State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — Third Reading 
State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill — Third Reading 
[Volume:640;Page:10129] 
State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill 
Third Reading 
Hon CLAYTON COSGROVE (Associate Minister of Finance) 
: 
 I move  
That the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill be now read a third time 
. The purpose of this bill is twofold: firstly to permit a merger of AgriQuality and Asure provided that shareholding Ministers are satisfied that it makes commercial and strategic sense for New Zealand; and secondly to allow shareholding Ministers to direct the board of AgriQuality not to provide examination services as defined in the bill. 
First I would like to get a few facts straight following some interesting and slightly misguided comments made in the Committee last night. They related to when the bill was before the Commerce Committee and the undertaking by Trevor Mallard the Minister for State Owned Enterprises to provide Gordon Copeland with a draft Supplementary Order Paper for his consideration. After the necessary advice was received from officials on Mr Copeland’s suggested wording the draft Supplementary Order Paper was provided to him for consideration. Mr Copeland was promised a copy of the draft Supplementary Order Paper for his consideration and this was indeed done. It is unfortunate that Mr Copeland considered that the provisions in the Supplementary Order Paper did not meet his expectations. However the provisions clearly met the expectations of Mr Copeland’s former party United Future which voted for the bill last night. 
I am pleased to report that good progress has been made in developing the business case for the merger. A working-group established to assess the potential merger of AgriQuality and Asure recently concluded that there is a robust strategic rationale for the merger. Significant quantifiable gains are expected from a merger derived mainly from scale and scope economies and enhanced biosecurity capability. Although the merger is still subject to Cabinet approval and the passage of the bill into law a strong prima facie case has been established for the merger to proceed. 
The second objective permits shareholding Ministers to direct AgriQuality not to provide examination services and a number of concerns were raised in the select committee. The most significant concern raised in submissions was that by reducing the prospect of competition in the provision of export red meat inspection services the bill could result in higher prices and lower service levels than would otherwise be the case. 
The Supplementary Order Paper adopted last night addresses these concerns. The first addition to the bill Subpart 3 of Part 2 requires the Commerce Commission to investigate and report on the prices charged for examination services within 3 years of the commencement of the Act. The second addition Subpart 4 of Part 2 provides for the Crown to continue its negotiation with international trading partners to permit examination services to be undertaken by agencies other than the Crown. Further in future if more than two-thirds by value of New Zealand’s red meat exports are made to international trading partners that accept international guidelines on meat hygiene as set out in the Codex code of hygienic practice for meat then the Government will permit private provision of examination services. 
In conclusion I am confident that these common-sense amendments have gone a long way to addressing any concerns raised about the bill. This bill is critical for maintaining and enhancing shareholder value in AgriQuality and Asure companies owned by the Crown on behalf of all New Zealanders. It has the added benefit of improving New Zealand’s biosecurity response capability at a time when New Zealand is becoming increasingly at risk from incursions. I commend the bill to the House. 
Hon DAVID CARTER (National) 
: 
 The State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill is another kick in the guts for New Zealand farmers. I am surprised that for a bill that is so important to New Zealand agriculture a junior Minister Clayton Cosgrove has been sent to the House to do the third reading speech on behalf of the Government. I do not think I can recall a contribution at all on this legislation through the first reading the second reading or the Committee stage by our current Minister of Agriculture the Hon Jim Anderton. I do not think he has made a contribution at all on this important legislation which again will land heavy costs on our meat producers. 
If one had to describe the bill correctly one would say it was a bill designed by the unions for the unions—a bill designed by the unions for the unions. I said last night in the House during the Committee stage that I found it ironic to say the least that in the very week the legislation had been originally introduced into Parliament coincidentally the Labour Party suddenly found the $850000 that it had taken from taxpayers in the last election. I raised that point and Maryan Street accused me of being very improper even to suggest it. So I went back through the submission process and found a very close linkage between the Public Service Association (PSA) and this legislation. 
Let me start with a submission from the Meat Industry Association. I guess the first point I should note is the comments made by Bill Falconer the chair of the Meat Industry Association and a person who has a reputation in New Zealand and overseas as having championed the interests of New Zealand meat producers. Mr Falconer had this to say to the select committee: “I have to say that in 47 years I’ve been in and around Government I have never seen a major trade organisation be treated so shabbily.” The background to those very strong comments from Mr Falconer is the fact that this legislation or the concept of this legislation was first made known to the Meat Industry Association not by the Minister of Agriculture—not in fact by any Minister of the Crown—but by none other than the PSA when it requested a meeting with the Meat Industry Association. At that meeting which took place in July last year the PSA told the industry that a merger between Asure and AgriQuality would take place. 
The PSA then confirmed that stance in an email sent to all PSA members in Asure dated 22 June 2006 and signed by Keith Gutsell and Ian Baldick who I presume are senior executives of the PSA. In that email they stated: “In recent meetings between the PSA and Government Ministers the Prime Minister and the NZFSA the PSA has been informed that the Government will promulgate Government policy stating meat inspection is to be done only by the Government and delivered by one Government agency Asure.” The email goes on to state: “Make no mistake this is a major turn-round of direction and delivers far better professional and secure meat inspection services for the future.” 
The industry on hearing these comments and receiving a copy of that email then wrote to the Minister of Agriculture and requested a meeting. The Minister of Agriculture refused to meet with the Meat Industry Association because he was not prepared to face its members and discuss the implications of the legislation. So what we find is that coincidental with the sudden payment by the Labour Party of the $850000 in comes this legislation which in effect removes any potential— 
Maryan 
 Street 
: I raise a point of order Madam Speaker. I seek your guidance on this but I consider that implication to be improper. I look to you to tell me some Standing Order under which I might claim that because that comment should not be repeated in this House. It is improper it is unworthy and it is untrue. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member has made a clear implication and he will stand withdraw and apologise. It is not acceptable to do that. 
Hon DAVID CARTER 
: Point of order— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No I have ruled on it. A member has raised a point of order an implication was made and I ask the member to stand withdraw and apologise. 
Hon DAVID CARTER 
: I withdraw. 
The ASSISTANT SPEAKER (Ann Hartley) 
: And apologise. I asked you to withdraw and apologise. 
Hon DAVID CARTER 
: I withdraw and apologise. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Thank you. 
Hon DAVID CARTER 
: I was saying before I was interrupted by the point of order that there is a clear association and a clear track from the PSA announcing this legislation to the industry and subsequent to that the legislation coming before the House almost 12 months later. That I think has been a very very sad state of affairs; this very important industry has been treated as though it were almost irrelevant. There is no paper trail as to why the PSA demanded this legislation. Suffice it to say it had demanded it for a long period of time. 
In the debate yesterday in the House Maryan Street made the point that there had not been any competition because AgriQuality had not entered into meat inspection services and therefore there were no complaints before the select committee about the current cost charged by Asure which of course is on-charged to the farming industry. I say to Ms Street that there has not been any difficulty around the fees because there has been the potential for that competition. But this legislation completely removes the potential for competition and mark my words cost increases will follow. That is the very reason that the PSA has campaigned very very successfully for reasons unknown to me and has achieved its desired result with the passing of this legislation today. 
I want to pick up on the process at the select committee. Initially Gordon Copeland was supportive of the National Party’s position of opposing outright this legislation. But United Future—of which he was a member at the time—took a degree of comfort from the promise of a Supplementary Order Paper being delivered to the House that would satisfy some of the concerns around the potential for offering alternative meat inspection services into the future. Supplementary Order Paper 120 was finally presented by the Minister for State Owned Enterprises Mr Mallard and in it we saw nothing but a sop. There is no way at all that that Supplementary Order Paper will deliver contestable meat inspection services within the next 50 years unless the legislation is changed. 
What the Supplementary Order Paper does contain is an instruction that the Commerce Commission must within 3 years investigate the cost of meat inspection services to ascertain whether they are fair and reasonable. What I find incredible is that the Government having kicked the farming community in the guts delivers yet another huge kick and says that the farmers must pay for the cost of work done by the Commerce Commission. If ever a Labour Government wanted to fall foul of the farming industry then this one is doing a superb job of that today. 
A Supplementary Order Paper put forward in my name gave the Animal Health Board the ability to cancel contracts it had already assigned if a merger occurred. The board has successfully been able to get very competitive pricing under the arrangement whereby two State-owned enterprises provide that service—namely AgriQuality and Asure. What happens now is that the contracts the Animal Health Board has entered into are not allowed to be completed because the Minister specifically removes that requirement today in the legislation. That again will mean the immediate passing of about $2 million of costs on to the farmers. 
Finally there was a very small glimmer of hope of an amendment put forward by Eric Roy to involve Meat and Wool New Zealand in that consultation process being successful. Again I understood that there had been agreement. I accept that there is some confusion about whether there had been; I accept Darren Hughes’ word on that. That amendment offered a little chance to achieve some fairness in this dreadful legislation but again Trevor Mallard used his numbers to make sure that we got no satisfaction with that amendment at all. 
It is a sad day to see the Government forcing through the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. I am surprised that New Zealand First has not taken a more genuine interest in this legislation and acknowledged the effect that it will have on our farming community but mark my words as we campaign towards the 2008 election I will take every opportunity to point this matter out to our farming friends. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First supports the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. We have taken a very close interest in this bill. In supporting it we believe that rather than supporting an illusory prospect of competition we are supporting a real move to bring down the cost of the delivery of a service by amalgamating two companies thus making them more efficient in what is proposed to be one unit shortly. If true competition does not exist then we must look at the costs of the monopoly provider if we want to call it that and make sure that those costs are as low as possible. That is what is being done here. 
Mr Carter and the National Party say because of some conspiracy theory they have about the Public Service Association that costs will increase and that the usual— 
Hon Clayton Cosgrove 
: Oh the Brethren. 
R DOUG WOOLERTON 
: No it is not the Exclusive Brethren in this case actually. The Exclusive Brethren come along at election time to help out; they are not interested in this sort of stuff. This is the grunt end of the business. Mr Carter said that costs will rise. Well I think that he and everybody else know—I certainly know—that the cost of building will rise too as will the cost of registering a motorcar and a whole lot of other things. But that is not because of a secret deal that has been done with the Public Service Association. Unions have always been a big part of the meat industry just as they have been a big part of the shipping industry and of other major industries around New Zealand. There is nothing unique in that nothing new in it and nothing untoward in it at all. 
Mr Carter also said that at the election he will go around and talk to farmers about New Zealand First’s part in this legislation and I hope that he does that. I hope that he talks to farmers a lot about New Zealand First. I hope he talks about New Zealand First’s support for a tax reduction in the last Budget—a tax reduction that was voted against by the National Party. In fact I could not believe this myself at the time of the last election but I am told it is true that the last time the National Party actually had a tax reduction rather than just talking about it—and it ran the whole election campaign about this issue last time and was assisted by the Exclusive Brethren in doing so—was back in 1966. A young man like Minister Cosgrove would not even be able to remember 1966; he would have been interested in other things then. He would have had the hormones running hot in those days and the last thing on his mind would have been— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. This is a very good speech and I do not want to interrupt the member’s flow but I have to say that I was not born in 1966. The hormones were not flowing at that point. 
Mr DEPUTY SPEAKER 
: Is the member taking exception? 
Hon Clayton Cosgrove 
: No not at all. I just thought I would help the member out. 
Mr DEPUTY SPEAKER 
: That is not a point of order. 
R DOUG WOOLERTON 
: The Minister just wanted to point out a few things such as that a rush of blood to the head of a young man is accepted by most of us as being possible I am sure. 
The matters provided for in this bill are serious issues. We take them seriously in New Zealand First and we will not run around casting aspersions on other parties when it comes to these things. In this programme we are talking about farmers. New Zealand First is conscious of the costs that are placed on farming. We are conscious that farming is always a difficult business. It is at the sharp end of exporting. Farmers cannot pass their costs on to anybody else. They have to compete against subsidised products in our overseas markets. They do it and they do it well—we understand that. I can tell the House and anybody who cares to listen that I have farmed and my brothers have farmed all three of them under various regimes and under various Governments. Some of the hardest times in farming in New Zealand have been under a National Government. That is a fact; it is an absolute fact. So I think that the National Party speakers should get off that bandwagon and get on to something that I know they are capable of which is addressing the issue and talking about things in a non-partisan manner. 
What the National members do not tell us in their speeches is that the Governments of the countries that we export to insist on a sign-off for meat inspections by a Government or a Government agency. They do not want to know about a private operator doing the job. In fact Minister Mallard has said that if two-thirds of those countries are prepared to accept a private operator then that can be made to happen. But those countries do not accept it. The Chinese do not want it. There are a billion people right there. The Americans do not want it. How many is that? Is it 250 million or more? The Australians do not want it. [ 
Interruption 
] There are 300 million people in America. The Europeans do not want it. So who wants it? I will tell members who wants it. The National Party wants some sort of illusory competition. Do members know why that is? So that the National members can satisfy themselves—and never mind about the farmers. The National members like to talk big to farmers but they do not want to deliver to them. 
We are happy to support this bill and we are happy to see that at least an attempt is being made by the Government to lower the costs to the industry through this merger. Thank you Mr Deputy Speaker. 
ERIC ROY (National—Invercargill) 
: 
 The debate we are having today is the third reading of the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. This is a bill that if passed after the conclusion of its third reading will eliminate the competition element from the assurance that we give our meat products in the international market and it will also eliminate the competition out of certain elements of pest and vector control in New Zealand. The National Party has through the course of the process of this bill—its first reading the select committee consideration and the Committee stage in this House last evening—expressed a number of serious concerns. The principal question we have asked in each case is why it is necessary to have this legislation. 
I note that the explanatory note states: “The Government wishes to prevent this competition from occurring as it considers that it would result in a net cost to the Crown …”. There are two elements of that that I wish to explore. When delving into why that was the case I found that the concern was that there could be a contingent liability about redundancy if one of these agencies took over some of the work from the other. We have been informed that in actual fact there is a contingency fund should this occur. I understand there is $12 million in that fund. [ 
Interruption 
] That is correct and I thank Mr Guy. So why does the Government see a liability when it has already acknowledged that there could be some inter-movement between two agencies in this area? I have to say that that has proven to be quite a nebulous issue. 
But does the Government have any concern about where the costs might fall if competition is removed? They fall squarely on the shoulders of the producer. At a time when the sheep industry is under some stress about the prices it is receiving should we load on to that industry another element of cost compliance by removing competition from what is a very important part of the process? 
That is the first point about this legislation. The case was not proven. The case to do this the necessity to wipe out the competition was not proven. I want to extend that a little. This legislation came into the House and has been processed but we have not been told and were not told of the process of the development of this legislation. Normally when the Government wants to do something that will advance a cause it will put out a consultation paper. It will confer with the various players in the industry. My colleague the Hon David Carter related to the House the element of surprise of the major players in terms of: “Hello? We were not consulted. We did not know.” Again it is the element of the fact that the case was not proven—that in fact it was not necessary. 
I am delighted that during the Committee stage last night our concerns about the competition element were listened to to some degree. I am not very happy about the solution the Minister put up in terms of requiring after 3 years a consideration of the competition element and having a trigger that can be effected by either the Minister of Commerce or the Meat Industry Association. That process completely eliminates the producers; they are not represented. I made the case last night that it was a little bit like the Boston Tea Party. The agency that pays for this is the producer because the cost comes off the product at the end of the line. 
There are a number of issues here that we believe are quite fundamental to the way in which we need to do business. It is interesting that a number of State-owned enterprises work in a competition model. This is really a debate about philosophy. We have a Labour-led Government that believes in regulation and we have a National Party representing the farmers which says that it believes in a competitive model. Every single element of the production the selling and the competition with other forms of protein is in itself a very very intense competition. Then we are having a regulatory approach to quite a high cost in the whole chain of processing validation and assurance of that product. 
It is of considerable concern to us in the National Party that this is going to increase costs. As I said earlier those who will be paying do not have a mechanism by which they can force the Commerce Commission to have a look at this. Why would we set up a Commerce Commission to oversee and ensure quality of spending and the best possible economic process by which these things can be done if it is eliminated from giving this some scrutiny unless there is a trigger point? 
We are concerned about the absence of consultation. We are concerned about the fact that the case that this actually needed to be done was not proven. We believe in principle in competition giving us the best possible price. Right now we have a situation in the rural community where there is a significant shift in land use because it is perceived—and at the moment it is real—that there is a much higher return from other forms of pastoral farming: namely dairying. I would have thought that this Government would have some consideration for dealing with the issues that improve the viability of an industry that is under some stress at the moment instead of loading another cost on to it. I relate to the House that although Fonterra has been reasonably coy about the number of conversions in the pipeline I am reliably informed that there will be 32 new conversions in the Southland province in this coming year and another eight considerable extensions to existing property—so some 40 properties have been— 
Darren Hughes 
: Who told you that? 
ERIC ROY 
: I can tell Mr Hughes that it is common knowledge amongst those who know that there is a significant shift. 
I just want to say that that is for this year. I was informed last night that there are 86 inquiries for the following year. If this Government is espousing concern about increased dairying in relation to greenhouse gas management climate change or whatever its notions are then it is important that there is some kind of competing tension in where land use might be because it is too late to turn back the clock at a later stage. 
I now want to address some comments made by Doug Woolerton in regard to who performs the assurance process. He claimed that no one in the world would accept anything other than a Government assurance in meat quality. But then we saw in the explanatory note of the Supplementary Order Paper that the Minister presented to the Committee last night that new Subpart 4 provides for the Crown to continue to negotiate with its international trading partners in order to allow animal material and animal products examination services to be provided by agencies other than the Crown. I repeat that the Government is negotiating to have that happen. 
So then we have to ask why it would eliminate a competitive model where others can perform while at the same time wiping out the opportunity. It is simply nonsensical. It is absolutely nonsensical that on the one hand the Government says that it will continue to chat to its trading partners about where it thinks this should go but then on the other hand it locks in by statute a nil opportunity for that to take place. 
I conclude by saying that the assurance of the products we sell is important. That has not been a question raised in this process. The question is simply the most effective and cost-efficient way that this process can be achieved. This bill is a serious cost to the producer. Therefore National will be voting against it. 
MARYAN STREET (Labour) 
: 
 It is a pleasure to rise to speak in this debate and hopefully to inject a few facts into some of the discussion. It seems to me that in terms of the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill the National Party is bent on defending the idea of competition even though currently there is no competition in the area of meat inspection services. 
Why is there no or little competition in this area? It is because our major trading partners who receive our meat products require the Government guarantee of quality and standards that is provided by the Food Safety Authority’s accreditation of Asure New Zealand. That is how the process works. Our major trading contracts—and I cite the United Kingdom and the United States in particular—absolutely require a Government guarantee of quality. That guarantee has been vested in the Food Safety Authority which is the accreditation body for Asure New Zealand. 
I want to make two points about the fact that the shareholding Ministers wish to prevent competition from occurring between two State-owned enterprises—two State-owned enterprises that may merge at some point in the future if that is considered to be the most efficient thing to do. First of all as the previous speaker said there was concern about a net cost to the Crown. An earlier speaker said that this liability was already provided for and therefore should not be of concern to the shareholding Ministers. This side of the House takes a different view on how taxpayers’ money ought to be spent. Because there may be provision for liability does not mean that that provision should be squandered or expended where such expenditure might be avoided. I would have thought that most taxpayers would get some kind of relief from the fact that the Government was behaving responsibly with their money and was not incurring additional cost if it could be avoided. 
A second issue arises in respect of the admission of competition in this area. In the explanatory note that the previous speaker Eric Roy referred to he will see that one of the reasons given was that it could result in a weakening of New Zealand’s overall biosecurity response capability. What does that mean? Well let me put it really simply for the Opposition. In the last decade or so we have seen outbreaks of such things as mad cow disease. There have been concerns about how nation States might best protect their biosecurity arrangements and make sure their response to biosecurity threats could be as swift and effective as possible. If that capability and that response are to be spread across two organisations rather than one then there is a further risk of complication which will slow down a response— 
Nathan Guy 
: Why? 
MARYAN STREET 
: Because I say to that member opposite if we have two systems operating it stands to reason that it is likely to take twice as long to respond adequately and to ensure that the processes surrounding the inspection of our meat products are as pristine and as comprehensive as they possibly can be. Why would a country have two ways of doing things if it could have one way of doing things? Why would we have two ways of protecting our biosecurity and the quality of our export product if we could have one? That one way of doing things has been proven to be perfectly efficient and more than acceptable. In fact it is in the higher ranks of these kinds of provisions and protections in the world and therefore New Zealand’s reputation in producing meat products of this kind has been second to none. It has been extremely high because the quality of our inspection services is high and is not threatened by the idea that competition will produce a better result. 
Quite frequently we have seen in other areas of endeavour examples of competition producing the cutting of corners; competition in order to drive down the price of something causes corners to be cut. This is one area where New Zealand cannot afford to have that happen. So on two counts the introduction of competition between two State-owned enterprises does not stack up. It does not stack up and it makes no sense. 
Secondly I want to address the issue of consultation with the New Zealand Meat Industry Association. Certainly as the Hon David Carter said earlier the Meat Industry Association spoke in very strong terms to the select committee. I was present. I am not sure that that member was but I certainly was present at the select committee when the Meat Industry Association appeared before us and the issue was certainly spoken of in very strong terms. 
But I draw the attention of the members opposite to Supplementary Order Paper 120 in the name of Trevor Mallard which was passed by the Committee last night. It specifically allows for consultation between the Minister of Commerce and the Meat Industry Association on the examination of services provided by meat inspection services—currently provided by Asure New Zealand. That is now written into the legislation. So the Meat Industry Association now has a legislative function in agreement with the Minister of Commerce in the provisions that allow the Commerce Commission to investigate and report on examination services. 
The Hon David Carter has been throwing wild assertions around and I think we need to come back to the facts and the words on the pages of this legislation which obviously provides a role for the Meat Industry Association. The National Opposition has been opposing this legislation on the absolute slimmest of pretexts. I would love to be in front of an audience where the Hon David Carter tries to explain why the National Party opposed providing the most efficient and the most secure system for the retention of quality meat inspection services and the maintenance of New Zealand’s reputation among its trading partners in the supply of meat product. 
KEITH LOCKE (Green) 
: 
 The Green Party has had somewhat mixed feelings about this bill but we do agree with the previous speaker and with Doug Woolerton that competition in the area of meat inspection is not necessarily beneficial. It can easily drive down the quality of the product and make it difficult to ensure that there is not some damage to or disease in the meat that is sent to market. When the previous speaker spoke on the question of whether competition is always good my friend Doug Woolerton yelled out “Air New Zealand” and I think that is a case in point. The wages and conditions of workers at Air New Zealand were driven down as a response by Air New Zealand to competition and I am scared that there will be a driving down of quality and a driving down of the conditions of workers if competition is allowed in this case even though it would be between two State-owned enterprises. 
If we look at the meat industry we see that that has happened a lot in the past. I used to work in the meat industry for a few years and the workers were pretty regularly under attack as there was competition between the meat companies for product—beef mutton and lamb—coming in from the farmers. The competition was often based on driving down the wages of workers. I think the Public Service Association which covers many of the workers in meat inspection is worried as well that that will happen if there is competition. 
Eric Roy talked about the problems the meat industry is having at the present time. That is true; meat prices have been down. We read articles in the papers about PPCS being in a difficult position in debt and things like that. We can see that that is a situation where if there is a competitive environment in meat inspection the meat companies might put pressure on these competing meat inspection services to come forward with a lower price. How would that be achieved? It would be achieved by putting the meat through more quickly with less quality in inspection and perhaps with lower wages for the staff involved. The lower the wages go the less skilled the workers are and then there are problems. As indicated before it is quite important if we are to provide guarantees and to coordinate with others around the world in terms of preserving safety in food standards and preventing diseases from going around the world and perhaps taking hold in New Zealand to have a real quality inspection system. 
The reason why the Greens have mixed feelings on this legislation is that one of the problems in merging these two State-owned enterprises is that we then have a monopoly State-owned enterprise and we do not necessarily think that that is the best form of organisation for a monopoly. We would favour a Crown-owned entity where at least there is more openness more ability for the Government to step in and where there will not be purely commercial criteria operating. We have seen the problem with some State-owned enterprises recently. For example the Solid Energy State-owned enterprise has gone really over the top in spying on protesters. The Minister Trevor Mallard had to criticise Solid Energy for putting spies in protest groups. 
We have had other cases where State-owned enterprises have got a little bit out of control; New Zealand Post went a little bit funny for a while. The Green Party position is that a Crown-owned entity would be a better model. Quality can be preserved with a publicly owned service; we saw that for years when the Ministry of Agriculture and Forestry inspectors were running the show. The ministry was in essence a monopoly. We had very good meat inspection through that service. That is the background we are working from. 
I know how easy it is to lower quality; I have worked on the chain and I have worked as a meat grader and I know that meat can be pushed through a bit too fast. The meat might not be graded properly or the meat inspectors might let certain diseases through by not paying sufficient attention. So I think it is important that we have the quality guaranteed by a transparent public body and as was indicated public bodies are recognised around the world too. People want a Government sign-off internationally when we export our meat and do not want to be reliant on a private agency. 
It is good that there was that Supplementary Order Paper to add in a role for the Commerce Commission; that gives some control over the situation. But the Green Party would certainly prefer a Crown-owned entity. Therefore rather than vote for the bill the party has decided to abstain to make the point that it thinks there is not enough openness in the system when it is a State-owned enterprise. Thank you. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Mr Deputy Speaker kia ora tatou e te Whare. Me moe tatouiteneiwa! 
[ 
Greetings Mr Deputy Speaker and greetings to us in the House. We should go to sleep now 
!] 
It is interesting to hear what some of the other parties think about this bill. Some have called it pandering to the Public Service Association (PSA) hush money for supporting political power and a reward to the unions for helping to pay off Labour’s overspending and others say all it will do is to destroy competition. All of that seems to be worlds away from the reality of meat inspection and from the working lives of—there used to be thousands; I do not know whether there still are—people who work in the meat industry and from major iwi interests in many successful sheep and cattle farming enterprises. Today the Maori Party would like to focus on the impact this bill will have on the Maori farming sector on the implications of a possible merger of AgriQuality and Asure New Zealand and on whether opening up the meat inspection services to competition will actually enhance their quality. 
We know that only people employed by the Crown can be meat inspectors and we have to ask what is wrong with that. Does is really matter if there is no competition for meat inspection services? There is a suggestion to open up tendering for the inspection services to the private sector. I have to ask why we would do that when nearly all of our trading partners insist—for obvious reasons—that any of our meat is Government-approved and when the inspection services are set up in that way. 
We are happy that the Commerce Commission is to review the cost of those services and that the commission will report on whether their prices are in line with the Commerce Act. But I would signal a note of caution about that because last week we saw an excellent example of what happens when independent bodies report back to the Government on things that it may not want to hear. I am talking here of course of the Waitangi Tribunal. It tabled two reports that were critical of the Government’s flawed processes incompetent officials and divisive tactics to which the Minister responded with typical ministerial non-enthusiasm. That was hardly the proactive response the tribunal was looking for so we are not holding out very much hope that the reaction will be any different here. That is not to take anything away from the quality of the work being done by the Commerce Commission chaired by the excellent Paula Rebstock the  
New Zealand Herald 
’s 2006 New Zealander of the Year. We have no doubt that the commission will not shirk from the challenge of reviewing the cost of the services. But as with the tribunal the issue is not about how good its reporting is how sound its recommendations are or how substantial its findings are but about whether the Government wants to hear the message. 
 We also note a submission from the chairman of the Meat Industry Association which stated that it was stunned that the Government could take such a profound decision without consultation with it and that the PSA should have been given or assumed the task of briefing the industry. So we are happy to see that the association will have a say as to whether the investigation and review procedures will take place. 
This is an important bill and this is an important industry which markets more than $5 billion of meat exports each year—fully 17 percent of all our exports. Maori are key players in this industry and we believe that it is in their interests and in the best interests of the nation that key quality controls assurance processes and standards are adhered to in the meat inspection services. On those grounds the Maori Party will be supporting this bill. 
NATHAN GUY (National) 
: 
 I rise to take a call on the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill. It is a complete nonsense bill—complete nonsense! I was here for the first and second readings and I sat here and listened throughout the Committee stage and I have heard all of the excuses from the other side of the House. Those excuses do not sit easily with us on this side of the House. When one thinks about it one realises that competition is a good thing. We should not be scared of competition; we should embrace it. I cannot see how this bill will actually achieve very much at all. Costs are going to go up at the farm gate. 
Hon Clayton Cosgrove 
: Oh rubbish! 
NATHAN GUY 
: Yes they are. 
Hon Clayton Cosgrove 
: That’s rubbish! 
NATHAN GUY 
: They absolutely are. For the Minister to sit here and gibe at me yesterday that any potential redundancies will cause $10 million— 
Hon Clayton Cosgrove 
: I wasn’t here yesterday. 
NATHAN GUY 
: The Minister for State Owned Enterprises. The contingency of $12 million is already sitting on Asure’s books so what a feeble excuse that is. I remind the House that the contribution of agriculture to this economy is huge. It is forecast to be over $9 billion next year yet red meat producers will cop the backlash of this bill—the dairy farmers the beef farmers and the sheep farmers who right now are really struggling. They are struggling against the high soaring Kiwi dollar and against costs imposed in this House that often affect their business. 
It is interesting to see that one of the big Budget bids of the Minister of Agriculture is a $1 million talkfest summit. I wonder whether that will solve the problems we have in the rural community. I will wait and see. When sheep farmers are up against it the big-spending Minister of Agriculture Jim Anderton is out there proposing a $1 million talkfest summit. 
In thinking about this bill I say it is interesting that the Hon David Carter produced a document yesterday in the Committee stage that showed that the deal on this bill was done with the biggest union the New Zealand Public Service Association (PSA) back in July 2006. It makes a mockery of the submission process does it not when the deal on this bill was done with that union back in July 2006. 
This bill has also been a real rush job. There were nine submitters and most of them were against the bill. 
R Doug Woolerton 
: You just said that the deal was done in 2006. That’s almost a year ago. 
NATHAN GUY 
: Bill Falconer the chair of the Meat Industry Association has been around this place for a long time—about as long as Mr Woolerton from New Zealand First has. He said that never before had the association been treated so shabbily by a Government. 
R Doug Woolerton 
: Who? 
NATHAN GUY 
: The Meat Industry Association which will cop the backlash on this bill. It is absolutely hopeless. 
Darren Hughes 
: You gave this speech last night. This is the same speech as last night’s. 
NATHAN GUY 
: No it is not. 
Darren Hughes 
: Yes it is. 
NATHAN GUY 
: Not at all. What I want to highlight to that member who probably does not understand the true meaning of competition and may not have been— 
Darren Hughes 
: I do and I beat you! That’s when I worked out competition—when I kicked your butt! 
NATHAN GUY 
: Oh yeah yeah. Around the next election Darren Hughes will be giving an “Elections 101” lesson to all the new Labour candidates’ at their candidates’ college on how he lost a safe Labour seat— 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. This is a third reading debate as the member may or may not know. This is a rather serious issue and although there can be a bit of humorous banter— 
Mr DEPUTY SPEAKER 
: Your point of order please without the speech. 
Hon Clayton Cosgrove 
:—for about the last third of the time he has spent talking I have failed to see any relevance to the third reading. I request Mr Deputy Speaker that you think about calling him back to the bill. 
Eric Roy 
: I just wish to point out to you Mr Deputy Speaker that the member on his feet Nathan Guy responded to an interjector saying some competitive things in respect of Nathan Guy’s own patch. It would be only rational and reasonable for Mr Guy to respond in the way that he did. 
Mr DEPUTY SPEAKER 
: I agree. 
NATHAN GUY 
: I was talking about competition. This bill is supposedly all about reducing competition. We heard from Maryan Street the same speech that she gave last night—that competition is all about cutting corners. Well let us think back a little bit because fewer than about 12 months ago the Minister for State Owned Enterprises wrote to all the chief executives of the State-owned enterprises that he wanted them to go out there diversify and make a greater return to the shareholders the Crown. He wanted them to diversify away from their core business. Now with the bill in front of us on the other hand he says he wants to reduce competition. Will the Minister for State Owned Enterprises be out there trying to create a merger between Genesis and Meridian Energy? I do not see any bill before the House about that if we are to talk specifically about reducing competition. 
This bill is all about red meat inspections and actually all about caving into the wishes of the PSA and we can prove that the deal was done back in July 2006. When we think about consultation on this bill we expect that the industry would have been consulted. The Meat Industry Association asked Jim Anderton for a meeting so that it could try to understand where he was coming from in respect of the bill. The Minister of Agriculture did not accept that offer and I thought that was absolutely pathetic. The Minister of Agriculture was not even in touch with the people at the coalface who will bear the brunt of this bill if it goes through this evening. National members will be voting against it. 
 It is also interesting to see that there has been no business case economic analysis. That will be done later. One would presume that the Government would do all the numbers and see how they stack up before putting the bill into the House but oh no this Government gets it into the House makes it a rushed job and rams it through and will do the numbers on it later. How daft is that? 
The most important thing around this bill is that with this merger if it ever goes through the costs of the Animal Health Board which now is able to go out and competitively pitch its products for TB testing to Asure and AgriQuality will go up by about $2 million. Who is going to pay those costs? It will be those people at the farm gate paying for the TB testing. We need to carry on with TB testing under the current strategy until 2013. Mrs Street mentioned mad cow disease. I could not quite understand her but I think she was saying that that if there was an outbreak we would be better off with just one State-owned enterprise. I cannot understand why she would even be suggesting that because we would need all the people on the ground if there was ever an outbreak—and let us hope there is not. 
I want to speak to new clause 14 which is inserted into Part 2 by the Minister’s Supplementary Order Paper 120. What is really interesting in this provision is that in the event of the merger of Asure and AgriQuality the new company will have to pay the Crown the levy prescribed—the Crown will prescribe it. And who will pay that levy? The industry will cop the levy on any sort of merger through the Commerce Commission. 
So to sum up the National Party feels that this bill has been a rushed bill. We feel it has been a rushed bill. We think there has been very poor consultation. Those people on the other side of the House have caved in to the wishes of the biggest union in the country and that is proved by a document showing that the deal was done in July 2006. Up will go the costs and who will pay the costs? You can bet that it will be those at the farm gate. That is why National is opposing this bill. 
A party vote was called for on the question  
That the State-Owned Enterprises (AgriQuality Limited and Asure New Zealand Limited) Bill be now read a third time. 
Ayes 64 
New Zealand Labour 49; New Zealand First 7; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Abstentions 6 
Green Party 6. 
Motion agreed to.