Zealand’s greenhouse gas emissions and the setting of a target for 2020 to help conclude a global agreement at the Copenhagen conference in December? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 The decision on 2020 emissions reductions is significant and will impact on all New Zealanders so over the adjournment we went about engaging with New Zealanders on that 2020 target. Nine public meetings were held across the country involving over 1600 people. We also had three meetings with business groups a national hui with Maori leaders and last night held a webcast panel discussion. The feedback from those meetings will be considered alongside scientific economic and foreign affairs advice in making a decision on New Zealand’s contribution to this global problem. 
Nicky Wagner 
: Is the baseline for setting the 2020 target the 1990 levels; if so does the fact that New Zealand’s gross emissions have risen by 24 percent since then not present a difficult challenge for New Zealand? 
Hon Dr NICK SMITH 
: The member is correct and that does need to be taken into account. Officials advise that on a business-as-usual basis emissions would be 41 percent above 1990 levels by 2020. We are fortunate currently that our emissions growth is being offset by trees that were planted in the 1990s but that situation will be reversed in 2020 due to the age class of our Kyoto forests and that makes New Zealand’s challenge in 2020 particularly difficult. 
Nicky Wagner 
: What additional reports has the Government sought to enable it to set a 2020 emissions target? 
Hon Dr NICK SMITH 
: Firstly there has been significant uncertainty over New Zealand’s forest data which has seen billion-dollar variations in our Kyoto balance. A major investment has been made in the Land Use and Carbon Analysis System which utilises satellite imagery data to provide accurate data on forests and this information will be available to Cabinet before it makes the decision. The Government has also commissioned specific analysis on the economic costs of various targets and that report will also be used to inform the Government’s decision on a 2020 target. 
Charles Chauvel 
: When the Government determines the 2020 target for New Zealand what weight will it give to the significant public support expressed at the recent consultation meetings for a 40 percent target relative to the weight to be attached to the other criteria that the Minister has outlined? 
Hon Dr NICK SMITH 
: There was a range of views expressed at the meetings. For instance in Hawke’s Bay and in more provincial areas people were quite conservative particularly those from the farming community who were very nervous about the impacts of a bold target. There was an organised campaign by Greenpeace around a 40 percent reduction by 2020. Those advocating a 40 percent reduction need to explain to their fellow New Zealanders how that can be achieved when New Zealand’s emissions have gone up by 24 percent over the last 18 years. 
Jeanette Fitzsimons 
: What plans does the Minister have to counter the misinformation repeatedly published in the rural papers which has led many farmers to honestly believe that cows are carbon neutral and emit no greenhouse gases that climate change is not human-induced and that agriculture should be exempt because the world needs our butter and meat and if he does not have any such plans how will he set a target that will be supported by both town and country? 
Hon Dr NICK SMITH 
: The Government as part of the consultation on the 2020 target has been quite upfront with the farming community about the fact that agricultural emissions are contributing to human-induced greenhouse gas emissions and to global warming. Equally so I would say that the major players in the industry—and I include both the meat industry and the dairy industry—are actively and quite constructively engaging to see how the agricultural industry can constructively contribute to a solution. I say that we need to be cautious though. Those who are promoting very bold targets need to recognise that the technological challenges around reducing emissions from agriculture are quite difficult for New Zealand. 
Maori Development—Priorities 
11.  
KELVIN DAVIS (Labour) 
 to the  
Minister of Maori Affairs 
: What are his priorities for Maori development? 
Hon Dr PITA SHARPLES (Minister of Maori Affairs) 
: 
 My priorities are to achieve whanau ora and tino rangatiratanga in accordance with the promise of partnership expressed in Te Tiriti o Waitangi. 
Kelvin Davis 
: Given that 400 to 500 Maori are joining the dole queue each week does he not think it would have been better to hold 21 hui on Maori job creation or Maori educational underachievement than on a flag? 
Hon Dr PITA SHARPLES 
: Many issues face Maori and in terms of employment I am actively focused on a range of issues. I have an economic task force which is creating opportunities for employment as well as for business and for iwi industry. 
Hon Ruth Dyson 
: Name one. 
Hon Dr PITA SHARPLES 
: Trade training. On Thursday I am going to announce 250 places for Maori trade trainees. 
Mr SPEAKER 
: I am concerned and will seek advice on the flying of flags in this Chamber. In the meantime I ask the honourable member please to take them down. I will seek advice. If I am wrong I will fully apologise to the honourable member. 
Te Ururoa Flavell 
: How is the Minister promoting and protecting the exercise of tino rangatiratanga by Maori? 
Hon Dr PITA SHARPLES 
: The right to autonomy self-expression and self-determination underpins my consideration of all issues. This should be obvious in the high-profile work that I am doing on reviewing the Foreshore and Seabed Act bringing in a shift of Government— 
Hon Trevor Mallard 
: Who wrote this? 
Hon Dr PITA SHARPLES 
: I wrote it; I can write. I am working for Maori representation on the Auckland Council which I am involved in plus shifting the Government’s opinion on the Declaration on the Rights of Indigenous Peoples—something that member’s party should have endorsed. 
Kelvin Davis 
: What does it say about the Minister’s priorities for Maori development if during this recession symbolism comes before creating Maori jobs and raising Maori educational underachievement? 
Hon Dr PITA SHARPLES 
: It does not come before those things; it comes as well as them. There are many issues with Maori and as I spelt out my employment activities will create a lot of training positions plus employment and as well as that education. I am launching a literacy programme in South Auckland very shortly reviewing kaupapa Maori education and opening a trade agency in a school. We are involved in many issues for the betterment of Maori people. 
Te Ururoa Flavell 
: Has the Minister seen any reports on progressing his Maori development priorities? 
Hon Dr PITA SHARPLES 
: I have seen a report from the  
National Business Review  
of 10 July 2009 that reported on an impressive— 
Hon Trevor Mallard 
: It is well named; the Tory rag supporting the Maori Party! 
Hon Dr PITA SHARPLES 
: Do you not read it? It reported on an impressive list of wins in Maori development including a possible repeal of the foreshore and seabed legislation that a Maori flag is to fly on Waitangi Day greater resources to speed up Treaty negotiations ratification of the United Nations Declaration on the Rights of Indigenous Peoples having two Ministers of the Crown being in charge of Te Puni Kokiri a planned major devolution of welfare spending the gaining of one or more Maori seats on the Auckland super-city council protection of the Maori seats in Parliament and a constitutional review—ea! 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I did not want to interrupt the Minister as I was enjoying his answer but I think he referred to you as endorsing a particular thing three times in his answer. I know we have— 
Mr SPEAKER 
: The member has made his point; he will now resume his seat. I simply ask the Minister to in the future be careful not to use the word “you” because he brings the Speaker into his answer and he should not do that. 
Victoria Park—Roading 
12.  
DAVID BENNETT (National—Hamilton East) 
 to the  
Minister of Transport 
: What progress has been made on advancing the Victoria Park road of national significance? 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 Last Monday I was pleased to attend with the Prime Minister the New Zealand Transport Agency’s announcement of its preferred tenderer for the Victoria Park project. I congratulate the winning V-Formation consortium which includes some of our leading infrastructure firms. This is an important milestone for the project and I look forward to construction beginning in November 1 year earlier than originally planned. 
David Bennett 
: What are the benefits of bringing this project forward? 
Hon STEVEN JOYCE 
: This project when completed will eliminate a major choke point on one of the busiest stretches of the Auckland motorway network and will greatly ease congestion for the 160000-plus vehicles that use that route each day including people who travel to and from the North Shore and Auckland’s port. It is estimated that 120 people will be working on the project within 6 months rising to about 300 by the middle of next year and that will be maintained until the project is finished. Of course that does not include the downstream impact for businesses and workers involved in related work. 
David Bennett 
: How was this project able to be brought forward? 
Hon STEVEN JOYCE 
: Victoria Park is one of the first big projects to benefit from the Government’s decision to increase funding for State highway construction by $1 billion over the next 3 years through the National Land Transport Fund. Victoria Park was scheduled to commence construction in November 2010 but under the previous Government’s policy statement there was doubt that even that date would have been met. Without the additional funding this project might never have got off the ground; neither would the jobs and economic benefits it will now bring. 
Questions to Members 
Education Estimates—Supplementary Question 
1. 
Hon MARYAN STREET (Labour) 
 to the  
Chairperson of the Education and Science Committee 
: Is the question of considering whether to forward a supplementary question on the estimates for 2009-10 relating to advice the Ministry of Education or Tertiary Education Commission provided relating to the Budget’s funding of universities on the committee’s agenda for its next meeting? 
Hon TREVOR MALLARD (Deputy Chairperson of the Education and Science Committee) 
 on behalf of the  
Chairperson of the Education and Science Committee 
: Yes. The committee will reconsider whether to forward a question on that issue to the Minister at its meeting tomorrow. 
Hon Maryan Street 
: Under what agenda heading is the matter to be considered? 
Hon TREVOR MALLARD 
: It is to be considered under the heading “Notice of Motion: Estimates for Vote Education and Education Review Office” and it will involve the reconsideration of four estimates questions that were not referred for written response from the last committee meeting. 
Education Estimates—Supplementary Question 
2. 
MOANA MACKEY (Labour) 
 to the  
Chairperson of the Education and Science Committee 
: Is the question of considering whether to forward a supplementary question on the estimates for 2009-10 relating to advice the Ministry of Education or Tertiary Education Commission provided relating to the Budget’s impact on regional and rural polytechnics on the committee’s agenda for its next meeting? 
Hon TREVOR MALLARD (Deputy Chairperson of the Education and Science Committee) 
 on behalf of the  
Chairperson of the Education and Science Committee 
: Yes. The committee will reconsider whether to forward a question on that issue to the Minister at its meeting tomorrow. 
Moana Mackey 
: Why is the matter being reconsidered? 
Mr SPEAKER 
: I am afraid that question is out of order. I will give the member a chance if she wishes to ask a supplementary question that is in order but it would in fact be a breach of privilege to try to answer a question relating to previous decision-making of the committee. 
Hon TREVOR MALLARD 
: I raise a point of order Mr Speaker. That is presuming that an answer relating to the previous meeting is given. I do not think you can assume that. 
Mr SPEAKER 
: The matter is pretty simple because as chairperson the chairperson cannot answer why something took place. It is not the chairperson’s responsibility to explain why something took place. That question is simply absolutely out of order. I have ruled that it is out of order. I have invited the member to ask a further supplementary question. 
Moana Mackey 
: Why is it on the agenda for the meeting tomorrow? 
Hon TREVOR MALLARD 
: The matter is on the agenda for the committee tomorrow because there has been a request to reconsider the issue placed on that agenda. 
Education Estimates—Supplementary Question 
3. 
CARMEL SEPULONI (Labour) 
 to the  
Chairperson of the Education and Science Committee 
: Is the question of considering whether to forward a supplementary question on the estimates for 2009-10 relating to advice the Ministry of Education or Tertiary Education Commission provided relating to the supplying of Cabinet papers on the youth guarantee scheme on the committee’s agenda for its next meeting? 
Hon TREVOR MALLARD (Deputy Chairperson of the Education and Science Committee) 
 on behalf of the  
Chairperson of the Education and Science Committee 
: Yes. The committee will reconsider whether to forward a question on that issue to the Minister at its meeting tomorrow. 
Carmel Sepuloni 
: What precedents will the chairperson rely on during the consideration of this matter? 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. I ask you to think very carefully about that question. Certainly in asking about precedents the question would be within the Standing Orders but for goodness’ sake it is somewhat trivial. We have the Standing Orders and we have an acting chairperson who has accepted agenda items. Do we really need to go through the farcical sort of process we are going through at the moment? 
Hon TREVOR MALLARD 
: Speaking to the point of order— 
Mr SPEAKER 
: I do not need to hear any further argument on the matter. The honourable member acknowledged that the question probably is within the Standing Orders and therefore the member is entitled to ask it. I will hear the Hon Trevor Mallard in answer. 
Hon TREVOR MALLARD 
: In researching this issue as acting chair I have been unable to find any precedents whatsoever. 
Education Estimates—Supplementary Question 
4. 
KELVIN DAVIS (Labour) 
 to the  
Chairperson of the Education and Science Committee 
: Is the question of considering whether to forward a supplementary question on the estimates for 2009-10 relating to advice the Ministry of Education has provided on each of the expenditure reductions within Vote Education on the committee’s agenda for its next meeting? 
Hon TREVOR MALLARD (Deputy Chairperson of the Education and Science Committee) 
 on behalf of the  
Chairperson of the Education and Science Committee 
: Yes. The committee will reconsider whether to forward a question on that issue to the Minister at its meeting tomorrow. 
Kelvin Davis 
: Is the question relevant to the estimates examination? 
Hon TREVOR MALLARD 
: In that case I will take the ruling of the chairperson who has ruled that these matters are relevant matters for estimates consideration. 
Personal Explanation—Document Tabled 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 I raise a point of order Mr Speaker. Earlier in question time the House gave me permission to table a letter from the Minister for Social Development and Employment regarding weekly unemployment benefit numbers. In fact it is a written answer to a written question. 
Mr SPEAKER 
: The honourable member has corrected the leave she sought. I appreciate her doing that. Is there any objection? Well it is a written answer but my having put it before I ask whether there is any objection to that written answer being tabled. There is none. 
Tariff (AANZFTA) Amendment Bill 
Customs and Excise (AANZFTA) Amendment Bill 
Third Readings 
Debate resumed from 2 July. 
DAVID BENNETT (National—Hamilton East) 
: 
 It gives us great pleasure to talk about the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill this afternoon. This legislation relates to something that will be of benefit to New Zealand for a long time in the future as our country develops and as the economies of the world and our region change to take into account the growing economic importance of the Asia-Pacific region. 
Many New Zealanders will look back on this legislation in a few years’ time and say that it was very important for the future of our country. Essentially New Zealand is becoming part of a host of free-trading countries in a very important bloc that will dominate world trade in the next generation or so and will be of great advantage to New Zealand which is a primary-producing economy and therefore able to fit neatly within the manufacturing economies that make up the ASEAN-Australia-New Zealand Free Trade Area. 
This legislation is important when we consider that New Zealand is a young country finding its place in the world of economic development and that the other countries represented in this bloc of trading partners are also young countries finding their feet. It represents a commonality not only of economic interest but also of political and geographical interest because New Zealand shares many common denominators with other countries in this group. Not only do we rely on this group to be an important factor in global and regional security we also rely on this group as our friends and neighbours when it comes to advocating on a world stage. So there are a lot of advantages in New Zealand’s going into this economic combination with these other countries. This bill makes New Zealand’s domestic legislation of a nature that allows us to proceed and be successful. 
When we look at the ASEAN countries—that is the countries of the Association of South-east Asian Nations—we see that they represent a very big and growing percentage of our exports. New Zealand exports to this region have increased by 121 percent since the year 2000. This legislation is a starting point and a very successful starting point for our economy. Imports over this period of time have also increased reflecting the trade advantage that these countries have with the New Zealand economy. Within the area we see a market of more than 566 million people and this accounts for more than $1.4 billion of global trade. 
Chris Hipkins 
: Put some passion into it! At least look excited. 
DAVID BENNETT 
: The members of the Labour Party are not excited about this legislation. They do not see the economic gains for New Zealand whereas the National Government does. We see that there is a huge gain to be made. Represented in the association are countries that have a common interest with us and we have many common backgrounds in the sense of having a historical link with many of these countries as well. 
This legislation is part of the free-trade mantra that is important for New Zealand as we look at getting out of this economic recession. If we do not have trade with other countries we cannot grow the productive side of the New Zealand economy. That was lacking under the previous Government which did not grow the productive side of this economy. The tradable side of the New Zealand economy did not grow under the Labour Government and that was not in the best interests of New Zealanders. But this legislation is in the best interests of New Zealanders. We will grow the productive side of the New Zealand economy. That is part of the process we are engaging in through this legislation. 
I think it is important that we recognise the long-term benefits for the New Zealand economy of this trading agreement. We need to ensure that the New Zealand legislature is of sufficient support to enable this agreement to proceed. That is what we are looking at in this legislation today; we support the legislation fully. We look forward to the House passing it in the best interests of the New Zealand economy going forward. 
STUART NASH (Labour) 
: 
 That was an impassioned speech from Mr Bennett. I tell him that his passion for international trade just shone through there—fantastic! I stand in support of this legislation. As Mr Bennett said we usually stand together as a Parliament on free-trade agreements and international trade agreements— 
Hon Member 
: Most of us. 
STUART NASH 
: —most of us. It is fantastic legislation and I take my hat off to Tim Groser. He is a good man and a very experienced trade negotiator but—come on! I would like Mr Bennett to give credit where credit is due for goodness’ sake. New Zealand’s next Prime Minister Phil Goff— 
Hon Members 
: Ha ha! 
STUART NASH 
: —oh sorry; will it be Bill English—was the man who negotiated this bill. Phil Goff went overseas and spent considerable time and energy negotiating this bill on behalf of New Zealand. Part of the vision for Helen Clark’s Government was to increase our international competitiveness our international trade flows through free-trade agreements. This legislation is fantastic and I tell members—and I tell Mr Bennett—that the agricultural sector loves it. I have a quote from Federated Farmers: “Despite all the doom and gloom in the other sectors it strategically sets New Zealand up for the long haul and farmers appreciate that.” Farmers really appreciate what Labour has done for the New Zealand economy and finally farmers know that Labour is the party of the land. Labour is the party of farmers; in fact all one has to do is have a look at what we did around Fast Forward. That was a fantastic initiative that pumped $700 million into recognising the value of our agricultural sector. 
Chris Hipkins 
: What did the Nats do? 
STUART NASH 
: That is a very good question. What have the Nats done for farming? What have the Nats done for the agricultural sector? I tell Mr Bennett that they have not done much at all. I know that he appreciates what happened in farming under the Labour Government. He did very well. But what has happened under the first year of the National Government? I tell him: “Oh mate—it is not good. Lion Red!” Let us face facts: agriculture forestry and land-based industries are still the backbone of this country which is why these sorts of free-trade agreements are absolutely fantastic for the country. But the business has changed. The business of agriculture the issues the challenges and the opportunities have changed and now it is about developing international contacts international links and international partnerships. 
Phil Goff has a vision for New Zealand. He went out as Helen Clark’s trade negotiations Minister and negotiated this deal with vision with foresight and with a plan of where we wanted to go. It was aspirational. It was aspirational as opposed to the actions of the National Government which has cut adult community education. Adult community education according to PricewaterhouseCoopers was worth $7.4 billion to the New Zealand economy yet National has cut it. Those were people who were going to train themselves to become better New Zealanders and to contribute to the economy and in export industries as well but National has cut funding. Where is the aspiration there? 
This legislation is truly aspirational because it is about putting New Zealand out into the international market and getting our brands out there. When Phil Goff negotiated this agreement he did it with vision and with aspiration and he walked the walk. As I mentioned I support this legislation for a number of reasons. The first and foremost is that it covers an area comprising about 500 million people—500 million people. That is a hell of a big market. 
Chris Hipkins 
: A lot of customers. 
STUART NASH 
: It is a lot of customers and a lot of these people are entering the age of consumerism for the first time. There is a recession going on in the developed world but in the developing world a whole lot of these 500 million people for the first time have money in their pockets and they want to buy what New Zealand can produce. When they see the New Zealand brand they understand what it stands for and their market is a hell of a big market. This region actually contributes $1.4 trillion to global trade. It is a significant trading bloc. In fact it contributes about $4.7 billion or about 10 percent of all New Zealand’s exports and of that about $2.2 billion is from dairy actually so even our largest company even Fonterra can benefit hugely from these free-trade agreements. 
As Mr Bennett said the value to New Zealand of this market since 2000 has increased by over 100 percent. Over the 9 years of a Labour Government trade into this market increased by well over 100 percent. In fact in the last 3 years of the Labour Government trade increased by over 24 percent—that is there was 24 percent growth under the Labour Government. That is how aspirational this legislation is because Phil Goff the next Prime Minister of New Zealand knew that this was where our future lay. He went out there he courted global trade and he got this agreement up and running. It is fantastic and aspirational. We import $7.5 billion worth from these economies; this legislation is hugely beneficial to this country and this economy. 
As I mentioned this legislation encapsulates a huge part of Labour’s vision for New Zealand and that economic vision is around greater economic international development. Sustainable economic growth for this country can really be achieved only through greater international agreements and engagement. Let us face facts: we are a country of just over 4 million people. If we can get it right here we can take it international. We do not have one large company that has not grown because of international engagement. This legislation will allow that to happen. This legislation will allow some of the 97 percent of companies that are now small to medium sized enterprises to get out there and make it happen. It is absolutely fantastic. In this day and age of globalisation economies the size of New Zealand need to develop country brands and a whole lot of brand attributes that sit against Brand New Zealand. We did that very well under Labour. 
Chris Hipkins 
: “100% Pure”. 
STUART NASH 
: “100% Pure” and 100 percent fantastic. I fear for this brand though when people like Rodney Hide stand up and doubt climate change. Goodness me they think climate change does not exist. We have people like Nick Smith who go to international conferences and in the space of about 6 months we become the laughing stock after having been the leaders. How aspirational is that? It is a shame. It is a shame for our exporters— 
Chris Hipkins 
: It’s disgraceful. 
STUART NASH 
: That is a much better word. It is absolutely disgraceful. We need to develop international brand attributes that do not go against the brand that Labour has worked so hard to develop over the last 9 years. Then what happens is that companies go out and leverage their own brand against Brand New Zealand. Do members know who does this? It is New Zealand Trade and Enterprise. New Zealand Trade and Enterprise manages New Zealand’s international marketing and development. It goes out there and finds the channels to market and the customers and it makes it happen. 
Chris Hipkins 
: Didn’t its funding get cut? 
STUART NASH 
: What happened to its funding? 
Chris Hipkins 
: Its funding got cut. 
STUART NASH 
: By $10 million? 
Chris Hipkins 
: Something like that. 
STUART NASH 
: The member must be kidding me. Has $10 million been cut from our international marketing manager at this time? That is scurrilous. I cannot believe that. Why would the Government do that at this time? Why would it do it when it is implementing one of the most important free-trade agreements? I cannot understand it and I bet that Amy Adams cannot understand it at all. She is sitting there shaking her head in amusement. 
It shows that Bill English just does not understand the economic drivers of this country. It is about sustainable economic development. It is appalling that he just does not understand. The reason this is so important is that 97 percent of New Zealand businesses are small to medium enterprises. They cannot afford to employ their own international marketing managers. They need New Zealand Trade and Enterprise and the last thing they need is for it to have $10 million cut from its budget. 
So I am fully supportive of this legislation for a number of reasons. First and foremost this implements a Labour vision for New Zealand. I would dearly love to see the vision and the resources necessary behind the legislation to make it happen. I am very very sad—sad for myself sad for the Government sad for the country and sad for New Zealand businesses because they know that it will be another 2 years and 2 months before the resources to implement this vision are put in place. Thank you very much. 
AMY ADAMS (National—Selwyn) 
: 
 I am delighted to have the chance to speak in support of these two bills: the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill. As we have already heard in the debate these bills will make the changes we need to make to our domestic legislation so that we can enter into the ASEAN-Australia-New Zealand Free Trade Area. 
We have heard already from all sides of the House in this debate as is usually the case in these free-trade matters of the importance of free trade and exports to our economy. I do not think anyone in this House would cast any doubt on the fact that it is our export economy that will lead us out of the recession. That is one thing that this National-led Government understands at a fundamental level. Our businesses our exporters and our ability to be the food basket for the Asia-Pacific region in particular will be New Zealand’s pathway out of this recession. Because of that we have to put in place every assistance that we can as a Government to ensure that the roadblocks to our exporters are addressed. The free-trade area that will be created will go a huge way towards freeing up one of the most fundamental progressive and developing areas of trade in the world. 
Let us look at the figures. In 2006 the ASEAN area represented $2.6 billion worth of trade to New Zealand. By 2007 a year later that had gone up to $3.1 billion. By 2008 it was up to $4.6 billion. That sort of growth represents the strong importance of this area to our economy and that is why when this agreement was signed in Thailand in February this year New Zealand should have let out a collective cheer and celebrated. Agreements like this help ensure that our exporters will be able to build the productivity that this country so desperately needs. 
I want to talk for a little minute about the rural sector which is essential to my electorate of Selwyn. I represent a vast area of rural production. In Selwyn that production is things like sheep arable crops horticulture viticulture dairy beef venison—the list is pretty much endless. In fact the other day I even visited a wasabi exporter who is based in Selwyn. Those areas of rural production primary production and horticulture are as I say the foundation for exports. For my constituents who rely on exports agreements like this that open doors for them are absolutely essential. I know that the economy in Selwyn as in all New Zealand is fundamentally tied up with our ability to get our goods into offshore countries. Our population is not strong enough that we can rely entirely on domestic trade. We must export. We are a small country but we can do some things incredibly well and agriculture is one of those things. 
We heard the last speaker Stuart Nash pay lip-service to the farmers of New Zealand which is pretty rich coming from a party that spent the last 9 years when it was in Government kicking farmers criticising them blaming them and running them down at every single opportunity. Now that Labour is in Opposition it is trying to find friends anywhere it can. The National Party has always stood up for agriculture. It is the party that has always understood the need to get behind our farmers our winemakers and our growers. That commitment to agriculture can be seen in our commitment to trade and to growing our export markets. 
In my patch we have a company that in the space of 2 years has gone from nothing to a $100 million processing plant solely on the back of its exports into the Asian market. That is the sort of business we need to be encouraging. That is the sort of business that will get the country through the recession. That is the sort of business that will benefit from this agreement. That is why I am so proud to support this legislation. I commend the Minister of Trade Tim Groser for his work in concluding the agreement. Thank you. 
MICHAEL WOODHOUSE (National) 
: 
 It is my pleasure to add my support to the Tariff (AANZFTA) Amendment Bill and the Customs and Excise (AANZFTA) Amendment Bill for the ASEAN-Australia-New Zealand Free Trade Agreement. That could be one of the longest titles for legislation that I have seen in this House. In particular I endorse the comments of those who spoke earlier today and on previous sitting days about the importance of free-trade agreements to New Zealand’s economy and in particular to our recovery from the present recession. Few in this House would disagree with the importance of the role that our export sectors will play in that recovery. I think that the biggest risk to that export-led recovery is protectionism. Already there is evidence that barriers are being considered or in some cases are already in place that could seriously affect our prospects for that export-led recovery. The best means of managing that serious risk is to put in place free-trade agreements with our trading partners. 
In the ASEAN nations there are already high levels of trade and significant growth even before the implementation of this agreement. New Zealand exports to ASEAN nations have increased by over 120 percent since 2000 to $4.6 billion in 2008. Imports over that same period increased nearly 250 percent to $7.6 billion. But as significant as those numbers are they pale by comparison with the possibilities that a free-trade agreement creates. Those countries—Brunei Cambodia Indonesia Laos Malaysia Burma the Philippines Singapore Thailand and Viet Nam—have more than half a billion people living in them. They comprise about 10 percent of the world’s population. They are also very much a part of the group of developing countries whose economies are growing at a rapid rate many of them with double-digit GDP growth. Even during this worldwide recession the scale of which we have not seen for nearly 80 years many of those countries still experience strong growth. 
Those who are listening carefully will have noticed that there is quite an imbalance between our exports to those nations and our imports from them. I think this is a good example of what the Prime Minister and the Minister of Finance have been talking about since the Budget. Those imports have contributed to debt-fuelled increases in consumption that combined with large increases in Government spending have meant as the Prime Minister stated last week that “In recent times the New Zealand economy has flattered to deceive.” The tradable sectors—things like agriculture fisheries manufacturing tourism and forestry—have effectively been in recession for the past 5 years as interest rates exchange rates high taxes and an increasingly complicated regulatory environment have made it more and more difficult to export and those exports have become less and less competitive. 
This Government has embarked on a number of initiatives to improve that export performance. No one of them is a magic bullet as the Opposition appears to think but the free-trade agreements are very much part of those initiatives. It is worth acknowledging that the Labour Opposition also supports free-trade agreements and made good progress on free-trade agreements with China and others and on this free-trade agreement during the term of the previous administration. But it is also worth pointing out that the Association of South-east Asian Nations was founded in 1967. New Zealand became a dialogue partner shortly after that under the Holyoake Government and the dialogue established that was the precursor to this free-trade agreement started as long ago as 1995 or 1996 under the Jim Bolger - led National Government. I am sure the present Government and our hard-working Minister of Trade the Hon Tim Groser will appreciate the continued bipartisan approach to free-trade agreements in the spirit of that shared understanding of the importance of these agreements to the New Zealand economy. 
This agreement will be significant in so far as the outcome of it will be the elimination of tariffs on 99 percent of New Zealand’s current exports to the four key markets within the ASEAN region within 12 years. By any measure that is a pretty speedy response. On full implementation of the agreement it will total savings to New Zealand of $50 million on current trade levels. We can expect those trade levels to significantly increase. There will be improved access to New Zealand markets through the elimination of those tariffs and the possibilities for the agriculture sector as the member for Selwyn pointed out are quite exciting. 
I support the bills and I look forward to their passage in the House. I also look forward to this Government working diligently on a free-trade framework that will result in more agreements in the next wee while. Thank you. 
Bills read a third time. 
Appointments 
Judicial Conduct Commissioner 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I move  
That pursuant to section 7(2) and clause 1(1) of schedule 2 of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 this House recommend His Excellency the Governor-General appoint David Rendel Kingston Gascoigne DCNZM CBE of Wellington as the Judicial Conduct Commissioner for a term of 5 years from the date of appointment having noted that the Attorney-General advises this House in accordance with section 7(3) of the Act that the Chief Justice has been consulted about the appointment. 
The Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 came into effect on 1 August 2005. It provided for the office of a Judicial Conduct Commissioner and set out a statutory regime for dealing with complaints about judges’ conduct. The commissioner is the first port of call for all complaints about judges with the Act requiring all complaints about the conduct of a judge to be directed to the commissioner. One of the aims of this system is to remove from the judiciary the burden of responding to complaints that have no substance. It is not a function of the commissioner to challenge or call into question the legality or correctness of any instruction direction order judgment or other decision given or made by a judge in relation to any legal proceedings or to undermine the immunities that attach by law to the discharge of judicial responsibilities. 
The position requires a person of high standing in the community with demonstrated integrity. The proposed appointee must be familiar with the role of the judiciary and with the principles of judicial independence natural justice and procedural fairness and must be a good communicator. The first appointee as Judicial Conduct Commissioner was Mr Ian Haynes ONZM. He has recently tendered his resignation effective from 12 July 2009. I thank him for his service in the role. 
Mr Gascoigne is a lawyer and professional director. He has held a number of directorships in both the public and private sectors. He began his career with Watts and Patterson as it then was where he became chairman of partners. He was a founding partner and subsequently national chairman of partners of the merged law firm Rudd Watts and Stone which is now known as Minter Ellison Rudd Watts. He is now a consultant to that firm and a member of the firm’s board. Mr Gascoigne is also very experienced in administration of the arts having been chair of Opera New Zealand since 2002 and one of the founding trustees of the New Zealand International Festival of the Arts. He was awarded the CBE in 1989 for his services to film and the DCNZM in 2005 for his services to the arts and business. He received an inaugural Distinguished Alumni Award from Victoria University of Wellington in 2006. 
The term of appointment is for not less than 2 years and not more than 5. It is proposed that Mr Gascoigne’s appointment be for 5 years. The commissioner is remunerated at a rate that is set by the Remuneration Authority. 
The Judicial Matters Bill currently before the House will allow for the appointment of a deputy commissioner who can deal with a complaint when the commissioner has a conflict of interest is absent or is incapacitated or when there is a vacancy in the office of the commissioner. I am pleased to move a recommendation to His Excellency the Governor-General to appoint Mr Gascoigne as the Judicial Conduct Commissioner. 
Hon DAVID PARKER (Labour) 
: 
 I am happy to rise and endorse the recommendation by the Attorney-General that the Governor-General appoint Mr Gascoigne as the Judicial Conduct Commissioner. I thank the Attorney-General for the consultation prior to his putting forward the name of Mr Gascoigne. Mr Gascoigne is as one would expect of a person being promoted for this position a responsible senior lawyer with many years’ experience and with respect throughout the legal community and across both sides of the House. I was fortunate to have experience in dealing with Mr Gascoigne in his prior role as the chair of the Transpower board. I always found him to be a man of integrity and a man of his word. He never played any games. He was responsible and capable. Charles Chauvel will be able to confirm that he was a chairman of partners of Minter Ellison for a number of years. Mr Gascoigne is very experienced in the law and I am sure he will bring the wisdom that is required to deal with the sorts of accusations that are made from time to time against judges. 
Although it is appropriate that we have a Judicial Conduct Commissioner it is also important that that person be wise enough to exercise his or her discretion to reject out of hand complaints that ought not to go forward. There will always be disenchanted litigants who find it convenient to blame the referee when they have a decision that goes against them. We have to be careful that we are not so process driven that we accept at face value all complaints that are made and that we have a vetting process to sort the very rare cases from the other cases so that we are not unnecessarily causing undue attention to be given to what at times can be spurious allegations. We tread a fine line in protecting the institutions we hold dear in New Zealand when we try to balance the need to properly investigate accusations of a serious nature against the need to preserve public confidence in institutions that can be undermined by repeated and sometimes scurrilous allegations against judicial officers. I think that through this Parliament and through the Judicial Conduct Commissioner we are getting that balance right and I am happy to endorse the Attorney-General’s recommendation of David Gascoigne as the initial appointee. Thank you. 
Dr KENNEDY GRAHAM (Green) 
: 
 It is the pleasure of the Green Party to endorse the appointment of Mr Gascoigne to the position of Judicial Conduct Commissioner. Having considered his qualifications we are satisfied that he is eminently equipped to undertake the role and we are entirely confident that he will fulfil the requirements of the position with distinction. We simply wish him well in the execution of his duties. 
CHARLES CHAUVEL (Labour) 
: 
 I want to make a brief contribution to the debate on this appointment. The office of Judicial Conduct Commissioner was established in August 2005 to deal with the issue of complaints against the judiciary. The purpose of establishing the office was to enhance public confidence in the judiciary and to protect the impartiality and integrity of the judicial system. Under the legislation complaints can be made against judges of the various courts set out in section 5 of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004. A very wide range of judges falls within the ambit of that section: temporary associate and acting judges but not obviously retired or former judges. 
As the Attorney-General mentioned the first Judicial Conduct Commissioner was Ian Haynes a past president of the New Zealand Law Society and a former president of the Auckland District Law Society. Mr Haynes is a well respected lawyer in New Zealand and internationally and is the architect of a new model for the governance of the legal profession on which the Lawyers and Conveyancers Act is based. 
One thing that I think it is appropriate to mention in this debate is that the Judicial Matters Bill which was introduced by the previous Labour Government is awaiting its second reading. It seems to me that it is worth commending that legislation to the Attorney-General because it makes some sensible machinery amendments to the legislation that would make the job a lot easier for the candidate currently under consideration for recommendation to the Governor-General. It would allow for the appointment of a Deputy Judicial Conduct Commissioner and it would allow the Judicial Conduct Commissioner in addition to existing remedies that he may exercise to decide to take no further action on a complaint. I think the Attorney-General will know—he is nodding—that one of the frustrations Mr Haynes found in the role was that he did not have those powers. He did not have a deputy to delegate any power to and he had to deal with each and every complaint that came before him. He did not have any power to dismiss them in limine in the event that they were clearly baseless. I urge the Government to consider the merits of that bill because I think that if Mr Gascoigne’s recommendation is adopted by the Governor-General and he is appointed he will find those powers quite necessary. 
I have just one or two words on Mr Gascoigne. As the Attorney-General said he was a founding partner of my old firm now known as Minter Ellison Rudd Watts. I was fortunate to spend some 8 years in that firm with David Gascoigne as a mentor when he was a consultant to the firm and I was a partner. He is a fine person. In addition to the positions that have already been outlined as having been held by him he is also a very distinguished corporate governance expert. He has been a chair of Mitsubishi Motors New Zealand and New Zealand Insurance and he served on the Minter Ellison Rudd Watts board at the same time that I did. 
I would just like to note with some pride that Minter Ellison Rudd Watts is a firm that delights in making its personnel available for public office in this way. There is Cathy Quinn’s contribution on the Securities Commission. David Patterson served on Michael Cullen’s tax review the so-called McLeod Tax Review. Peter Rowe served on the board of the New Zealand Symphony Orchestra. The firm has also made its contribution to the judiciary in the persons of Justices Allan and MacKenzie in the High Court at the moment and Judges Thomas and Crosbie in the District Court amongst others. David Gascoigne joins in that tradition and I am sure he will hold his head high as he performs the important role of Judicial Conduct Commissioner. I certainly wish him well in that role in common with other members of the House. 
Motion agreed to. 
Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill 
Second Reading 
Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) 
: 
 I move  
That the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill be now read a second time 
. I am pleased to move the second reading motion. This bill is an important achievement for those Wellington iwi who are part of the Taranaki Whanui collective. It is important for the Crown and it is important for the people of Wellington. 
The bill gives effect to certain provisions of the deed of settlement that settles the historic claims of the collective in what is known as the Port Nicholson Block. The collective is made up of Te Atiawa Taranaki Ngati Ruanui Ngati Tama and other iwi from the Taranaki area. By 1839 representatives of those iwi had established themselves around Wellington Harbour. They had contact with whalers and traders before the arrival of representatives of the New Zealand Company in September 1839. The settlement covers the area of the Port Nicholson Block which is an area of approximately 271000 hectares spanning what is now Wellington the Hutt Valley Wainuiomata and Eastbourne. In 1839 Taranaki Whanui ki Te Upoko o Te Ika agreed to sell some of this land to the New Zealand Company in what is now known as the Port Nicholson Block purchase. As part of the agreement one-tenth of the land was to be held in reserve for the benefit of the four iwi that now form this collective. But the sad reality is that the Crown and its agents failed to protect the interests of those iwi. 
Although the initial purchase was negotiated by the New Zealand Company the Crown instigated a commission of inquiry into the company’s purchase. Despite the commissioner’s initial view that the greater part of the land claimed by the company had not been alienated and that the explanation of the reserve system was “perfectly unintelligible” the Crown eventually completed the transaction. In the early 1840s significant areas of valuable urban tenths reserves in and around Thorndon were taken for public purposes through a series of endowments. When one walks down Mulgrave Street past Old St Paul’s one may not be aware that that land was originally reserved for those iwi who are now part of the collective or that the pouwhenua at the gates of those grounds mark what was a landing place for their waka. Equally the Wellington Harbour islands were also taken by Crown proclamation in 1843 without any consultation with the Maori owners. Furthermore the Crown assumed ownership of the islands before commencing its inquiry into the validity of the New Zealand Company’s Port Nicholson deed. The use of those islands was denied to those iwi. 
In short the Crown failed to ensure that the agreements reached in 1839 between the New Zealand Company and later the Crown and those iwi who now make up the collective were in fact honoured. As a result those iwi have been deprived of almost all of their lands in the Port Nicholson Block. By 1882 less than 1000 acres from an original allocation of 11000 acres of rural reserves and one-third of the urban reserves remained in Maori ownership. 
Those iwi that now make up the collective also suffered the loss of their connection to Wellington Harbour and the loss of their forests waters and natural resources in the Port Nicholson Block. The deprivation caused by those losses cannot be measured. The losses have inflicted profound pain and suffering. This bill enables the Crown both to recognise its past wrongs and to provide some atonement for its actions and inaction. 
The Crown is providing redress over a number of areas to Taranaki Whanui ki Te Upoko o Te Ika. The harbour islands are being returned to the Port Nicholson Block Settlement Trust with all current reservation classifications retained. Once again Taranaki Whanui will be the owners of the islands while ensuring that the people of Wellington can continue to enjoy them as they do now. The Port Nicholson Block Settlement Trust which is the governance entity for the iwi and the Department of Conservation will jointly manage the islands. The Pencarrow Lakes will also be returned as cultural redress as will Korokoro Gateway and Point Dorset Recreation Reserve. Those are areas that the iwi have a strong association with. In all cases current reserve classifications will be maintained as well as existing public and third-party access. 
Another site of great significance that will be given back to the iwi is Pipitea Marae. This marae sits on what used to be the edge of Wellington Harbour in Thorndon and was part of the historical Pipitea Pa. The Crown has agreed to return the land under the marae to the settlement trust. In the time that the committee has been deliberating on the bill the Ngati Poneke Maori Association and the Port Nicholson Block Settlement Trust have agreed to form a new joint legal entity to administer the marae—the Pipitea Marae Charitable Trust. I think that that is an exciting step forward. The Crown will vest the land under the marae in the Port Nicholson Block Settlement Trust. Following the settlement date the marae land and the improvements will be vested in the Pipitea Marae Charitable Trust. Clause 45 of the bill has been amended to give effect to those arrangements. 
The bill also provides for the settlement trust to purchase a number of commercial properties at market value. Shelly Bay was sold to the settlement trust and the transaction was completed in February this year. The trust also has the opportunity to enter into sale and leaseback arrangements with Government agencies over key properties such as Archives New Zealand Wellington Girls’ College and the Supreme Court. Under that arrangement the trust can choose to purchase the land under those properties at market value and lease the land back to the agencies who will continue to own the buildings. The commercial redress contained in the settlement package will enable Taranaki Whanui to enhance the economic capacity of their members and to regain a position as a key player in the local economy. The settlement has been a long time coming. It has the overwhelming support of the registered members of the claimant community—98.6 percent of the registered adult members voted in favour of accepting the settlement package. 
The bill was referred to the Maori Affairs Committee on 9 September 2008. The committee received and considered 17 submissions from interested groups and individuals including iwi recreational and environmental groups and a number of others. Of those submitters 10 supported the bill. The committee heard eight oral submissions. The committee has now examined the bill and as well as amendments in relation to the marae the committee also recommends it be passed with a number of technical amendments. The bill settles finally and fully all the historical claims against the Crown of those represented by the Port Nicholson Block Settlement Trust. The level of support shown for the bill is recognition of the collective strength that several iwi have been able to gain by coming together to air and settle their grievances with the Crown. Finally I thank the Hon Tau Henare and the Maori Affairs Committee for their careful deliberations on this bill and their recommendations which I endorse fully. I commend the bill to the House. 
Hon MITA RIRINUI (Labour) 
: 
 Otira hei wahi tuatahi maku e Ta Paora koutou ra he ra whakahirahira tenei ki a koutou ake. Na ka roa koutou hikoi mai ana i runga i tenei huarahi kia rongo mai nga taringa o te Karauna i nga tukinotanga o te Karauna ki a koutou otira ki te iwi Maori whanui tonu i nga ra kua taha ake nei. Otira na runga i te ngakau mahaki na runga ano i te rangimarie kua tatu mai koutou i raro i te tuanui o tenei Whare e oti ai te hikoi i hikoi ai e koutou. E tika ana kia mihi ake ki a koutou ki a koe me o tamariki kua tatu mai a me ratou kihai te hara mai ratou kua wheturangihia ratou kua takahia atu te huarahi wairua ana kua tae atu i mua i te torona o Ihoa o nga mano. Nana ratou i tuku mai a i tona wa nana ano i tango atu. Otira kei konei ra koutou hei kanohi hei arero mo ratou kia marama ai te katoa i te ahuatanga o te huarahi i whai nei e koutou. No reira na runga i ena maumaharatanga mihi ake ana ki a koutou. No reira tena koutou tena koutou tena koutou katoa. 
[ 
The first part for me Sir Paul and indeed to others of you is to acknowledge that this is a particularly important day for you. You have travelled this path for a long time so that the Crown can hear about its past wrongdoings to you and indeed to Maoridom at large. Because of your humble and peaceful nature you have arrived here beneath the roof of this House to conclude the journey that you walked. It is apt that I acknowledge you and your children others who have arrived here those who did not come those who have passed on and those who have walked the spiritual path to come before the throne of Jehovah of the multitude. He delivers them and in time takes them. But you are here as a face and representative for them so that everyone understands the condition of the path that you pursued. So having made those reflections I congratulate you. Greetings to you greetings to you and greetings to you all. 
] 
I take this opportunity to acknowledge the presence in the House this afternoon of our very very esteemed guest Sir Paul Reeves and his supporters. It is on their behalf and for the many who have led the charge on this particular and historic event that we stand and speak in the House today. I congratulate them on being here today and on representing those people who are not able to be here—those kaumatua and kuia who have for many many generations and over many decades attempted to gain the attention of the Crown in order that it listen very very carefully to its wrongdoings towards their people. The second reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill is significant. It has been a long journey and it has been a very very painful journey for many if not all of the people involved. 
I also acknowledge and congratulate the people on their tolerance their generosity and on the compromises they have made to satisfy the interests of not just their iwi but also of other iwi who have settled in their rohe and who have specific interests that they wish to protect as well. The generosity and the compromises have certainly been demonstrated in the manner in which the Port Nicholson Taranaki Whanui ki Te Upoko o Te Ika representatives have behaved. It has been an honour to work with them over many years and as recently as the last couple of weeks to be able to listen to their story. Whilst I acknowledge the commitment of the current Minister for Treaty of Waitangi Negotiations to seeing the passage of this settlement bill I need to take the time to acknowledge the contributions of my former colleagues—the Hon Margaret Wilson the Hon Mark Burton and in particular the Hon Dr Michael Cullen. I acknowledge the passion and vigour that he gave to insisting that we make positive progress on this settlement bill. He understood that it had been a long journey for the iwi of Taranaki. 
Can I once again thank the Minister for Treaty of Waitangi Negotiations the Hon Christopher Finlayson for his support of the Port Nicholson Block (Taranaki Whanui ki te Upoko o Te Ika) Claims Settlement Bill. I congratulate him on avoiding any delays in the passage of this bill; I wish I could say that about the Whakarewarewa transfer and I wish I could say that about the Waikato River transfer but it has not been the case. Certainly in this case we have had no delays whatsoever. The Minister provided a lot of detail about the particular components of this settlement legislation. He also provided detail not only of the benefits that will be enjoyed by the iwi of Taranaki but also of the benefits shared with and enjoyed by those iwi who have settled here in Te Upoko o Te Ika. 
I remind the Minister that over the next 3 years the only settlement bills he will be speaking to in this House will be those that have been signed up to by the previous Labour-led Government. But if he wants to increase the number of settlement bills passing through the House in the next 3 years so that he can stand in the House and say that he did it on his own—well I am looking forward to that moment. That is a challenge to the Minister. 
He spoke about some issues that were covered at the Maori Affairs Committee. When I spoke of the generosity of Taranaki Whanui ki te Upoko o Te Ika it was at that point when those particular issues became more relevant and more obvious. The attempts by the representatives of Taranaki Whanui to satisfy the wider interests of the community were discussed by the committee hour after hour after hour. Congratulations must go to the chair of the Maori Affairs Committee the Hon Tau Henare on allowing that debate to continue although if I have anything negative to say about it he may have let the debate continue too long. We might have been having this debate much sooner than we are now. But as the Minister said certain areas of the Upoko o Te Ika settlement are of significant interest to the iwi of Taranaki Whanui. 
I say to members that the whole 271000 hectares is of significance to the iwi of Taranaki Whanui. All of it has a spiritual significance all of it has a historical significance all of it has a cultural significance and in particular for the welfare of its people all of it has an economic significance. When the Minister said that the actions of the Crown had a negative impact on the iwi of Taranaki Whanui ki te Upoko o Te Ika I am sure he would have liked to use stronger language—but we cannot do that in this House—but the acknowledgment certainly is there. 
I described Taranaki Whanui as being generous because they have settled for much less than many would think they deserve. I am sure that all of us in this House shared that sentiment as we have in respect of previous settlement bills but in this particular case this is the capital city. This is the hub of Government. This is the brains of the Crown—here right here in Te Upoko o Te Ika. When many decisions were entered into in the past most of them were done in the absence of Taranaki Whanui. For that reason they were—shall we describe it as—wrongly treated. There is a stronger word for it but I cannot say it in the House and not today. Sir Paul Reeves and supporters are here today to acknowledge the second reading of this very important settlement legislation. 
I am sure that at the Committee stage when we debate some of the changes that have been made particularly for instance in respect of Pipitea Marae and other areas it will become more obvious why it was an issue for Taranaki Whanui and why compromises were made on their behalf. A number of issues were highlighted at the select committee but it was the view of the select committee that many of those issues if not all of them were for iwi themselves to resolve—iwi hapu and whanau. It was not the role of the select committee the Government or the Crown to act as an adjudicator in these particular matters. We have seen that on many occasions and in respect of many of the settlement bills. 
This is the second reading of the bill and I do not want to go on about this particular aspect of this bill but I will have questions to put to the Minister at the Committee stage. I am sure he has the right answers for me. My questions will be along measuring the strength of his support not only for this legislation but also for the other settlement legislation that the previous Government signed up to. 
Once again I offer my congratulations to the representatives and the negotiators for the Port Nicholson Block and those representatives of Taranaki Whanui ki te Upoko o Te Ika. I am sure they are very anxious to have this particular matter resolved so that they can as the Minister of Maori Affairs said have autonomy over their future a certain measure of tino rangatiratanga and get on with their lives. No reira Mr Assistant Speaker thank you very much tena koutou. 
PAUL QUINN (National) 
: 
 In opening I join my cousin Mita Ririnui in welcoming and expressing my best wishes to the representatives of the claimant group who have joined us here today to witness the second reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill. I also express the best wishes of the chairman of the Maori Affairs Committee the Hon Tau Henare who unfortunately could not be with us today because he is carrying on doing other work for the nation in the Auckland Governance Legislation Committee in Auckland. His thoughts are with us and his full support is too. 
I do not intend to speak for too long because there is no question that the iwi and hapu of the Taranaki Whanui ki Te Upoko o Te Ika and others have been waiting since 1839 for this justice. I do however wish to speak to carry out the obvious role this House has of scrutinising the legislation and the deed on behalf of the nation and the people of New Zealand to make sure that the settlement is both fair and enduring. It is on that basis that I stand to support this bill in terms of the settlement for Taranaki Whanui ki Te Upoko o Te Ika and others. 
It is worth reflecting on the fact that this is one of the grievances that have arisen as a consequence of the failure of the settler group—if I can call it that—in 1839 to deal justifiably and in an honourable way with the indigenous people of that time. Of course I am referring to what became commonly known as the Wellington Tenths one of which I was very familiar with for a long time. One of the more well-known tenths was Athletic Park. It was great to see that the return of Athletic Park did not require this bill in terms of giving back and reaching an agreement in respect of land from which the claimant group we are now supporting had been in effect alienated. 
The previous speaker Mita Ririnui made the comment that this was a Labour bill and I acknowledge that. But this is a joyous occasion so I do not want to go down the track of reflecting on some of the issues under the previous administration and its approach to the Treaty of Waitangi because I think it is a time to rejoice. 
Having said that I think that two particular aspects of this bill are important to understand and recognise going forward. They have been briefly touched on but not in the way that I think is necessary in order to highlight and draw them to the House’s attention. The first aspect relates to Pipitea Marae. As the previous speaker said in respect of both the issues that I will raise—one being Pipitea Marae and the other being the Ngati Tama opt-out clause—the select committee was able to make considerable progress and to bring some finality to the two issues through the good grace and support of the claimant group. The select committee offers its thanks to the claimant group for its consideration. 
When the bill was first brought before the select committee the issue in respect of Pipitea Marae was left unsettled. As far as the Government side of the House was concerned that was a wholly unsatisfactory situation for the simple reason that an existing group had property rights over the use of the land. Unfortunately at the stage that the deed came to the select committee those property rights were not recognised to the satisfaction of the select committee. Through the good grace of the claimant group and the good work of the Office of Treaty Settlements the committee was able to resolve that matter. I guess the short message is that in going forward this Government will ensure that in settling one grievance it does not create another. It is very important that we recognise existing property rights and do not create other grievances in the process of resolving current grievances. 
The second issue I will briefly touch on is Ngati Tama’s opt-out clause as set out in the deed and given authority through this bill. That clause provides for the ability of one of the groups that has been associated with this negotiation in very broad terms to opt out. Some sections of Ngati Tama have chosen to opt out but other sections are actually represented around this claimant group’s board table through their representative Neville Baker. This creates confusion. As I think the previous speaker alluded to very briefly the Crown is being forced into a situation where it is asked to adjudicate in disputes between iwi. The Crown should not be in that situation. The select committee was very strong in its commitment to put before this House the fact that opt-out clauses should not carry on. I say again that this is not a practice that the Government will be carrying forward. 
Other than that we have picked up the bill and supported it and we look forward to taking it through as quickly as possible. Thank you Mr Assistant Speaker Barker. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 A tenei e tu ana ki te tautoko nga mihi kua mihia. Ka tapiri atu enei whakaaro ki era o taku hoa a Mita ki a koutou Taranaki Whanui ki Te Upoko o Te Ika. Koutou katoa tena koutou. 
[ 
I rise to endorse the salutations that have been expressed and to add these thoughts to those given by my colleague Mita to you Taranaki Whanui ki Te Upoko o Te Ika. Greetings to you all. 
] 
I wanted to add my opening comments in acknowledgment of Taranaki Whanui ki Te Upoko o Te Ika comprising Te Atiawa Taranaki Ngati Tama and Ngati Ruanui and to say that after a very very long time we are at the point where we can have the second reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill and move into the third and final reading. It is a good signal. When going through  
Hansard 
 I am reminded that the recitation of history which was put on record in the first reading of this bill by the Hon Dr Cullen was one that was substantive and it will stand as a record of the legitimacy of this claim and the worthiness of continuing with a settlement for the people of Taranaki Whanui o Te Upoko o Te Ika. 
I want to highlight notwithstanding the travesty of history that has been experienced in this particular area that I think the acceptance of the necessity to move forward has been courageous. I will always acknowledge that point with those claimant groups that move forward in Treaty settlements because it is a difficult task. 
This particular claim has seen about eight general elections eight Governments seven different Prime Ministers and numerous officials. We as parliamentarians represent a smidgen of the long history associated with this claim. That should not go unnoticed because although there have been several acknowledgments of the claimant groups and the negotiators who have been involved today there have been many more who have preceded them and I know that they too will have acknowledged the people in whose footsteps they have carried out this tremendous task. 
As this is a second reading of the bill it is important to note the chronology of the recent history associated with the claim as well: the mandate of the negotiating team which was reached in January 2004; the terms of negotiation which were signed in mid-2004 during the previous Labour Government; the agreement in principle which was signed in December 2007; and the initial deed of settlement which was signed in June 2008. During June and July the post-settlement ratification process occurred and at that time 7120 registered adult members were eligible to vote out of which 2634 valid votes were cast and of those votes 2597 were in favour of accepting the deed of settlement. Within the context of that brief time line we reached a final deed of settlement in August 2008 and then this bill went to the select committee in September of the same year. 
Submissions were heard largely after the last general election. This provided an opportunity for people I guess if they had some doubt as to levels of support for opportunities for further recourse to viewpoints. The select committee was the next natural step. Although I was not on the select committee I have read the information. The committee received 16 submissions seven of which were heard. That probably is an indicator if at any point in time in the future comments are raised and this applies to many Treaty settlements in terms of there being opportunities for people to have input. As we can see the chronology of history has provided opportunities for people to engage. 
I will now talk about the select committee report on the bill and highlight two things in the report and one thing that has been mentioned by the Minister. Firstly in respect of the Ngati Tama opt-out clause the point was well made in the select committee report that this really is a precedent that the committee does not think should be set in the future. With the best intentioned efforts one would hope that various disagreements or disputes within iwi about aspects of settlements could be settled internally. I know from our own experience in Waikato-Tainui that had the opt-out provision been contemplated we might not have reached a settlement. The same thing might also have been applied to Ngai Tahu. There are many other variables that exist in contemporary modern Maori society that we cannot altogether put our finger on and we have to look at those on a case by case basis. Although I certainly understand and agree with the select committee view that opt-out clauses are not the preferred mechanism we still need to consider each Treaty settlement within the context of the dynamics and the issues that they are dealing with in and of themselves. That is the key point. 
The next point is around requests made by other iwi to have certain statements expressed in deeds of settlements with the iwi in question. I think as a general principle if the Crown acts in good faith with an iwi to negotiate the terms of that deed of settlement it is a binding agreement on those two parties. For the third parties then to ask for particular considerations to be included in someone else’s deed of settlement I think again provides some very tricky ground and sets some very difficult precedents and is perhaps not the preferred path to go down. I make that statement in particular in relation to the comments of the select committee with regard to the request for a statement of non-challenge by Ngati Toa rangatira many of whom are my whanaunga too. 
The third point I comment on is the one that was raised by the Minister in relation to the remedies of redress and the comments that he made that there will be an opportunity for Taranaki Whanui to purchase back particular properties within the Wellington central business district such as Archives New Zealand the Supreme Court and Wellington Girls’ College and then lease them back. It is up to them what they do but I urge parliamentarians to consider that if that transaction takes place future lease provisions should be treated as for any other property developer or business organisation within the city. 
There is an expectation I think sometimes unfairly put on iwi organisations Maori organisations to have a greater conscience towards the purposes of use of buildings when it is OK for private property developers but not Maori. I think some equity of treatment is an important aspect when we are looking at provisions like this because in the general public perception if iwi purchase back certain properties at market value then market rentals should be a natural consequence if they are going to lease them back. That is not often the case when dealing with Government organisations and public entities and it should be. 
Finally I acknowledge the good work and hard work of the Maori Affairs Committee under the stewardship of Tau Henare and all the committee members. I know in particular the previous Minister of Maori Affairs would want his acknowledgment and continued support for this settlement to be made in this House and also the officials of that select committee and the Office of Treaty Settlements officials. Select committee processes can often be unwieldy and very lengthy but I think there is a general accord across the House that on Treaty settlement legislation the more that we can ensure it goes through with a level of consensus across the House then the better opportunities we provide for all New Zealanders to enable iwi to get along and do the things that they do. 
Without too much more to add to previous comments I am pleased to offer these small thoughts on the second reading of this bill and endorse Labour’s continued support for the Port Nicholson Block and the Port Nicholson Block (Taranaki Whanui ki Te Upoko o te Ika) Claims Settlement Bill. Kia ora tatou katoa. 
CATHERINE DELAHUNTY (Green) 
: 
 Tena koe Mr Assistant Speaker. He mihi nui ki a Taranaki Whanui ki Te Upoko o Te Ika. 
[ 
A huge acknowledgment to you Taranaki Whanui ki Te Upoko o Te Ika. 
] 
Acknowledgments and respects to the honoured guests in the gallery. Green MP Metiria Turei is not here today but I as the Pakeha side of the Green Party’s te Tiriti portfolio am humbled to stand and speak in support of the second reading of this bill. I cannot claim to have had any association with it until this moment. However a number of us in this House were born in this city. We went to school here we had tertiary education here and we made our lives here. My own family lived in a suburb here for 55 years but at no time in my youth was there ever any Pakeha recognition or acknowledgment that we stood on Maori land. We also purportedly studied New Zealand history and the activities of the New Zealand Company in Te Upoko o Te Ika. We were taught that the company was a heroic entrepreneurial trailblazer in the acquisition of lands on which to build Wellington City. The real history of this land alienation process has been well summarised in some excellent first reading speeches made by members on all sides of the House. I include the comments of Green MP Sue Kedgley who as a former Wellington City councillor identified that the process of justice is vital not only for the future of tangata whenua but for Wellington’s peoples as a whole. 
It is exhausting and overwhelming to contemplate the last 21 years of painstaking research and remembering and of documenting and advocating for this claim. I acknowledge all of those who led that process towards justice. The Green Party particularly acknowledges the damage done to the resource base of tangata whenua of Te Upoko o Te Ika by the pollution of their resources through urban development and particularly sewage. That pollution is not only a pollution of food sources and wahi tapu; it is a pollution of identity and collective human rights of cultural relationships and spiritual well-being. My own culture and our addiction to “flush and forget” has dumped sewage down the drains and sent it to that magical and mythical realm called “away”. The hurt and te Tiriti breaches in just that one failure to manage human waste has led to deep and long-term effects. Of course there are many other issues associated with this bill with the history of invalid land deals the tenths issues the theft of land for reclamation and the violation of wahi tapu throughout the rohe. 
However this settlement offers some positive resolution in terms of a journey towards tino rangatiratanga and mana motuhake. It is not perfect as we have heard. No dealing with the consequences of colonisation can be called perfect. They need constant re-evaluation by all parties. But I would like to briefly speak of one matter that touched my heart when I heard some of the speeches made today. It was the matter of forgiveness. The Crown’s apologising which happens quite a lot with claims has become standard. But something unique happened which is both customary and groundbreaking in the tangata whenua giving their forgiveness. There is no healing without forgiveness and without a return of resources and an offer of apology but the acceptance of that apology is profound. We are blessed in this country that tangata whenua can continue to offer forgiveness when we actually return very little in terms of economic cultural social or spiritual resources. From now on how well we play our part in this city in recognising the Treaty relationship is a responsibility for the Crown and all citizens but Taranaki Whanui have taught us much through this process and the Crown and tangata Tiriti katoa need now to give our thanks to them. I am proud to support the second reading of this bill. Kia ora koutou. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Kia ora Mr Assistant Speaker. I want to mihi to the team upstairs. It is really good to have them here today. I am really humbled to be able to speak today on behalf of the Maori Party in support of Taranaki Whanui ki Te Upoko o Te Ika. In doing so I recognise the legacy of the tipuna of Te Atiawa Ngati Tama Taranaki Tuturu Ngati Ruanui and other people from Taranaki including Ngati Mutunga. 
This is historic legislation in which every individual who is a member of Taranaki Whanui ki Te Upoko o Te Ika has the opportunity to benefit from the deed of settlement that will settle their historical claims. This legislation acknowledges statements made by Taranaki Whanui of their cultural spiritual historical and traditional association with 13 statutory areas. 
As with any settlement legislation the bill’s passage through the House is a time for quiet reflection for tears to flow and for stories to be told. It can never be an occasion of celebration no matter how significant the outcomes articulated in the bill. I think it is an opportunity to reflect on the occasion that took place just less than a year ago not far from here at Pipitea Marae. The occasion was the day on which the Port Nicholson Block claims team together with Taranaki Whanui ki Te Upoko o Te Ika met formally with Crown Ministers for the official signing of the deed of settlement. 
When one looks at the reports of that day a phrase stands out: “An air of heavy anticipation hung over the marae.” The heaviness that hung over the heads of all those gathered was the pain the memories of ancestors who migrated to Wellington in the 1820s and 1830s. It is the heaviness of the stories recalling those tupuna who signed the Port Nicholson deed of purchase in 1839. 
We think back to those days we think back to last year and we look ahead mindful of all those who have gathered in the gallery today. Their hearts are also heavy with the collective losses that were recorded in the Waitangi Tribunal’s report on the Wellington district inquiry published in 2003. It can never be a day for rejoicing when we acknowledge in this House the breaches of the Crown in its obligations under Te Tiriti o Waitangi. 
There are also tears that can be shed for Taranaki Whanui ki Te Upoko o Te Ika for today as any of us who have read over the submissions can attest to. Members of Te Runanga o Ngati Toa also my relations shared with the Maori Affairs Committee their concerns that much of the Crown’s estate has been provided to Taranaki Whanui at the expense of Ngati Toa but in the spirit of true manaakitanga of generosity of spirit they conceded to moving on despite the redress they had been offered within the Port Nicholson Block not meeting their expectations or adequately reflecting their interests. 
Ngati Tama ki Te Upoko o Te Ika supported the intent of the bill but was concerned about the Crown’s treatment of the Ngati Tama interests that have not been addressed. Here I have to mention that Ngati Tama is my husband’s iwi and he was very involved with Ngati Tama’s claim. Ngati Tama’s support of the bill therefore was guarded influenced by the spirit of hope that the Crown in conjunction with the Taranaki Whanui governance entity will resolve the outstanding Ngati Tama issues in the best interests of all concerned. 
It is deeply distressing to know that just 10 days ago some Ngati Tama opted out of this settlement and will not be part of the Port Nicholson Block claim entity receiving settlement entitlements. Instead they seek to renegotiate for their own exclusive settlement within the same area. There was the option to go back to the Waitangi Tribunal for further recommendations but they have chosen to opt out instead. 
This situation has arisen because some from Ngati Tama felt that they had not been well-served in the process. To raise unresolved issues in the context of settlement legislation is always an uncomfortable position to be in. The Waitangi Tribunal report  
Te Whanga-nui-a-Tara me ona Takiwa 
 in making reference to iwi that have unresolved issues states that “Leave is granted to the parties to seek more specific recommendations (from the tribunal) if agreement cannot be reached.” We acknowledge that there is the opportunity and the mechanism by which unresolved issues can be heard but that does not make it easy by any means. 
It is precisely because of those concerns that the Maori Party has advocated to establish a Parliamentary Commissioner for the Treaty to review and monitor progress of Treaty settlements and of the whole settlement system. Our member on the Maori Affairs Committee Hone Harawira told us of the agonising concerns regarding the opt-out clause. 
As Mr Quinn noted in the case of Ngati Tama the committee does not recommend the use of opt-out clauses. The committee’s view was that if some Ngati Tama wish to negotiate a separate settlement they should form a single entity and achieve a mandate recognised by the Crown. The committee noted that the Crown should not be called upon to adjudicate differences within an iwi grouping and it considered that these are matters for iwi to resolve. So we leave it there for the time but we leave it knowing full well that these issues will return to haunt us if we do not ensure a full and comprehensive understanding of all the varied positions and views of this settlement as with any settlement. 
The submission put forward by Eldon Potaka was clear that Ngati Tama people wished to have their right in terms of tino rangatiratanga founded on Te Tiriti o Waitangi to determine their own future with regards to lands forests and all taonga. Ngati Tama do not assume the right to oppose a settlement that the bill provides but they would hope that they are not denied their right to choose their own negotiators as the tribunal recommended. 
These are important issues and they are issues that the Crown and this Parliament must continue to take seriously. The desire had been that the Taranaki Whanui governance entity seeks a resolution of the Ngati Tama issues simultaneously with the passage of this bill and implementation of Taranaki Whanui’s settlement. We will be interested to watch this progress as the bill moves through the House. 
Finally the Maori Party acknowledges those who have been part of the negotiations team and who have played such a major part in this negotiation. We acknowledge the enormous dedication of people such as Sir Paul Reeves Professor Ngatata Love Neville Baker Kara Puketapu June Jackson Liz Mellish Mark Te One Dawn McConnell Spencer Carr and Kevin Amohia—I apologise if I have left anybody out—who were all represented at the signing last year. 
In naming individuals we think too of all the whanau who have given so much to supporting those who have taken the claim so far. We acknowledge the negotiators the beneficiaries those who cast votes and all those who gave so much to this process. We also acknowledge those who have taken the hard call to opt out—those who did not vote but who also carry the legacy of their history upon their shoulders. We mihi to them all we add our vote of support for this stage and we remember their pain. 
AARON GILMORE (National) 
: 
 I rise to support the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill as well and it is really good to see such a collegial attitude across this House towards this bill. This settlement bill represents another step in the right direction towards our Government’s target of resolving all Treaty of Waitangi claims by 2014 and I am really pleased that it represents an agreement across this House. We are a Government that is committed to the settlement of claims and I am pleased that one year since the signing of the deed of settlement we are having the second reading of this bill. 
As a young Treasury analyst about 10 years ago I recall aspects and issues of the Wellington Tenths Trust coming across my desk and passing various issues and concerns over to the relevant Minister at that time. It is quite strange that today I stand to speak in support of this bill in its second reading as a result of that. This settlement will see some significant redress being made to the descendants of the Maori people in Wellington and the Hutt Valley generally. We should be thankful for the sound guidance of the Minister for Treaty of Waitangi Negotiations the Hon Chris Finlayson who has picked up this bill from a previous Labour Government bill and also for the stewardship of Tau Henare who pushed this bill through the Maori Affairs Committee with good guidance and some interesting comments that a number of earlier speakers touched on and that I would like to touch on. 
Some minor changes to this bill that the select committee made following the first reading have been mentioned. The big issue that has jumped out at me is around the opt-out clause that exists for one group in particular. It is really interesting; I have not seen such an opt-out clause in any deed of settlement. As other speakers have mentioned it is an aspect that we should not encourage in future deeds of settlement. It is also interesting that the opt-out clause allows for only one particular group to opt out and some people in that group have chosen to do that. I understand their decision but I think it is disappointing that they want to negotiate what they perceive might be a better deal for their people given all the work that has been done to date to get to where we are today by people on both sides of this House and by people who are no longer in this House. That aspect is contained in the select committee report and interestingly it is touched on in some changes to clause 9(1) of the bill. This opt-out clause places the Crown in a difficult position and causes a lot of uncertainty not only to the people of Ngati Tama who have opted out but also for people who may have some other aspects like Ngati Toa—and they have been mentioned today as well. 
I hope that all Maori who will benefit from this legislation see this settlement as a method for them to move on and a potential position for them to move on from together. We have approximately $20 million in cash being passed over to the various iwi groups under this settlement but more interestingly so are a number of very iconic land sites that exist across Wellington. I know the very important aspects include former canoe landing sites Pipitea Marae and other sites. Some of those things will hopefully provide a sustainable position for Wellington Maori to go forward from in the future. I note that other iwi when they have been awarded similar types of amounts have gone on to be very successful in sustaining their own economic and financial position. 
I cannot stand here without pointing out how successful Ngai Tahu were in getting their $170 million to grow to well over $600 million within a 10-year period. I encourage the people who will benefit from this legislation to learn from the experience of Ngai Tahu. Perhaps they can go and get some understanding of what may have happened around that. I encourage people to share their experiences because if Wellington Maori can go on to grow and be successful as Ngai Tahu have done that would be a wonderful thing. I am sure that the people of Ngai Tahu would be very happy to share their experiences—for a fee of course. 
I think this is a momentous occasion for the people of Wellington. They have waited since 1839 for this settlement bill to come to this House. It is a wonderful occasion and I look forward to the people of Ngati Tama thinking more carefully about what they have been offered. Maybe they could think very carefully about what that might mean for them about what may arise for them in the future and about not having to have a large amount of renegotiation which could occur from a further deed of settlement and set of negotiations and which might take a significant period of time. 
I will leave it there but I commend this bill to the House. It is an excellent step and I think it is wonderful that this House is in agreement on this settlement. Hopefully it leaves Wellington Maori in a good position to go forward from for the long-term future. 
KELVIN DAVIS (Labour) 
: 
 A te mea tuatahi maku he mihi kau atu ki a koutou o Taranaki Whanui ki Te Upoko o Te Ika na koutou i tatu mai ki raro i te tuanui o tenei Whare e whakarongo ana ki a matou e whakawhitiwhiti korero ana mo tenei kaupapa tino ataahua e pa ana ki a koutou. Na reira tenei te mihi ki a koutou. Tenei hoki te mihi ki o koutou awaawa o koutou maunga o koutou whenua o koutou rawa katoa kua murua i a koutou. Kore e warewaretia hoki o koutou tupuna na ratou tenei kaupapa i pikaungia a tae noa ki tenei wa. Na reira tena koutou tena koutou tena koutou katoa. 
[ 
The first thing for me is to acknowledge you of Taranaki Whanui ki Te Upoko o Te Ika who have arrived here beneath the roof of this House and are listening to our exchanges over this extremely attractive matter that relates to you. And so I greet you as well as your valleys mountains lands and resources that were taken from you. Your ancestors cannot be forgotten. They carried this matter from the outset and it has continued to this day. Greetings greetings and greetings to you all. 
] 
I begin my address in the debate on the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill by reading from the deed of settlement and it is the acknowledgments apologies and statement of forgiveness that I would like to refer to. I will not read it all but I will go into the part that says: “For too long our history has been a troublesome burden. It is now time to set the record straight.” Kei te tautoko ahau i wena whakaaro. [ 
I endorse those thoughts. 
] “We acknowledge and forgive the Crown for its breaches of the Treaty of Waitangi and its principles. We acknowledge and forgive the Crown for its failure to protect our interests in the acquisition and administration of our lands. We acknowledge and forgive the Crown for its actions which caused hurt and prejudice for Taranaki Whanui ki Te Upoko o Te Ika. We acknowledge and accept the Crown’s profound regret for the significant impact on our social economic cultural and spiritual well being.” 
I would like to say to Taranaki Whanui ki Te Upoko o Te Ika thank you. Forgiveness is the start of healing and from healing we then move on to hope. My hope and hopefully their hope as well is that the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill is the beginning of the future for Taranaki Whanui ki Te Upoko o Te Ika. For too long they have had to wait for this moment like many other iwi around the motu. For too long and at too many times this has happened over and over again to Maori through the confiscation of lands resources and mana. 
Let me say as a member of the Maori Affairs Committee that it was a privilege and an honour to participate in the deliberations. As a new member of Parliament it was the first opportunity I had to listen and to hear. It was a privilege to hear the submissions to the select committee to hear and experience the pain that had been caused. To some extent as a member of Parliament I feel a sense of responsibility for what has occurred. In another sense I feel a sense of responsibility for finding the solutions. I believe this bill is a solution and that it will help not only the people involved but also when similar settlements are reached all of us as Maori to move ahead. 
I acknowledge those members of Parliament from the previous Government who began this process. I acknowledge Dr Cullen my colleagues Parekura Horomia and Mita Ririnui and others who have contributed to our reaching this point as well as the current Government which has stated some urgency in terms of settling our claims. It is really important not just in this instance but to us as Maori to make sure that these settlements occur quickly so that we as Maori can move on and assume our rightful place as leaders and that we can use these settlements to progress ourselves as people. 
I also acknowledge the select committee led by Tau Henare as well as Paul Quinn Hekia Parata Hone Harawira Parekura Mita and myself for the deliberations. It was not easy discussing everything. I also acknowledge members from the Office of Treaty Settlements in particular Darren and Margot. I recall the to-ing and fro-ing around the Pipitea Marae issue. They would come to us and we would believe that the issue was almost resolved then they would have to go back and it was forward and back. In the end we have come to a resolution and I acknowledge both Margot and Darren—I see them there in the gallery—for the hard work commitment and dedication that they put into the job. 
The opt-out clause has been touched on by a number of previous speakers and I too share some of those concerns. It was put there because not all members of the iwi could come to an agreement in terms of how to go forward. There is an opt-out clause for them so that if they can form a single entity and achieve a mandate recognised by the Crown they can move forward on their own. It saddens me that this process to an extent is dividing people rather than bringing people together but I also understand and acknowledge that people—iwi whanau hapu—who feel their needs are not being met or addressed have the right to form an entity of their own and move ahead. 
We noted in our report that “The opt-out clause in the Deed is an unhappy exception to the Crown’s practice of dealing with large natural groupings.” and also that “We wish to note that the Crown should not be called upon to adjudicate differences within an iwi grouping.” I agree with that. It is not the Crown’s role to tell Maori whom they should affiliate to. That is an issue that iwi themselves need to hui and wananga about. We went on to say “We consider the provision of an opt-out clause to be inappropriate as a model for any future settlements. We consider that these are matters for iwi to resolve. We do not recommend the use of opt-out clauses in the future.” 
I do not wish to draw out this debate. I believe that we need to settle these issues as quickly as possible be it with Taranaki Whanui ki Te Upoko o Te Ika or in any other settlements that need to occur. But I think it is appropriate once again to acknowledge the pain and hurt over the years for what has occurred. As I said earlier I believe that as members of Parliament we need to take some responsibility for what has gone on in the past but also as members of Parliament we are in a position to right those wrongs. In my time as a member I genuinely and sincerely hope that I will be able to help other iwi to settle their claims against the Crown. 
Na reira ka nui wenei maku mo tenei wa. He mihi whakamutunga ki a koutou kei runga ake ra Taranaki Whanui ki Te Upoko o Te Ika huri noa tena koutou tena koutou tena tatou katoa. 
[ 
So what I have stated for now is enough. In closing I congratulate you Taranaki Whanui ki Te Upoko o Te Ika seated above. Greetings to you greetings to you and greetings to us all throughout. 
] 
JO GOODHEW (National—Rangitata) 
: 
 I rise to make a brief contribution to the second reading of the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill and in doing so I join in acknowledging the representatives of the claimant group who are here in the House today—people for whom this day is an important day of progress. 
This bill gives effect to aspects of the deed of settlement signed by the Port Nicholson Block Settlement Trust and the Crown in July 2008 to settle all of Taranaki Whanui ki Te Upoko o Te Ika’s historical Treaty claims against the Crown. The enactment of the bill is an important indicator of progress in settling historical Treaty of Waitangi claims which is a commitment of this National Government. 
In respect of the claims Taranaki Whanui ki Te Upoko o Te Ika’s claims against the Crown which the Crown acknowledges and this settlement will settle include firstly the Crown’s failure to consistently protect Taranaki Whanui ki Te Upoko o Te Ika’s interests during the process by which the Crown and its agents acquired their interests in the Port Nicholson Block; secondly the compulsory acquisition and endowment of their lands for public purposes; thirdly the delay in implementing legislation and administration of their reserves; and lastly the undermining of Taranaki Whanui ki Te Upoko o Te Ika’s tino rangatiratanga. 
This is a comprehensive and final settlement. The bill is a comprehensive and final settlement of the historical Treaty of Waitangi claim. It is intended to enhance the ongoing relationship between Taranaki Whanui ki Te Upoko o Te Ika and the Crown and I commend the work of the Maori Affairs Committee the Minister for Treaty of Waitangi Negotiations the members and most important the claimants and their representatives. Thus I conclude my contribution in support of this bill. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Tena koe Mr Deputy Speaker. Taranaki Whanui ki Te Upoko o Te Ika—tena koutou tena koutou tena tatou katoa. It gives me a great deal of pleasure as the member of Parliament for Wellington Central to stand in the House today and speak during this second reading. It is a pleasure to be here not too long after the joyous occasion at the Pipitea Marae that my colleague Rahui Katene mentioned earlier. That was indeed a special occasion. I am not sure whether the air of heavy anticipation that Rahui mentioned was just Darren Ponter’s stress about whether all the i’s had been dotted and the t’s had been crossed but it was a very special day. 
I join with my colleagues in acknowledging the work of both the Taranaki Whanui and the Office of Treaty Settlements and of all the officials who have worked on this settlement. It has indeed been a long long road since the claim was lodged and obviously even a longer road since grievances were aired. 
I will not dwell in great detail on the aspects of the agreement; they have been covered quite well today by a number of other members. But I do not think that anyone who reads through the submissions or who looks at the settlement or at any of the history around the Port Nicholson Block could help but be moved by it and feel that there needs to be urgent redress. As the Wellington Central MP every day as I walk around the electorate I serve I am very very conscious that the steps I take are on land that was taken on the basis of a flawed deed and without compensation on land where title was extinguished without any reason or need and on land where long delays to justice and redress have been experienced. As I walk around Wellington Central I feel that so I can therefore only imagine how it feels for the Taranaki Whanui. I hope that as we move through this process now the feeling that we are resolving that issue and moving on together is one that we can grasp. 
I will talk about two matters in particular today. There has been some discussion about the first of them and none about the second so I will speak more about the second. The first matter I want particularly to talk about is the statement of forgiveness. For me the thing that struck me at Pipitea Marae last year was the way in which Taranaki Whanui were able to do something that had never happened before in a Treaty settlement. That was a unique aspect. For me it is the strongest possible basis for the people of the Wellington region of Whanganui-a-Tara to move forward together. We have the apology and the apology is meant and seriously meant and that has been reflected in the speeches today and in other speeches in Parliament during this process—and indeed in the deed of settlement. But the notion of a statement of forgiveness in return is something quite remarkable. I believe that that will give us an extremely solid basis going forward for the Wellington region to develop and I am happy to be a part of that. 
An aspect of the bill I will also mention now in terms specifically of the future of Wellington is the question of Wellington town belt land. There is a reference in the commentary from the Maori Affairs Committee to some of the submitters who raised concerns about the inclusion of former town belt land in terms of this bill. I will read briefly from the report of the select committee to ensure that this ends up on the record: “We understand that the bill provides for ‘Right of First Refusal for 100 years’ and that agencies owning land which is subject to the right of first refusal may offer the land to a local authority in accordance with section 50 of the Public Works Act 1981. Upon such a transfer the local authority for example the Wellington City Council would take on the right of first refusal obligation to Taranaki Whanui ki Te Upoko o Te Ika.” 
I put into the record that the process for dealing with and ensuring that we continue to have a strong and constructive relationship around the town belt has some basis in the bill. But what is much more significant for me is the ongoing relationship between the Taranaki Whanui and the people of Wellington around the management of our town belt. 
The town belt is an incredibly important part of Wellington. The green space that surrounds this city is one of its unique features valued I think by all Wellingtonians Pakeha and Maori alike. I think it is extremely important as we move forward that there is a place for the Taranaki Whanui in the overall management of the town belt. At this time I am working with the Wellington City Council on a local bill that will begin to clarify some elements of the town belt—its shape and its size and how land is taken out of it or put into it. That work will crucially involve Taranaki Whanui. I hope that some form of kaitiaki-type status will be able to be vested with Taranaki Whanui and that the Wellington City Council and those represented by the Taranaki Whanui will be able to be part of managing that land together. That town belt land now forms a critical part of what I believe is a joint future in Wellington. 
I know that I did not participate in the select committee. Therefore it will be of great interest to me in the Committee stage of this bill to be able to work through some of the issues that other colleagues have raised—the opt-out clause being one I am particularly interested in. 
I like the fact that in the select committee process the issue to do with the Pipitea Marae has been dealt with. I think that it looks as if there is an enduring process there. Pipitea Marae plays a very important role in Wellington as a whole. It is obviously of great spiritual significance for the Taranaki Whanui but it is also of significance for Wellingtonians generally. One of the great occasions each year in Wellington takes place immediately after the Dawn Service on Anzac Day when people troop down the road towards the Pipitea Marae and come together in a way that is particularly special on a day that many New Zealanders now regard even more fondly—Anzac Day. To me that symbolises the important place that Pipitea Marae has in my city. I am very pleased that in the select committee process we have been able to work through the Pipitea Marae issue. 
I look forward to the Committee stage of this bill. I believe that the settlement will allow Wellington to move forward together as a city where Maori and Pakeha have their rightful say and their rightful place and an ability to stay connected to the lands and the history that are so important to them. Thank you Mr Deputy Speaker. 
DAVID BENNETT (National—Hamilton East) 
: 
 I am grateful for the opportunity to speak on the Port Nicholson Block (Taranaki Whanui ki Te Upoko o Te Ika) Claims Settlement Bill. I must admit I am not a member of the Maori Affairs Committee so I speak with a certain amount of naivety as to what actually went on at the select committee. However I would like to make a few points that I think are important as to what we see in this House. The first is that Treaty settlements are always a special time for this House because the people who are affected by the bill actually come and watch the House pass the legislation. For the vast majority of other legislation that is passed through the House we do not necessarily have interested parties come and watch. The reason I think that is special is that it shows the degree of time that many people have waited to see the legislation being passed and the importance that those communities place on this House passing the legislation. It goes to the heart of Maoridom and the way in which Maori have approached many of these settlements in recent years. 
Maori have been waiting for a long time for the words of sorrow and regret from the Government about what has happened in the past. It has been a long time coming but now both major political parties have been pushing the settlement process over a number of decades and we are finally giving regard to the importance of the process that this Parliament represents. 
I thank the members of Taranaki Whanui for their attendance here today. What it symbolises to this Parliament is very important. I also thank those who were involved in the decision making and in the negotiation of this settlement. I know that it was started by the previous Government but I draw special attention to our Minister Chris Finlayson who has taken an active interest in progressing settlements and who has achieved a lot in a very short time. 
I also mention the select committee. I am sure that Tau Henare will be very disappointed that he was not able to be here today. He is in Auckland working on the Auckland governance issues but he would definitely want his regards passed on. Tau Henare is someone who has made a huge commitment to Maoridom and this House over many years. It would give him great pleasure to see the advancement of this settlement. 
I think it is also important to thank the other parties in this House especially the Labour Party in this regard and the Maori Party for their input and their desire to see this settlement progress. It shows a genuine intention on the part of this Parliament and its members to see some redress. 
As a farmer I can say that one of the things farmers have is an affinity with the land. One of the dearest things to us is the land. I can understand how Maoridom associates with the land and places prime importance on it. When one slaves on the land and works hard on the land one does have certain respect for it and a real desire to maintain it. I guess one of the most hurtful things that could be done to people like myself would be to take that land off us for us to lose it after having worked so hard to achieve on it. We have a great degree of respect for the Maori communities involved in the settlement processes who look beyond that and look for the better good of their communities and the country going forward. We take our hat off to those communities that work towards a settlement. It is a major challenge and a lot of emotion has to be dealt with to get to that point. It is something that I think resonates with a lot of people in our community because we understand the nature of the issues involved. 
I remember the history of Port Nicholson from when I was a school student. It was an important part of how New Zealand came about and the population growth from Europe and England. So historically a lot of sentiment is involved in the nature of this claim as well. In closing I thank all of those involved in the select committee the Minister the political parties and most important Taranaki Whanui for the way in which they have approached this issue. We wish them all the best with that settlement as they go forward. 
Bill read a second time. 
Disputes Tribunals Amendment Bill 
Second Reading 
Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Disputes Tribunals Amendment Bill be now read a second time 
. I thank the Justice and Electoral Committee and its chairman Chester Borrows for its careful consideration of the bill particularly in such a tight time frame. This pace was set by the Prime Minister’s announcement of a small business relief package on 4 February this year of which this bill was a part to respond promptly to the global financial crisis. Expanding the jurisdiction of the tribunals also fulfils National’s election promise to increase the jurisdiction of the disputes tribunals to reduce pressure on District Courts. This bill will increase the maximum claim levels of the disputes tribunals thereby improving access to justice for individuals and small businesses through the simpler faster and cheaper processes of the tribunal. 
Since the first small claims tribunals were established in 1977 there has been a forum for resolving small civil claims culminating in the disputes tribunals from 1989. These forums have proven to be effective in resolving disputes in an efficient and low-cost manner. They have been and will continue to be an important pathway for New Zealanders to access justice. 
The increase to the maximum claim levels proposed by this bill is the first increase in over 10 years. The current maximum levels are $7500 or $12000 where both parties agree. This bill will increase these levels to $15000 or $20000 where both parties agree. This will improve access to the disputes tribunal for individuals and small businesses thereby reducing costs for up to 3600 additional cases annually. 
I am advised that the Justice and Electoral Committee received 10 written submissions on the bill and three submitters appeared before the committee. Submitters were broadly in favour of an increase to the maximum claim levels of a disputes tribunal as proposed by this bill. In fact a number of submitters considered that a further increase could be made to the maximum claim levels than that proposed by the bill. I have some sympathy for that view but ultimately the committee was right to conclude that a further increase could not be justified within the current framework of the disputes tribunals. 
The disputes tribunal provides a unique and important justice service in that it limits a number of the normal protections found in the court system in order to provide simple fast and cheap access to justice. For example disputes tribunal proceedings are held in private parties are not entitled to legal representation referees are not required to be legally qualified and the grounds for appeal are limited. An increase to the threshold beyond that proposed in this bill would require the strengthening of a number of the disputes tribunals’ protections because there would be more at stake. This bill strikes a balance between increasing the maximum claim levels of the disputes tribunals while maintaining the tribunals’ integrity. I want to make it clear that I will not rule out further changes to the threshold as long as the character of the tribunals can be maintained. 
Submitters suggested a number of other changes to disputes tribunals that could be considered including changes to the appeal rights of a tribunal the requirements for the appointment of referees the publication of tribunal decisions and the mechanism for adjusting the maximum claim levels. These ideas have merit and I am willing to consider them once the impact of the current change has been assessed. 
It is important that the increase proposed by this bill is progressed as quickly as possible in order to assist small businesses and individuals to resolve their disputes more simply and faster. Many of these cases would currently be dealt with in the District Court with its higher associated costs including the cost of legal representation. The lack of change in the maximum level claims for the disputes tribunal over 10 years has created a gap between cases that can be taken to the disputes tribunal and those that are financially viable to be taken to the District Court. This bill will improve access to justice for individuals and businesses pursuing cases that would otherwise fall through the cracks. That in turn will free up valuable time and money for small and medium sized businesses so that they can get on with the business of producing goods and services. 
Again I thank the Justice and Electoral Committee for the expeditious consideration of the bill. I thank all of those who made submissions on the bill for their interest in the work of the tribunal. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I rise to support the further passage of the Disputes Tribunals Amendment Bill which has been reported back from the Justice and Electoral Committee. I am very pleased with the consideration the bill has obviously gone through at the select committee but was somewhat interested to learn that only 10 submissions had been received and that only three of those submitters wanted to be heard. That raises a question about having to amend the principal Act every time we want to review the adequacy of the thresholds. I know that this issue was raised at the select committee and the select committee quite rightly referred to it in its report back to the House. The select committee stated that a recommendation came through the submissions to allow the maximum claim levels to be amended by Order in Council. 
One of the things that in considering such a matter I would like the Government and also Parliament itself to seriously think about is whether there has to be such a close correlation between the amount at which one can require that the matter be determined at the disputes tribunal and the amount that is able to be agreed between the parties. I am just thinking about whether the new thresholds that are introduced with this legislation—lifting them to $15000 or $20000 with the consent of both parties—are too low. Is that $20000 too low when it is by consent? If parties to a particular transaction have a dispute that relates to $22000 they will have to knock off $2000 in order to reach an agreement for $20000 or have to knock off $7000 in order to have it heard as a matter of right by the disputes tribunal. That is an area where a degree of consideration could be given to separating the two thresholds and thinking about them as two quite separate issues—the issue of where the threshold is to be determined. I actually wonder whether a gradual inflation indexing approach might solve the problem which is the alternative to the proposal that came up in the submissions to allow the maximum claim levels to be amended by Order in Council. 
There are issues around whether this is the type of amendment that requires the consideration of the House. I still think that the Order in Council process is a pretty robust regulatory process and requires a degree of consideration and consultation for it to meet its regulatory impact analysis provisions. It is also subject to the review of the Regulations Review Committee so it is not as though Parliament is completely distanced from the process. But when a bill is brought into the House goes to a select committee gets only 10 submissions and only three of them ask to be heard one has to really argue that perhaps this is not the best way to alter what is essentially an access to justice issue. 
I heard the Minister say he was willing to look again at the thresholds but I actually wonder whether he would look at the substance of the issue that has been raised in the submissions and also raised by the lack of submissions in terms of the public interest in this matter. I wonder whether there is a better way of determining the amounts against which the thresholds would be measured. Again I think that separating the mandatory amount and the agreed amount would be a way to do that. 
Obviously from time to time we hear of people who are not happy with the results of disputes tribunal hearings but in the main we do not get that feedback. In fact the overwhelming response to the disputes tribunals process that we have in place—originally the small claims tribunal—is a very positive reaction from those people who would find it completely impossible to negotiate both the cost and the access to the District Court. The disputes tribunal has been a mechanism for resolving disputes of a very minor nature and enabling people access to justice which is so important. I personally have used the small claims tribunal as it was known in the olden days. I had taken a leather jacket into a dry-cleaners. Those members who have studied law will know exactly the scenario that I would have confronted when the dry-cleaners lost my beautiful blue leather jacket. 
Hon Members 
: Blue! 
Hon LIANNE DALZIEL 
: I was going through my blue period at the time. Tragically I was born with blue eyes so I suit the colour unfortunately. The point I am making is that the dry-cleaner ended up saying it was not liable because of the little ticket it gives to customers. As I was studying law at the time I knew perfectly well about those rules but in this particular case I had not accepted the jacket because it had not been cleaned properly. I had actually resubmitted it for further work which was when the dry-cleaners lost it. So I had the dry-cleaners on that point. I filed with the small claims tribunal and the dry-cleaners happily paid up several hundred dollars for me to purchase a new leather jacket which was not blue. 
The small claims tribunal—now the disputes tribunal—enabled me as a student to take on a business that I would not have been able to take on if I had had to rely on the District Court. The disputes tribunal process is a very very good service overall and it is excellent that we are seeing its parameters extended by increasing the maximum claim threshold with this bill. 
I was looking at the dates of the original legislation in 1977 the disputes tribunal itself in 1988 and changes to the thresholds again in 1998. It seems to me there is a bit of a pattern emerging; every 10 years we give this threshold a substantial boost. I am wondering whether that is the best way to do it. It is probably a very good reason to think about perhaps finding a different way to make this legislation permanently relevant rather than having to jump the threshold up every decade. 
On that note I say that I too am grateful for the work of the select committee. I am not on the Justice and Electoral Committee but I know that it does some excellent work and this bill has been no exception. I congratulate the chair Chester Borrows and other members of the committee on the work they have done. I certainly look forward to the chair’s comments on the bill. I commend the bill to the House. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise as the chair of the Justice and Electoral Committee which considered the Disputes Tribunals Amendment Bill and I can agree with a number of the comments that have been made so far. The fact is that the disputes tribunal is a facility where laypeople can access justice very cheaply and in a timely way in a local court. Where I live a disputes tribunal hearing can be obtained within about 2 months of making application. As a member of Parliament I find that it is not uncommon for me to assist constituents to fill out a statement of claim on the forms provided by the court and to give them a bit of a start on how they can head down the track to access justice. The disputes tribunal enables people who are working in small businesses to be able to resolve disputes in a fair way because it is not rigidly bound by the black letter of the law. It is able to take into account what is fair in a situation and that is something that encourages confidence within our legal system. 
It is true to say that a number of submitters wanted the threshold to go up because they felt that access to justice through the District Court was a very expensive business. To have thresholds of $15000 and $20000 for the disputes tribunal seemed to be quite low when people were trying to pursue a matter through the District Court at a level say of $22000 or up to $25000. It could cost nearly half of that to get the matter before the court and to get it argued depending on its complexity. I think that the point made earlier by the Hon Lianne Dalziel is quite valid in that we need to look at the mechanism by which we can increase the threshold but I think it is also fair to say that before Parliament does that it needs to have its ducks in a row. 
Those complicating factors that led the committee not to recommend that the bill go a lot further at this stage took into account for instance that the higher one gets in terms of the threshold the more precise the decisions need to be. At the moment there is no requirement for adjudicators to be legally trained yet there is provision for an appeal through to the District Court. So we want to have legally robust decisions coming out of the disputes tribunal but at the same time we want a level of fairness metered in there so that people are not tied to the black letter of the law. If we extended that threshold further people would feel the need for or feel some safety or comfort in actually being legally represented and of course the beauty of this process is that people go into the room without lawyers and without having to make long and protracted legal arguments after having swotted all the law books. People seeking redress through the disputes tribunal go in there as laypeople up against laypeople who are wanting to make an argument that is based on where the law is as they understand it and as members of the public understand it but that is also based on fairness as it applies in that particular case and on recognising that they cannot go to the disputes tribunal just to get a bill paid. There needs to be a dispute. 
I am pleased also to hear the Minister say he is willing to look at a future mechanism for changing it. There will be a timely way of doing that and I am sure that it can be done simply. We have given some indication that that can happen when as I say we have other ducks in a row. 
I endorse the bill. I commend it to the House and I look forward to its wide support. I thank members of the Justice and Electoral Committee for their contributions. I thank the public for their submissions and I thank those most involved with the disputes tribunal process. Thank you. 
CARMEL SEPULONI (Labour) 
: 
 I stand to talk on the Disputes Tribunals Amendment Bill. Labour supports the bill. I will refer to something the Hon Lianne Dalziel talked about before which is that this issue is essentially one of access to justice. What Lianne was saying was that unfortunately only 10 submissions were made to the select committee so perhaps there is another way in which this issue can be looked at. She pointed out the fact that we need to look at the substance of the issues raised in the submissions and also at the lack of submissions. So I thought I would start by talking about that. 
The aim of this bill is to amend the Disputes Tribunals Act 1988 to increase the maximum claim levels of the disputes tribunal from $7500 or $12000 with the consent of all the parties to $15000 or $20000 with the consent of all the parties. Lianne also mentioned that an important issue to consider is the separation of the mandatory amount and the agreed amount. So that is something that maybe needs to be taken into consideration by the select committee in the future. 
The disputes tribunals were established by the responsible Minister as divisions of particular District Courts. The jurisdiction of disputes tribunals is exercised by referees who are appointed under warrants by the Governor-General for terms of 3 years and the referees may be reappointed. In performing their statutory duties referees have the same status as justices of the peace acting in their criminal jurisdiction. In general tribunal decisions are enforced as District Court decisions. 
The increase to the maximum claim levels will enable an increased number of New Zealanders to resolve their civil disputes in a simple cheap fast and less formal forum. The tribunal will continue to operate on its current basis balancing the required protections for parties against the need to provide simple cheap and fast access to justice. 
I reiterate that the main provisions of the bill are that the maximum amount for claims will increase from $7500 or $12000 with the consent of all the parties to $15000 or $20000 with the consent of all the parties. The bill makes consequential amendments to the Consumer Guarantees Act 1993 the Credit Contracts and Consumer Finance Act 2003 the Fair Trading Act 1986 the Fencing Act 1978 the Minors’ Contracts Act 1969 and the Retirement Villages Act 2003. Labour supports this amendment bill. Thank you. 
PAUL QUINN (National) 
: 
 It gives me pleasure to stand and support the Disputes Tribunals Amendment Bill. Once again we have here a National bill that was laid out in the manifesto— 
Hon Lianne Dalziel 
: No it wasn’t! 
PAUL QUINN 
: Anyway it was one of our election promises that we would bring it before the House as one of our 100-day achievements. 
Hon Damien O’Connor 
: What about the tax cuts? 
PAUL QUINN 
: That has got those members all going; it is good to see them liven up and lift the atmosphere and the drag of the House. 
I congratulate the Minister of Justice and I also congratulate the chairman of the Justice and Electoral Committee Chester Borrows on the excellent work he did in moving this bill through that select committee. I notice that for whatever reason Opposition members of the select committee are not here to speak to the bill which is disappointing. 
Hon Steve Chadwick 
: I raise a point of order— 
Mr DEPUTY SPEAKER 
: I know what the member is going to say. The member cannot refer to members who are not here; withdraw that comment. 
PAUL QUINN 
: I withdraw. 
Mr DEPUTY SPEAKER 
: Thank you. 
PAUL QUINN 
: Thank you for your guidance Mr Deputy Speaker. As a number of the earlier speakers have mentioned this bill lifts the limits in respect of the cases that referees can hear from $7500 and $12000 by agreement to $15000 and $20000 by agreement. Of course the principal reason it is time to review that is inflation. Since fees were last set I think in the mid-1990s and in terms of their real impact there has been a significant decline in the real value of that maximum. 
Lianne Dalziel raised the issue of having a more efficient mechanism to review the level and in some ways I can see the value of that. I think the real issue is what that level should be. The issue arises because it is not a legalistic process; it is a process that involves dare I say it people on each side who are ordinary hard-working folk. Certainly in the examples I am aware of they tend to be plumbers carpenters or electricians who are pursing bills from householders for jobs they have done. One example that I am familiar with was a job requiring some wiring in an office; there was a dispute over the payment when the job was done. I think the dispute was over only about $2500 and it went before a referee and was resolved. The point is that those disputes are coming from hard-working New Zealanders who just want to get on with their lives. They do not want to spend a year waiting for a case to be heard. They do not have the time money or resources to employ a lawyer. This provides a conduit enabling them to resolve outstanding issues in a less legalistic forum and in a forum where those issues can be dealt with expeditiously. 
A lot of decisions are being made there and then at the time of the case. The real issue is that the higher that level is lifted the more information one would need to consider and the more legalistic the process would become. I think I am right in saying that part of that is simply because in many of these cases the referees are not lawyers; they are people from various backgrounds who may have experience in mediating. If one starts lifting up that level higher and if larger amounts of money are being dealt with it makes it necessary for the applicant to be more well-resourced and briefed as the outcome may depend on who can confuse the referee. I think one has to be careful about setting these thresholds simply because the adjudicators and referees do not necessarily have the experience to be able to deal with those levels of mediation. That is one issue. 
Another issue that has not been mentioned so far is that everyone may be happy with the law which was an interesting point that was raised during the course of submissions. I note that the Opposition speakers have commented on the lack of submitters but the people who use this service may be happy with what is being proposed and may have better things to do than make submissions. Most people would be happy with what this Government is doing as we tend to do things that people like. Therefore there is no need to make submissions; it is the silent majority—I think that is the phrase used—who are in the support of this bill. The fact that there were only 10 submitters is neither here nor there. After all we threw out the days of administrating justice by way of the roar of the crowd in the Colosseum. We on this side of the House are about quality. 
An interesting point that was raised in the select committee was whether the judgments of the decisions should be released. From memory it was the New Zealand Law Society that raised the issue as to whether it would be useful to release decisions to referees adjudicators and others in order for them to understand the reasons why the decisions were made and therefore assist them in developing mechanisms and precedents around those things. In the end that issue did not come to anything so we decided not to make that change. 
The rest of the bill is all pretty standard stuff. The real issue regarding limits and maybe in the future finding a mechanism so that we do not have to change those thresholds through a parliamentary process has been raised by previous speakers and that may well be the way forward. I commend this bill to the House and I look forward to its Committee stage. 
CHARLES CHAUVEL (Labour) 
: 
 In my first reading speech on this Disputes Tribunals Amendment Bill I recounted some of the history of the disputes tribunals and their predecessors the small claims courts in New Zealand. I was very proud to note that the small claims tribunals were introduced by the third Labour Government and Martyn Finlay was the architect of that legislation. The disputes tribunals were introduced in amending legislation introduced by the Attorney-General in the fourth Labour Government who was Geoffrey Palmer. So it is appropriate because each of those changes involved changes in the jurisdiction and monetary limits of the tribunals to continue to update that jurisdiction. 
As far as this reform goes it is not bad. If one looks at the monetary limits overseas one can see that in New South Wales the limit is $10000 and the same in the Australian Capital Territory. The limit is only $5000 in Tasmania; it is $7500 in Queensland and it is back up to $10000 in Victoria. We are going further than some of the comparable Australian jurisdictions with the proposed amendment but not as far as some of the Canadian ones. In Alberta the limit is $25000 as it is in Nova Scotia and British Colombia. In Saskatchewan the limit is $20000. The American comparable courts and tribunals have much smaller limits. 
I do think that my colleague and friend Lianne Dalziel made a good point when she said in her speech that there was an element of time-wasting in legislating for these limits. The fact that there were only 10 submissions to the select committee and three of those submitters who wanted to be heard orally on this increase does lend force to the suggestion in the select committee report that maximum limits in future should be able to be dealt with by Order-in-Council laid on the Table of the House then disallowed by the House if it feels that the regulations have gone too far or not done enough. It would seem to a be a more efficient way to deal with the question of continuing to update the jurisdiction of these sorts of tribunals in future rather than taking up the time of the House by way of substantive legislative amendment. 
The changes are all about access to justice. Obviously it is a good thing to keep informal justice within the reach of ordinary people and ordinary businesses and that is the whole nature of the thinking behind the disputes tribunals themselves. But when we think about the questions of whether New Zealanders have access to justice we do need to think more widely. There is the problem of the community law centres and their ongoing uncertainty about funding. There is the cut to civil legal aid rates which was introduced recently by this Government after a substantial rise in those rates last year under the outgoing Labour Government. Those are issues that go to the ability of ordinary people to access justice. They are issues of which this House should be mindful. 
It is also interesting to note that the legislation amends the Consumer Guarantees Act and the consumer finance legislation. Those are two pieces of legislation in respect of which I have proposed a member’s bill that would introduce amendments to put caps on payday lenders and introduce some responsible lending criteria in this country. Those are two reforms that I think are necessary to ensure access to justice in the wider sense for some of the most vulnerable consumers in our society. 
Another criticism of the disputes tribunals has been that one actually has to have a dispute about a question of law before one can access their jurisdiction. There is no simple “non-lawyerised” “non-judicialised” process by which ordinary people and small businesses can prove a monetary claim and get enforcement of that claim. Again this is a real access-to-justice issue that I think members in this House should be mindful of. In summary the Labour Opposition will continue to support this reform as it did at the first reading and at the select committee. But it is a timid reform; many more things could be done to guarantee better access to justice for ordinary people in this country. It would be good to see those more thorough reforms enacted rather than these sorts of piecemeal extensions to jurisdiction in the disputes tribunals from time to time. 
Hon NATHAN GUY (Associate Minister of Justice) 
: 
 It is a great opportunity to take a call on the Disputes Tribunals Amendment Bill which has just come from the Justice and Electoral Committee. We heard from the previous speaker Charles Chauvel that 10 submissions were gained through the select committee process and that three of those submitters chose to be heard orally. It looks to me as though the bill has a great deal of support across the whole of Parliament this evening. 
The objective of the disputes tribunals is to provide cheap simple and fast access to justice and a forum that avoids the legality and formality of the courtroom which is extremely appropriate. Filing fees are significantly lower and no lawyers are allowed. Therefore the costs of taking a claim in the tribunal are significantly lower than in the court process. 
It is significant that National is delivering on its election promises as it has done in its first 6 or 7 months in Government here increasing the jurisdiction of the disputes tribunals to reduce pressure on District Courts. This is the first step in that process. This bill will also help the cash flow and make enforcement of debt easier for small and medium sized businesses and individuals who are feeling the strain placed on them in the current economic climate. That is also a very significant point. 
The bill will make some amendments to quite a large number of other Acts. If members turn to the schedule they will see that this bill affects the Consumer Guarantees Act 1993 the Credit Contracts and Consumer Finance Act 2003 the Fair Trading Act 1986 the Fencing Act 1978 and the Minors’ Contracts Act 1969. So this legislation is very far reaching. 
It will increase the maximum claim level in the disputes tribunals to $15000 or $20000 where both parties agree which is an important point. The current maximum claim level in the disputes tribunals is $7500 or $12000 with the consent of both parties. So the bill represents a significant increase in the monetary threshold. The maximum claim levels were not adjusted under the whole of the previous Government’s 9 years. There has not been any adjustment since National was last in power in 1998 which is a very important point for the House to realise. National has certainly got on with the business here during the first 7 months that we have been in Government. 
Due to inflation and the increase in costs associated with litigation in the District Court the disputes tribunals were losing some of their usefulness to individuals and small businesses with relatively simple disputes and the proposed increase in maximum claim levels improves access to justice. This is a significant point. 
This is an important bill which is progressing through its second reading this evening. It looks to me as though it has a great deal of support right across the whole of Parliament. It is great that the Government and the other political parties in this Parliament support it. I commend the second reading of the bill to the House. 
AMY ADAMS (National—Selwyn) 
: 
 Like my colleague and friend Nathan Guy who spoke before me I am very pleased to speak in support of the Disputes Tribunals Amendment Bill. 
Before I came into this House I was a lawyer and I can tell members that one of the most discouraging situations lawyers face is to have in front of them clients who have very genuine claims that deserve redress and deserve to be followed up on for amounts of $10000 to $15000 and up to the $20000 band. That is a lot of money to the people involved. It may not be big money for some of the large corporates but for a lot of people I would see that was a considerable amount of money for them to have been done out of. When one had to tell those clients that they had a valid claim and a reasonable prospect of success but that it was simply not worth their while to take it to court it was really heartbreaking. That is not what our justice system is supposed to be about. That is not the sort of advice one should have to give clients. That was incredibly discouraging in respect of the band of claims that fell within that unspoken cost level where it was too big to go to the disputes tribunal and too small to make the claim justifiable to take to the District Court where claimants would have run up considerable costs. Even if a claimant won a case there he or she would not get the costs back and the chances of success were not absolute no matter how strong the lawyer felt the case was. 
We are able now to expand the jurisdiction of the disputes tribunal up to $15000 as of right which is double the amount that parties can take to that forum under the existing legislation and beyond that there is the ability to go to the tribunal for claims up to $20000 where the parties agree. I think that is a very significant step and one that we should not downplay simply because we are not talking about millions of dollars. It is an access to justice issue. As a person who has seen people turned away from justice because that additional jurisdiction is not there I see this legislation as being a real and meaningful step now being taken. 
As well as providing that access to justice this legislation will have a measurable and important benefit for businesses in terms of their cash flow in terms of their time and in terms of their ability to enforce debts and collect debts in a quick manner. I think everybody knows particularly in difficult times that cash-flow management is all-important. This bill makes the process easier and quicker for businesses—often small one-man-band businesses or mum and dad enterprises—to recover money owing to them without having to involve lawyers without having to spend years often in the court process and without having to throw more good money into the pot in order to have the prospect of success. Quite apart from the access to justice issue that is a very important step as part of this Government’s plan to help small business in these difficult times to get the economy moving and to look after cash flow. Although it may not make any headlines around this Government’s work to support small and medium enterprises I do not think the effect of it should go unnoticed. For those people who are in the category that can now access the tribunal the effect will be measurable and real. 
It is good to see general support in the House for the reforms. I think equally that the Justice and Electoral Committee should be commended for doing a very good job of consideration here because there are important issues at stake around justice and the entitlement of people to have the full protection of the law. There are important considerations where the rights of appeal are limited and where claimants do not have lawyers. It might seem strange for a lawyer to be endorsing a situation that precludes lawyers from getting involved in more cases but then again that might be reason enough in itself to support the bill in some people’s minds. But I think that the balance here is right for the current times between the informality and low cost that the disputes tribunal system gives us and the right to have the more full and complete protection of our system of law where the monetary amounts creep up above the levels that we now have. 
I turn now to the matter of how long it has been since the issues addressed in this bill were last raised. I think the bill should be supported and I commend it to the House. Thank you. 
Bill read a second time. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Securities Disclosure and Financial Advisers Amendment Bill 
In Committee 
Part 1 Securities Act 1978 
Hon SIMON POWER (Minister of Commerce) 
: 
 The Securities Disclosure and Financial Advisers Amendment Bill primarily addresses three areas. It deals with the simplified disclosure prospectus; categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act; and the Financial Advisers Act through the correction of a minor error. We saw that Act pass under the previous Government. One or two technical areas in it need to be sorted out. 
With that in mind it might be worth with the leave of the Committee briefly going through the two Supplementary Order Papers in my name that have been tabled on the bill. 
Hon Darren Hughes 
: I think so. 
Hon SIMON POWER 
: The shadow Leader of the House indicates that that would assist his members in making a contribution to the Committee stage of this bill. This is likely to be my only contribution to the Committee stage but I am happy to lead the charge in that regard. 
The first Supplementary Order Paper Supplementary Order Paper 29 is in effect a proposed motion to divide the bill into two bills the first being the Securities (Disclosure) Amendment Bill and the second being the Financial Advisers Amendment Bill. It is a pretty straightforward Supplementary Order Paper and we will not dwell on it for too much longer. The second Supplementary Order Paper Supplementary Order Paper 30 relates to some amendments to ensure that the offers of securities that are made to eligible persons and persons who fall within one or more of the categories set out in subparagraphs (i) to (iii) of section 3(2)(a) of the Securities Act be also made to apply to persons outside New Zealand. That is really the extent of Supplementary Order Paper 30. 
I note that the Labour Party the ACT Party and other political parties have been supportive of this legislation. I look forward to a constructive but swift Committee stage in respect of these matters. 
DAVID BENNETT (National—Hamilton East) 
: 
 Having heard that introduction from the Minister Simon Power I think it is important that we get a feel for the Securities Disclosure and Financial Advisers Amendment Bill. It is a very topical issue when we consider the nature of the financial stress that much of New Zealand and the world economy is under at the moment and has been under in the last 9 months or so. There is always talk about what can be done to avoid that kind of stress occurring in the future. One of the ways of doing this is around securities disclosure and financial advice. It has been a perennial problem from the time of the old days when New Zealand was seen as the Wild West of financial markets. Various Governments have tried to address this and they have done so with a piece by piece approach. This is another piece in that jigsaw; it is very difficult to set up one of those systems straight away from scratch that covers all of the issues. 
Part 1 deals with the Securities Act 1978. A number of clauses in Part 1 which we will debate over the course of this evening are there to aid in the disclosure and also to assist investors so that they get the fullest information they can in order to make the right investment decisions. That is a crucial part of the Government’s role in this Securities Disclosure and Financial Advisers Amendment Bill. The Commerce Committee which I was not on considered this legislation and I am sure under the guidance of the Minister the Hon Simon Power it has done a very detailed and thorough analysis of what is required to deal with some of the issues. 
The objectives of the bill are twofold: to respond to the global financial crisis by removing unnecessary impediments to raising capital in New Zealand and to ensure the timely disclosure of relevant information to prospective investors. That is the nature of the objectives of this legislation. The Securities Act 1978 provides exemptions from standard disclosure requirements for certain investors who because of their experience and knowledge for example are assumed not to require the standard level of protection that the Act offers. The appropriateness of these exemptions will be reviewed in the current full review of the Securities Act. In the meantime however this bill proposes some amendments that by removing minor anomalies in the law will make it easier for businesses to raise capital. Although those changes would apply to both listed and unlisted companies they would particularly benefit private companies that tend to approach investors for capital directly often in cases where the investor is well known to the issuer. That is what we often call a closely held company; it may not be listed but it is a company that has issues around the investment and the capital that is needed. Basically that covers a lot of New Zealand investment because we have a very big small-business community in New Zealand that makes up a huge part of our business community. So the investment in those small to medium sized businesses is crucial to the economic growth of this country especially in these uncertain economic times. 
The select committee recommended exemptions from standard disclosure for subsequent offers which after an initial subscription of $500000 would be allowed to include offers for different types of security rather than just being limited to securities where the rights privileges limitations and conditions attached are identical to those initial securities. Basically what the select committee is doing there is looking at the different types of securities that are outside the previous ambit of the initial security offer to give a little bit of flexibility to those that are making the offer so that investors have a bit more comfort in investing in the company at stake. The committee looked at the extension of offers to subsequent offers made within 18 months of the first allotment rather than the 12-month process. 
AMY ADAMS (National—Selwyn) 
: 
 I also am delighted to take a call in the Committee stage of the Securities Disclosure and Financial Advisers Amendment Bill. In looking back to the first reading debate I think that the points raised there were absolutely correct. They focused in large part on the absolutely fundamental importance in a climate like we have in front of us of access to capital. Businesses in this environment more than in any other will be fairly clear on the point that the ability to access capital is one of the key criteria that will determine the success or failure of many a business over difficult times. Issues around liquidity and cash-flow management are absolutely essential to that debate. 
Like many of the issues we have been discussing this is the journey of a thousand miles. We cannot fix it with one simple piece of legislation that will make all the ills of the world—all the capital and liquidity issues—drop from in front of us. We have to take a number of small steps and this bill is certainly one of those steps. 
As the Minister of Commerce has already told us in his opening remarks tonight this bill will simplify capital raising by identifying where information is already in front of markets and in front of the prudent investor and removing the need for those companies in particular companies that are listed on the stock exchange to have to jump through hurdles and reproduce re-present and re-disseminate that same information. That sounds very sensible and very clear-cut but of course the difficulty and the challenge for a Government in doing that is to ensure that the change does not go beyond removing duplication to in any way undermine investor confidence in the markets. That must be ensured. 
Equally however if areas can be identified where there is simply unnecessary duplication and that duplication not only is putting cost on business but is delaying their ability to access funds and is making those funds harder and harder to access then it is absolutely our duty and our responsibility to say that we will not have bureaucracy for the sake of bureaucracy. There is no point in keeping bureaucrats busy with busywork. If those requirements will not add to investors’ protection in the market then there is no need to have them. Under this bill we have the ability to exempt certain businesses from providing information that is already provided where that information can be shown to already be in front of the market. Those who offer certain debt and equity instruments will be able to take advantage of that simplified disclosure regime for their prospectuses. 
Having worked with the Securities Commission on behalf of clients for many years I am well aware what a prudent and effective watchdog of investor rights it is. I think it is worth pointing out and putting on record that that scrutiny and those protections that already exist within the Securities Act are very much maintained and that the changes here although they will make it easier for business are not doing so at the expense of the investing public. I think that point is worth making. 
The other part of the bill that I particularly want to talk about in this part of the Committee stage is the changes to section 3(2) of the principal Act inserted by clause 5. This clause inserts a further category of exempt persons clarifying the law around exempt persons and effectively says that investors who have already invested $500000 in substantially similar securities can be regarded as having more awareness more competency and more involvement with and oversight of the activities of that company. They are not in the same category as a mum and dad who saw an ad in the paper and thought they would sign up for a couple of thousand shares because the guy down the road thought it was a very good idea. Investors in this category have identified themselves by that sort of large investment as investors of a certain level of skill and experience and as regular habitual investors. The bill creates this additional safe harbour category. I think that is important because in many situations business partners who are very experienced and very careful and who are used to doing these sorts of transactions are being forced to jump through a whole series of hoops that they neither want or need. Again it is about getting the balance right so that we allow people who know what they are doing who have proven their experience in that field to get on and do it. 
This is about information that is already available. The information is already out there for investors. We are simply saying once more that here is an area where the Capital Market Development Taskforce has identified some unnecessary red tape and unnecessary bureaucracy and we as a Government in our push to make business easier in troubled times and to get this economy growing will address that. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 New Zealand is probably alone in the world in deregulating in the face of what has occurred overseas. I would be very interested to hear what other members of the Government have to say about that issue. 
I will speak about one particular issue which is the whole question about experienced investors and wealthy investors. The issue the previous speaker has not taken into account is measuring somebody’s ability to invest without proper advice being given to them and not having all of the detailed information that is available through a prospectus explained to them. Just because someone has a large amount of money it does not necessarily make him or her someone who needs to be protected from this overregulation which is how we have just had it described. 
I make the point that there are business people in this country who have retired who put every single last cent of their money into ING and they are now facing a 60 percent return on that investment. Those people deserve to have the full ramifications of their investment explained to them. I have made the comment on more than one occasion that ING in offering 60c in the dollar really owes the country an explanation as to why it says that those who accepted the 60c in the dollar should release ING from any consequences that may flow from a Commerce Commission investigation. I cannot believe that members of the Government think that that is OK because it is not OK. 
That is why I have raised a concern both at the select committee and in subsequent comments that I have made on this legislation that although we are not opposing the specific amendment around wealthy investors some of us are very concerned that changes are being made to the exemption when the exemption itself may be repealed as a result of the review of the financial products and providers process. 
Personally I think the exemption should be repealed as the discussion document stated. The people who proposed these changes the Capital Market Development Taskforce when they appeared before the committee had not even read the discussion document that had been put out on this very subject of wealthy investors. I think it behoves us to give this matter a little bit more careful consideration. 
The discussion document describes the wealthy investor category as the least principled exemption in the Securities Act. It is very important that we look at the recommendations in that discussion document which are to beef up the provisions around sophisticated investors. These are the real people who are prepared to take the risks. The professional habitual and experienced investors are sophisticated investors. Let them make a choice about where they get their information from. I have no objection to that. But we should not say that somebody is able to make those decisions without having the protections that the law is supposed to give. I know that the Government likes to talk about it as regulation; let us talk about it as protection. Someone cannot just give up that right to protection simply because he or she has a large sum of money at a given moment in time. I would expect someone selling a business to have more than $500000 in the bank if he or she has been any good at running a business. That does not necessarily mean that that person will be able to make a good decision on where to invest that money in terms of how it will support him or her in retirement. 
I think the Minister should respond to the question about why we are making an amendment to the wealthy investor provision when in fact we will be undertaking a serious review of the legislation as a whole and we will be looking I hope at beefing up the professional habitual and experienced investors category. 
I should also make the point that we have clarified in this bill that somebody who is asserting this exemption will sign a document stating that he or she will not be receiving any of the information that is usually provided by an issuer offering securities to the public. Again that is a very clear statement that the investor is accepting the responsibility of going ahead with the investment without having that particular information. I would like the Minister to respond to that question. 
AARON GILMORE (National) 
: 
 I am pleased to rise to talk in support of this bill. It is an interesting bill for me in that in my professional capacity I used to raise a lot of money for venture capital companies. In fact I was an investor this bill would apply to in many ways in terms of investments of half a million dollars. I will talk a bit about some of this stuff. As someone who has gone through a prospectus and the situation of spending $10000 to $50000 on legal costs probably in Mr Chauvel’s old firm— 
Charles Chauvel 
: You can’t leave the lawyers poor. 
AARON GILMORE 
: —no let us see how we go—I know that to go through the process of raising an investment statement costs anywhere between $10000 and $50000. That is a dead-weight cost for somebody who is going to invest anyway. The previous speaker talked about the worry for those people who may be investing in this category. I think it is interesting that the previous speaker was the Minister of Commerce for a number of years; she had opportunities to do many of these things but never took them up. 
One of the interesting things that exist in clause 7 of this Part 1 is the really good amendment in subclause (7) allowing people who have the opportunity to take up this choice to disclose. They will have the ability to sign away and know that they have had that opportunity to turn down a prospectus or the investment statement that is normally given to investors. I saw a number of examples in my prior job and the man who chaired and ran the Capital Market Development Taskforce was my former employer my former boss. He is an interesting gentleman and he came up with some interesting changes to the scheme outlined in this bill. I think they are positive changes and they will allow venture capitalists to raise capital faster. The costs going to lawyers and accountants will be reduced and I think that is a good thing as some of those costs are completely wasted. My friends in the accounting and law professions will not be happy with that but it is a step in the right direction to reduce some of the costs that exist for raising capital across New Zealand. If we look at the capital raisings that have occurred in New Zealand that this legislation will apply to we can see that millions of dollars in time and effort could be freed up and used for more productive purposes. Those investors could apply those millions of dollars to productive parts of the economy and that would be a wonderful thing. If it allows one or two new businesses that are fast growing to raise capital they otherwise would not have raised because it would have been wasted on accountants and lawyers then that will be neat. 
The amount of capital that was used to set up TradeMe for example was in the order of a couple of hundred thousand dollars initially. Maybe another five or six “TradeMe” companies could be created as a result of fees being freed up from lawyers and accountants because of this bill because people will enrol in this and sign away their rights and will not have to spend so much money. They will knowingly have the ability to say that they do not need an investment statement; they will have the professional capacity and knowledge to make a decision on that. I think it is a really positive move. 
Hon Lianne Dalziel 
: What are you going on about? TradeMe didn’t do that. 
AARON GILMORE 
: Unlike the member on the other side I have raised millions of dollars in this sort of thing before. I have seen it in practice I have seen it working and I have seen the amount of time and effort that is— 
Hon Lianne Dalziel 
: You’ve done everything! There is nothing you haven’t done! 
AARON GILMORE 
: That member might think so and maybe that is right. Maybe there is a bit of envy on that side of the House; I think it is really interesting. But if we look at what this bill will do we see that it will free up the ability for investors to do positive things. Maybe the members on the other side are a little bit jealous because they do not have the ability to take up this opportunity—maybe; I do not know. This bill will allow some investors to improve their ability to invest in companies they want to invest in. It will reduce their costs and speed up the time and the effort for them to do so. I think that is a good step. If those members on the other side of the House are against that then that is their prerogative. If they are all for giving lawyers and accountants more fees and not having that money invested in productive parts of the economy then that is an interesting thing given we are in the middle of a recession and we want to reduce our red tape. But I think these are positive steps. 
There are many aspects of this bill that we could touch on in this initial part and the other exemptions that exist in other parts of the bill are all positive steps. There are some questions over the move from 12 months to 18 months that the committee has made some decisions on but they are positive moves. I can understand that and I think it is a positive step in the right direction. There were a number of questions and issues raised by the previous speaker but they are not in the scope of this bill. As I said this bill is designed to free up the ability of people who are what we call in the Securities Act “habitual investors” to invest and to reduce the cost of their investing so those companies that are trying to raise capital in the capital markets can do so cheaper and faster. 
Hon Lianne Dalziel 
: The wealthy—it’s another section that deals with experienced investors. 
AARON GILMORE 
: You know that member went through the select committee on this bill. Thank you. 
CHRIS TREMAIN (National—Napier) 
: 
 It is always a pleasure to rise and speak after a member who has the level of experience in the business community that Mr Aaron Gilmore has. 
Charles Chauvel 
: Self-confidence! 
CHRIS TREMAIN 
: No it is. 
Hon Darren Hughes 
: Stop laughing! 
CHRIS TREMAIN 
: It is an absolute pleasure to have members on this side of the Chamber who have been out there raised capital in the financial markets and dealt with the issues that come along with that. 
Tonight I want to focus on the Securities Disclosure and Financial Advisers Amendment Bill and at this point in the debate on Part 1 I want to discuss clause 4 “Interpretation” and also clause 5 “Construction of references to offering securities to the public”. Before I do that I say that this particular bill responds to the current international financial crisis by removing unnecessary impediments to the raising of capital while ensuring the timely disclosure of relevant information to prospective investors. Members of the public will be wondering how this particular bill helps businesses to raise capital and what the issue is with regard to that. The fact of the matter is that we have been through a financial crisis of huge magnitude over the last year to 18 months. The issue here is the credit crunch which has made it very difficult for businesses to raise debt on financial markets. 
One example from the Hawke’s Bay of this issue is a business with a total balance sheet of about $10 million that had about $8 million in borrowings and about $2 million in equity. All of a sudden with the credit crunch the banks came back to this particular company and said they were no longer prepared to lend to the level of debt at 80 percent and equity at 20 percent and they wanted to see that come back to debt at 60 percent and equity at 40 percent. That was all very well but for a company like that to come up with $2 million in equity overnight is quite simply impossible. It is just impossible for shareholders in a small company to raise $2 million out of their back pockets. It puts huge pressure on these companies to raise extra equity and that starts to push them very close to a position where the banks come in and say they are actually going to wind the businesses up. That has a huge impact on jobs in this country and has a downstream impact on suppliers who provide goods and services to those companies. 
That is why a bill like this is so important. It puts a focus back on what is a rare commodity at the moment: capital. Over the previous year or so we have been financing companies by debt and now there is a focus on bringing more capital into them so a bill such as this is particularly important. Under the runaway credit economy businesses were able to get to a position where they were financed by up to 90 percent debt and 10 percent equity. Although that might have provided a much better return on invested equity for shareholders the fact is that it became pretty risky. When the credit markets tightened and banks came in and said they were sorry but 10 percent equity was no longer any good and they wanted companies to be back at a level of 60 percent debt and 40 percent equity that put huge pressure on companies. This Government through Minister Simon Power has stood up and asked how we can make it easier even in difficult conditions—because capital is really rare at the moment—to get more capital into those businesses. That is what this bill does. 
Part 1 deals with the Securities Act 1978. It is a substantive part of this bill and it deals with a number of sections of that Act. In the interpretation clause there are a couple of definitions that simplify disclosure and prospectuses. We are trying to take the compliance costs out of complex prospectuses once again making it easier for capital to get into not only small businesses but also medium-sized and larger businesses. Having a simplified disclosure prospectus will certainly do that. Part 1 does a range of things. The amendments will make things easier for both stock market - listed companies and unlisted businesses. Overall I think Part 1 will improve that Act. 
CHARLES CHAUVEL (Labour) 
: 
 It has been interesting to listen to the debate so far in this Committee stage on the Securities Disclosure and Financial Advisers Amendment Bill. Both the previous speaker Chris Tremain and Amy Adams spoke about the importance of broadening and deepening New Zealand’s capital markets and no one on this side of the Chamber would argue with that proposition. But it is fascinating to hear this bill being trumpeted as a contributor to that exercise; I would have thought that if anything this bill will make a relatively small contribution to it. 
If we were really serious about broadening and deepening capital markets in this country then we would encourage better savings as David Parker has just said. We would not have refused Kiwibank permission to get itself into a better equity permission which is what I understand Ministers have told the New Zealand Post board. We would not have decimated the New Zealand Superannuation Fund contributions in the way that the Government did in the Budget and frankly KiwiSaver contributions would not have been cut in half either. Those are the long-term paths to increasing savings in New Zealand and to broadening the sorts of capital markets that speakers have been referring to. The proof of the pudding in that of course is the Australian example. The superannuation investments that have been made there over the last 10 or 15 years since Paul Keating put in place the compulsory superannuation that Australia now has have really made a difference. They have created a huge pool of capital savings upon which businesses can draw for investment. 
It was interesting to hear Aaron Gilmore’s contribution and of course very entertaining. The problem with using TradeMe as an example is that I am not entirely sure that the provisions of this legislation would have applied to TradeMe. As I understand it that was a privately owned business until it was acquired by Fairfax so there would not have been a requirement for a prospectus at all when that business was started. But I may be wrong and if I am I bow to that member’s clearly superior intelligence and experience. 
Dealing with the substance of Part 1 the major amendments recommended by the Commerce Committee are to clauses 5 and 7. In respect of clause 5 the recommended amendment would allow subsequent offers after an initial subscription of $500000 to cover different types of security rather than limiting this to securities carrying identical rights privileges limitations and conditions to the initial securities. The recommendation from the select committee was that the bill should allow offers subsequent to an initial $500000 being made within 18 months of the first allotment rather than 12 months as was originally proposed in the legislation. That amendment appears in the bill as it is reported back and although as speakers on this side of the Chamber have indicated we do not regard this reform as particularly ambitious we are not opposed to that amendment. 
The select committee also came to the view that it was unnecessary to restrict the securities to those identical to the initial securities. If that premise was accepted limiting the securities to the original offer would needlessly restrict a company’s ability to use a range of investment vehicles to raise further capital from its initial investors. Following that logic there are amendments to clause 5 and again those amendments are supported by members on this side of the Chamber. 
Then there are the provisions on experienced investors the changes that are reflected in clause 7 and which are made in the bill. As I have said although Labour does not regard these changes as particularly ambitious we do not oppose them. We can see that they make sense. 
I hope that the Minister in the chair the Hon Simon Power will take a call and that we will hear from him in response to the questions that were posed by my friend and colleague Lianne Dalziel on the question of wealthy investors. It seems to me that there are some important unanswered questions on that topic and it would be good to hear from the Minister on them. 
MICHAEL WOODHOUSE (National) 
: 
 I am delighted to take just a quick call on Part 1 of the Securities Disclosure and Financial Advisers Amendment Bill. Before I do I feel the need to defend my colleague and the future member for Christchurch East Aaron Gilmore. He is one of the few members of this House who has actually had a little bit of experience in the issuing of securities. I find it quite extraordinary and rather sad that our friends on the other side see it as some sort of humorous joke that Mr Gilmore is prepared to share the benefit of that experience and the need to raise these securities and invite empathy with his past taking of the risk and somehow that is a bit funny. Well I find that particularly sad especially given the dearth of business experience on the other side of the Chamber. Yes the Opposition has a few lawyers which is always good. The world needs more lawyers I am sure the public will agree but really there is an absolute dearth of business experience among members opposite and I find it really sad that somehow that should be seen as a bit of a joke. 
I will also touch on the comments made by the soon-to-be former member for Christchurch East about her investing without proper advice being available. Let us bear in mind that the whole purpose of the amendment we are discussing is that the provision is for people who have already invested at least $500000 in the organisations that are issuing securities and have already gone through the necessary due diligence to assure themselves that they have all the information on which to base their initial investment decision. Yes we can talk about what other information they need and about the time frame between 12 and 18 months. I think that is probably semantic but it is an appropriate response given the select committee’s careful consideration of that issue. 
I also acknowledge Mr Chauvel’s contribution about this legislation being seen to broaden and deepen the financial market’s ability to raise cash. I think he said the bill is a small contribution to that goal and not ambitious. I find that somewhat disingenuous particularly in the light of the very deliberate but rather small steps the previous Minister of Commerce took in this regard. Of course every journey starts with an initial step and it is quite clear that these amendments will improve the ability not only of investors to invest easily but also there is the issuing of securities which is a significant burden on the issuer and we have not talked so much about the benefits of these changes on the issuer themselves. Obviously this is a less invasive regulation that they need to comply with and something they will benefit from. 
I applaud the Commerce Committee for the work it has done on this legislation. I am also interested in the comments made about whether there will be an inquiry into the failed finance companies. I am not sure whether that decision has been made and I will certainly defer to the chairperson of the Commerce Committee in that regard. What is certain and I understand the Minister has said this too is that we should not cut across the existing inquiries by the Commerce Commission and other authorities into that collapse. We need to tread carefully in that regard and I am sure the committee will. I support this bill. I think it will be extremely positive. It is a small but significant step in reducing the compliance for issuers and taking away some of the problems for experienced investors. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to speak to Part 1 of the Securities Disclosure and Financial Advisers Amendment Bill. The bill is a step in the right direction in this recession a recession the likes of which we have not seen since the 1930s. The bill attempts to deal with some of the struggles that businesses are facing in raising capital giving certainty to those companies. 
Around 11 New Zealand finance companies are unaffected by receivership moratoria or restructure according to a report that was considered by the Commerce Committee. That report was the very helpful  
New Zealand Finance Companies Report 2008 
 prepared by McDouall Stuart. There used to be a lot more of these companies before the pinch of the recession and many of them are presently busy restructuring and dealing with falling levels of reinvestment from retail deposits. 
This bill attempts to deal with the struggles that finance companies are having by providing for the use and regulation of a simplified disclosure prospectus by stock exchange - listed issuers offering certain debt and equity securities. Amongst the sector there is some hope though thanks to the previous Labour Government’s fast attempts to guarantee retail deposits in these tough times. Until the guarantee scheme was announced we did not see a recovery from the debenture downturn that was being faced by most of the sector. 
The “buy now pay later” approach that has become so ingrained in many New Zealanders is over. New Zealanders have traditionally had a poor record of savings in New Zealand and that has been worrying. Savings are important during recessionary periods because we can never be sure of what is around the corner. That is why KiwiSaver—a Labour Government initiative—was so important. Unfortunately KiwiSaver is now being eroded. 
The poor savings record of New Zealanders has resulted in a reliance on offshore funding and KiwiSaver simply makes sense as a voluntary savings initiative that was designed to make it easier to save for the future. But on the election of this Government one of the Government’s priorities was to examine KiwiSaver. As with many initiatives the Government decided there was room for change and then it decided to gut the scheme. Any of the changes made to KiwiSaver simply go against what the scheme was set up for. 
With regard to global pressures I tell members there has been encouragement in the recovery of household savings. That should contribute to an improvement in New Zealand’s external balance over the next few years according to a May press statement from the Reserve Bank stating that the global financial crisis is still affecting New Zealand. 
The explanatory note of the bill states: “The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors.” Finance companies have been heavily hit by the recession because they were typically the holders of second or subsequent mortgages that took direct hits and it was the start of the property market downturn in 2007 that was the crucial turning point of the collapse of New Zealand finance companies. 
It is interesting that of those finance companies that struck problems most opened their doors only 5 or 6 years ago. It was Labour that set up the Capital Market Development Taskforce in July 2008 which is where I understand many of the proposals contained resulted from and I thank the Hon Lianne Dalziel for taking that initiative. 
Another initiative that this Government could have taken but decided against was the inquiry into bank profits by the Finance and Expenditure Committee. Today Labour the Greens and the Progressive party will hold the equivalent of this inquiry as announced today in a joint statement. Labour wants ordinary New Zealanders to share their views—and we are listening unlike Government members on the other side of the Chamber. 
TIM MACINDOE (National—Hamilton West) 
: 
 I am pleased to hear the new member for Dunedin South taking a reasonably serious response to this issue because like my admirable colleague Mr Woodhouse the future member for Dunedin North I have been particularly concerned as I have sat in the Chamber for the last three-quarters of an hour— 
Hon Members 
: Ha ha! 
TIM MACINDOE 
: It has happened before I say to members opposite and it will happen again. It was not so long ago that Dunedin North was held by the National Party and if ever the conditions were right for us to recapture the seat they have to be right now. And if ever there was a member more likely to do it it would have to be Michael Woodhouse. I look forward to seeing Mr Woodhouse emulate the feat of Richard Walls in 1975 and it is tremendous to be able to welcome the retiring member the Hon Pete Hodgson into the Chamber as I do so. 
It has been a bit disturbing to hear members opposite tonight taking a fairly cavalier approach to what is a pretty serious issue so I am delighted to be able to take a call to lend my support to the amended Part 1 of the Securities Disclosure and Financial Advisers Amendment Bill. I commend the Minister the Hon Simon Power for yet another measure that he is personally spearheading through this House. He is tackling an issue of tremendous importance to many New Zealanders. I also acknowledge the hard work of members of the Commerce Committee. Like my good friend and colleague Mr Bennett I was not a member of that committee but I am aware of the fact that a huge amount of work has gone into this bill as members have considered many amendments and I am sure they have brought forward a bill that is much improved as a result of their efforts. 
I am surprised and disappointed that although some members opposite have occasionally risen tonight to take an inaudible and incoherent call or to make the odd interjection they have broadly speaking shied away from speaking as often as they could despite apparently as we have just heard from the previous speaker and from Ms Dalziel being pretty much in favour of this measure at a time—and this is the really important point—when businesses around this country and certainly in my electorate are really crying out for capital to enable them to continue producing and trading in these incredibly challenging times. I am really pleased to be here tonight to represent those in my electorate who say that this measure is desperately needed and to stand in strong support of my colleagues who have received the same message. This is a Government that is listening to the needs of the people this is a Government that is listening to the needs of the business community and this is a Government that is producing pragmatic appropriate steps as the need arises. This legislation is definitely an approach to economic management that is finding favour in the community at large. 
I doubt whether there are many constituency MPs who are not being contacted by local business owners in their electorates almost on a daily basis who urgently need to be able to raise capital to continue operating to continue employing and to continue producing and trading to earn foreign exchange. 
Hon Lianne Dalziel 
: How many of them issue prospectuses? Seriously how many have contacted you? 
TIM MACINDOE 
: Undoubtedly that is why most submitters I tell Ms Dalziel were in favour of the overall thrust of this bill—she can carry on talking but she has to say something that is worth listening to—and in particular in favour of a simplified disclosure regime. 
My colleague Aaron Gilmore drew on his vast international and commercial experience to highlight the obvious benefits of this measure much to the obvious delight of Opposition members and we on this side of the Chamber share their deep appreciation of his expertise. As he and my colleague the member for Napier both noted this bill is yet another important measure in the National Government’s prudent pragmatic and determined commitment to guide New Zealand through—let us remember—the worst global recession not only in my lifetime but since the great recession of the 1930s. Inevitably with a measure— 
Hon Lianne Dalziel 
: Look how many issuers have approached you? Tell me; name one. Name one issuer— 
TIM MACINDOE 
: I could name many of my constituents but as an experienced member like Ms Dalziel well knows that would be totally inappropriate. However I am more than happy to have that discussion with her outside this Chamber and look forward to doing so very soon. There will always be some who claim that a Government is not going far enough and sure enough that came through in the submissions. 
RAYMOND HUO (Labour) 
: 
 Labour supports the Securities Disclosure and Financial Advisers Amendment Bill— 
Hon Members 
: Hurrah! 
RAYMOND HUO 
: Thank you for that. The bill is intended to make capital raising more efficient through reducing costs to issuers while ensuring that the level of information provided to potential investors is not reduced. 
The bill is in two parts. Part 1 amends the Securities Act 1978 and Part 2 the Financial Advisers Act 2008. After this Committee of the whole House stage the legislation will be divided into two separate bills: the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. The intended benefit of the reform is usefully summarised by Bell Gully: “The obvious advantage for listed issuers is to reduce the time and the cost of complying with the full (prospectus and investment statement) disclosure regime. The simplified disclosure prospectus would not seek to reduce the amount of information available to investors instead simply to reduce duplication. As a result relevant announcements and information made through the continuous disclosure regime will need to be referenced (incorporated by reference) in a simplified disclosure prospectus and made available to investors.” 
At the bill’s second reading I cited as an example of the simplified disclosure prospectus that an offer of fixed-rate bonds for Auckland International Airport Ltd—which was prepared for illustrative purposes—could be succinct enough to be limited to 25 pages compared with the 300-pages of the original investment statements and prospectus. That demonstrates the simplification that is possible through avoiding the duplication of material including material released under continuous disclosure. I thank officials for the great efforts they have put in. 
Part 2 amends the Financial Advisers Act 2008— 
The CHAIRPERSON (Lindsay Tisch) 
: No we are on Part 1. 
RAYMOND HUO 
: Part 1 yes. The Commerce Committee of which I am a proud member spent a considerable amount of time deliberating clauses in relation to exemptions. The Securities Act 1978 provides exemptions from standard disclosure requirements for certain investors who because of their experience knowledge wealth and existing relationship with the issuer are assumed not to require the standard level of protection the Act offers. The appropriateness of those exemptions will be reviewed in the current full review of the Securities Act which forms part of the Review of Financial Products and Providers. 
However Labour members of the Commerce Committee have concerns about the wealthy investor category. As the Hon Lianne Dalziel and my friend and colleague Charles Chauvel said earlier although we do not oppose the specific amendment we are concerned that changes are being made to the wealthy investor exemption when that exemption may be repealed as part of the review of the Securities Act. I note that in the relevant Review of Financial Products and Providers the discussion document described it as the “least principled of all the exemptions.” 
To conclude I say that this bill is designed to remove impediments to raising capital without undermining investor protection. Labour supports those proposals which are the outcome of recommendations made by the Capital Market Development Taskforce in November 2008. The Labour-led Government launched the task force to identify ways to improve access to capital. It is great to be able to support legislation that we began. I congratulate the Hon Simon Power on adopting this great initiative. Thank you. 
HEKIA PARATA (National) 
: 
 Tena koe e te Heamana huri noa i te Whare tena tatau kia ora tatau katoa. 
[ 
Greetings to you Mr Chairman and to us all throughout the House greetings. 
] 
Te Ururoa Flavell 
: Kia ora. 
HEKIA PARATA 
: Kia ora tungane. I am pleased to rise and take a short call on the Securities Disclosure and Financial Advisers Amendment Bill tonight. This is one small step as has been pointed out by others at a time when we are discussing landing on the moon but it is a small step of a different kind. As my colleague Mr Macindoe indicated it is characteristic of the approach of this Government which is pragmatic and practical. The approach is characterised by a short medium and long-term outlook in relation to all that we do. So although some of these initiatives such as the one we are debating tonight are small in the scale of things they nevertheless contribute to the longer-term outlook on how we free up the environment so that businesses in New Zealand can be successful not only now while we face this recession but also long into the future. 
We are facing one of the biggest challenges of our time and it is important that we bring to bear a range of possibilities that will make it easier for New Zealanders to achieve the goal of this Government which is to facilitate a better quality of life for all New Zealanders. The way that quality of life will be achieved is by ensuring that we can grow our economy that there are jobs and incomes available to New Zealanders and that they are not buffeted too badly in the recession and more than that that in the medium to long term they are able to invest in businesses with confidence and confidently attract investors. This bill contributes to that kind of environment. In Part 1 we are concerned to ensure that investment can continue that businesses are able to raise capital and that we can simplify disclosure while at the same time allowing businesses to focus on their business rather than being overburdened by compliance and reporting. We want all businesses to benefit from this kind of simplified environment whether they are small medium or large. 
As I have said the goal of this Government is to increase growth and productivity such that we can look forward to an improved quality of life for all New Zealanders. How does this bill contribute to that? It amends two separate Acts: the Securities Act 1978 and the Financial Advisers Act 2008. The objectives are twofold. In the first instance the objective is to respond to the global financial crisis by removing unnecessary impediments to raising capital in New Zealand while also ensuring the timely disclosure of relevant information to prospective investors. The bill implements changes to simplify this process and to reduce the costs of compliance with existing securities legislation. The bill addresses a number of the recommendations made by the Capital Market Development Taskforce and as I have already said it is part of an urgent response to the current global financial crisis. It is part of the Government’s commitment to helping New Zealand get through the economic downturn in the best possible condition. 
I understand that there were a number of submissions on the bill. Like my colleagues before me I congratulate the Commerce Committee on the work it has done. I also acknowledge the previous speakers on this bill in particular my colleague Mr Gilmore. I share in the comments of my colleagues Mr Woodhouse and Mr Macindoe that it is a sad day indeed when members choose to disparage the experience and competence of someone who has direct experience in the industry when that person has the opportunity to bring that experience to bear in the Chamber. I should have thought we would be able to celebrate contributions of the kind that Mr Gilmore has been able to share with us. I look forward to continuing contributions of the calibre that Mr Gilmore has to offer us. 
Returning to the bill I say that I have personal experience— 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to remind people what the Securities Act 1978 is about. It is investor protection legislation. It is not there to make it easy for business to raise capital; it is designed to protect investors. That is its function. I will set out for members opposite—because it is obvious that they have not been listening—why we agree with this particular amendment. But I also point out that anyone who stands in this Chamber and ignores the fact that the Act was designed in 1978 under a National Government to provide investor protection should remember that that is what the legislation is for. 
The premise underlying the Act is that the best protection for investors lies in full timely and accurate disclosure of information material to investment decisions. This allows investors to make informed decisions on the potential risks and rewards of their investment choices and to take responsibility for their own investment decisions. 
Let me make another point. Everyone who has spoken has talked about the recession. Everyone has spoken of it. Why did it happen? Can anyone remember what started the global financial crisis? Members on the other side of the Chamber want to ignore the fact that people were allowed to get away with dishonourable immoral and unethical conduct in the business world whereby they took money off investors knowing full well that their interests had not been disclosed and explained to those investors. They allowed investors to lose a considerable amount of money as a result. At the end of the day New Zealand was protected from the full impact of what happened internationally by banking regulations that were enforced and were not able to be opted out of with a sweetheart deal on insurance as was the case with AIG in America. 
I think people should remember that regulation in this area is absolutely vital to investor protection and to confidence in the markets. When that confidence goes look what happens! We have heard people talking about finance company failures in New Zealand. When one fell over it had an impact. When two fell over it had more of an impact. When three fell over the rest started to tumble. Investor confidence must be drawn back into our capital markets. That is one reason why we established a Capital Market Development Taskforce. 
Labour accepts this bill because it is a relatively small adjustment to the rules. It is a relatively small adjustment and we do not see any great risk associated with these particular amendments. They go nowhere as far as the Capital Market Development Taskforce wanted to go. These changes are very minor compared with what it asked for. But we are prepared to go with the bill because we have assessed it against the level of risk that people will be asked to take. I think this House is in danger of overstating the importance and impact of this particular legislation. 
The one matter I have an issue with and one that the Minister will not respond to relates to why we are adjusting the wealthy investor provision at all when in fact I hope it goes as a result of the fuller inquiry now being undertaken into the Securities Act with the review of securities offerings. We mentioned it in the report back from the Commerce Committee because it is stated to be the least principled of all the exemptions. Just because someone has a lot of money at a particular period of time does not mean he or she is no longer in need of protection in terms of full timely and accurate disclosure of information. 
It is really important that we get on with the major piece of work that is coming in terms of the review which is why I am disappointed that the Minister has not responded to the question about why we should bother amending the wealthy investor provision. I hope he will give us some guidance as to where the Government might be going with that particular review. I hope that matter is before the House in the not too distant future. 
KEVIN HAGUE (Green) 
: 
 I agree with the analysis that has just been presented by the Hon Lianne Dalziel but I differ from her conclusions. The origins of the Securities Disclosure and Financial Advisers Amendment Bill predate the financial crisis. I have spoken in the Chamber on a couple of occasions now about the events that have occurred in the world since 2006. The crisis if anything must surely have taught us that the balance proposed by this bill between access to capital for businesses on the one hand and protection for investors on the other hand has been struck in the wrong place. The events of the crisis should have caused the Government to rethink where that balance is to be struck. In this case the increased risk to investors on the one hand outweighs the marginal benefit to businesses from somewhat increasing their access to capital. The Green Party opposed the bill at its first two readings and will continue to do so. 
I will talk about one of the matters at the heart of the bill because it is a fundamental matter of political philosophy. It is the extent to which people should be protected from the consequences of their own decisions when those consequences are adverse. This bill touches precisely on that point. It is all very well to say a fool and his money are easily parted and the fool should take those consequences but the reality in this case is that actually we all pay for the cost of those poor decisions. In excess of $7.1 billion worth of New Zealanders’ wealth was invested in the finance companies. Now at least $1.7 billion worth of that wealth is tied up in the various finance company moratoria. That represents an enormous erosion of national wealth. In other words we all face the consequences of the poor decisions made by those individuals. There are other consequences. Those individuals who were relying on those investments for their retirement savings will now be coming to the State and saying they need support. The issue is not as simple as saying the individual must face the consequences of his or her actions because we all face those consequences. 
I want to draw the House’s attention to the report by the Morningstar Group which reviewed a number of countries for their friendliness with regard to investment. The report looked at Australia Canada China France Germany Hong Kong Italy Japan the Netherlands New Zealand Singapore Spain Switzerland Taiwan the United Kingdom and the United States and it looked at a variety of criteria. Overall New Zealand ranked dead last of all of those countries in relation to our friendliness to investment. In particular the issues on which we ranked the poorest—with a D minus—were in relation to our disclosure provisions and investor protection. Those are the very provisions that this bill seeks to relax. 
I know that the Government will say that the bill does not represent a relaxation of the disclosure provisions because investors can still find the same information through the continuous disclosure procedures. However the reality is that that represents an erosion of the accessibility of the disclosure information and a reduced accessibility of the information effectively amounts to the same thing as a relaxation of the provisions. The bill is relaxing the disclosure provisions at the precise time when around the world everyone is saying we need to increase transparency and disclosure. It is clearly the wrong direction for New Zealand to be moving in to relax those provisions. 
I will conclude by also referring to the wealthy investor provisions and to heartily endorse the comments made by Lianne Dalziel. There is no place for those provisions. I have spoken previously in the Chamber about Madoff’s Ponzi scheme and about the very compelling demonstrations that have been provided both in New Zealand and around the world of the relative inability of wealthy investors to make wiser decisions than the rest of us. Once again I say we all face the consequences of their poor decisions. 
The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Simon Power to Part 1 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2 Financial Advisers Act 2008 
DAVID BENNETT (National—Hamilton East) 
: 
 It is a pleasure to speak on Part 2 of the Securities Disclosure and Financial Advisers Amendment Bill. Part 2 deals with some amendments to the Financial Advisers Act 2008. It seeks to correct some small errors in that legislation and to make sure that those minor and technical changes are made in a way that ensures the Financial Advisers Act is complete and effective. 
Some of those minor issues relate to bigger issues. I refer to some of the issues that were discussed in the last term of the previous Government in regard to financial advising. “Retirement villages disclosure statements” is one of the headings in the commentary. When we looked at retirement villages we saw that there was quite a bit of debate about retirement villages in the last term of the previous Government. Any constituent MP has probably dealt with retirement villages and the need for disclosure that came about in the last term of the previous Government. Some villages felt that they needed an exemption from that disclosure and felt that the rules were too onerous. This legislation inserts a new clause 16A “clarifying that the disclosure statement which operators of retirement villages must make under the Retirement Villages Act 2003 does not constitute financial advice for the purposes of the Financial Advisers Act.” This new clause just clarifies the requirements in respect of disclosure statements for retirement villages. 
Another minor change that Part 2 makes to the Financial Advisers Act covers some minor drafting errors. Clause 16B corrects a minor typographical error in section 17(1) of the Act and clause 16C amends section 18(1) of the Act to reflect that an agent is engaged rather than employed. That may seem like a very simple difference but it is reflective of the nature of Labour Party members. They could only ever expect somebody to be employed. They would never expect someone to be engaged because they do not have the level of understanding of business that National members have. I think that change is very symbolic as it shows the fundamental difference between the two political parties. One political party understands business and is doing what is in the best interests of New Zealand companies and New Zealand investors so that we have a strong investment climate in these economic times. Members on the other side of the House try to play on keeping people under the thumb of the Government and under too many rules and regulations. It does not like to see people succeed and make choices and make investments because it wants to be able to control those things. 
Todd McClay 
: They don’t trust New Zealanders. 
DAVID BENNETT 
: They do not trust New Zealanders as the member for Rotorua rightly points out. Although the change in that clause is a minor one it is actually quite a major shift in the sense that it shows the balance between the political parties and it reflects the nature of business. 
Another slight change is the alignment with the Financial Service Providers (Registration and Dispute Resolution) Act 2008. It removes an unintended conflict between the registration requirements under the Financial Advisers Act and the Financial Service Providers (Registration and Disputes Resolution) Act which stated that it did not apply to employees of financial service providers when operating in the capacity of employees. However the Financial Advisers Act generally requires individuals to be registered in their own right. It is a matter of dealing with that inconsistency and that is what the amendment does. It proposes that employees of financial service providers would not be required to register and belong to a dispute resolution scheme unless the individual were required to do so under the Financial Advisers Act. 
That is another very important change. It may seem minor in its effect but it is about balancing the equation and making sure the rules and regulations around financial disclosure and financial advisers are correct and are suitable for the economic environment we are facing. There is nothing worse than having technical errors in legislation that deals with quite important issues and with people’s money and the economic future of this country. 
AARON GILMORE (National) 
: 
 It is a pleasure to rise and talk about Part 2 of the Securities Disclosure and Financial Advisers Amendment Bill. 
Hon Clayton Cosgrove 
: What a genius! 
AARON GILMORE 
: The member for Waimakariri called me a genius and I think that is quite interesting because I taught that member when he did his MBA classes a number of years ago and he was not very clued-up at that stage. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. I just want to advise you that I slept through the lectures he gave. 
The CHAIRPERSON (Lindsay Tisch) 
: I am sure that is pertinent to the debate! 
AARON GILMORE 
: Thank you Mr Chair. That was a wonderful contribution by the member! We are talking about Part 2 and I want to talk about some of the issues that were touched on by my colleague Mr Bennett. He touched on a couple of really important aspects particularly the issue of engagement versus employment. If members have worked with any sort of financial adviser they will know that advisers have letters of engagement not letters of employment for their activities. That is actually quite an important subtle and technical change. I think that even lawyers or accountants generally do not believe they are giving letters of employment; they give letters of engagement. So this is an interesting bit of clarification in the bill. I think it is an important change and a good change. It is a wonderful step to take if it means that we again move a little bit of the red tape that exists in the system and give a bit more clarity. 
The next issue I want to talk about is a related point that exists around the issue of liability and the exemption of liability for some financial advisers. We are making it quite clear what this bill applies to in terms of whether a person is a financial adviser and we are making it quite clear as to when a liability may or may not arise. It is one matter to say it does not apply; it is another matter to say that a liability may or may not arise. New section 75 inserted by clause 16E clarifies that quite significantly and makes it quite clear when a financial adviser is exempt from liability. 
Mr Bennett touched on some of the subtle tidy-up issues that exist in this bill such as little typos and issues about what area is covered. I notice that some changes have been tabled. One in clause 19 is the omission of the words “by a person in New Zealand” which is an interesting aspect as the current Act currently states “by a person in New Zealand”. The other aspect is around the dispute resolution service. That is quite important because some of the issues that arise around dispute resolution for financial advisers can be quite complicated. Letters of engagement rather than letters of employment can be quite unclear and uncertain and quite short and there can be some issues between the client and the provider of the service. 
Clause 19A provides some clarity by inserting new section 161A and I think that is another positive step to reduce some of the red tape and some of the confusion that exists in the capital markets. As somebody who has operated in the capital markets—and I enjoyed the hilarity from the other side of the Chamber when my experience in the capital markets was pointed out—I was pleased to work under the gentleman who was the chairman of the Capital Markets Development Taskforce Rob Cameron. He was my boss for a number of years and he was a good boss to work under. 
Charles Chauvel 
: Were you employed or engaged? 
AARON GILMORE 
: Some of these changes that were put forward are wonderful things—I will ignore that comment from that gentleman. One of the issues we have here is that if these changes in Part 2 bring in more clarity and get rid of a bit of red tape and allow some of our capital markets to be able to get into a position where they can raise funds faster more cheaply and more efficiently it gives more capital to other firms and gives them the ability to get into the markets faster and to help create jobs. That is what we are worried about in this day and age in some shape or form. 
There is a myriad of other minor amendments in this bill and we could touch on them. But I think that one of the big issues goes back to such things as a clarification between engagement and employment; when a liability does and does not apply; and clarifying whether someone is a financial adviser. One of the issues is about clarifying when dispute resolution may or may not apply. I think they are all very good and positive changes and I think the bill is one we on this side of the Chamber definitely applaud. We believe it is a step however small it may be towards improving some of the issues in the capital markets. Thank you. 
AMY ADAMS (National—Selwyn) 
: 
 I will make a short contribution on Part 2 of the Securities Disclosure and Financial Advisers Amendment Bill this evening. As I look through the bill and the revision-tracked version that has come back from the Commerce Committee one thing jumps out about Part 2 which is the tremendous amount of work that the select committee did on amending it. We can certainly see as we look through the revision-tracked version that the select committee has worked hard and has contributed significantly to Part 2. 
I know that when the bill first came before the House for its first reading Part 2 was much shorter. It was designed just to catch one or two small technical drafting errors. But in all seriousness I think the select committee is to be commended for taking the time to pick up address and deal with other errors that came to light. 
The Financial Advisers Act 2008 which Part 2 amends is a new Act but notwithstanding that clearly some errors slipped through the original consideration of it through whatever means. It is incumbent on this House not to just charge ahead and make new laws; we need to take the time to look back reflect make improvements and correct errors when we find them. 
The speakers before me have touched on a few of the provisions of the bill and there are just one or two more that I want to come back to. We have heard about a retirement village’s disclosure statement and we have made it quite clear that that is not financial advice. The bill clarifies the liabilities of employees of qualified financial entities employees agents and the like. 
It sounds like pretty dry stuff but when one is working with companies in this space that are trying to sort out their liability any confusion around the wording of the legislation and any lack of clarity through an insufficient process on our part in this House has very serious consequences for those companies. It creates huge amounts of doubt and it costs them consultant time and lawyers bills to try to address the issues. It is really incumbent upon this House to make sure we go back and make our intentions very clear in order to remove doubt so that those companies do not have to live under the fear that they are somehow committing an offence that was not intended. The natural meaning of the legislation’s wording as interpreted by the court could well make someone liable for something that was not intended. That was certainly potentially the case for employees and agents of qualified financial entities. Now we have clarifications in Part 2 that address that side of things. 
In this regard I will touch on some of the earlier contributions. A lot of the discussion has been based on whether the bill is about protection or about toughening up and about what we are doing with the bill. It is not a case of good and bad. It is not just about whether we should be tough or weak. It is as much about saying that here is a particular issue that we should address on its merits. We are not taking a broad-brush approach. We are not just cracking down on everything or loosening up on everything. Part 2 shows us specific situations of where what is there now in the legislation is not quite right. Whether those situations have come about as a result of policy change or circumstances change or whether the bill is simply picking up oversights it does not matter. If something is not right it needs to be addressed. 
When the Minister of Commerce introduced this bill and then in his second reading speech he made it clear that this bill was put together quite quickly in response to severe and urgent financial times and that it is part of a more comprehensive overview. So let us not look at this bill and wonder about what it is not doing; let us recognise that it is highlighting deficiencies and seeking to address them quickly. It is ensuring that the people who work in this space can do so with a very clear understanding of what this House intended in the legislation and of the liabilities it sought to impose where they have to comply when they had to be registered and when they did not. 
In particular one of the oversights or loopholes that has been corrected and clarified was the change to the Financial Service Providers (Registration and Dispute Resolution) Act which would have meant people were exempt from the obligation to register as financial advisers. That was a loophole that was not intended. With the correction that has been put in place in Part 2 we can be sure that a more comprehensive regime is in place that will ensure that financial advisers who are to be registered properly under the intent of the Act now will be when they would not have been before. 
I know I have made this point in respect of other bills and this bill might not change the face of business in New Zealand as we know it but for the people who are affected by this legislation once again I say that it is important. It is significant. We should not measure the worth of our legislation by the thousands of people who are affected by it. To those people whom the legislation affects it is real it is serious and it deserves our consideration. For that reason I am very happy to support the Part 2 amendments that have been reported back to us in the Committee stage. I have gone through them and I think the Commerce Committee should be commended for its work and for picking up the additional errors and addressing them. In doing so the committee has saved a huge amount of time cost concern confusion and compliance time that would otherwise have resulted. 
The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Simon Power to Part 2 be agreed to. 
Amendments agreed to. 
Part 2 as amended agreed to. 
Clause 1 agreed to.  
Clause 2 agreed to.  
The Committee divided the bill into the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Billpursuant to Supplementary Order Paper29. 
Bill reported with amendment. 
Report adopted.  
Insolvency Amendment Bill 
Second Reading 
Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Insolvency Amendment Bill be now read a second time 
. The Insolvency Amendment Bill amends the Insolvency Act 2006—not unsurprisingly—in order to preserve the integrity of the personal insolvency processes namely bankruptcy— 
Hon David Parker 
: “Not unsurprisingly”—a double negative. 
Hon SIMON POWER 
:—that is true—and the no-asset procedure also known as NAP. The amendments in the bill will also ensure that the official assignee is able to administer these processes effectively and efficiently for the benefit of creditors. 
The bill addresses three major areas. Firstly the no-asset procedure provisions are being tightened to prevent the discharge of debts under no-asset procedures that have been obtained as a result of a fraudulent act or behaviour. It is proposed that the no-asset procedure discharge period be extended by a maximum of 25 working days to allow the official assignee to undertake a thorough investigation of any late objections that are received in relation to a debtor’s entry to the no-asset procedure process. Secondly the insolvent gift provisions are being tightened to allow the official assignee to claw back gifts that have been made by a bankrupt in the period leading up to his or her bankruptcy. This benefits creditors as the clawed-back assets are added to the pool of assets for distribution to the creditors of the bankrupt. Lastly it is proposed that the personal insolvency public register provisions in the Act be amended to reflect information about a debtor’s previous insolvency history for longer periods of time—a total of 5 years for no-asset procedure debtors and permanent retention for those debtors who have been through multiple insolvency processes. This will allow further lenders to better assess the creditworthiness of an individual. Any risk would then be accurately reflected in the cost of credit extended to the debtor. 
Since the first reading of the bill the Commerce Committee has recommended a number of amendments to strengthen the bill which will contribute to the bill meeting its objectives. Those amendments do not alter the original policy intention. However they do clarify those policy decisions. I thank the committee for its work in this area and I thank its chair in particular. I am pleased that the committee has recommended those amendments. Firstly I start by discussing some of the changes recommended by the committee to Part 1 of the bill particularly dealing with administration of the no-asset procedure. I will then discuss the changes proposed by the committee that relate to the public register provisions in the bill. As I understand it overall submitters welcomed the introduction of the bill. In particular they supported the proposed amendments to the treatment of fraudulent debts under the no-asset procedure the extension of the no-asset procedure discharge period and the proposed treatment of insolvent gifts under bankruptcy. 
Submitters however expressed different views on the proposed changes to the personal insolvency register provisions in the bill. The committee did not recommend any substantive changes to the no-asset procedure part of the bill; the changes proposed to the no-asset procedure were matters of clarification rather than policy which strengthened the administration of the no-asset procedure by the official assignee. One of the key criteria for entry to the no-asset procedure is that the debtor must not have any realisable assets. To gift an asset or provide security against an asset in the periods leading up to the application for entry into the process implies that the debtor has realisable assets which can be used to pay creditors. It is the official assignee’s current practice to ensure that assets have not been concealed by the debtor in any way prior to filing the no-asset procedure application. The committee therefore clarified that realisable assets include any assets that might be recoverable by the official assignee under the irregular transaction provisions in the Act. The insolvent transaction provisions are an integral part of a bankruptcy regime allowing the official assignee to claw back assets that for example have been gifted by the bankrupt debtor in the periods leading up to his or her bankruptcy. These gifts can be made to a friend a relative or a trust. This change not only formalises the current practice of the official assignee but also preserves the integrity of the no-asset procedure by preventing dishonest debtors from entering into it. 
In relation to the treatment of fraudulent debts under the no-asset procedure the committee recommended amending the bill to clarify that fraudulent debts become enforceable again once a debtor is discharged from the process and that the debtor is liable to pay interest and penalties accrued during the procedure. That reinforces the underlying principle that insolvency laws are designed to deal with debts arising as a result of contractual obligations not debts that have originated from fraud. To forgive penalties in interest of a fraudulent debt would be inconsistent with that principle. The committee also clarified that a discharge from the no-asset procedure does not release any other person who at the date of discharge was a business partner co-trustee joint debtor or guarantor of the discharged debtor. If these individuals are in financial distress they would have to file a separate application for entry to the process. This change mirrors the current bankruptcy provisions. 
The committee’s discussions focused largely on the proposed changes to the public register provisions in Part 2 of the bill. The committee clarified the practicalities of reintroducing details of a debtor’s earlier insolvency into the public register should that person again become insolvent. Also due to a lack of reliable information regarding bankruptcies under the Insolvency Act 1908 the committee has agreed to exclude bankruptcies declared under that old legislation for the purposes of determining multiple insolvencies. Instead bankruptcies declared under the Insolvency Act 1967 and the Insolvency Act 2006 will be used to determine multiple insolvencies and the bankruptcy public register will reflect that information accordingly. 
The majority of submitters on the bill welcomed the proposed changes to the no-asset procedure and bankruptcy public registers in the bill. That was not unexpected given that the changes are designed to assist future lenders in making prudent lending decisions. Those changes will also facilitate flow of credit which is being clearly negatively impacted by the current global financial crisis. 
The diversity of reasons for financial distress such as job loss illness or marriage breakdown means that the length of time that information remains on the public registers will be appropriate for some debtors and not for others no matter what amount of time is chosen. I note there is no international consensus on that matter. The committee considered the proposed extension of the no-asset procedure register time frames from 1 year to 5 years which some submitters suggested goes against the rehabilitative objectives under the no-asset procedure process. Getting debts of up to $40000 written off under the process is a privilege to the debtors as they no longer have to repay their debts to the creditors. The changes proposed to lengthen the time a debtor’s details are made available on the public registers provide some balance to the no-asset procedure process. It also promotes responsible lending by not denying creditors the opportunity to ascertain the true creditworthiness of individuals wanting to obtain credit. That is equally applicable to the proposal to permanently retain the details of debtors who have been through multiple insolvency processes. 
The committee also recommended a minor change to the Privacy Act 1993 to make the summary instalment order register subject to the privacy principles under that Act. The no-asset procedure and bankruptcy public registers are currently subject to those principles. There is no sound policy reason to exclude the summary instalment order public register which had inadvertently been omitted from the Privacy Act. 
I conclude by thanking the members of the Commerce Committee for their swift consideration of the bill and by acknowledging the contributions of those who provided submissions. I am confident that the amendments made by the Commerce Committee will help the bill achieve its objectives of firstly preserving the integrity of the no-asset procedure and bankruptcy processes and secondly making those processes efficient and effective so that returns to creditors are maximised. I commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I rise to speak to the second reading of the Insolvency Amendment Bill. As chair of the Commerce Committee I think that we received very good support from the officials and I acknowledge that. Also the members of the committee were very keen to meet the deadline for report back—as requested by the Minister of Commerce the Hon Simon Power—in order that a timely amendment would be made to allow for retrospectivity which would not normally be applied in legislation. However with the Minister stating very clearly in the public release of the bill before it was introduced that it would apply from the date of the announcement he met the requirements of retrospective application in relation to the fraudulent debt provisions. 
The Labour members of the committee along with all members of the committee were very supportive of this change being made to the law. We were also very supportive of the gifting provisions that were clarified in respect of insolvent gifts. But the one issue we had great concern about was what seemed to be the addition of a provision that related to the length of time people are on public insolvency registers. That provision did not come from the same area of concern. The issues had clearly been raised with the Minister in respect of the matters that needed clarifying with regard to a discharge from the no-asset procedure in relation to fraudulent debt provisions but it certainly seemed to me and I think to others as well that this other amendment relating to the length of time people are on public insolvency registers had really not come from the same place. 
Sure enough when we sought to find out where that particular amendment had come from we found that it had come from a newspaper article that had been published some months before. It was as if we were just tacking the issue on to a bill that we were introducing to address a more pressing issue. I can understand why the Minister did that. Obviously a Minister likes to use the opportunity of the legislative time he or she gets in the House to get as much done as he or she possibly can. But I do not think it is a very good process when it goes towards changing a law that has only been in place for just over 12 months. Our concern was about changing the length of time that people were on the public insolvency register in respect of the no-asset procedure. It really does mean that there is not the same strong distinction between the no-asset procedure and bankruptcy as there was before. 
When the select committee received submissions a practitioner in Christchurch gave quite an extensive submission about the sorts of changes he would like to see in the insolvency law arena. In fact it tied in with one of the submissions we received from the budget advisory services. The submitter suggested that rather than just letting people off the hook as it were with bankruptcy or the no-asset procedure in both cases there should be a requirement to do some sort of budgeting course so that people would not fall back into this position. The Government is moving amendments in order to allow for people who are multiple insolvents and have gone through the insolvency process on several occasions. Would it not be better to try to get to the root cause of the problem which is the inability of people to deal with credit that they have obtained through a variety of means? By developing a very specific budgeting programme that would go alongside the no-asset procedure—or indeed the bankruptcy—we could end up with a situation where a person could earn his or her ability to come off the no-asset procedure. I think that would be an excellent addition because it would then be seen as a learning experience rather than just a forgiveness of the significant amount of debt that had accumulated. 
One of the things that came up at the select committee was that a number of members really questioned whether honest people—good decent people—could end up using one of these positions. It really seemed to reek of people who were being irresponsible and gaining credit when they were not in a position to repay. We then had a submission from the citizens advice bureau and they had some very compelling stories of the types of cases where the no-asset procedure although it really is the fence at the bottom of the cliff had been the saviour in terms of allowing somebody to get back on his or her feet. The particular example as I recall—and I wish I had brought my notes down to the House—involved a woman whose marriage had broken up. The couple had income protection insurance for a particular thing that had happened; I cannot remember whether she had to have an operation. The income protection insurance that she had did not kick in. There was a dispute and she could not afford to fight the insurance company. She actually ended up on a benefit and her life was completely turned upside down. We felt that we were hearing the story of somebody who had taken considerable steps to protect herself against the unforeseen and the unexpected but at the end of the day she had ended up with all of this debt. She would have been in a position to repay it before but because of the turn of events she was not able to repay it. So in that particular case the no-asset procedure was very much appropriate for her to use. The idea that she will be on the register for a significant period of time will say more about her lack of creditworthiness than the circumstances would disclose. 
The other example I had was a case in my electorate office where an individual had believed firmly that he had paid all of his debts to a legal firm that had been acting for him. His belief that he had paid for it all was absolutely sincere and genuine and I understand why he thought he had. What he did not realise was that the legal firm had conducted two additional pieces of work for him after he had paid what he thought was his final bill and therefore there was money owing. When the firm demanded the money from him he said he did not owe it any money and he ended up going to court. A $950 bill became $3500 by the time the court had finished adding on all of the bits and pieces. I literally had to get from the law firm all of the information it had and then I had to sit down and explain things to him and draw up a time line so he could understand why he owed this money. Why did the law firm not do this? Well it had a huge row with him because he said he had definitely paid the money. The reason he did not understand any of it was that he could not read. I was the first person who picked up that he could not read and that is why he does not get stuff like this. We have got him with a budget advisory service now and we are helping him work through all of these issues. 
Anyone who thinks that people who end up using the no-asset procedure or bankruptcy provisions are all somehow culpable and totally responsible for the circumstance that they find themselves in should think on it. There are people out there who get through life in a difficult way. They need additional support and sometimes this is the way that they can get themselves back on their feet. So I am disappointed that we are having the debate on the public insolvency registers along with the other material; we support the other parts of the bill. We still have some concerns about aspects of the legislation and we will deal with those in the Committee stage. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to stand here tonight and talk to the Insolvency Amendment Bill. I would like to acknowledge the Otari Probus Club whose members are in the gallery and had dinner at Bellamy’s tonight. They are sitting there listening to this great debate that we are having tonight. 
The no-asset procedure is quite an interesting procedure. It is something that not many people know a lot about because it is relatively new. It sits in a different place from most bits of insolvency legislation. I will give members a couple of facts about the no-asset procedure so that they can understand who is eligible for it. The official assignee may admit a person to the no-asset procedure if satisfied on reasonable grounds that the debtor has no realisable assets has not been previously admitted to the no-asset procedure has not been previously adjudicated bankrupt has total debts of not less than $1000 and not more than $40000 and has absolutely no means of repaying any amount towards those debts under a prescribed means test. That is basically people who have run up debt and do not have any assets at all to pay it back. Between 2007 and March 2009 3194 people applied for this procedure but only 2094 were granted entry to it. So 983 thought that they fitted the prescription but they actually did not. They would have had assets or most probably their debts would have been outside the range we are talking about today. 
It is interesting to talk about the no-asset procedure because it is actually designed for a one-off situation for people who are down on their luck. They have been made redundant they have got sick or they have had a marriage separation and all of a sudden they are carrying a lot of debt which they cannot pay back on a single income. It is for just that one-off situation that people get into. 
Some statistics were given to the Commerce Committee when we asked about the types of people who face these procedures. New Zealand holds statistics but they are based on self-assessment. When we look at New Zealand’s statistics and the United Kingdom’s statistics—the UK has exactly the same type of no-asset procedure but it is based on insolvency services filling out the forms—we see quite a variance in the two categories. The statistics indicate that the way the UK classifies and records the insolvencies or the no-asset procedures is more realistic. 
I will tell members how people get into this situation. Forty-eight percent were cases of individuals living beyond their financial means. These were people who ran up credit and got things on hire purchase but had no way of paying the money back. They ran up credit card debt and knew they could not pay it back. They were living beyond their financial means. There were also one-off situations where people got sick had to take leave without pay and could not pay back their debts. Fourteen percent of cases involved loss of individual or household income 8 percent involved accidents 6 percent involved business failure 5 percent involved failure to deal with tax affairs 4 percent involved relationship breakdowns and 3 percent involved guaranteeing liabilities. The statistics are quite important; we can get an idea and a picture of the sort of person whom this procedure applies to. 
The committee has adjusted this legislation to make it more relevant and to fill in some of the loopholes. This legislation changes four key areas. The first one is that a person cannot gift away any money before he or she goes into the procedure. People were gifting money then going into the no-asset procedure and saying that they had no means and no assets with which to pay the money back. This was a loophole that people were getting through so we have closed it up. 
Also there was a loophole in regard to fraud. People who committed an offence when bankrupt would still stay in the no-asset procedure. They could do illegal activities and still stay in the no-asset procedure. But that has changed under this new legislation. People cannot conceal any fraud and if they are found to have fraudulent means then they are taken out of the no-asset procedure. It is quite important to have these loopholes fixed. 
The other loophole is the discharge of joint debtors. This is where a spouse has a joint debt on a credit card or a business partner has a joint debt on a cheque account or there are co-trustees or joint debtors on something. When someone goes into the no-asset procedure the whole debt does not go in with that person. Only that person’s portion of the debt can go in with him or her. That was another loophole that we found and we have now changed it as well. 
One of the most contentious areas that the committee discussed was the public register in terms of how long someone should be on it and what is fair. We had a great debate on this in the select committee with our officials. We asked for information on what is happening internationally. It is different everywhere we looked so it is hard to tell. We had to draw a line and say that we believed that this was how long someone should be on the register. That was really important. The term was 1 year for the no-asset procedure and we have changed it to 5 years. We picked 5 years because we think it is important to have a balance. The debtors have to be able to come off the register. They are in a no-asset procedure. It is meant to be a one-off. It is meant to be for someone who is down on his or her luck and has hit hard times. It is not meant to be a big big stick. At the same time the people to whom they owe the money—the people whom they borrowed from—such as the finance companies and the credit card companies need to get a good picture of the credit rating and the credit history of people who have been in the no-asset procedure. Taking people off the register after 1 year is most probably a bit too quick; after 1 year they are able to get another credit card or run up some more debt with GE Finance. It is important that people are on the register long enough for the moneylenders to get a feel for their credit history. 
The other concern was multiple insolvencies. A person can be in the no-asset procedure only once. If there are repeat problems with credit in that someone cannot pay it back that person then becomes bankrupt. We changed the term for those people from 7 years to indefinitely. That makes sure that if someone has multiple insolvencies and has gone into bankruptcy a number of times a red flag will go up to indicate that that person is a bad credit risk. That person will be on the public register for a very long time. It was important that we were fair and balanced the debtors and the creditors. 
I spoke to one of my constituents the other day. She most probably needed budgeting advice rather than anything else. It would be interesting to see her case come through the no-asset procedure and I am sure it will. She went to Harvey Norman and basically refitted her house on finance. She has a beautiful plasma television on the wall an LCD television in her bedroom a nicer sofa than I have and a beautiful coffee table. The kitchen is just amazing. It has all the new appliances courtesy of Harvey Norman. She went on a scheme that offered no repayments for 3 years interest-free. The first payment is now due and she has no money. She has absolutely no way of paying it back. She said to me that she could go in the no-asset procedure. I said that actually she most probably could not. She will most probably have to sell some of her assets before she can go on to that procedure. 
The no-asset procedure is not about giving people an out for bad spending; that is not what it is about. When we started looking at it I was really concerned that it would be abused by people who have run up credit deliberately. They knew what they were doing and knew that they would not have the money to pay it back. That is something we will be watching very closely moving forward. 
Thank you Mr Deputy Speaker. It has been my pleasure to support this bill tonight. 
CHARLES CHAUVEL (Labour) 
: 
 Can I join the previous speaker my friend Katrina Shanks in welcoming members of the Otari Probus Club to the House tonight. I am sure they will be delighted to listen intently to the debate on this legislation the Insolvency Amendment Bill as members read it a second time. 
Katrina Shanks spoke in her second reading speech about the length of time a debtor should spend on public insolvency registers. My friend and colleague Lianne Dalziel did the same thing. I will spend a little bit of time addressing that issue because I think it is one of the more significant ones that the House needs to pay attention to. The bill lengthens the time that information about a debtor remains on the public insolvency register from 1 year to 5 years in the case of a NAP or no-asset procedure as it will be called and from 7 years to indefinitely in the case of multiple insolvencies. That is two or more bankruptcies or a no-asset procedure and a bankruptcy. 
The Commerce Committee as I understand it heard evidence that lengthening the time that a no-asset procedure debtor remains on the public register would dilute the important distinction between bankruptcy provisions and the no-asset procedure. That procedure was introduced to provide a one-off opportunity for financially distressed individuals to avoid the stigma of bankruptcy and to rebuild their lives. The Privacy Commissioner’s view and I think it is incumbent on the House to pay close attention to the views of the commissioner on matters of information storage and privacy was that a total of 3 years on the public register for a no-asset procedure debtor would be more consistent with the purposes of the procedure and more proportionate to the period for which individuals should be publicly listed following bankruptcy. But the majority of the select committee members accepted the advice that it is a matter of balancing the interests of debtors who seek understandably to move on with their lives with the interests of creditors who require reliable information about a debtor’s history on which to make informed business decisions. The majority of the members concluded that the approach proposed in the bill does strike a reasonable balance between those interests. The majority said that the diversity of reasons for financial distress means the length of time that information remains on the public registers will inevitably be more appropriate for some debtors than for others no matter what period is plumped for. As Katrina Shanks said there is no international consensus on this issue in overseas jurisdictions. Members on this side of the House believe that there should be further consultation on this part of the bill before we proceed to make what are quite significant changes to the public register provisions. 
It is interesting to note that these provisions were not an essential component of the bill which was designed to deal with fraudulent debts. And there has been a shorter report-back requirement than would normally be expected. On this issue as Lianne Dalziel said Labour members think that there has not been sufficient consultation with key stakeholders and this is reinforced by the fact that the Privacy Commissioner’s concerns have not been adopted by the select committee. We would therefore much prefer that the provisions relating to the public register be separated from the rest of the bill. 
On the rest of the bill members on this side of the House think it is generally a good one. We do support it but we do think that it would be better to prevent more insolvency in New Zealand rather than just tidy up the small number of issues that have arisen since the enactment of the Insolvency Act 2006 which after all is really all this bill does. Members on this side of the House ask where the Government’s plan is to prevent insolvency from becoming more and more of a problem for ordinary New Zealanders. Where is the economic plan? This is a question that is fairly asked in my view of a Government that scrapped the research and development tax credit gutted KiwiSaver trashed the Fast Forward fund and cut contributions to the Superannuation Fund thereby endangering future superannuation entitlements. These are the fundamental questions facing the nation when it comes to how we deal with insolvency how we prevent insolvency from becoming more and more of a problem for ordinary New Zealanders and how we build a wealthier society. It is those questions that Labour members want addressed rather than the Government being too preoccupied with tinkering which is the concern we have about the rest of the bill. We are concerned also about the public insolvency register provisions that I spoke about in some further detail. Thank you. 
KEVIN HAGUE (Green) 
: 
 I rise to again conditionally support the Insolvency Amendment Bill and to make a short contribution in this second reading. In 2007 the Reserve Bank undertook a study that indicated “that New Zealanders are aware of some of the financial issues that they face but they are ill-equipped to make financial decisions. They do not effectively understand basic financial terms or instruments or more worryingly the concept of risk and return. Furthermore they do not use existing financial disclosures or credit ratings in a manner that would enhance their understanding of financial exposures.” For example the results of the survey showed that more than 50 percent of New Zealanders did not understand compound interest and that 80 percent either were not aware of mandatory disclosures or did not use them for financial decision-making. The point I make is that the level of financial literacy amongst New Zealanders is appallingly low. The concept of financial education in our schools is quite a new one and the no-asset procedure is one that meets the needs of a very large number of people. 
The Green Party is very pleased that the Government is closing some of the loopholes in the Insolvency Act 2006—the existing law—but the provision to extend the term for which someone sits on the insolvency register does not fit the description of closing a loophole; it is a new kind of provision as Lianne Dalziel has drawn the House’s attention to. The Green Party remains opposed to it partly because one of the principal effects of that extension will be to make this group of vulnerable New Zealanders more prey to the predatory tactics of some finance companies. 
The point of the no-asset procedure is to provide a clean slate-type of approach to people who as Katrina Shanks pointed out due to unfortunate circumstances such as broken relationships or ill health find themselves in debt that they cannot pay. It is not a provision that exists for serious or business fraudsters. Often the people to whom these provisions apply are young people whose maturity in decision-making around financial matters is still developing. Nearly half the people who were admitted to the no-asset procedure were beneficiaries and I compare that proportion with the 48 percent that Katrina Shanks has drawn the House’s attention to who were living beyond their means. Perhaps that says something about the level of benefits. The mean indebtedness of people who were admitted to the register and qualified for the no-asset procedure was $10600 which is not a lot of money. 
The evidence is that the law as it stands is working well and I am pleased that both Lianne Dalziel and Charles Chauvel have drawn the House’s attention to the view of the Privacy Commissioner that the 3-year term on the register is more in accordance with the intent of the law than the 5-year term that is proposed in this bill. The extension to 5 years would have a number of effects. Firstly it would have a disproportionate effect on a young person. As I said many of those who are admitted to the no-asset procedure are indeed young people. The consequence of the extended term on the register will be disproportionate for that group of people. Secondly and this is a point I made in the first reading debate on this bill the extension to 5 years will remove the incentive for debtors to deal with their debts before they reach $40000. In other words the extension of the term on the register may exacerbate the problem faced by those who are extending credit rather than relieving that problem. Perhaps most important from the Green Party’s point of view the extended time on the register will serve to reduce the access of people who have been admitted via the no-asset procedure to reliable and genuine sources of credit. That will mean that if they require credit or capital of any sort they will be desperate and may well be forced into the hands of loan sharks and finance companies which this House this evening has been debating the tactics of. I do not think that anyone is well served by that consequence of the bill. 
The Green Party supports the majority of the provisions of the bill. It seems to me that there is pretty much consensus in the House on the measures in the bill that are genuinely intended to close off loopholes but we oppose the extension to 5 years of the term on the insolvency register. We will vote for the second reading of this bill but if that problem with the bill is not addressed in the Committee stage then we will not support it at the third reading. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise this evening to speak to the Insolvency Amendment Bill 2009 in its second reading. Before I do that I echo the Hon Lianne Dalziel’s comments by thanking the officials who assisted the select committee process. 
In the current economic downturn the rate of insolvency is expected to rise. The introduction of this bill was very timely and a matter of urgency to prevent fraudulent debts from being discharged. It was introduced by the Minister of Commerce the Hon Simon Power to amend the Insolvency Act 2006 to preserve the integrity of the personal insolvency processes particularly the no-asset procedure and bankruptcy in order to provide more protection for creditors and potential creditors. It was very interesting to hear Mr Kevin Hague from the Green Party talk about people who are vulnerable. It is not just the people with lower income levels who are vulnerable but also people who lend money to potential fraudsters. I do not think any members in this House will disagree with the objective I mentioned earlier which is to uphold the integrity of the personal insolvency processes. Having sat through the Commerce Committee meetings I know that all members from all sides in this House pretty much agree with most of the provisions in this bill. 
I start by talking about the no-asset procedure. The no-asset procedure is like getting a free pass in a Monopoly game I guess where we get to pass “Go” and collect $200. When a person has no means of paying off a debt of between $1000 and $40000—which is a lot of money I say to Mr Hague—they can apply to go on to the no-asset procedure. It was introduced as an alternative to bankruptcy in December 2007. It is indeed a great opportunity for someone who is in a financially distressed situation and can see no way out. They effectively get a clean slate after 1 year. This procedure was for people who had no realisable assets that they could possibly sell to pay creditors so that they can avoid the stigma of bankruptcy as Mr Chauvel said and rebuild their financial lives. 
Although this procedure is a great opportunity for people who are genuinely in difficulty the Insolvency Act 2006 created a loophole as we have already heard in this House allowing fraudulent debts incurred by individuals going into the no-asset procedure to be wiped. This was obviously an anomaly that needed to be corrected and the Insolvency Amendment Bill 2009 does that. The select committee has recommended that a minor amendment be made to the bill to clarify that fraudulent debts become enforceable again after a debtor is discharged from the no-asset procedure and the debtor be liable to pay interest and penalties accrued during the no-asset procedure. I think that is fantastic. If people who are in this no-asset procedure for a year—and as we are proposing on the register for 5 years—incur interest while they are on the no-asset procedure they will need to pay that debt after they are discharged. 
Another thing this bill does is give more power to the official assignee to investigate a debtor who applies to go on to the procedure by extending the period of discharge by a maximum of 25 days. That will allow any new information on debts or information relating to concealed assets to be brought to the attention of the official assignee right up to the day the debtor is discharged. With the new information the procedure can be terminated. 
The other aspect of the bill is to allow the official assignee the ability to recover gifts made by a bankrupt to a third party prior to his or her bankruptcy. It has long been an accepted presumption that if one is declared bankrupt one has been insolvent for a period of time before that declaration of bankruptcy is made. If one is able to make a gift to a third party one’s insolvency should be questioned and the gift should be seen in light of one’s bankruptcy as a way to hide assets often by way of setting up trusts etc. to avoid paying creditors. This bill puts the onus of proving the solvency of the person who has made the gift not on the official assignee but on the recipient of the gift. I think that is brilliant. If I have received a gift from an insolvent person who declares himself bankrupt I have to prove that he was solvent when he gave me that amazing gift. If I cannot prove that I have to give it back and I think that is brilliant. 
This bill reverts to the Insolvency Act 1967 around insolvent gifts extending the 2-year time frame prior to becoming bankrupt to 5 years. If I declare myself bankrupt tomorrow the time frame will go back 5 years and any gift I have given in that 5 years can be taken back to pay creditors. The select committee has also recommended a minor amendment to this aspect of the bill to include a clause to clarify that gifts would be “realisable assets” and therefore disqualify the debtor from entry to the no-asset procedure. This would ensure that debtors cannot conceal assets from creditors by gifting to another person. 
During the first reading of this bill there was a lot of opposition to the length of time the bill proposed a debtor’s name remain on the no-asset procedure’s public register and once again tonight we have heard from the Hon Lianne Dalziel Mr Chauvel and the Green Party that they are concerned about it. The time period we are proposing is not intended to harm people who are as Mr Hague said poor and vulnerable. The bill proposes to protect the people who lend money to fraudulent people. It proposes that those people stay on the list for 5 years. For multiple insolvencies—for example for two or more bankruptcies or a no-asset procedure and a bankruptcy; not just a oncer where a no-asset procedure was introduced to protect innocent people who had difficulties paying off their debts—the time period that their names will stay on the register goes from 7 years to indefinitely. This is done to protect creditors and potential creditors. It could be you Mr Assistant Speaker Roy. You could be lending to someone whose name may only stay on the register for 1 year and then fall off and you may not know that that person has have been on the no-asset procedure or that he or she owes lots of people lots of money. 
The select committee recommends that a minor amendment be also made to the clause of the bill about the public register including a record of each insolvency of a person who has had two or more bankruptcies. That means it will include how much they may have had the procedure against how many times they have been through bankruptcy or whether they have been through the no-asset procedure. Because of the unreliable records before the 1967 Insolvency Act the committee recommended that they not be used for the public register. 
These amendments are required in order to maintain the integrity of the personal insolvency processes. These changes will prevent fraudulent debtors from avoiding the legal obligation to repay debts. These changes remove the potential to reward dishonest persons; we should not be rewarding dishonest people. I commend this bill to the House. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to talk to the second reading of the Insolvency Amendment Bill. This bill as we have heard tonight amends the Insolvency Act 2006 to address a small number of issues that have arisen since its enactment. The bill preserves the integrity of the new no-asset procedure by preventing the discharge of fraudulent debts and the integrity of bankruptcy by restoring the official assignee’s ability to recover gifts made by a person prior to bankruptcy. The bill also amends the public register provisions to better enable creditors to make informed lending decisions by ensuring that a public record of people who have been discharged from the no-asset procedure is available for an appropriate period and by providing for permanent public records where a person has had multiple insolvency events. 
We have heard a number of speakers talk about the provisions of the Act. Essentially they are about preventing the discharge of fraudulent debts under the no-asset procedure allowing the official assignee to extend the amount of time that a person is under the no-asset procedure allowing a no-asset procedure debtor’s information to be kept on the public register for 5 years from the date of entry to the no-asset procedure and reinstating permanently a debtor’s details on the public register when the debtor subsequently enters a bankruptcy process. 
Members have heard from this side of the House that we consider this to be a good bill. Generally we support it but ultimately we have some concerns which have been noted in the select committee report that I will refer to in a minute. We also believe that it would be better to prevent more insolvency in New Zealand not just to tidy up the small number of issues that have arisen since the Insolvency Act 2006 was introduced. 
As has been noted by a couple of the previous speakers there was very good support from the Commerce Committee for this bill as it needed to go through the committee quite quickly. The committee members worked hard and quickly to get the bill through the committee. There were also a number of very good submissions and I will read to the House from one of those submissions in a minute. 
Labour has been very supportive of most of these issues but we are concerned that the length of time the debtor remains on the public insolvency register is being extended. That amendment extends the time the debtor remains on the register from 1 year to 5 years in the case of a no-asset procedure and from 7 years to indefinitely in the case of people with multiple insolvencies. 
The committee heard that lengthening the time a no-asset procedure debtor remains on the public register would dilute the important distinction between bankruptcy provisions and the no-asset procedure. The procedure was introduced to provide a one-off opportunity for financially distressed individuals to avoid the stigma of bankruptcy and to rebuild their lives. It is the view of the Privacy Commissioner—as we have also heard tonight—that a total of 3 years on the public register for a no-asset procedure debtor would be more consistent with the purposes of the procedure and more proportionate to the period for which individuals are publicly listed following bankruptcy. The majority of the select committee members however accepted the advice that it is a matter of balancing the interests of debtors who seek—understandably—to move on with their lives and the interests of creditors who require reliable information about a debtor’s history on which to make informed business decisions. 
Labour members consider that the approach proposed in the bill strikes a reasonable balance between these interests. The diversity of reasons for financial distress means that the length of time the information remains on the public registers will inevitably be more appropriate for some debtors than for others no matter what time period is chosen. But there is no international consensus on this in overseas jurisdictions and the Labour members believe that there should be further consultation on this part of the bill before we proceed to make significant changes to the public register provisions. We note that these provisions were not an essential component of this bill. They were described by the Hon Lianne Dalziel as being tacked on the end of the bill. We note that they were not an essential component and were designed to deal with fraudulent debts and as a result had a shorter report-back requirement than would normally be expected. It is the view of Labour members that there has not been sufficient consultation with key stakeholders and that view is reinforced by the concerns raised by the Office of the Privacy Commissioner. We would prefer that the public register provisions be separated from the rest of the bill. 
Just to highlight our position I will read to the House two case studies from one of the submissions that my colleague the Hon Lianne Dalziel referred to. The submission came from Citizens Advice Bureaux. The first case study was of a single professional woman with an income of $50000 who had to go on an invalids benefit because her illness which had been controlled for 10 years flared up. She was in debt to the bank and to a finance company but had insurance cover on both loans that specified the illness. The bank paid out on the insurance; the finance company did not. Within 3 months of the change in circumstances she was “tormented by them”. Her only solution was to apply for the no-asset procedure with $29000 of debt; the only creditor was the finance company. This woman had been very responsible in getting insurance to ensure that she could pay off her debts should her illness flare up again. Through no fault of her own but through the finance company’s refusal to pay out the insurance—putting her under pressure to pay—she was faced with insolvency so she entered the no-asset procedure which enabled her to get out of that situation. 
The second case study was of a young couple with three children aged under 8 years. They had credit contracts on cars a TV etc. and they rented their home. The man’s income was $36000 gross and they were receiving Working for Families payments. They were encouraged by the bank to consolidate their finances which they did with a personal loan. The woman got a part-time job to help with high rent costs high power costs and high medical costs for two of the children. They got into further debt and the bank refinanced them by putting all of their debt including that which was included in the personal loan on to a credit card. The couple subsequently separated. The woman went on to the domestic purposes benefit and received an accommodation supplement and family support. The credit card was in the male’s name only as he was the income earner. Because of the increased expenses caused by their separation such as rent living expenses and child support this man was unable to cope with the credit card payments and he was accepted into the no-asset procedure. I think the point here is that this couple’s situation was made significantly worse by the bank putting all their debt on to a credit card with a much higher interest rate than they had been charged for the personal loan. The no-asset procedure allowed him to regain his place in society. 
Labour does support this bill in its second reading but it has noted its concerns which are highlighted by these two case studies. The point is that in those cases and in many others like them that Citizens Advice Bureaux and a number of other submitters put before the Commerce Committee the people were in those circumstances really through no fault of their own and they were able to use the no-asset procedure to regain their place in society. Should they be penalised for using the no-asset procedure by being put on a register for a lot longer period of time as a result? That is why the Labour members of the committee believe that there should be more time taken and there should be more consultation before this part of the bill goes through. 
PAUL QUINN (National) 
: 
 I rise to support the second reading of the Insolvency Amendment Bill. I think it is useful to reflect on the reason why this bill is before us. The bill amends the Insolvency Act 2006 in response to a number of minor issues and anomalies that have arisen. I guess to sum up this bill it could be described as strengthening the authenticity of the no-asset procedure. On that basis I fully support it. 
The two main areas of particular interest as a number of speakers have already referred to are the issues of fraudulent debt and gift avoidance. Those are two of the issues I want to talk about. In terms of fraudulent debt an example of that might well be where a social welfare benefit has been obtained on false grounds by declaring false details or suchlike. It is important that if that sort of behaviour is undertaken people do not get away with it at the expense of the taxpayer. Under this bill it is clearly set out that those debts will not be able to be covered by a discharge from the no-asset procedure. 
Another specific and particular aspect of the bill that is very important is the issue of gift avoidance. A good example of that currently which is of high interest to a number of people although on a much larger scale is Rod Petricevic’s convertible car. That sort of gifting behaviour where people know they are going down the track towards insolvency and are trying to get rid of property by making gifts to family members so that the property is out of the reach of the creditors is the sort of behaviour that this particular aspect of the bill endeavours to prevent. 
I will touch very briefly on an issue that Lianne Dalziel covered very well which is that we are moving into a time when this legislation will be very useful because a number of people may well come under pressure. She mentioned a couple of examples that she is currently involved in. I can sympathise with her because a similar situation is currently occurring for a client of mine who lives in the Hutt Valley. For whatever reason the constituent MP for Rimutaka is unavailable so she has had to come to me for support and help. Maybe that is because Chris Hipkins is incompetent or is unable to help but for whatever reason a woman has come to me for assistance. She has had a marriage breakdown and is facing issues around her finances. I am working very hard on that case because the member for Rimutaka does not seem to be around when he is needed. These are very real issues particularly in a time of recession. 
It is indeed a pleasure to be able to support the bill. Thank you. 
Bill read a second time. 
Sittings of the House 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I seek leave for the House to rise very slightly early as we have made good progress this evening. 
The ASSISTANT SPEAKER (Eric Roy) 
: Leave is sought for that purpose. Is anyone opposed to that course of objection? It appears not. 
The House adjourned at 9.59 p.m.