Standards and Conformance Bill — In Committee 
Standards and Conformance Bill — In Committee 
[Volume:634;Page:5457] 
Standards and Conformance Bill 
In Committee 
Debate resumed from 12 September. 
Part 2 Amendments to Testing Laboratory Registration Act 1972  
(continued) 
NICKY WAGNER (National) 
: 
 We were discussing the Standards and Conformance Bill and I was worried about the standards concerning noisy vehicles and the lack of a testing regime for noisy vehicles. Our legislation is out of sync with international standards. It has become weaker and harder to enforce over the last few years while most countries including the UK Australia and those in Europe have tightened their standards. Australia has updated its requirements so that all new cars need to meet a test of 76 decibels while New Zealand cars have to meet a test of only 81 decibels. 
But the real problem is that we allow the modification of cars with no commitment to a regular testing regime to ensure that even our inadequate standards are met. Cheap Japanese cars with modified noisy exhausts have been a consistent persistent and growing problem ever since Labour came to power and over the last 6 years it has done absolutely nothing to solve it. If New Zealand is going to conform with international vehicle noise standards we need to introduce a regular and compulsory testing regime with an approved objective test through vehicle-testing stations. The key is to have an objective test because that is the only way we can guarantee consistency. 
National opposes the Standards and Conformance Bill but we do support improved and updated vehicle noise standards and the introduction of a standardised objective test in vehicle-testing stations to ensure conformance to international standards. So I ask the Minister for Transport Safety Mr Duynhoven to please get on with it. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I firstly want to support my colleague Nicky Wagner in the quite powerful points she has made to the Committee about the mess the Government has made in respect of standards for noisy exhausts. The member for New Plymouth Harry Duynhoven was rolled by members of the noisy industry as a self-confessed boy racer. As a consequence I myself and Nicky Wagner have heard complaints from communities all over New Zealand—Nelson Christchurch Hamilton almost every corner of New Zealand—about the hopeless Government response to noisy boy racers. The Government allows 7000 vehicles a year that are imported into New Zealand to have perfectly good muffler systems ripped out of them and be replaced with ones with wide bores that are designed to be as noisy as possible. In fact I found out that in my own community of Nelson the equivalent of a 747’s noise is being created by the wide-bore muffler industry every single week. 
What has the Government done? I can recite the contents of six press releases from Tim Barnett of Christchurch who said he would bring a member’s bill into this House in 2004. That is over 2 years ago. Well I have searched through the papers gone to the Clerk’s Office and crawled over the desks looking for Mr Barnett’s member’s bill and it is nowhere to be seen. He got the sexy story in the Christchurch  
Press 
 but he has not done a single thing. 
And we keep getting statements from Harry Duynhoven. He issues press releases—I think he has them in the fax machine on automatic release every 6 months. “I am going to do something about noisy exhausts.” he says. He puts the press statement out and nothing happens for another 6 months. He puts it out again; nothing happens for another 6 months. It has become farcical. 
Thankfully there is somebody who is taking this issue seriously. Nicky Wagner has launched a proper member’s bill to deal with noisy racers and to set some standards in place. 
Hon Harry Duynhoven 
: Bit late—it’s already done. 
Hon Dr NICK SMITH 
: Well I ask Mr Duynhoven why the standard of noise for a car in New Zealand is less than that for a 12-axle truck in Australia. I sort of thought that New Zealanders were more environmentally conscious than Aussies but here we have Harry Duynhoven and his boy-racer mates allowing that sort of abuse of New Zealanders. People staying in hotels are refusing to pay their bills the next morning and are walking away in disgust. Cafe owners in my own electorate of Nelson are frustrated out of their tree with this problem. Thousands of people have signed a petition launched by Nicky Wagner. And still the Government does nothing. 
So I challenge the Government in respect of this Standards and Conformance Bill to actually do some doing actually walk the talk because for all the rhetoric for all the waffly provisions we see in this bill this Government in important areas like building standards and exhausts standards is doing nothing. In fact I will re-emphasise a question that I have put to the Minister ad nauseam. Standards New Zealand says there is one set of standards for the treatment of construction timber for houses but the Department of Building and Housing is saying something different. A number of building associations are saying: “Please tell us what the rules are.” The Minister in the chair Lianne Dalziel cannot tell us. She refuses; she does not know. 
Hon Lianne Dalziel 
: Part 2. We are doing Part 2 of the bill. 
Hon Dr NICK SMITH 
: Yes and I have a simple question for the Minister. 
Hon Lianne Dalziel 
: This has got nothing to do with Part 2 of the bill. 
Hon Dr NICK SMITH 
: Well the bill is about Standards New Zealand and Standards New Zealand has introduced a change in standards for timber treatment. We want to know what the standard is to which we have to build a house today. The Government does not know. So why should we be ramming through this Parliament the Standards and Conformance Bill when the Government cannot answer something as basic as that? The reality is that for the first time in New Zealand history we have two different agencies of Government telling different stories about what the right standard is for something as critical as New Zealanders’ most important asset—their home. We do not know from this Government what the correct standard is. Why on earth should this Parliament advance a bill of this type when there is that sort of confusion in the Government ranks over an issue as important as the standard of timber treatment which is critical? 
DAVE HEREORA (Labour) 
: 
 I move  
That the question be now put 
. 
SANDRA GOUDIE (National—Coromandel) 
: 
 Thank you Mr Chairperson. 
Hon Harry Duynhoven 
: I am sorry to interrupt the member who is about to speak but I seek leave to table a set of statements outlining the noise-testing procedures currently in place and recently introduced. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that? Is there any objection. There is. 
Hon Dr Nick Smith 
: I simply challenge the member Mr Harry Duynhoven to take a call. If he wants to contribute to the debate I would be delighted to have him answer the questions. Instead I seek leave to table the very good member’s bill that is in the ballot in the name of Nicky Wagner which will actually show some leadership on the issue of noise control for vehicles. 
The CHAIRPERSON 
: Leave has been sought for that course to be followed. Is there any objection? There is. 
SANDRA GOUDIE 
: In speaking to Part 2 I would just like to look at the powers of the council and also at the amendments to testing laboratory registration. I note that International Accreditation New Zealand has made a substantial submission with regard to that. Its members are concerned—they want to clarify—that the issue of competition created by the Joint Accreditation System of Australia and New Zealand for inspection body accreditation is currently the subject of review by the Ministry of Economic Development. The council is concerned that continued competition for inspection body accreditation by the Joint Accreditation System of Australia and New Zealand risks compromising confidence in and the credibility of New Zealand’s accreditation system for inspection bodies particularly in regulated areas critical to safety and public health. 
 Actually speaking of public health I say we are concerned about the Government’s intention to require water quality standards throughout this country. It will place unbearable costs on to ratepayers to try to meet those water quality standards. That is a huge cost. We have a community of about 35 households and 95 percent of the water is used for stock purposes yet they will be required to meet the water quality standards set by this Government at a cost of over $500000. That is an insurmountable cost for any small community. Those communities just cannot afford to meet those sorts of standards. 
The very Minister in the chair the Hon Lianne Dalziel says that standards are set with the input and consultation of all parties involved that have a major interest in them. I challenge her to take a call and explain the input into the water quality standards from all of the councils throughout New Zealand that will have to meet those standards. I put it to the Minister that that consultation was poor in the extreme and that communities did not support having water quality standards set. Communities want to be able to make those decisions for themselves. They want to be able to choose the standard of water quality they want for their communities. If they want to set a lower or reduced standard they should be able to choose that standard—it should be up to them. In actual fact the water quality in the Canterbury area is so good that communities there are penalised by the water standard. Their water quality far exceeds the standard yet the activities they have to undertake to meet the standard reduce the quality of their water. 
In talking about the Joint Accreditation System of Australia and New Zealand I would like to identify one of the other submitters’ concerns: the compliance costs. Of course the Joint Accreditation System of Australia and New Zealand states in its charter that it is a not-for-profit organisation. We should remember it is a joint committee between Australia and New Zealand. It has 10 members and six of those members are Australian. It is meant to be a not-for-profit organisation yet in 2005 its profit before tax was $773000. That is pretty good for a not-for-profit organisation. We have to ask ourselves what the Minister was doing. Was a compliance report required? What was the assessment of the compliance costs involved in all of that profit? Was there an assessment of the charges as was asked for by a number of the submitters? It is quite clear that the compliance analysis for this bill is so poor that we could consider it to have not been done at all. 
I will go back to my original concern around the amendments to testing laboratory registration and about International Accreditation New Zealand and its competition with the Joint Accreditation System of Australia and New Zealand. Perhaps the Minister would like to take a call to explain how she has met the concern that was raised by International Accreditation New Zealand about the competition from the Joint Accreditation System of Australia and New Zealand. In the council’s view the very same reasons that support that system having sole responsibility for the accreditation of certification apply equally in the case of International Accreditation New Zealand having sole responsibility for the accreditation of inspection. It is critical to the credibility of New Zealand’s accreditation system that International Accreditation New Zealand has sole responsibility for the accreditation of the inspection bodies. It is a pretty big concern for that organisation and perhaps the Minister may like to take a call and tell us how she will address those concerns. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 51 
New Zealand National 48; Maori Party 3. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 51 
New Zealand National 48; Maori Party 3. 
Part 2 agreed to. 
Schedule 
 agreed to. 
Clauses 1 and 2  
The CHAIRPERSON (Hon Clem Simich) 
: Before I give the call I point out that some members may have thought I was hasty in putting Part 2 to the vote. That was not the case. We had a number of speakers on a previous sitting day. All bar one of those contributors were not speaking to the part in question. In no way were they speaking to Part 2 so I thought we had had enough and I took the question. We are now on to clauses 1 and 2. It is a wide-ranging debate. 
JACQUI DEAN (National—Otago) 
: 
 I have been going through the standards update. I do not know how up to date it is but I have been going through the local government component of it because local government is a subject dear to my heart. 
My colleague Sandra Goudie very ably raised concerns about the by-laws and the standards for the water supply standard. I just want to reconfirm what my colleague Sandra Goudie has been saying about water quality standards and to perhaps give members a bit of a picture of the impact that those standards have had on rural communities throughout New Zealand. They have had an impact on all communities obviously but in my experience the impact has been felt in rural and provincial communities. I can tell members that the drinking water standards have added an awful lot of cost to the people in local government particularly where I come from where there are a lot of people but not many people to pay for these new standards. We really need to keep that in mind when we are passing legislation. 
I will now talk to the title of the bill. One thing that worries me about this bill is that we seem to have a daily diet of rhetoric from the Government on reducing compliance costs. I find it ironic that Minister Dalziel touts herself as being business-friendly because in the general debate today it appeared that big business had become the enemy. I am not sure why big business should be anybody’s enemy especially given that big business is a large employer it seems to make a great contribution to our GDP and it also pays an awful lot of tax. If somebody could tell me what is so wrong about big business I would be very interested to hear. 
I come back to the Minister’s comments on reducing compliance costs and I turn now to the business compliance costs statement which appears on page 10 of the Standards and Conformance Bill. Here is the issue I wonder about. The business compliance costs statement covers the effect the bill will have on businesses. It will affect businesses run by a couple of people businesses involved in manufacturing or perhaps a large company. 
The business compliance costs statement—and I will read from the explanatory note of the bill because I think it is very interesting—states: “One-off compliance costs arise as the 2 bodies that are affected by the proposal will be required to shift their accreditation from IANZ to JAS-ANZ and they will need to understand the requirements imposed by JAS-ANZ in order to obtain accreditation by that organisation.” Those requirements seem to be imposing an awful lot of work on some of the small businesses that I represent. I read further: “This will require staff of the affected organisations” or businesses and people in offices who are otherwise trying to earn a living—and I know that the Minister is enjoying my speech so I will continue—“spending time with JAS-ANZ accreditation staff so that the latter can have confidence that the 2 organisations are issuing certificates to their clients in accordance with IAF procedures.” This is riveting stuff and it is also costly. “The size of these compliance costs will depend on the confidence JAS-ANZ has in the previous accreditations undertaken by IANZ.” 
I ask the Minister whether we will hold seminars for people so that they understand how to do this. But she should not worry about it because the statement then goes on to state: “These compliance costs will be mitigated by the Ministry of Economic Development …”. Well that is good; I feel better! And I am sure our businesses will feel better too! Our little businesses trying to make a dollar in Central Otago and Cromwell which is a wonderful hub—[ 
Interruption 
] No in the middle of the picking season for stone fruit. Those businesses have all the time in the world! All the staff necessary will sit down with this business compliance costs statement and it will not cost them a thing and will take no time at all! They are not to worry about it because the compliance costs will be mitigated by the Ministry of Economic Development! 
NICKY WAGNER (National) 
: 
 The title of this bill is the Standards and Conformance Bill and one cannot have much argument with a bill that is designed to make sure that the Standards Council which develops standards for goods and services and the Testing Laboratory Registration Council which makes sure those standards are being met both conform to international standards norms and practices. But we can have an argument about how much this legislation will cost—what my colleague Jacqui Dean has just been talking about—and we can oppose it because of the costs and level of compliance it demands. 
The business compliance costs statement accompanying the bill—which my colleague also referred to—lacks detail but it does show significant increases in costs particularly in the fees of the new certification body. In fact there is a huge increase in those fees as was explained by Pansy Wong last night. She calculated it as being nine times— 
Pansy Wong 
: Ten times. 
NICKY WAGNER 
:—10 times the existing cost and the worst thing is that the increase is for no discernible improvements in service. I have to say that for someone who comes from a background in small business compliance costs especially any huge increases in compliance costs are like a red rag to a bull. 
New Zealand businesses believe that regulation and increased costs of red tape are their biggest problems. We can look at the latest findings of Grant Thornton’s international business owners survey 2006 which shows that companies in New Zealand rate red tape as the most significant constraint to business expansion—at a 42 percent rating. These results are reflected in a global trend. Australia with a 32 percent rating and Ireland with 30 percent were among those countries that fretted less about red tape but the least concerned was Singapore which is at the foot of the global worry league. In fact only two Asian nations Malaysia and the Philippines rated above 30 percent. Of course the worry for New Zealand manufacturers and service deliverers is that increasingly we are competing with those Asian markets. 
The Grant Thornton survey was conducted among more than 7000 owners of medium-sized businesses—businesses with between 10 and 50 employees—around 30 countries. Its chairman Warwick Jones said that he was not surprised at the New Zealand results from the survey. He said that New Zealand business is strongly wrapped up inside regulations rules and bureaucracy. The situation here is in stark contrast with our competitor State in the shape of Singapore which many people perceive as being authoritarian but which clearly has a much more open view on making it easy to do business. 
It is also a concern that for our neighbour Australia red tape is very much second among concerns about constraints—well behind its concern about the availability of skilled workers. That is not good news for New Zealand for two reasons. One reason is that it could further encourage New Zealand businesses to relocate their operations to Australia and the other is that it could mean that Australia will lure more skilled workers across from New Zealand in order to alleviate its chief block to expansion. 
So because of the costs and the increased demands of certification National opposes this bill. We also oppose it because New Zealand business does not want and does not need any more red tape. Thank you Mr Chairman. 
BARBARA STEWART (NZ First) 
: 
 I rise to take a call on behalf of New Zealand First. I was not going to do so but I am compelled to get to my feet by the speakers I have heard. I have never heard so many erroneous statements in my life. It is important to realise that this is not a compulsory accreditation being imposed on the businesses of New Zealand. It is a totally voluntary regime that is there to help businesses in the export industry to have some accreditation to an internationally recognised standard. 
The businesses involved in this accreditation know the costs before they become involved. I know that because in my previous employment I was involved in working to an international standard ISO 9002 and we knew the costs. We knew what was involved. So for members to say that this is extra red tape and that it will increase costs is absolutely ridiculous and for them to say that the businesses do not know the requirements to meet these standards and will need seminars to get them to meet the standards is outrageous. The manuals are there in clear black and white to assist businesses to reach the standards. 
When we hear about accreditation costs the costs are dependent on the size of the business and one expects to have those costs. One knows the costs before one gets into this particular regime. They are outlined by the agencies when one applies to have one’s product or service certified. So it is quite astounding for members to say that there will be extra red tape and costs when a business actually goes into this accreditation regime knowing that this will happen. 
We know that these standards support New Zealand’s trade. They support a health and safety environment. In a manufacturing industry particularly—like the dairy industry—one has to have that certification to sell product overseas. It is the only way that one can give one’s customers an assurance that the product meets the standards that are required and often the product standards are set by the country one is exporting to. 
Before I left my previous employment I was very pleased to see that standards were made fit for purpose because prior to that one could manufacture a lead lifejacket—which I know some National members would like to have—but that lifejacket was absolutely not fit for purpose. Not many people want a lead lifejacket; they want one that will actually help them when they get into difficulties out on the water. 
So some of the arguments I have heard tonight are totally astounding. This is a good Standards and Conformance Bill. It meets the requirements of the people who are involved in this particular industry. I hope that I hear some more accuracy in speeches before the end of the night. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to be speaking to the Standards and Conformance Bill and to the title even more so when I know that we are opposing it. One of the things I wanted to do was to see why these changes were being made and why we were going down this path with this bill which makes changes to various pieces of legislation. I could find only one reason—it is stated in the explanatory note that international practice is that only one body in any country has the function of registering certification bodies. I would have thought the system we had was fine. I did not see any reason for the change and I still do not. Perhaps the Minister in the chair the Hon Lianne Dalziel might like to take a call and give us an explanation but I will not hold my breath. 
I was interested to look at what the Joint Accreditation System of Australia and New Zealand—JAS-ANZ—is required to do particularly when it is meant to be a not-for-profit organisation yet is making $773000-odd before tax. What does that not-for-profit organisation do? It is about strengthening trade. It is to be the joint accreditation body for Australia and New Zealand to develop mutual recognition in overseas markets for Australian and New Zealand producers exports and personnel. I thought that was a bit strange when I thought about our apple exports. I think Craig Foss would be interested in that. If he has a little look at the objectives of the Joint Accreditation System of Australia and New Zealand he will wonder why on earth we cannot get our apples to Australia and he will see what those guys are doing. 
Hon Lianne Dalziel 
: Ha ha! 
SANDRA GOUDIE 
: Well it is all part of free trade. Do they or do they not meet the standards? Can it not do something in this regard? This is meant to be about trade. 
I would also like to take on the points made by Barbara Stewart. She said that this is a voluntary situation. It may be a voluntary situation but if people want accreditation for international trade they are caught between a rock and a hard place and they do not have much of a choice if that is to be the process by which they can improve their market access. With a captured clientele the Joint Accreditation System of Australia and New Zealand can screw the cost and from the concerns raised by submitters it seems that that is exactly what it is intending to do. 
If we look at the submissions from Telarc and from Health and Disability Auditing New Zealand Ltd we can see quite clearly that they have major concerns about the increases in costs. They have set out those cost increases quite clearly to the Minister and the select committee and one has to wonder why those concerns have not been addressed. If we look at the explanatory note in relation to the compliance cost report we can see quite clearly that the Joint Accreditation System of Australia and New Zealand itself acknowledges that there will be some confusion amongst organisations wanting accreditation and some confusion about what is to be complied with what the procedures are and what has to be done to meet its new certification. 
Perhaps the Minister would like to take a call and explain the situation around compliance costs and how she can justify increased costs—to a degree of 10 times the original—which is what has been mooted by submitters. These submitters have some expertise in this field and it is to be hoped that the Minister has taken some cognisance of the substantial outline of fees that will be imposed. I draw her attention to the outline of fees by Health and Disability Auditing New Zealand. It has shown in summary that a 3-year certification period will cost $155000 compared with the $18000 it used to be through International Accreditation New Zealand. That is a huge difference in cost—$155000 as opposed to $18000. Could the Minister please take a call and give us an explanation about the difference in those costs and why she is condoning a compliance cost that will be incurred to that degree by all participants. The Joint Accreditation System of Australia and New Zealand is supposed to be a not-for-profit organisation. It is supposed to be there to assist not only consumers but also businesses. I cannot see businesses being assisted by compliance costs to that degree. So could the Minister please take a call. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 52 
New Zealand National 48; Maori Party 4. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 52 
New Zealand National 48; Maori Party 4. 
Clause 2 agreed to. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Committee divide the bill into the Standards Amendment Bill and the Testing Laboratory Registration Amendment Bill  
divided into Standards Amendment Bill and the Testing Laboratory Registration Amendment Bill  
pursuant to Supplementary Order Paper 49 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 52 
New Zealand National 48; Maori Party 4. 
Motion agreed to. 
Bill to be reported without amendment presently.