Volume 714 Week 47 - Tuesday 24 May 2016Text is incorporated into the Bound VolumeVolume 714 Week 47 - Tuesday 24 May 2016[Sitting date: 24 May 2016. Volume:714;Page:11099. Text is incorporated into the Bound Volume.]Tuesday 24 May 2016Mr Speaker took the Chair at 2 p.m.Prayers.VisitorsBougainville—Delegation ParliamentMr SPEAKER: Honourable members I am sure that members would wish to welcome a parliamentary delegation from the Autonomous Region of Bougainville led by the Honourable Francesca Semoso whichis present in the gallery.Amended Answers to Oral QuestionsQuestion No. 12 to Minister 10 MayHon PAULA BENNETT (Minister for Social Housing): I seek leave to make a personal explanation to correct an answer I gave to a supplementary question during question No. 5 on 10 May 2016.Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is none.Hon PAULA BENNETT: In response to a supplementary question asked during question No. 5 on 10 May I said in relation to the $41.1 million for emergency housing in Budget 2016 that “The new 3000 places will be for anyone—individuals or families—who has a genuine need for emergency accommodation.” I should have said that the funding will be for 3000 places and that some of those will be new and some will go to the many emergency housing providers that require dedicated ongoing funding so that they can keep their doors open.Questions to MinistersHousing Affordability and Availability—Government Measures to Address1.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in his Minister for Building and Housing?Rt Hon JOHN KEY (Prime Minister): Yes.Andrew Little: How can he have confidence in bumbling Nick Smith who promised 500 hectares of new housing on Crown land in the last Budget but found only 13 hectares and is now claiming he never made any promise at all?Rt Hon JOHN KEY: Apologies—I just could not hear the question.Mr SPEAKER: I will allow the question to be heard. It would be—[Interruption] Order! The question as I heard it was certainly one that was going to lead to some interjection but so that it is heard clearly I do not want any interjection particularly from my right-hand side.Andrew Little: Thank you Mr Speaker. I am obliged. How can he have confidence in Nick Smith who promised 500 hectares of new housing—Hon Dr Nick Smith: Did not.Andrew Little: —on Crown land in the last Budget but found only 13 hectares—he is over there—and is now claiming he never made any promise at all?Rt Hon JOHN KEY: I have confidence in the Minister for Building and Housing because he has undertaken a wide range of initiatives when it comes to housing. What we are seeing is a considerable increase in the number of houses that have been built. Yesterday the Minister announced that three sites in Auckland would be paving the way for 750 new homes; if combined with the Moire Road development last year it is a total of 940 homes.Andrew Little: Given his statement about housing “I don’t think it’s a crisis” why does Statistics New Zealand data show falling homeownership rates every quarter under his Government?Rt Hon JOHN KEY: I always have to check those facts when I see them from the Labour Party but homeownership rates around the world actually have been reducing. One thing we do know is that under this Government we are helping a lot of people into their first home. One example of that is the nearly 12000 people who have been helped into their first home under the KiwiSaver HomeStart grant scheme totalling $55.6 million.Andrew Little: I seek leave to table information provided by the Parliamentary Library on the dwelling and household figures and ownership rates which shows a declining—Mr SPEAKER: Order! [Interruption] Order! The document has been described. Before I put the leave it is not simply a précis of Statistics New Zealand is it?Andrew Little: Not at all.Mr SPEAKER: OK then I will put—[Interruption] Order! I will put the leave. [Interruption] Order! Leave has been sought to table the information prepared by the Parliamentary Library. Is there any objection to it being tabled? There is none. [Interruption] Order! Can I just have a little less assistance from Mr Brownlee.Document by leave laid on the Table of the House.Andrew Little: Is Kim Campbell chief executive of the Employers and Manufacturers Association (Northern) right when he says “Whatever is happening now—it’s not working.” and “What we need is a massive Government-led house building programme.” which funnily enough sounds a lot like Labour’s KiwiBuild programme?Rt Hon JOHN KEY: He is absolutely right when he says that whatever is happening now is not working if he is talking about the Labour Party. [Interruption]Mr SPEAKER: Order! To my left the Leader of the Opposition is asking for a supplementary question.Andrew Little: When Kim Campbell the Council of Trade Unions’ Richard Wagstaff and even Paula Bennett say there is a crisis why does he not just admit that the Government’s housing policies have failed?Rt Hon JOHN KEY: The Government’s response in housing has been quite comprehensive and that is why we are seeing 9500 new homes being built in Auckland the highest number in more than 11 years. That is why we are seeing more people employed in construction. That is why we are seeing people accessing KiwiSaver HomeStart to get into their first homes. This is an issue that takes quite a lot of catch-up because of the work that is required but I will say that this Government and under Minister Smith has been implementing a wide range of policies. The previous Government sat around for 9 years and did absolutely nothing.Andrew Little: Have any of these Government policies reversed the fall in homeownership: (1) cheaper Gib board which has now got more expensive; (2) trying to build houses on cemeteries; or (3) building less than 3 percent of the promised 39000 houses in special housing areas?Rt Hon JOHN KEY: Once again the member wishes to make things up and he is welcome to do that. But I will tell you what is working and that is the fact that 24000 houses and sections have been consented in the first 2 years of the housing accord; that there are now 154 special housing areas in Auckland; that the rules have been tightened on property investors; that more Crown land has been released; and that thousands and thousands of people—in fact 42000 I think additional people—are in the area of housing and construction. A great deal is happening in Auckland housing. [Interruption]Mr SPEAKER: Order! [Interruption] Order! Mr Brownlee!Andrew Little: Is it not time to stop the excuses and admit that after 8 years it is the failure of his policies that means that homeownership has fallen every quarter under his Government?Rt Hon JOHN KEY: Firstly I reject the assertion from the member. Secondly as I have pointed out already today there are a great many initiatives that the Government has undertaken. I just look back at the 9 years under the previous Labour Government and all we saw was interest rates going up.Metiria Turei: Why is his Government prioritising the building of 4500 new hotel rooms for tourists as part of “Project Palace” when those resources could be directed to the Minister for Building and Housing in order to help build homes for the 4500 people on the State house waiting list?Rt Hon JOHN KEY: They are different issues of course. One is around tourism and the fact that it has become such a massive employer in New Zealand now. I would have thought that the member would want to welcome that. Regarding many of the hotels that are being built it will ultimately be decided by the private sector whether it wants to invest in them—and they are in places like Queenstown. This might come as a shock to the member but not every builder who lives in New Zealand wants to move to Auckland.Metiria Turei: Does the Prime Minister not think that in the midst of a housing crisis his Government should prioritise “Project Homes for New Zealanders” and not “Project Palace” for tourists?Rt Hon JOHN KEY: I reject the member’s assertion.Metiria Turei: Is this the Prime Minister’s new social housing policy where he builds expensive hotel rooms so that homeless people can stay in them and rack up huge debts to Work and Income instead?Rt Hon JOHN KEY: No.Metiria Turei: Does he genuinely think that 4500 people on the waiting list for a State house and more than 30000 New Zealanders in severe housing deprivation does not mean that we are in a national housing emergency one that demands his full attention?Rt Hon JOHN KEY: Like many issues that the Government faces this does have my full attention. What you have already seen announced by the Minister for Social Development is $41 million being applied to 3000 places some of which are new and some of which are existing but they allow people to access what will no longer be a loan but a grant for social housing. You have also seen the Government moving now on income-related rents for social housing providers. You have seen the Government insulate nearly 300000 homes. You have seen the Government making sure that there are renewable tenancies which benefit those with the greatest need. You have seen the Government working in areas like the Tāmaki redevelopment. The Government is doing a great deal—Mr SPEAKER: Order! The answer is long enough.Immigration Auckland—Housing Infrastructure and Services2.Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements; if so why?Rt Hon JOHN KEY (Prime Minister): Yes and because I do.Rt Hon Winston Peters: How is Auckland going to solve its housing supply problems when demand is inflated by 34000 people coming into Auckland from overseas every year—[Interruption] When they stop I will keep going. [Interruption]Mr SPEAKER: Order! There is too much interjection and there is one member particularly who is continuing to interject. I can name him if that would help quieten him down. Mr Peters start the question again.Rt Hon Winston Peters: How is Auckland going to solve its housing supply problems when demand is inflated by 34000 people coming into Auckland from overseas every year or is this to quote him and I do “hardly some sort of crisis that we cannot cope with.”?Rt Hon JOHN KEY: Some of those people who come in actually come in with skills that can be applied in this particular area of housing. Secondly if you look at the construction workforce which has grown by 40000 in the last 2 years nationally and by 24200 in Auckland the reality of a fast-growing Auckland partly because of population growth both internally and externally has added to a great deal of economic activity and job opportunities for New Zealanders.Rt Hon Winston Peters: How is Auckland going to solve its now massive roading infrastructure problems when half the population of New Plymouth or 34000 are now coming into Auckland from overseas every year?Rt Hon JOHN KEY: As the member should know the Government has been investing massively in infrastructure in Auckland spending a great deal not only on roading but also on public transport and billions—I think $4 billion—has gone into KiwiRail in the time that we have had that and that has included the electrification of lines in Auckland the additional rolling stock and the like. The Government is committed to its share of the central business district rail tunnel now. The Government has also invested in very large roading projects like the Waterview Connection.Rt Hon Winston Peters: How is Auckland going to solve its education and health supply problems when the demand for education and health services is inflated by 34000 long-term arrivals from overseas going to Auckland each year let alone those who come from the rest of the country?Rt Hon JOHN KEY: Firstly many of the people who go to Auckland are returning New Zealanders who have decided to come from overseas because like myself they have worked in another part of the world and they have realised what a great place New Zealand is. And under a National-led Government there are so many reasons for them to come back and be a part of Auckland and a part of New Zealand and there are reasons to celebrate that.Hon Gerry Brownlee: This is great. The member’s running an advertorial for the Government.Rt Hon Winston Peters: Eat your heart out Gerry.Hon Member: Bring back Ron.Rt Hon Winston Peters: They have never asked you mate.Mr SPEAKER: Order! I know the member is responding but on this occasion can we have the supplementary question.Rt Hon Winston Peters: If the latest household economic survey reports that every income decile has declined in homeownership except for the top 10 percent when will he start governing for all New Zealanders and not just for his rich mates?Rt Hon JOHN KEY: If one looks generally at those who think the country is going in the right direction versus the wrong direction the member will see that substantially the number of people who think the country is going in the right direction outnumbers those who think it is going in the wrong direction. They are New Zealanders from all parts of the country and with all different economic cohorts. I think that answers the member’s question. [Interruption]Mr SPEAKER: Order!Budget 2016—Fiscal Strategy3.TODD MULLER (National—Bay of Plenty) to the Minister of Finance: How will Budget 2016 build on the Government’s commitment to a more productive and competitive economy while delivering responsible fiscal management?Hon BILL ENGLISH (Minister of Finance): New Zealand has made good progress over the last 3 years. The economy is growing by 10.2 percent with average growth of 3.4 percent per annum over those 3 years. Average weekly wages have increased by 7.7 percent there is an average growth rate of 2.6 percent compared with average inflation of 0.7 and the unemployment rate is down—in fact in the member’s electorate it is about 5.1 percent compared with 3 years ago. Budget 2016 will build on this considerable progress.Todd Muller: How will Budget 2016 deliver on the Government’s commitment to responsible fiscal management?Hon BILL ENGLISH: The deficit from 2011 was $18 billion and in 2015 there was a small surplus. The Government has turned its focus to consolidating those surpluses so it can begin the process of paying down debt which has run up fairly significantly since 2009 onwards. That would put New Zealand in a better position to deal with future recessions or natural disasters. In Budget 2016 the Government will of course measure its success not by how much money is spent but by how much difference the spending makes particularly for vulnerable New Zealanders.Todd Muller: What recent initiatives has the Government announced to support a growing economy as part of Budget 2016?Hon BILL ENGLISH: The Government has so many initiatives to support a forward-looking growing economy that it has announced a number of them prior to the Budget. For instance there is $45 million for the tourism sector because it is growing so fast to help communities build smaller scale infrastructure projects. Last week Minister Joyce announced funding for a further 5500 apprentices by 2020. This will also support 2500 more people into the Māori and Pasifika trades training programme which will reach 3400 next year—up from just 1200 in 2014. Those are just a few examples of the Government focusing on getting better results.Todd Muller: What reports has the Minister seen from notable—or at least recognisable—commentators on the indicators of a successful society?Hon BILL ENGLISH: I have seen a recent report from one commentator listing indicators of a successful society which include improving employment outcomes and raising incomes. By contrast I have seen a report from another commentator who instead says that what matters is the percentage of the increase in GDP each year going to income. The first one was Grant Robertson and the second one was Andrew Little. I wish they would agree with themselves. [Interruption]Mr SPEAKER: Order! We are coming to it now I suspect.Budget 2016—Tax Cuts4.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: What is his answer to Fran O’Sullivan’s question “Was John Key’s brain fart on the tax front an involuntary exercise or was it calculated”?Hon BILL ENGLISH (Minister of Finance): I would say she got it wrong.Grant Robertson: When he took tax cuts off the table in his pre-Budget speech was he expecting the Prime Minister to put them back on the table 3 days later?Hon BILL ENGLISH: What I made clear is that the fiscal conditions in this Budget had not been met for tax reductions and of course the Opposition will just have to have a look at the numbers in the Budget this week to see whether they think those fiscal conditions can be met in the future.Grant Robertson: What is his response to Westpac economist Dominick Stephens who said: “If the plan is for $3 billion of tax cuts as the Prime Minister said down the line then that makes the accounts that he will deliver this week irrelevant and obsolete.”?Hon BILL ENGLISH: I would disagree with him.Grant Robertson: Why do you disagree with him?Hon BILL ENGLISH: Due to the hard work of the Public Service the members of the various coalition Governments and the New Zealand public this Budget will indicate that New Zealand has choices out ahead of us that very few other developed countries have. They simply will not have choices because their public finances are not yet in a sustainable position—ours are.David Seymour: When was the last time that the Government of New Zealand cut taxes with the Labour Party in power and who was the Minister of Finance at the time?Hon Members: There’s no responsibility for that.Mr SPEAKER: Order! No. It is an information question to the House. I think there is some responsibility to answer it.Hon BILL ENGLISH: This Government’s tax package in 2010 cut some taxes—that is the taxes on things we like like work savings and investment—and pushed up taxes on something we think we had too much of which was consumption. Prior to that I think it was Dr Cullen who announced tax cuts in 2008 which could not be fulfilled because of the recession. [Interruption]Mr SPEAKER: Order! The level of interjection now on my left-hand side is simply too high. If I want to specifically mention a couple I could do that but I am going to have to ask for some cooperation. Otherwise I will be dealing with it more severely.Grant Robertson: Are tax cuts a priority when New Zealanders are living in cars and garages?Hon BILL ENGLISH: As we have indicated there will not be any tax cuts in this Budget. There are other priorities to deal with but there is a whole range of priorities. On different days the Opposition says it is elective surgery. On other days it is student debt. On other days it is budgeting services. Today it happens to be people living in cars. The Opposition does not seem to have any idea of what it thinks the priorities are. [Interruption]Mr SPEAKER: Order! [Interruption] Order!Grant Robertson: In light of that answer if New Zealanders are still living in cars and garages in 2017 will he still propose tax cuts?Hon BILL ENGLISH: The member is getting well ahead of himself. He can be assured that the level of public support for the Budget for 2016 I am sure will be positive and considerable and that will give this Government—because of its sound financial position—plenty of choices for dealing with pressures that might be there next year.Grant Robertson: Did the Prime Minister tell the Minister of Finance that he was going to put tax cuts back on the table just 3 days after he had taken them off?Hon BILL ENGLISH: We completely disagree with the member’s characterisation of what the Prime Minister said and the Prime Minister and I and Ministers regularly have strategic discussions.Conservation Department—Funding and Maintenance of FacilitiesKEVIN HAGUE (Green): My question is to the Minister of Conservation and asks: is she confident that the Department of Conservation can carry out its work considering the inflation-adjusted reduction in Vote Conservation allocation it has endured under her Government?Hon MAGGIE BARRY (Minister of Conservation): That question varies from the one that was given to us. It has included inflation adjustment. I am happy to answer it.Mr SPEAKER: It is the question as it is on my sheet. I can ask the member to read it again if that would help the Minister. Can we repeat the question? It was certainly read exactly as per my sheet.5.KEVIN HAGUE (Green) to the Minister of Conservation: Is she confident that the Department of Conservation can carry out its work considering the inflation-adjusted reduction in Vote Conservation allocation it has endured under her Government?Hon MAGGIE BARRY (Minister of Conservation): I am entirely confident that the Department of Conservation (DOC) can carry out its work but I refute the idea that DOC has endured a reduction. It has not. The core Crown revenue provided to DOC in the dying days of the Labour Government in 2007-08 was $263 million. We are forecast to provide $338 million out of an overall budget of $391 million in 2015-16. This is an increase and in addition to that commercial-partnership funding has gone up over the past 7 years from about $4 million to $9.3 million—not a reduction by anybody’s mathematics I would have thought.Kevin Hague: I seek leave to table a document. It is a table prepared by the Parliamentary Library and it analyses the differences in conservation spending from a 2008-09 baseline in real terms demonstrating the reduction.Mr SPEAKER: Order! The last part is not necessary. Leave is sought to table that particular Parliamentary Library information. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Kevin Hague: Can the Minister confirm that 38 DOC-maintained structures are in serious or critical need of work including 23 bridges and six viewing platforms including a well-known viewing platform in Milford Sound?Hon MAGGIE BARRY: The member is being a bit selective with the places that he is highlighting. I would like to just put some facts out on the table. The data shows that about 13 of 944 huts that DOC manages had some serious work that was outstanding—something as small as a missing hearth brush is enough to mean that a hut does not meet its service standards. The number needing serious work equates to just 1.3 percent of DOC’s extensive network of—often remotely located—huts. This actually serves to reinforce DOC’s inspection and maintenance programme as very thorough. DOC spent more than $18 million on hut maintenance last year and it continues to invest—Kevin Hague: I raise a point of order Mr Speaker.Hon MAGGIE BARRY: —in improving its—Mr SPEAKER: Order! Point of order Kevin Hague.Kevin Hague: It is a long answer but my question was actually quite straightforward—Mr SPEAKER: Order! [Interruption] Order! The way forward because I do not think the question has at this stage been addressed is that I am going to invite the member to ask the question again.Kevin Hague: Can the Minister confirm that 38 DOC-maintained structures are in need of serious or critical work including 23 bridges and six viewing platforms including a well-known viewing platform in Milford Sound?Hon MAGGIE BARRY: There are tasks—and these are ones that the member alludes to—that the engineers have indicated a need to have carried out within the next 6 months. About a third of the work on the list that the member is citing and was provided with by my office has already been completed within this past month. The department undertakes tens of thousands of individual tasks such as these every year. All structures are inspected on a 2-yearly rotation. DOC takes its responsibilities for the public’s and its staff’s safety very very seriously and we have scheduled work for all of the projects that the member has noted to be concluded by November this year. We spend $45 million—Mr SPEAKER: Order! I think that the question was answered some time ago.Kevin Hague: Can the Minister confirm that there are 103 DOC-maintained bridges that either are not safe to walk across or are in critical need of repair?Hon MAGGIE BARRY: No. I would go back to the answer that I gave you before. DOC takes its responsibilities very seriously. I will not and do not confirm that the repair that is needed is of a substantial nature. If it was dangerous—if our inspectors who go through regularly and inspect it thoroughly felt there was any risk to public safety—then those structures would be closed down. They are part of a work schedule that is being done and that is being carried out with all seriousness.Kevin Hague: I raise a point of order Mr Speaker. I seek your guidance. The numbers that I am using in these questions have been derived from answers that the Minister herself has provided. They relate to the—Mr SPEAKER: Can I have the point of order?Kevin Hague: What I am not sure about is whether it is possible for me to table her answers to my questions for written answer.Mr SPEAKER: No it is certainly not and the member knows that. The question was answered immediately. The member asked whether the Minister could confirm and then went on and listed 103 bridges etc. being safe or in need of critical repair. The Minister immediately said no she was not in a position to confirm that. The question was addressed.Kevin Hague: Can the Minister confirm her answer to written question No. 4765 that a quarter of huts do not meet DOC’s own service standard including for example Whariwharangi Hut on the Abel Tasman Coast Track Great Walk?Hon MAGGIE BARRY: The member is misrepresenting the information that he was provided with. The data actually shows that just 13 of the 944 huts that DOC manages had serious work outstanding. Something as small as I said as a missing hearth brush—those are the things that count. So the number needing serious work is just 1.3 percent and we are working on it. We spent more than $18 million on hut maintenance last year.Kevin Hague: I raise a point of order Mr Speaker. My question was about whether or not a quarter of the huts met the service standard and the Minister is answering about critical repairs. That was not the question.Mr SPEAKER: The question was whether the Minister would confirm an answer she had given to a written question that she had answered from her office and she immediately took the approach that the member was misrepresenting and misinterpreting the answer that has been given. That is a right that the Minister has. The member can take it further with supplementary questions but that question has been addressed.Kevin Hague: Can the Minister confirm her answer to written question No. 4766 that nearly half of tracks administered by DOC are not up to the department’s own standard including 60 percent of Great Walk tracks?Hon MAGGIE BARRY: When we look at the tracks 50 tracks have been closed since 2008 on our watch. That has often been due to unavoidable natural hazards but more than 400 tracks and more than 1000 extra kilometres have been added to DOC’s network over the same period. As with its hut network DOC is constantly reviewing and upgrading its network of more than 14000 kilometres of track. If it would help the member to go back over to the hut question the loose bricks that he identified in the chimney of that hut in the Abel Tasman have meant that the chimney has been demolished. The hut is still open for about 20 people to use and it is safe. It is fully functioning but the fire and the chimney have been cordoned off. These are the staged repairs that DOC does in an effort to keep tracks and huts and the people who visit our tracks and huts absolutely safe.Kevin Hague: Does the Minister stand by her answer to written question No. 4757 that indicated that there were some 168 structures administered by DOC that had failed their load capacity assessments and 709 that had yet to be assessed?Hon MAGGIE BARRY: I think the details that the member is going into are all very well. The general responses that I have given need to be applied which is that when something goes wrong with a DOC structure whether it is a bridge a platform a hut or a track we are on to it right away. We have various stages of importance that we address when we are looking at the stages of work and their priorities. DOC does that with the utmost integrity and with health and safety as our paramount concern.Kevin Hague: In this week’s Budget will the Government increase conservation funding to enable the Department of Conservation to ensure that the 142 species that have become closer to extinction do not become extinct that people do not put their lives at risk on DOC viewing platforms or bridges and that our huts and tracks—Mr SPEAKER: Order! Bring the question to a conclusion.Kevin Hague: —meet the expectations that New Zealanders have for them?Hon MAGGIE BARRY: There are not 143 species that are at risk. The member is definitely being disingenuous. As a result of further information and classification you boil that figure down and there are 14 and they are very detailed and we are working on them very hard. When it comes to additional funding every department in every Government would always say they would like more. DOC is adequately funded at the moment. We have had $20 million given for Battle for our Birds and more than $11 million last year for the kiwis. New Zealand species protection is a very important part of what DOC does and we take it very seriously.Kevin Hague: I seek leave to table a list of the 142 species derived from the Minister’s answers to written questions—Mr SPEAKER: Order! I just need to know the source of the list.Kevin Hague: It is a list compiled by my office from her answers.Mr SPEAKER: No. I refer the member to Speaker’s ruling 165/1. Information must come from a source like the Parliamentary Library which I would consider but if it is prepared by the member’s own office I am not prepared to put the leave.Housing Auckland—Removal of Urban Limits6.JAMI-LEE ROSS (National—Botany) to the Minister for Building and Housing: What steps has the Government taken to dismantle Auckland Urban Limits that were identified by the Productivity Commission report in 2012 as a key problem for the city’s housing supply and affordability?Hon Dr NICK SMITH (Minister for Building and Housing): The first step was creating special housing areasin 2013. This enables new housing estates to be approved beyond the urban limit and to date this has provided capacity for 27000 homes in Auckland beyond the old urban limit. The second step was fast-tracking a new unitary plan to replace those urban limits permanently and that process has only weeks to run. The third step is the Resource Management Act Reform Bill before Parliament which puts a specific new requirement on councils to provide for land supply. And the fourth step is a new national policy statement that would not allow councils to reinvent metropolitan urban limitsin the future.Jami-Lee Ross: What comments and reports has he seen of the adverse consequences of removing Auckland’s urban limits?Hon Dr NICK SMITH: I have read reports that the 2012 Productivity Commission report recommending an end to urban limits was an ideological burp from dinosaurs of the extreme right and was best ignored. I have also read a statement saying that Dr Smith’s threat to get rid of Auckland’s metropolitan urban limit is total nonsense and that it will allow massive urban sprawl and completely unsustainable urban development. I have another statement which says that wholesale destruction of the city limits is the last thing that Aucklanders want to see. It will allow suburban sprawl to rip across the countryside from Whangarei to—[Interruption]Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. That answer is not going to help.Hon Gerry Brownlee: I raise a point of order Mr Speaker. It was a reasonable question. [Interruption] Well it was. Although the Minister might have taken too long to read some of the extremely strong quotes that were offered by some it would be nice for the House to know exactly who said those things.Mr SPEAKER: No no. It was an unreasonable answer. It went on for far too long and I listened very very carefully. I was left in little doubt that it was going to then be in breach of Speaker’s ruling 174/4 and I am sure that I am right. Point of order Hon Gerry Brownlee.Hon Gerry Brownlee: Supplementary question.Mr SPEAKER: Oh no. I would need to deal with the point of order first I suspect.Hon Dr NICK SMITH: I raise a point of order Mr Speaker. It was not necessary to identify the source of the comments—Mr SPEAKER: This had better be a point of order Mr Smith.Hon Dr NICK SMITH: —because his face was quite red.Hon Gerry Brownlee: I did not quite hear what the point of order was but my question is: who was the genius personality who made those comments?Mr SPEAKER: No there is no ministerial responsibility for that.Jami-Lee Ross: Does the Minister recall any reports of dozens of hoardings being erected in Auckland in 2013 with his mugshot on them that decried his policy of overriding the urban limits and advocated a compact city; if so has he subsequently heard from the authors of those hoardings of any change in position?Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: Order! [Interruption] Order! I will deal with that point of order in a minute. As I call the Minister to answer that question if it in any way breaches Speaker’s ruling 174/4 and is simply an answer designed to attack the Opposition I will deal with it very very severely. There is a point of order from the Rt Hon Winston Peters.Rt Hon Winston Peters: I am very reluctant to do this but no backbencher should describe a Minister as being a mug no matter how appropriate the description might be.Mr SPEAKER: That is hardly going to help the order of the House. Does the Minister wish to answer the question? I suspect it is very unwise to.Hon Dr NICK SMITH: Yes I do recall those hoardings although it was not my best side. There probably is not a best side in my case. In respect of Labour’s change in position actually I welcome it because we can now have a far more intelligent discussion about what will make a difference on housing to Auckland families.Housing—Affordability and Availability7.PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he stand by his statement when asked about the housing crisis that “the idea that suddenly happened in May 2016 is a figment of some people’s imagination”?Hon Dr NICK SMITH (Minister for Building and Housing): I stand by my full statement which was preceded by this: “I have been a member of Parliament for 26 years dealing with constituency cases every single year involving families in desperate situations around housing including people living in caravans and people living in garages as well as cars. This is not new.”Phil Twyford: What is the Government’s position on the housing crisis: Paula Bennett admits there is a crisis John Key says “crisis” is an emotive word and he says it is a figment of someone’s imagination?Hon Dr NICK SMITH: Every one of those claims by the member were typical half-quotes. There is no question that New Zealand is doing well. Our population has grown by 70000 over the last year and particularly our housing issues have become a real challenge in Auckland. I would also have to say that in Christchurch where rents have dropped by 5 percent the Government’s measures to address the housing shortages over the earthquakes has seen a drop in the number of people facing acute housing need.Phil Twyford: When he accused the media this morning of inventing promises was he denying that in last year’s Budget he pledged 500 hectares of Crown land for housing but has delivered only 13 hectares or was it just a figment of the media’s imagination?Hon Dr NICK SMITH: I challenge the member to go back and read the press release from last year’s Budget in which $52 million was committed to the Crown land programme. All of that money has been spent on purchasing land and that land is going to be providing houses—940 houses for Aucklanders—which I assume members opposite would welcome.Dr Parmjeet Parmar: Has the Minister seen today’s housing affordability data from interest.co.nz and what does it say about homeownership costs as compared with a year ago and when National came into office?Hon Dr NICK SMITH: This independent index of affordability was previously named the Roost index and it measures the proportion of a single person on the median wage to serve an 80 percent mortgage on a median-priced house. The index today stands at 58 percent nationally; it has improved over the last year from 62 percent and it is about 20 percent better than what it was in 2008. The index in Auckland is currently 93 percent down from 96 percent at the same time last year and 101 percent of where it was at its very worst under the last Labour Government. This index shows actually that housing affordability both nationally and in Auckland has improved over the last year and is significantly better than at the time when Labour was in Government.Phil Twyford: When he promised in his 2014 Budget initiative that he would knock $3500 off the cost of a new home was that a figment of our imagination given that plasterboard costs alone have gone up by more than the total saving that he promised?Hon Dr NICK SMITH: I absolutely stand by the initiative taken in Budget 2014 to take tariffs off building materials. The advice I have had from the ministry is that the reduction in those tariffs is within 10 percent of the estimates that I gave at that time. I totally dispute the member’s claim that the cost of plasterboard has gone up by 50 percent.Phil Twyford: Is it not actually the Minister who has the overactive imagination given that he dreams that houses can magically appear on cemeteries and exploding substations?Hon Dr NICK SMITH: I would focus on the facts. The facts are that when Labour left Government only 10 houses per working day were being built. The latest figures show that in fact 40 houses per working day are being built and I suggest that that is where the answer lies.SuperGold Card—Auckland Transport8.Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements; if so how?Rt Hon JOHN KEY (Prime Minister): Yes; and by saying so.Rt Hon Winston Peters: Well if it is by saying so how does he reconcile his statement of 6 April “the entitlements for the SuperGold card are not changing.” when over 650000 senior citizens must spend $15 if they want to use public transport in Auckland after 1 July this year?Rt Hon JOHN KEY: Because my statement was correct on the advice that I had.Rt Hon Winston Peters: Why is the Prime Minister—Mr SPEAKER: Order! Is this a supplementary question?Rt Hon Winston Peters: I know it should be a point of order but it is a supplementary question. Why is the Prime Minister insisting upon his word given only last month when there is already a travel card that can be used by retirees all over New Zealand—and Auckland—and it is called the SuperGold card?Rt Hon JOHN KEY: These can continue to be used and will be.Rt Hon Winston Peters: Why is the Prime Minister saying that the SuperGold card can continue to be used in Auckland when this document here from Auckland Transport coming out on Friday says the very opposite?Rt Hon JOHN KEY: The member did not specifically ask me about Auckland.Rt Hon Winston Peters: Why is the subterfuge of a needlessly expensive gold-coloured HOP card going to replace the free SuperGold card retirees have been happily using for years?Rt Hon JOHN KEY: The advice I have had is that there are long-term benefits of using the HOP card.Rt Hon Winston Peters: I seek leave to table the evidence to go in behind these questions today that is from the Auckland Transport release to be made this Friday which totally gainsays what the Prime Minister said.Mr SPEAKER: I just need the source. Were they—Rt Hon Winston Peters: Auckland Transport. This is the issue that is going out to every retired person—Mr SPEAKER: Order! Is the stuff available on the website?Rt Hon Winston Peters: No it is not.Mr SPEAKER: No? Then I will put the leave. [Interruption] Order! Leave is sought to table this particular information. Is there any objection? There is.Roading Auckland—Western Ring Route Motorway9.ALFRED NGARO (National) to the Minister of Transport: What recent progress has been made on construction of the Government’s Western Ring Route motorway in Auckland?Hon SIMON BRIDGES (Minister of Transport): Construction of the Government’s $2.4 billion western ring route has serious momentum. As part of the project I had the pleasure of opening the $210 million Te Atatū and Lincoln Road interchanges alongside my colleague Alfred Ngaro. West Auckland is experiencing high population growth but many need to travel for work in the central business districtat the airport and to South Auckland. The new interchanges will support this growth by freeing up traffic flow on the north-western motorway while the extended bus shoulders will improve bus journey times during peak periods. All up the two projects will mean that traffic and bus services will be able to get to and from west Auckland more quickly and reliably.Alfred Ngaro: How will the Government’s western ring route improve roading connections for those travelling in and around Auckland?Hon SIMON BRIDGES: Once completed the western ring route will be a game-changer in terms of the way people and freight move about Auckland by providing an alternative 48-kilometre north-south route to use instead of State Highway 1. The new motorway will support the fast-growing western suburbs of Auckland and provide more reliable access to and from the city and Auckland Airport. It will also improve public transport and ease pressure on local roads. The western ring route is the biggest infrastructure project in New Zealand. It has been 60 years in the making and I am proud to say that I am part of the Government of infrastructure that is delivering this game-changing motorway for Auckland.Rt Hon Winston Peters: What about Northland—10 bridges?Mr SPEAKER: Order! The memberhas had his series of supplementaries today.Police—Funding and Burglary Resolution Rate10.STUART NASH (Labour—Napier) to the Minister of Police: Does she believe the Police have sufficient funding to meet the expectations of the public?Hon JUDITH COLLINS (Minister of Police): Yes.Stuart Nash: Does she think that the closing of the Papatoetoe Police Station in order to “reduce property costs” has contributed to the solving of only 70 of the 1020 burglaries in Papatoetoe in 2015?Hon JUDITH COLLINS: No.Stuart Nash: Does she think that solving just 53 of the 1013 burglaries in Glen Innes last year is meeting the expectations of the Glen Innes residents?Hon JUDITH COLLINS: I am sure it is not.Stuart Nash: Does she think that solving none of the nearly 100 burglaries in the tourist spots of Russell national park Arthur’s Pass Lake Tekapō and Te Ānau in 2015 is a result of underfunding of the police in these areas?Hon JUDITH COLLINS: Definitely not. In fact I would suggest to that member that if he considers that burglaries in those particular spots often occur in homes that are vacant—in other words they are holiday homes—it is very difficult to get burglars when it is announced to the police and reported 6 weeks after the event.Stuart Nash: Is the lack of funding the reason that according to the New Zealand Police’s own annual report “The Police employee to population ratio in New Zealand is low in comparison to most similar overseas jurisdictions.”?Hon JUDITH COLLINS: Not at all. In fact I would suggest that that member remember that this Government put 600 extra police on the beat—600 more than his Government ever did.Cyber-security—Computer Emergency Response Team11.TODD BARCLAY (National—Clutha-Southland) to the Minister for Communications: What recent announcements has the Government made to improve New Zealand’s response to cyber security incidents?Hon AMY ADAMS (Minister for Communications): Earlier this month the Prime Minister announced that $22.2 million of funding would be provided in Budget 2016 for a new national Computer Emergency Response Team (CERT) to combat cyber-attacks and cyber-crime. New Zealand’s CERT will receive and triage cyber reports track incidents or attacks and provide advice and alerts to its customers on how to respond and prevent further attacks. It will also be key to our international cooperation on cyber-security. Cyber-security is a growing issue for New Zealand businesses and costs our economy an estimated $257 million last year. Our new national CERT will be a key piece of our cyber-security architecture and the central place to go for help and information.Todd Barclay: What are the next steps in setting up the CERT?Hon AMY ADAMS: The CERT will initially be set up as a branded business unit within the Ministry of Business Innovation and Employment to ensure that the CERT can be stood up without delay. It is also in keeping with our emphasis on the economic benefits of improved cyber-security and making the most of our digital economy. To ensure strong public-private partnership we are establishing a CERT advisory board to advise us on the set-up and operation of the CERT and nominations for this board close tomorrow. It is our intention to have the CERT up and running by March next year while we consider what the best long-term structure should be for the CERT.Child Youth and Family—Death of Moko Rangitoheriri and Reform12.MARAMA FOX (Co-Leader—Māori Party) to the Minister for Social Development: In the revamp of CYF will she be strengthening the appeals process for the review of decisions that may prevent incidences such as the death of Moko Rangitoheriri; if so how?Hon ANNE TOLLEY (Minister for Social Development): The death of Moko was a despicable crime and we must continue to raise awareness of child abuse so that it does not happen again. I am confident that the coroner will conduct a full investigation into this awful tragedy. Unfortunately no one raised safety concerns with Child Youth and Family (CYF) around the care arrangements that were in place for poor wee Moko prior to his tragic death. If we are going to ensure that this does not happen again we all need to realise our part and do everything that we can to protect the children and mokopuna in our communities. We must pick up the phone if we have concerns about the safety of a child. The design of the new system including complaints and reviews will be strengthened to ensure that the voice of the child is at the heart of everything that we do and that decisions are made in the long-term best interest of those children.Marama Fox: Does the Minister then agree with her officials that more could have been done to prevent the death of Moko Rangitoheriri; if so what is she doing about it?Hon ANNE TOLLEY: My congratulations to all of those who stood up in the weekend abhorring violence and saying that it is not OK. But as I announced in the overhaul of the Child Youth and Family system we are going to move from a system that is focused on crisis to one that begins with prevention and includes intensive intervention care support youth justice and transition into adulthood and independence. I am confident that that system will go some way to preventing such tragedies but at the end of it we all have a responsibility to pick up the telephone when we have concerns for the safety of a child.Marama Fox: How can she ensure that information that is sent to her and her officials about the vulnerability of children in CYF care such as information sent to the Lower Hutt CYF office is not lost and does not ultimately disadvantage children and their whānau?Hon ANNE TOLLEY: I certainly take all information that is provided to my office seriously and I am always willing to investigate if people have specific concerns but I have to balance that with being conscious that with Family Court proceedings and with investigations that are under way including the complaints process it is sometimes hard to intervene.Urgent Debates DeclinedMinistry for Primary Industries—Independent Review into Illegal Dumping of FishMr SPEAKER: I have received a letter from Rino Tirikatene seeking to debate under Standing Order 389 the decision by the Ministry for Primary Industries to launch an independent review into its handling of the illegal dumping of fish in 2012 and early 2013. The announcement is a particular case of recent occurrence involving ministerial responsibility.The big hurdle to get over in applications for urgent debates is whether the matter has reached the stage where the business of the House ought to be set aside. The test is a high one. There must be an element of urgency or substantive policy change for the matter to take precedent over other business. Although the announcement of an inquiry may warrant an urgent debate the circumstances must be exceptional especially when the inquiry may take some time to finalise. I am not persuaded that setting aside the business of the House for an urgent debate on this matter can be justified. The application is therefore declined.VotingCorrection—New Zealand Public Health and Disability (Southern DHB) Elections BillMr SPEAKER: Honourable members on 12 May when the House was considering the New Zealand Public Health and Disability (Southern DHB) Elections Bill the result of the vote on the question that the bill be now read a third time was incorrectly recorded as Ayes 95 Noes 16. The correct result is Ayes 95 Noes 26. The record will be corrected accordingly.Residential Tenancies Amendment BillIn CommitteeTIM MACINDOE (Senior Whip—National): I seek leave for the parts of the Residential Tenancies Amendment Bill to be considered as one debate with the questions to be voted upon separately at its conclusion.The CHAIRPERSON (Hon Trevor Mallard): Is there any objection to that course of action? And I am assuming that the member means the preliminary clauses as well.Tim Macindoe: All parts and the clauses.The CHAIRPERSON (Hon Trevor Mallard): So just making it clear the member has sought leave for the parts and preliminary clauses to be debated as one question but for votes to be taken separately. Is there any objection to that? There appears to be none.Parts 1 and 2 schedule and clauses 1 to 3PHIL TWYFORD (Labour—Te Atatū): Recognising that we are going to treat the Residential Tenancies Amendment Bill as one part for this debate including the preliminary clauses I want to make some opening comments about this debate. We have made it clear all the way through that Labour is supporting this bill because we think that it long overdue that the standards of New Zealand’s rental housing are brought into the 21st century. We believe that it is long past time for mandatory standards to be set for rental properties public and private and that there is a strong public support for the idea of making sure that rental properties—whether they are Housing New Zealand the council or community organisations as well as those in the private rental market—are warm and dry. The reason is this: the latest estimates from Otago University are that 50000 children are hospitalised every year in New Zealand and many of them are hospitalised with preventable infectious and respiratory diseases that are associated with poverty overcrowding and cold damp mouldy homes.We have had many debates in this House about this issue in recent years and I have to say I am pleased to finally see the National Government acknowledging there is a problem that needs to be solved here and this bill makes some attempt to set some standards. But we on this side of the Chamber are bitterly disappointed that the bill does not go far enough. We agree with the comments that were made by Dr Russell Wills the Children’s Commissioner who came to Parliament and said that Nick Smith’s Residential Tenancies Amendment Bill is a broken promise to the nation’s children and that it is a wasted opportunity to do the job properly. One of the things we are going to be talking about in this debate is what is not in this bill but should be and we will be doing our best to link that to the specific provisions in the bill.The CHAIRPERSON (Hon Trevor Mallard): The member had better start fairly soon.PHIL TWYFORD: What the bill does is set standards for insulation and that is good in itself but the problem is that without setting standards for heating and for ventilation all we are doing with this bill is insulating many houses that are cold and damp and miserable. That is why we believe there should have been ventilation standards in here and there should have been heating standards. That is quite doable and much of the work has been done particularly by the metro councils.Five different local authorities have done a comprehensive trial of the warrant of fitness concept. There are lots of data that could be drawn on including the Minister for Building and Housing’s own trial of Housing New Zealand properties but sadly for a spurious reason—the Minister thinks it will be an unwarranted and onerous burden on landlords that may cause rents to go up and we will deal with that argument in the course of this debate—this bill focuses far too narrowly on insulation standards and there are many provisions in Part 1 of the bill that deal with the machinery that will implement those insulation standards.There are other issues that we will deal with in the course of this debate. One of them is the grace period that this bill gives to landlords. There is a 3-year grace period. We believe that is far too long. A year’s grace period would be better as is reflected in Andrew Little’s Healthy Homes Guarantee Bill (No 2). We could then allow the changes to be implemented as tenancy agreements turn over. I think the average length of a tenancy is around 10 months. If you phased in the changes that are required when tenancies turn over in a very short period of time the great majority of rental properties would meet the required standards.The other issue we want to talk about in more detail is in the schedules and it relates to the regulation-setting powers that this bill puts in place. It is quite sensible for things like insulation standards—and heating and ventilation standards if there were heating and ventilation standards—to be set by regulation. [Bell rung]The CHAIRPERSON (Hon Trevor Mallard): Just before I call the member I do want to remind members that the Committee stage of a bill is not the point when members can speak about what is not in the bill. They have got to speak about the bill the technical clauses in it and the amendments to it. By way of advice I would refer members to Metiria Turei’s Supplementary Order Paper to the bill and in particular the amendment to add subclause (2B) to clause 13 which probably will help members.PHIL TWYFORD: The only remaining comment I wanted to make in the opening contribution is really about the regulation-setting powers and to say that it is perfectly logical and reasonable for these kinds of standards to be set by regulation because standards will change as new technologies new design and new products are available and as social expectations develop.The unfortunate thing in relation to this bill is that the draft regulations that have been released at the same time as this bill demonstrate an intention by the Government to allow a giant loophole in the insulation standards that this bill propagates. Unfortunately it is going to allow hundreds of thousands of properties that are already insulated to the redundant 1978 standard which is insulation that is not very thick and the draft regulations which have been released alongside this bill will mean those properties will not have to be upgraded to the current 2008 building standard which would allow insulation that is much thicker. This bill is effectively legislating into place redundant and inadequate standards for legislation. Thank you.METIRIA TUREI (Co-Leader—Green): I want to address my Supplementary Order Paper 172. It is quite comprehensive and I will need to take a number of calls to describe its parts and why we think they are necessary.What we have in New Zealand now in the rental arena is that we have moved from what used to be about 80 percent of New Zealand homes being owned and occupied by the owner and about 20 percent being rentals. That proportion has significantly changed over the last 20 or 30 years to much more of a 60:40 kind of proportion. This has put renters at a severe disadvantage because the law has been designed around a very narrow set of residential tenancies mostly in relation to State housing actually from way back.So there has not been a significant upgrade in the rights of long-term renters in our law and we see the effects of that through the failure of our systems including enforcement by the Tenancy Tribunal to make sure that rental homes are up to standard and are actually warm and safe and dry for families to live in. This is why in part we have such a major problem with poor-quality housing because our law does not allow for tenants to be able to require landlords to take action. And although we do have the Tenancy Tribunal for example which is established for that purpose as the proportion of tenants increases and the supply of rental housing decreases—we know we do not have enough for everybody who needs it—then tenants become increasingly vulnerable to landlords who are in it for a quick buck who are not committed to making sure they are professional landlords and are doing a good job and maintaining their homes to a high standard. When it comes to looking at anything like a warrant of fitness approach to New Zealand’s rental housing it is also important to improve the rights of the renting families who are in those homes so that they can genuinely hold their landlords—and often their property managers—to account for the minimum standards that are set in the law.The first of the amendments on my Supplementary Order Paper 172 is to clause 6. Clause 6 is about changes to the tenancy agreements. There are a number of changes that the Government wants to make and I have a number of additions to them. These additions are about improving—they are a start; they are not the full story—the rights of tenants so they have some ability to hold their landlords to account both for standards but also to protect their tenancy so that they are not kicked out if they complain about poor-quality housing or a landlord’s failure to meet the standards.The first of those additions is that a tenancy agreement must include a statement saying that when the tenancy terminates the tenant has the right of renewal. This is particularly important for families. There are many many thousands and thousands of New Zealand families now who will never own a home. They are permanently locked out of the homeownership pathway. They will always be renting—raising their children from little babies; through to when they eventually retire—they will always be renting. In those circumstances it is critical that families are able to secure themselves a long-term tenancy. In New Zealand the tenancy agreements are generally for about 12 months so we do not have the kinds of long-term tenancies that you see in other places where renting has been part of the culture for longer particularly in places in Europe. This provision to enable a tenant to have the first right of renewal means that that tenant can stay in their house. If the landlord is wanting to get rid of them because they want to put up the rent or they want to do something else with the house well actually that house is now the home of the tenant. If it is better for the tenant and their family that they stay in that home—their kids are going to the local school they have got access to local work and they have built themselves a life in that community—then they should have the right to stay. That is the first change.The second change is that the tenancy agreement must include the calculation that the landlord intends to use to increase the rent. One of the major problems that we hear from renters is that their rents are going up every 6 months and they have absolutely no idea what is going to happen. We heard a terrible story Marama Davidson and I in Christchurch just last week about a woman who was renting a home. It had earthquake damage. The Earthquake Commission was finally going in to do the repairs. She had to move out. The landlord told her that if she wanted to move back in she would have to pay another $250 a week in rent so she is now effectively homeless as a result of the earthquake. This is because there are no protections for tenants as a result of the earthquake. So this woman and her family are now having to find themselves a new home. This change would at least prevent the landlord from being able to say: “Well we’re going to massively increase your rent for you to be able to stay.” The rent calculation would have to be set into the tenancy agreement so that tenants know how much extra rent they can expect to be paying and when it is.We would also under this Supplementary Order Paper restrict the number of times that a landlord could put up the rent—no more often than once every 12 months. That still seems to me a bit harsh on tenants but landlords would not be able to put up the rent more than once every 12 months. This gives the tenants certainty—how much the rent is going to go up by and when it is going to go up and they can plan for that. It means they can plan their finances. They know the rent increase is coming. It is not going to come as a surprise. It is not going to come rapidly time after time. They have got some control over it.We would also change the tenancy so that is for a fixed term of 3 years as a default. That again is to help provide tenants with greater security. We are advocating these changes because one of the concerns that often gets raised is that if you have a warrant of fitness even one as minor and as miserable as is in this bill the tenants’ rents will go up. They need more protection and there is not sufficient protection. The policy settings to provide sufficient protection are pretty tricky; it is not easy to find a solution to this. We need to get on the policy road of better protecting tenants’ rights so that they can deal with these kinds of changes and make sure that tenants are secure in their homes.One other thing we would do is get rid of the 42-day notice. There are stories after stories after stories of landlords who issue a 42-day notice to tenants saying that their kid wants to live there or their auntie wants to live there. No such thing is really happening. The tenants have no comeback. They get 42 days’ notice to leave their home. These are people’s homes. If you are a landlord you own a house. If you live there it is your home.We need to make sure that people are warm and safe and dry and secure in the homes they are raising their families in. There is a very significant list of what a comprehensive warrant of fitness would look like. This is a list that has come directly from the research that was prepared by the recipient of the Prime Minister’s Science Prize. I have a great deal of confidence—and clearly the Prime Minister has a great deal of confidence—in the research the skill and the veracity of this warrant of fitness list given that it came from Philippa Howden-Chapman who was the recipient of the Prime Minister’s Science Prize. I think this would be a great way if we agree to the list in this bill to recognise not only her skills as a scientist but actually the work that she does.There are some basic things in here because they are not provided for in the law such as adequate cooking facilities. Those of us who live in our own home or have had the benefit of living in a high-quality rental property might not think that is important. But last night I was told a story by a group of students who said that their land agent refused to replace their stove. All they had to cook on was a gas element and a skillet—for 12 months. The land agent said the stove was a non-essential item and refused to replace it. You can say that they should go to the Tenancy Tribunal but then they risk losing their home because they have no security of tenure. So you cannot expect people in very vulnerable situations to hold landlords to account for this if they have to argue their case before a tribunal. We have to make it mandatory that the basics are provided: adequate food preparation and storage areas potable water—there is no requirement in the law for drinking water to be in the home. Hot water—there is no requirement in the law for that. A functional toilet a bath or a shower—there is no existing requirement in law for those.Fixed space heating is also in this list and it is essential. It has to be adequate for the house. One of the critical issues we have found from the Emma-Lita Bourne tragedy was that this was a home that had a fixed space heater in it but it was in the lounge in a two-storey cold concrete block terraced house. The heating got nowhere except—JONO NAYLOR (National): I just rise to take a brief call at this Committee stage of the Residential Tenancies Amendment Bill. I just want to I guess from my perspective re-emphasise what a balanced sensible approach this bill is taking. We have heard some contributions already at this stage implying that perhaps the lead-in times for some of the provisions here are too long but I just want to remind the Committee that in some of these aspects that are being brought in—for smoke alarms for example which we know will save lives of people in New Zealand; we know statistically about people who have died in house fires where there have not been smoke alarms installed in rental premises—immediate action is being taken.At the moment what are we talking? We are in May now. By the time this bill goes through 1 July this year it is going to be mandatory for rental households to have smoke alarms. That is I think appropriate timing because we know that there are immediate effects and immediate benefits that can be had. Of course it is realistic for a landlord to be able to have those checks in place to ensure that those smoke alarms are going to be in place by 1 July. It is a relatively low-cost thing that can be done and easily organised and so of course we should ensure that that is put in place immediately.Mr Twyford in his contribution thought that the lead-in time for the insulation aspects of this bill was too long. It is a little bit more complex when you are looking at insulation requirements than it is for smoke alarms. When it comes to smoke alarms as I have said they are low cost and easy to organise. But if a landlord is having to look at completely redoing the insulation on a property it is going to take some time to organise—to assess the current standards and to also assess whether or not it is actually going to be viable for that to occur. I am sure as we go through this process there are going to be some things that need to be sorted out from time to time between officials from the Ministry of Business Innovation and Employment and landlords as to what constitutes viability for the retrofitting of insulation because not all houses are designed the same. We are going to need a significant lead-in time to ensure that this occurs and also to ensure that landlords have put aside appropriate financial provision to enable them to do this.One of the other arguments that I have heard that has been a bit concerning is that we are simply settling for a substandard level of insulation by requiring people to come up only to the 1978 standards. There has been a bit of misinformation that has been out there and I just want to make this completely clear: if a house was built prior to 1978 it will need to be insulated up to the 2008 standard. So we are not simply settling for the 1978 standard. What we are saying is if it was built before 1978 absolutely it will need to come up to the 2008 standard.However if the house was built after 1978 and that insulation is still in good repair then it will not need to be upgraded. That is because the cost of upgrading what may be a minor amount is not proportional to the benefit that will be determined from that. For example if a house was built in 2007 and was not up to the 2008 standard but was close to it—not necessarily back at an absolute minimal standard but because technology had changed over 30 years a builder may have put something in that was more substantial than the 1978 standard—it would be absolutely impractical it would be an excessive expense for very little benefit to require that landlord to retrofit a 2007 house that has been insulated to a very good standard up to that 2008 standard. So as I said this is highly practical. It is highly feasible.If you think it is all one-way traffic for landlords in this bill it absolutely is not. There are going to be higher fines for landlords if they do breach any of these things. It is absolutely imperative that we have a big disincentive for landlords to breach any of these things that are being introduced through this bill and so we are going to be increasing those top fines that people can be paying to ensure that they do comply and do go forward.I just want to address a couple of things that the previous speaker Metiria Turei mentioned. The first is the idea of there sort of being a right of renewal necessary for tenants. Well I can tell you I have yet to meet a landlord who had good tenants in place and who if they wanted to continue would suddenly just terminate their tenancy at the end of their fixed term.LOUISA WALL (Labour—Manurewa): I am specifically going to talk about Supplementary Order Paper 172. I want to commend my colleague Metiria Turei for specifically focusing on a 3-year term. The reason I do so is that I have just read an extract in the National Business Review from Philippa Howden-Chapman’s book called Home Truths: Confronting New Zealand’s Housing Crisis and actually the average tenancy is 11 months. The impact of that on families and on communities is pretty intense.I specifically want to talk about a Child Poverty Action Group report called The revolving door: Student mobility in Auckland schools dated May 2014. The impact of transience on our children’s learning is immense and I am sure the Minister in the chair Nick Smith would be interested to know that within that report essentially it said: “ ‘Overall we found that student mobility often produces an array of negative psychological social and academic consequences for children…’ ”. But surprisingly in that particular report it was not just the children living in transience who were affected it was actually the entire school community. So what we know is that stable communities produce better outcomes for the social good. And the relevance to electorates like mine in South Auckland is that our Pacific and Māori rates of homeownership are actually incredibly low—for Pacific it is 18 percent; for Māori it is 28 percent.So this piece of legislation is incredibly important and this amendment that Metiria Turei is trying to have endorsed here in the Chamber today is incredibly important. Allowing children to live in a home for 3 years is actually going to produce much better outcomes and this is reflected in a Ministry of Education report from 2004. It came from an Education Review Office finding that basically said that carefully planned and sequential learning experiences were required for sustained learning that built upon previous learning. So the impact on our education system of having a housing system that does not provide stability to our most vulnerable communities and community members is incredibly important. The reason that I am standing up to support this particular part of Metiria Turei’s Supplementary Order Paper is that enabling our families who are the most vulnerable to have 3 years of living in the same home is actually going to have a huge impact on our children’s learning.But not only that—we think that children’s learning actually starts as 5-year-olds or 6-year-olds when we have compulsory education but what Shirley Maihi found at Finlayson Park School in my electorate was that it actually impacts on early childhood education learning. So the compounding effect of children not having sustained early childhood education when they are 3 4 and 5 then means that they enter the school system and they are already behind. The long-term implications for not enabling our families and our children to have some security in that tenancy are incredibly important. This then leads to the first part of Metiria Turei’s Supplementary Order Paper which is that when the tenancy terminates the tenant has the right to renew that tenancy hopefully for another 6 years. So in fact we build an ability for families to create homes to be part of communities to be part of their school communities and to have a secure base to be able to go to school from and for parents to be able to get extra education and to go to work. But I think we completely underestimate how vital a home is in the overall development of our children and society.I hope that people who are here today in the Chamber participating in the debate will take seriously the impact of insecure housing on the ability of our children to learn because I think that it is missing in this whole debate. We are not talking or thinking about the ongoing consequences. We know there are 26000 “neet” kids out there—kids who are not engaged in education employment or training—but they do not just manifest out of nowhere; they actually manifest because fundamentally at the beginning of their lives those children do not have stable base they do not have a home they do not go to early childhood education and they do not go to school. For people who think that this is irrelevant I have got within my electorate kids who have been to—Hon Dr NICK SMITH (Minister for Building and Housing): Firstly can I welcome the broad support for this bill across Parliamentat the Committee stage. I will briefly summarise the key provisions in these Committee parts and then just briefly speak to the Supplementary Order Paper in my name.This bill does five important things. Firstly it requires smoke alarms in all tenanted properties by 1 July this year—thus the priority for the bill. That is expected to save three lives per year. Actually 75 percent of the fatalities that occur in fires in New Zealand are in tenanted properties. They are higher risk and this bill provides the regulation-making power that we have in line to bring that provision. The Government is particularly keen to get that provision in place by 1 July as per the requirements in this Committee stage because we all know that those fire risks are greatest during the winter months.The second key requirement of this bill is a requirement for all homes to be insulated progressively over a period of 3 years. I do want to note that during the second reading there was some debate about the number of lives that it would save. I do want to correct something. At that time I said that the figure was 23 lives per year that would be saved as a consequence of the provisions. That was on the basis of a sample size of 30000 homes. Actually it is 180000 homes so my ministry has come back to me and said that the insulation provisions in this bill are actually expected to save 129 lives per year. They are very substantive they are important and I welcome the broad support for them.The third provision in this bill toughens up the capacity for the ministry to be able to actually enforce the existing standards. We have housing regulations. They cover issues of heating electrical ventilation and all of those things. The problem is not that the regulations are not there; the problem is a matter of enforcement. What this bill does is create the mechanics in the law to enable my ministry to actually go after that relatively small minority of slum landlords and ensure that those existing regulations are enforced.The fourth change in this part is around retaliatory notice. I am sure a number of MPs have noticed the issue that when a tenant does choose to go to the Tenancy Tribunal and seek to have an application of those housing regulations enforced there is a risk that the landlord will just give them notice. The provisions in this bill extend the period in which we can take a retaliatory notice application to the tribunal and the powers for that to be resolved.The last and the fifth useful part of this Residential Tenancies Amendment Bill is to provide for abandoned tenancies. Nobody wins from properties sitting vacant for months. As a consequence of the fast-track mechanisms in this bill it will improve that. The Supplementary Order Paper in my name No. 177 does make some amendments that I wish to make plain as to their intent and what they do.The first of those is in respect of the enforcement orders that are required in respect of the requirement to fix a property. It is making plain that those orders include those important new insulation and smoke alarm provisions. The second is an issue that has been debated and we want to make absolutely clear that anybody upgrading the insulation of their property before the deadline of 1 July 2019—just 3 years away and I remind Mr Little who is in the Chamber that that is a substantially faster programme of insulating houses than what is provided for in his own bill. What I am making plain with the Supplementary Order Paper is that any insulation work has to be done to the 2008 standard—that is if you are a landlord and your property is not insulated at the moment you cannot whip in and get some 1978 insulation and pretend that that meets the requirements of this bill. The Supplementary Order Paper makes that absolutely explicit: any insulation work has to be done to the 2008 standard.The last point that I would like to make is that the Government is not intending to support the Green Party amendments. They go too far. Let me give a practical example: it would be illegal to rent a home if it did not have visibility strips under the Green Party’s Supplementary Order Paper. Yes we think things like insulation and smoke alarms are right. But I do note that the Green Party’s own offices do not meet—do not meet—the visibility strip requirements that Metiria Turei is imposing on others. We on the Government benches say: “Don’t put rules on others that you’re not prepared to comply with yourself.” It is exactly the same I have to say when I check these standards against my own private home—it does not meet them. We need to focus on those things that are the basic legal requirements and that is what the bill does.ANDREW LITTLE (Leader of the Opposition): I would like to take a moment to address clauses 6 and 38 of the bill as well as Supplementary Order Papers 177 and 172. I just note that notwithstanding what the Minister in the chair has just said—the requirement that there be insulation and delegating it to regulation to determine what the standards will be—it is pretty clear that there will be ample rental housing that simply will not meet the 2008 standard that he glowingly talks of now. The reality is that his bill means there will be rental housing that simply will not come up to the 2008 insulation standard. But there is something that is even more disappointing and that is that it is just confined—this bill and the new standards that rental properties must meet whether income-related rental properties or not—the only additional standards they now have to meet are an insulation standard and a smoke alarm standard.It has been alarming to see in the justifications that the Minister gives that they include—he made this statement on 19 April 2016: “These new tenancy regulations will make 180000 homes warmer and drier by requiring insulation …”.I have news for the Minister: adding insulation does not make a house warmer. It will retain whatever warmth there is; it will retain whatever coolness there is. It will not add warmth. It will not make houses warmer and so this is a lost opportunity.When the Minister talks about houses that are safer because they have smoke alarms he might just want to reflect on houses that at the moment are making people—including young children—sick and are therefore unsafe. He might want to reflect on what a difference he could make if clause 6 which refers to the tenancy agreements and clause 38 which refers to the new powers for regulation making in fact added a requirement that not only should there be insulation as determined by the regulations but there should be a form of heating as determined by regulations.The regulation-making power allows ample flexibility for him as Minister or the department administering the legislation to ensure that it is not just one form of heating that counts.I know that part of his criticism of suggestions that other minimum standards should be added such as a source of heating is that it is all just about heat pumps—it is not.This is an opportunity for this Committee with his bill to get it right and we could expedite this House’s time on my Healthy Homes Guarantee Bill (No 2) by the Minister admitting that perhaps we can make some modest improvements now that would allow those standards to be added. The regulation-making power in clause 38 would allow ample flexibility and provide some reassurance to that part of the constituency that he is concerned about who might be thinking that they could be put to extra cost.I want to refer to Metiria Turei’s Supplementary Order Paper 172 because it does contain a list of additional standards that might be added. The Minister is critical for example of visibility strips. He is a former Minister forACC; he will know from the data from ACC that a common household accident is people walking into ranchslidersand floor-to-ceiling glass. In modern architecture and with a growing number of people living in apartments—and if only there were more of them to alleviate the housing crisis that “does not exist”—we will probably see more of this so actually visibility strips are not such a silly idea. It is after all an inexpensive idea.I will just prevail on the Minister while he is in the chair and while he has got the time and the attention of this Committee that with this piece of legislation at a time when the entire country is gripped by issues of housing housing standards and housing quality now is a time for leadership. He is capable of providing leadership—it has happened before I am sure of it. He could actually step up and say that insulation is important but a source of heat which is what the insulation is there to keep in the house is equally as important and those other standards that have been laid out in Supplementary Order Paper 172 are equally important for safety reasons for tenants living in rental properties. He could do it today.Hon Dr NICK SMITH (Minister for Building and Housing): I am delighted to have the opportunity to respond to the challenge from Mr Little. There is only one provision in his Healthy Homes Guarantee Bill (No 2) that is not in the existing regulations and that is the issue of regulating for a minimum temperature in a house. Members on our side of the Chamber say that it is not proper in this bill to regulate for a minimum temperature in a house. What Mr Little needs to go back and check is that housing regulations already require heating. It is already in the current regulations—not the regulations from this bill; it is in the current regulations. Heating ventilation absence of mould electrical safety plumbing integrity—all those things are in the existing regulations so the Leader of the Opposition does need to do his homework.The second point is this: the member has raised the issue of visibility strips and it is not the view of the Government that it should be illegal to rent a house that does not have visibility strips. If people want to have them and want to advocate for them that is fine but I have to confess that my house does not have them. My office does not have them. That does not mean I am an irresponsible parent or homeowner. It is not the sort of thing that should be regulated for and I am surprised that Mr Little is getting his party back into the nanny State routine of saying that visibility strips on all long glass windows must be provided or it will be illegal to rent a house.The third point I want to make in respect of Mr Little’s contribution is that he is mistaken around the issue of insulation standards. Let me take him through it very simply: in 1978 when we first provided compulsory regulations—Andrew Little: That one there?Hon Dr NICK SMITH: Yes for that insulation. Do you know that that 1978 standard reduces heat loss by 84 percent—84 percent? The 2001 standard took that up to 87 percent.Andrew Little: That one?Hon Dr NICK SMITH: No that is the 2008 standard righty-o? And here is the issue: why would you want to incur an expense of $3000 ripping out perfectly good insulation to gain only a few percentage points in insulation performance? It does not make sense. It does not stack up to cost benefits. You are going to impose more costs on people than you are going to impose benefits and this is where members of the Labour Opposition live in a world where when you impose regulatory requirements no one gets the cost. Yes you do. We need to—Andrew Little: You’re going backwards Nick.Hon Dr NICK SMITH:—we are going forwards. In fact let me just tell you how far we are going forward: 300000 homes insulated under—The CHAIRPERSON (Hon Trevor Mallard): I am just going to interrupt and admonish the Leader of the Opposition mainly because the responses coming—[Interruption] Well it is happening both ways. I remind members not to use the second person. Thank you.Hon Dr NICK SMITH: This bill’s provisions around insulation around smoke alarms around being able to enforce existing standards and around the abandonment notices and the retaliatory notices are a huge step forward for the standard of residential tenancy agreements. I just encourage Parliament to support this bill to drop the nit-picking and to actually focus on what is a big step up in the standard of New Zealand housing.CARMEL SEPULONI (Labour—Kelston): I am going to focus on a different aspect of this bill. I am looking at clause 17 in Part 1 “Section 661 amended (Landlord’s ongoing obligations)”. This clause is in relation to compliance in respect of smoke alarms and the compliance issues imposed on the landlord by regulations. The issue I have which I want to ask the Minister about is that when we were going through the select committee process the regulations for smoke alarms had not yet been determined. As I go through the regulatory impact statement in relation to smoke alarms again we seem to be presented with two options but again a decision seems not yet to have been made about what the regulations will look like. So when we are considering these compliance issues we do need to know what the regulations are in order to know whether or not we actually agree with the regulations and then therefore agree with them being imposed on the landlords.When considering the regulations I do want to bring up that there was much discussion around the smoke alarm regulations particularly in relation to having a period of time where landlords would still be able to use battery-powered smoke alarms. The issues that were raised by us on the select committee and also by some of the submitters were the issues with families being able to actually take the batteries out of the smoke alarms for other technical devices. It may seem ridiculous and some people might say—I would not say this—that it would be irresponsible of those people living in those homes. But you can imagine where there are low-income families then when you need a battery for another more urgent device you will take it out of a smoke alarm possibly. So the issue around that was that there was more of a push for the photoelectric alarms. They have long life—10 years.But in one of the options that we were presented with through the regulatory impact statement they would not be required unless the current alarm or the existing alarm which could be one of the battery-powered ones that I am talking about needed to be replaced and at that point the expectation would be on the landlord to put in a long-life 10-year photoelectric alarm. It is really difficult for us to envisage how that could possibly be monitored but that is what is in option 1 in the regulatory impact statement. So I would really like the Minister Dr Nick Smith to speak a little bit to that.I guess option 2 which we are presented with in the regulatory impact statement is even more concerning. Option 2 would involve the Ministry of Business Innovation and Employment (MBIE) educating landlords and tenants on the benefits of installing smoke alarms and ensuring that the alarms continue to work over time. This option as quoted in the regulatory impact statement “is essentially the status quo as the Fire Service currently runs a public information programme. It would not be a good use of taxpayer funds for MBIE to also conduct an education programme. Fire Service public information programmes have had relatively limited effect on reducing the incidence of residential fires among high-risk groups including low-income tenants.”From my perspective option 1 is better but given the problems with the battery-powered smoke detectors that we are talking about I still think it is an issue. So I really want to know how far along the Minister has got with considering the regulations for the smoke alarms so that when we vote for this bill when are considering this clause we will know absolutely what the compliance issues are going to be for the landlords and what regulations are going to be imposed on the landlords because at the moment that is not clear at all.I am going through the bill and I am wondering whether there are other clauses too—and maybe the Minister could enlighten us on this—in this bill that have regulation considerations that have not actually been entirely thought through yet. I think we need to know that. I think my colleagues and I will be going through this bill with a fine-tooth comb just to see where those areas may exist because it is as I said very difficult to agree with parts of the legislation when you are not even entirely sure what the regulations will look like. Thank you.METIRIA TUREI (Co-Leader—Green): I am disappointed in Nick Smith—I really am—for two reasons: first that we have a building and housing Minister who cannot tell the difference between a rental home and an office—and perhaps that explains some of the problems the country has when it comes to the housing crisis—and second that he would actually so devalue the lives of 500 children every month who are injured when they fall out of and more important through glass windows. I mean this is 500 kids a month. It is about 120-odd a week or 17 a day.So today 17 children will present at hospital with injuries ranging from cuts and bruises from toppling out of a window to severe slicing through their faces arms and legs as a result of crashing though glass windows and doors. That matters to me. Those 17 kids today matter to me the 120 this week matter to me and the 500 this month matter to me. The cost of preventing injuries to 17 kids today and 500 this month is that we require landlords as part of their general maintenance of the house where they have glass doors or windows that reach from the ground to 700 millimetres because that is what the building code requires to put in a visibility strip. It is like a slightly opaque kind of design sellotape. It is not tricky. It is not expensive. You can buy it from any hardware store in the country for a couple of bucks. That is one of the provisions in Supplementary Order Paper 172 in my name. That is all it would take and that alone would help prevent 500 kids a month from going to hospital with bruises and cuts and severe lacerations. I think that is a win for our kids and a win for our families. I think it is a win for landlords.Does anybody want to be a landlord whose tenant’s child smashes though a glass door and injures themselves or sometimes dies just because you could not be bothered getting some tape from Mitre 10 and putting in a glass strip? We do not want any of that happening in this country if we can avoid it. That is why we have regulations to help avoid these kinds of serious and expensive consequences from accidents like this. So I make no apology at all for wanting to protect 500 kids this month and 17 today from going to hospital because they fell through a glass door. So yes glass visibility strips are a critical part of a comprehensive warrant of fitness because they are one of the measures that will protect children from injury and help to save lives along with a range of other measures that are also in these provisions.I was talking earlier about Emma-Lita Bourne and about the fact that the home she was living in which contributed to her death did have a heater installed in it. But it was an inadequate one and no proper ventilation no certainty of being free from mould and no proper insulation meant that that family could not heat their home adequately and save her life. So if we are going to have regulation around what landlords need to provide to keep their homes warm safe and dry let us make sure that it actually will do that by making sure we include fixed space heating effective ventilation and a requirement that it is free from mould.There are other aspects in my Supplementary Order Paper. Effective window latches—this is one of the major issues that were reviewed during the Housing New Zealand test around a warrant of fitness—actually led to massive insecurity of homes. It was a huge risk factor for burglaries which made people feel insecure in their home. These are not difficult things to do. There are some other provisions in there that members can go through like securely locking doors fire egress and of course fire alarms because they do need to be installed as part of a comprehensive warrant of fitness.I would remind us too following on from Louisa Wall that children aged between zero and 3 spend 90 percent of their time in their home—so 90 percent of a child’s time between zero and 3 is spent inside their house. The quality and the condition of that house is absolutely critical to their health. We can make sure through relatively inexpensive measures good quality regulations and careful thought that every single one of those rental homes that these little babies are living in is warm and safe and dry and secure for them to live in. The consequences of not doing so we see being lived out every day: 40000 hospitalisations of children for respiratory illness as a result of cold damp homes.If we want to understand how effective a warrant of fitness can be for that the research on a comprehensive warrant of fitness has shown that in rental homes we can reduce hospitalisations of children by 19 percent—a nearly 20 percent reduction in hospital visits by children because of respiratory illness if we make sure that there is a comprehensive warrant of fitness for their homes. For a child who might be ill and go into hospital three or four or five times in a winter that is at least one fewer hospital visit for that child. In terms of 40000 hospitalisations a year thousands fewer is what we are talking about—thousands fewer children going to hospital because their homes make them sick. That is a win for us. That is a win for policy. That is a win for the Government.There is no cost here to the Government of a comprehensive warrant of fitness. It is not going to be expensive for the Government to require landlords to meet basic safety standards and have good quality homes that they rent out to families. Everybody wins. Landlords have better quality homes that over time they may well be able to rent for greater amounts improving the value of their property. The Government wins by having good quality policy that reduces hospital visits reduces accidents and reduces the financial burden on hospitals and ACC. Families win because they know that their kids are safe in their homes safe and secure warm and dry.So I find it impossible to understand why Nick Smith would pick on petty issues and make ridiculous claims about the provisions in my Supplementary Order Paper when he could choose to do something great for New Zealand families—something that is also great for him is part of his legacy as a Minister something that is great for the Government in terms of taking housing issues seriously something that is great for families and something that is great for the national budget—win win win. These are the solutions that the Greens are putting forward. They are good for the Government good for our economy good for our homes and good for our families. Thank you.DENIS O’ROURKE (NZ First): The major problem with this piece of legislation is not what it does but that it does not do it well enough. The main problem that we in New Zealand First see with it—we will continue to support the bill but we are disappointed in it—is the issue about non-uniform insulation standards. This bill does mean that properties built after 1978 with insulation standards that were in force at that time will for ever be permanently exempted from modern insulation standards—for ever exempted from that—and that is completely unacceptable to us. We would expect that over time all properties should have to come up to those standards.I listened to what Minister Nick Smith said about that and the excuse that he gave as to why he would allow that situation to continue to occur in the future under this bill. I forget the exact figure but he said that more than 80 percent of the modern insulation standard would be achieved by the 1978 standard. First of all I do not accept that that is the case. I do not accept that that is anything more than just an estimate and the reality is that that will be very patchy. There will be some well under that percentage and some no doubt considerably better than it. I built my home shortly after that time. I remember investigating standards and looking at what other people were doing and I found that there was a huge array of different solutions to the insulation of homes so factually I do not accept what the Minister said.The other excuse that members on the other side of the Chamber have given for not requiring all properties to come up to modern 2008 standards is the cost. The claim was made that if that cost was imposed on people with properties built after 1978 then that would mean significant rent increases and that that would be a problem for renting properties but that is completely untrue. That is not the way markets work because once a regulation is in force the whole level playing field just goes up a little. One property is not performing any better or worse than the other if that happens and there are no grounds for one landlord increasing rents more than another. So market competition simply means that the market can bear a certain amount and that is the amount that will determine the rent not whether the properties are being improved in terms of their insulation standard. So for that reason I do not accept the National members’ arguments either.What does of course increase rents is house prices and rents are based on the recovery of the cost of capital of houses. That today is what is really driving rent increases and anybody with half an ounce of common sense knows that if we continue to get the magnitude of house price increases that we are currently getting then inevitably that is going to push rents up and up and up and little or no proportion of those rent increases will come from having any requirement for an improved insulation standard. That is the truth of the situation there. I think that the National Government’s arguments in terms of those exemptions—which is what they effectively are—for 1978 properties from having the current standards is simply unacceptable.In fact if the Government really was concerned about rent increases arising from having a requirement for properties built after 1978 to improve insulation standards to current standards then why would it not for example allow landlords to expense the whole of the cost of that upgrade in the year that the expense was actually incurred? If that was done then what we would see is landlords wanting to do this voluntarily whether it was required in the regulations or not. I know that that is the case because I have talked to representatives of the landlords’ organisation and they have said to methat for a certain specified number of particular improvements—like insulation like improved heating facilities in homes—if they were allowed to expense those costs fully in the year that they were incurred then those people would invest much more readily and much more willingly in the improvements to their homes.So if the Government really is concerned about those issues then that is the sort of thing that it would do about it but we are not seeing that. So I do not accept at all the arguments that the Minister and the speakers from the other side of the Chamber have put up against requiring over time all properties to meet what we are calling now the 2008 insulation standards. There should be no difference whenever the property was improved or whenever it was built. What I would say is that if a property was built after 1978 because the insulation standards were better than before 1978 I would think it would be reasonable to have a longer period of time for compliance for properties built after 1978—maybe 7 or 8 years or something like that—but it should not be for ever. There should be a period within which all landlords know that today’s standards—the 2008 standards—are the standards that ultimately they will be required to have.Furthermore as technologies improve we should improve those standards and landlords should continue to have to meet those standards within a reasonable period of time no matter what those standards are and no matter when a property was built. That has got to be the objective—uniform standards for all properties—so that we get this very essential requirement for insulation at the highest achievable standard that we can in New Zealand and of course that will not be enough by itself.I want to refer lastly to Supplementary Order Paper 172 because the part of that that I particularly want to see is that heating and ventilation must also be subject to minimum requirements for performance of a property in terms of heating and ventilation—not just a list that space heating for example should be required but what the standard actually is. There is not much point in having very good insulation standards without having similar standards for performance of heating systems and for performance of ventilation.That should not of course apply only to rental properties. We have to try to see that those standards get met throughout New Zealand’s housing stock as soon as possible because as others have said the cost savings and the avoidance of illness and the avoidance of a whole raft of social problems that arise from this lack of standards in New Zealand are fundamental problems we have to address in this country and we need to try to get ourselves much closer to the kinds of standards that you see in North America in particular and in parts of Europe. So we need to aspire to that much.That is why I think I am so disappointed in this piece of legislation because it really does not go far enough. The Minister has criticised other parties for wanting to go too far. He should look in the mirror and see that the real problem is not them; it is him for not wanting to go far enough.Su’a WILLIAM SIO (Labour—Māngere): I want to make some preliminary statements and then make reference to clause 4 clause 23 and clause 37 of Part 1 and then if I have time I do want to speak in support of Metiria Turei’s Supplementary Order Paper 172.I want to put to this Committee that we have three significant crises that this country is facing. The first one is housing—the lack of affordable housing and cold and damp housing. The second one is the growing number of children living in poverty. The third one is the growing gap in equality. All three contribute to another growing crisis—that is sickly and unhealthy children—but I am told by those in the medical profession that if we get the affordable housing and if we get housing to be more warm and more healthy then we can fix the growing number of sickly and unhealthy children.Firstly I want to ask the Minister a question. In a statement that he released as a preamble to this bill he said that this bill was primarily about affordable or cheap insulation and yet I heard earlier that he talked about saving lives. I want to ask the Minister: what is the primary focus of this bill? Is it about cheap insulation or about saving lives? I put it to you that if you are saying it is about saving lives then I do not believe—I have to agree with my colleague who spoke earlier Denis O’Rourke—that you are going to achieve that. And I do not believe the figures that you have put out particularly when you hear the Children’s Commissioner say that as a result of cold damp and unhealthy housing we have 42000 kids going to hospital and 15 deaths a year. Am I correct—it is 15?Hon Member: Yes that’s right.Su’a WILLIAM SIO: So I am asking the Minister: is it true that the primary focus of this bill is about saving lives or is it true what he released in a preamble statement leading to this bill that it was about cheap insulation? I do not believe that you can have both. If you are going to save the lives of children and families at risk then you cannot have the primary focus of this bill being cheap insulation. It concerns me what has been raised earlier that those houses that were built prior to 1978 will get insulation retrofitted but those houses built after 1978 will remain as they are.I have to say that many of the houses in South Auckland go back to the 1940s but some of the new houses that come after 1978 do not have insulation. These were built—I think the Hon Maurice Williamson made reference to it—during the period of those homes that had the leaky home syndrome. These were the houses that were built during that era after 1978—the 1980s. So those houses are not going to be healthy or safe for children if we are not going to compel their owners to retrofit them with insulation that is of the time. By leaving out those houses that were built after 1978 you have got a gap of 33 years.I do ask the Minister: is this about saving lives or is it about providing cheap insulation? If it is about providing cheap insulation there we go again—you lead yourself to the condemnation of the public because the public will be seeing this and they will say: “There he goes again—supporting his mates rather than doing the right thing for the country.” I want to then ask in terms of clause 4 of Part 1: do the provisions that extend insulation apply to garages and to sleepouts? Because—Hon Member: What about cars?Su’a WILLIAM SIO: And cars—well ha ha! Right now at this very moment we have a number of families with children living in garages—garages with concrete floors. There is no insulation on the walls. There is merely a piece of iron around that and a boarding up against the wall but there is also no insulation.Hon Dr NICK SMITH (Minister for Building and Housing): I want to rise to the challenge of the points that were made by both Denis O’Rourke and Su’a William Sio who has just spoken. Firstly he says the Residential Tenancies Amendment Bill is about cheap insulation. No it is not. Let me be very clear: the bill and the regulations require that all insulation to be installed is to the 2008 standard—absolutely. He asks the question as to whether cost should be a factor in the policy making. Of course it should because all costs that we impose through regulation of this sort are ultimately passed on to the tenant and we have to be confident that the benefit is more than the cost. So here is my challenge for Mr O’Rourke and Mr Su’a William Sio and it is this—Hon Members: Sio.Hon Dr NICK SMITH: —Sio—when it came to the earthquake-prone buildings legislation this Parliament did not require that every single building be upgraded to today’s standard. Were we as a Parliament saying that lives do not matter? No we were saying quite logically that there needs to be an upgrade of older buildings but that it is not realistic that every older building meets the same standard today.I challenge the member on this point: the current new regulations require every home in New Zealand to have double glazing. Why do we not put in this bill that every house has to retrospectively get double glazing? If you want to follow the logic that you have advanced which is that every building has to be to the same standard that is what you would do. The reason we do not do that is not because we do not care about children or about home warmth; it is because we are economically rational. If we required every home to meet today’s standard and to be double glazed—if you believe what you say you would actually put in this bill that every home has to be double glazed because that is the current standard. But we do not because the cost that that would impose would exceed the benefit.Here is the bit that I do not think is understood: the 1978 standard provides for an 83 percent reduction in heat loss. The 2001 standard—they are the facts; they are the technical statistics the R rating. In respect of the 2001 standard that takes it to 87 percent and the simple logic is this: insulating the 180000 homes that are not insulated at all of which you are getting no reduction in heat loss is where the massive gains are to be made. Members opposite are completely underestimating the challenge for the insulation industry to do 60000 homes per year over the next 3 years which in my advice is going to stretch that industry to its absolute limits. That is my view: the cost-benefit analysis is overwhelming in saying that the benefits come from those houses that are uninsulated. Furthermore this bill requires that where the insulation from 1978 is not in fit and proper condition it does need to be upgraded and when it is upgraded it is upgraded to the 2008 standard. That is logical that is consistent that is the right thing for New Zealand families and it is the right thing for New Zealand homes.PEENI HENARE (Labour—Tāmaki Makaurau): Ka pai Mr Chairman. Thank you very much for allowing me this opportunity. I rise to make a brief contribution to this debate and I want to speak specifically to clause 37 in respect of the installation of smoke alarms. Minister Nick Smith has just mentioned to us that we are underestimating the cost that it has to be economically viable and sustainable and all of this choice jargon. I received a text message from one of my constituents who is actually watching right now in one of the libraries in South Auckland. Let me explain what is “economically viable” for that constituent—and it is a matter of dollars and cents just as the Minister has already mentioned. In this particular clause there will be an onus placed upon the tenant to replace flat batteries in the alarms. I understand the reasons around safety because we do see a heck of a lot of unnecessary house fires in communities whether they are rural or in the city but this particular constituent of mine said that after his expenses go out for rent and for those urgent expenses that are required to maintain life for him and his family he is left with $15—$15—to make sure he can put kai on the table for his family.Although this might seem just a silly little bit in the bill when you place an expectation on a tenant who struggles on $15 per week to feed their family you place on them an expectation to buy say in a standard three-bedroom home three smoke alarms. You have one in the lounge or open living area—it usually covers the dining room as well—one near the kitchen which makes sense and generally one in the hallway which will cover the bedrooms. I am afraid that the price of those batteries is just beyond the reach of some of our families. I know that sounds petty and minuscule to some in the Committee here but I can tell you that if it is a matter of dollars and cents for those who come through into my offices then they struggle to meet those costs. They struggle to meet emergency situations—a flat tyre for example—where costs are really high. Even the smallest of price increases in their weekly budget which they must factor into their budgeting throughout the week or throughout the month—however they might be paid—just those small things are a real challenge for those people.While continuing on this point I want to consider the current crisis. I want in relation to smoke alarms think about the emergency housing situation. I also want to think about the emergency housing situation that is being met right now by the likes of Te Puea Marae. Some of the compliance requirements for those emergency houses—I know this legislation says “private rentals”—I wonder how we can then boost these kinds of protections for those who are providing these necessary services. Some of those people were mentioned by my colleague Su’a William Sio who talked about garages and the need for those to be insulated and have a fire alarm placed inside them. That is even more important in my constituency when I consider a particular house I recently visited. Will there be compliance requirements for that private rental property? The garage is also being rented out by the person who owns that property so essentially there are two dwellings on the property where separate families are living. I wonder whether these particular amendments to the bill will require those other dwellings like a garage—and like a carport as we have seen very recently—to meet any particular standard that will provide a warm safe dry and healthy home for those families and those resident in those homes; and safe by way of fire alarms.I consider Supplementary Order Paper 172 presented to the Committee by Metiria Turei and I think it is probably a fair reflection of what is not being done by this Government. Why? Because if you look at the Supplementary Order Paper you will see a heck of a lot of recommendations—[Bell rung] Mr Chair?The CHAIRPERSON (Hon Chester Borrows): Peeni Henare.PEENI HENARE: Excellent Mr Chair thank you very much. You will see quite a large number of amendments being proposed in this Supplementary Order Paper in the hope that we can actually fix the problem—fix the problem not tinker around the edges. This is because what this particular bill that we are debating at the moment proposes is a “steady as she goes” approach—that there is actually not a crisis. We will turn a few knobs here pull a few strings there in the hope that longer term we will have a solution to some of the issues. That is literally tinkering around the edges and not doing enough.Now to Metiria Turei’s fantastic Supplementary Order Paper which details what I consider to be some pretty standard human rights—some of them are as simple as adequate cooking facilities. I wonder whether there are kitchens in the sheds in South Auckland? Probably not. I wonder whether there are places where there is a bath a shower or a toilet with proper sewage disposal in a lot of those sheds that are being rented out as a second dwelling on one property? Probably not. So I want to support Metiria Turei’s Supplementary Order Paper to the Committee today and once again emphasise the fact that this bill just does not go quite far enough.Just going back to clause 37: I know there are small technical things in bills such as this but the word “may” keeps coming up. I consider that the word should be “must”. It should be “must” in many cases and in particular this one where it actually forces the landlords who own these properties to comply and to make sure that smoke alarms go into houses. It sounds like a small word but it is an important word in the scheme of things. I wonder whether Minister Smith or some of the other members from the other side of the Chamber can just address some of those things because they are questions that we all have. They are questions around the safety of our families and they are questions that must be answered in order to fix this housing crisis.I end by saying once again that this bill is just not good enough and it is not big enough. OK we will be supporting it but we do have huge reservations and we also have some other views that we hope to express. Kia ora.ALFRED NGARO (National): It is quite an honour to be able to take a call. I want to start by first acknowledging the comment by Mr Peeni Henare when he said that small things do make a big difference. I absolutely agree. For almost 20 years I worked in the community of Glen Innes—for a number of years—which had the largest State housing stock in New Zealand at one stage. Almost 2500 homes were there. I know that in working with a small trust with the families the children and the young people in that community and wanting to meet their needs—I know there were many times that there were cold homes that I went into. There were homes in which there were people who were struggling where there was poverty and where there were issues.Although the talk on the other side is about housing poverty and health conditions I saw all those three things and under a Labour Government of 9 years not once did I see any change in that. I can name the streets: Fenwick Avenue that is there; Flanders Street; and Ropata Avenue. Those are the streets with houses that families were in and not once in those 9 years did I see insulation going into those homes addressing the issues of poverty. Even the Salvation Army’s state of the nation report talked about how that needed to happen.But I am talking about the bill here in its Committee stage. What is really important are the issues. I want to address the issues around insulation because talking about insulation—there has been outcry over the fact that this does not meet the standard. I understand that many of those members may not have had the report. We know that the Building Research Association of New Zealand (BRANZ) had a report and a survey. It said that there were 450000 homes out there that needed some form of insulation. When Mr O’Rourke talked about the sense of uniform ability—well if he had read the report he would realise that at least 100000 of those homes are unable to be insulated because of their physical dimensions.I want to point to the two different sizes of insulation that have been making their way around the Opposition benches. Having come from a construction background as an electrician by trade what I can say to you is this: while they can bandy around and show two different forms of insulation what they will not understand is that to truly insulate a property and a home it is like for instance how you need to think about a chilly bin or a cooler. In order to get 100 percent insulation you need to make sure it is watertight and airtight. You cannot do that in a house but what you can do is move towards that with double-glazing of windows. It is insulation in ceilings and in the floor—that is what this Government is moving towards. That is what this bill is moving towards and has the best reasonable and rational point of view in what it is doing.What do we say then to the point of insulation from 1978? Well there was an energy performance survey that was done in which it clearly states that obviously from 1978 the sealing of the insulation that was installed to the new standard of 2008—when the Opposition members talk about it they will keep holding up the two different levels of insulation. If you take the technical aspect—not just your own philosophy or ideology—the technical issue is that from that form of insulation to this form of insulation the efficacy and the efficiency that you will try to gain is not there. As long as the insulation retains itself to that 1978 standard—to try to include that is not there. The technical aspect of different insulation does not weigh up.Let us go a little bit further than that because the BRANZ report clearly states this: the average cost of insulation is $3400 per home for ceiling and floor right? Therefore if you were to upgrade that form of insulation to try to get it back to what you would call the standard of 2008 what is the cost? It is $2800 on average. Where is the cost saving in that? There is none. There is no cost saving.But here is the question that Mr O’Rourke then brought: will that cost go back to the tenants? He said that of course it will not. Mr O’Rourke needs to realise this: over 70 percent to almost 80 percent of current landlords in New Zealand are who? They are mum and dad investors with one rental property. That is the average. They are good people who are out in our communities who want to do the right thing and who are doing the right thing. That is what we are saying inside of this legislation. If we are going to try to have a uniform response to try to make sure that everyone has to impose these costs then mum and dad and average investors will simply say: “We have to push this cost on to the tenant.” That is not rational. That is not reasonable. That is the reason why we believe the standards that we are taking are making a difference.I just want to make some other comments in regard to regulatory powers that are inside the bill. There was the issue around ventilation. The Housing Improvement Regulations 1947 clearly state the fact that households need to provide adequate ventilation and also the heating that is inside of that. The question was asked to the Ministry of Business Innovation and Employment (MBIE) and it looked and reviewed this. What clearly came back from MBIE was this: that the cost that is incurred will be passed on to the tenant.JACINDA ARDERN (Labour): We have had a lot of discussion about cost-benefit analysis and obviously with any significant legislative change there is an expectation not just because of the requirements around setting out regulatory impact statements that at least some cost-benefit analysis is done. But it is really up to a Minister and a department to factor in the range of issues that they would like to include in that cost-benefit analysis. In this debate an area that seems to be severely lacking in the Minister for Building and Housing’s logic around the cost of for instance including standards in the Residential Tenancies Amendment Bill around heating or even including higher standards around insulation is that it does not factor in the cost to the State in the cost-benefit analysis of some of the issues around living in cold and damp housing.I would actually really like to hear from the Minister about what he considers to be an adequate cost-benefit analysis because he describes this bill as economically rational when for instance the cost to the State of rheumatic fever for a child is between $300000 and $500000. Obviously the Government does consider that to be a cost worth mitigating because why else would it have made it one of its Better Public Services targets. It has implemented ways to screen by swabbing children for streptococcus and treating children with antibiotics but actually if we were serious about prevention in this space we would acknowledge that you cannot pick up a child who is not at school—because that is where the children are being swabbed—and so if you really want to prevent further incidences you would look to the source which is cold damp overcrowded housing.So I think that it would make very good sense to include in a cost-benefit analysis the cost of the diseases of poverty and overcrowding but also those that are directly influenced by—Hon Dr Nick Smith: They have.JACINDA ARDERN: If the Minister says that they have I would welcome then further detail on why it is that in his cost-benefit analysis where we have over 40000 children admitted to hospital per annum it did not make economic sense in his mind to add for example heating and higher standards around insulation in this instance because—Hon Dr Nick Smith: It’s already in the regulations.JACINDA ARDERN: It does not make economic sense for the State to bear the burden of that cost because the ministry has made an assumption that if that went to a landlord—and I challenge this assumption—and we required landlords to provide a source of heating they would automatically put that cost on to their tenants. I actually question that rationale. Alfred Ngaro has said that mum and dad investors are the people we are talking about here who would be impacted by changes like that—I do not disagree with that—and that they want to be good landlords and those are the people whom we would be putting this cost on to who would naturally then pass it on.I question the decision making there to assume that every single landlord would put that cost on to the tenant. I have been a tenant for most of my life living in properties outside of my family home. I have had continual upgrades to different properties that I have lived in. Not once has that upgrade come at a cost where that landlord has said to me: “Because I have made this adjustment to the property that you are in I am now going to immediately charge you more in your rent.” I have not had that experience. We have made an assumption here—an assumption that we want the tenant to bear the brunt of poor quality housing because the trade-off is that they will paying more.Tenants are paying more because we have a housing crisis—let us be clear on that. That is the reason why tenants are primarily paying more. Why not have a requirement that landlords do right by their tenants because actually I have a belief that there are a good number of landlords who would not necessarily pass that on. For those who would not—those who are the slum landlords—let us make them provide quality housing. What is wrong with that? Why should we as a State bear the burden of the cost of children being hospitalised whilst we allow landlords to get away with not providing quality housing?DENISE ROCHE (Green): I rise to take a short call on this. I want to address the Supplementary Order Paper that my colleague Metiria Turei has put forward. But before I do that I just want to make a couple of general comments. I think I will start by saying that essentially what we have got in New Zealand is housing stock rental accommodation that is substandard. How do we know that? We know that because there are according to the Children’s Commissioner 42000 hospital visits per year with 15 children dying every year because of substandard housing with poor insulation. We know that because we have seen so many people who are desperate for housing who are living in sheds who are living in garages and who are living in caravans and even in cars. I blame this Government because it has not addressed the housing crisis that has enabled bad landlords to continue to provide poor rental accommodation. It is about time that we did something about it.The Minister said earlier that we do have regulations. But they are being flouted. There are so many different examples of people who are living in substandard housing where if there are regulations their landlords are not meeting them anyway. I have examples of that in my own community where I have some friends who essentially were renting a house in which in the end they basically could not turn on the electricity because the wiring was so poor let alone heat the home in the middle of winter. When they asked for that to be fixed it just did not happen and so they moved out. But the landlord put that property on the market and another desperate family moved in with no repairs being undertaken whatsoever.I want to refer to some of the submissions that came through that support the measures that my colleague Metiria Turei has put in the Supplementary Order Paper. These were particularly from the Citizens Advice Bureau that said that it has had a 40 percent increase in inquiries related to residential tenancies in the last 5 years. I believe that reflects the fact that there is a wide breach of minimum standards from landlords and it is probably why the bureau supports more regulation for the protection of tenants. That is what we should be aiming at. We should be remembering that a home when it is rented is a home; it is not just a rental property and not just a way for the landlord to make money. If we focus on that then we should be focusing on the rights of tenants as well: the right to warm safe dry affordable housing is the first point but the second point is around security of tenancy. This is why we have in the Supplementary Order Paper a right of renewal for tenants after 3 years.I grew up in rental accommodation provided by the State through the railways. About 10 or 11 years of my life was spent in one rental property. That enabled me to go to one school to have one community that I was part of and to be very very stable. We have seen through various reports the declining education outcomes from children who are shifting from house to house to house because their rental properties are not secure and who have to move because they are facing rent increases. That is another reason why we want rights for tenants that include that any increases in rent need to be part of the rental agreement at the beginning. And it has to be justified so that we do not have families who are facing major rental increases are unable to budget and are having to shift into cheaper accommodation—and upsetting interfering and interrupting the education of their children.When you move into a home it is a home and that means that you are part of a community—that is where the schools are—KRIS FAAFOI (Labour—Mana): It is a genuine pleasure to speak to the Residential Tenancies Amendment Bill. Can I refer to clause 38 which I think a number of my colleagues have referred to previously in the debate.Like Denise Roche who said in her speech that she grew up in a railway house I too spent most of my younger years in a State house in Christchurch. I do not think I left it until I was about 20. I think my parents moved in there about 1976 so it would have been prior to the 1978 age of insulation. I think my colleague Jacinda Ardern poses a decent question to ask of the Minister for Building and Housing around any work the Government has done around how this piece of work will make the lives of those people in low to medium income families better off and safer and healthier in those homes. The reason I ask that is that I grew up in one of those homes. I suffered from asthma; I still do to this day and I think it is because of the lack of decent insulation my family home had that I still suffer from asthma from time to time—sometimes it is due to my own management but most of it I believe is because of the home that I grew up in. I do not say that lightly. There were a couple of occasions my late father told me when the doctor said “Well that was a close one.” when I was young because I had such bad asthma attacks that I nearly died.I believe we come to this House with a responsibility to make the lives of people who follow us markedly better. It is certainly one of the things I push for in my own electorate. With all sincerity and all generosity and fairness to the Government although it is trying to make an effort with this piece of legislation I do not think it goes far enough. I fear that the same kind of experiences that my family went through with me having asthma when I grew up will happen to families who grow up in the same poorly insulated homes which we are allowing to continue to happen under this piece of legislation. On this side of the Chamber we have argued that as well as insulation there needs to be a decent mode of heating—something again that my family did not have. We had fan heaters which cost us far too much to run—and I am talking here of the 1980s and 1990s.I am asking in all seriousness why families who are on low incomes and in poorly insulated houses have to go through the same experience my family went through 20 years ago. Why should parents have to worry about their children who get constantly admitted into hospital with illnesses like asthma like me—and in some cases those children will pass away unnecessarily—because we here in Parliament have not learnt the lessons of 20 to 30 years ago?I do not think my parents overly enjoyed the experience of taking me to the hospital and seeing me nearly pass away from an asthma attack yet in this Parliament we seriously think it is OK to let the conditions of a 1978 insulation standard continue to be OK for families here in New Zealand. It is simply not good enough. I was one of the lucky ones but I still go to hospital every so often with an asthma attack. But why should we allow this to continue to happen?Someone from that side of the Chamber—and they already have—stood up and said: “Well what did you guys do in your last period of Government?”. Are we here to sit here and continue to play politics like that?Hon Jo Goodhew: Ha!KRIS FAAFOI: Is that all you are going to say? And there is laughter over there. But I do not think it is good enough that we allow conditions in terms of heating and insulation to continue to be those of 1978 1980s and 1990s standards. The Government members can laugh at my speech—they can say whatever they like—but what I think is that we deserve to do better for the families out there like mine who are living in these substandard conditions and who do not want their kids to go to hospital with life-threatening illnesses not just once but constantly.I think we owe it to the people of New Zealand who are in these conditions and these substandard houses to make sure that they can live a decent life. I was lucky enough to do that because my parents cared for me and looked after me and I think other families deserve that too. When people ask why I am a member of Parliament I say it is because I got the lucky chance to have a decent home and be looked after and I am in Parliament to be able to make sure we do better for the children in New Zealand. We can do better and we must do better.STUART NASH (Labour—Napier): I would like to talk first and foremost about something called a social contract. The social contract is a philosophical term and it talks about the moral and the political obligations that are dependent upon members of society to look after the health and well-being of others. Basically what it says is we have an obligation to build the sort of society within which we all like to live. This is where I think every single landlord understands the social contract and if they do not we legislate to make sure they abide by the moral and social obligations that society has put on them.I would agree with Mr Faafoi and other speakers that this bill does not go far enough in this. There is an implied social contract and that is that a landlord will provide a tenant with a warm dry safe home. It does not matter whether it is a private landlord or the Government in the form of State houses. Insulation I believe is a fundamental part of that social contract when we are talking about tenancy and when we are talking about rental accommodation.If we talk about the sort of society we want to create—and this is related to clause 38 with regard to insulation—I think that most of us find for example rheumatic fever which is a disease of poverty to be abhorrent. The cost to the health system of a child diagnosed with rheumatic fever from when they are diagnosed to when they die about 50 years later is about $1 million per person. It is extremely high. So I think we have to enforce this obligation on landlords to provide tenants the sort of warm dry house the landlord himself or herself would be prepared to live in or put their own children in.I am a landlord myself. Last winter I installed four heat pumps in a block of apartments. I can tell you that I did not change the rent one cent. The reason for that is that I reject the Minister for Building and Housing’s argument that if we impose a cost on the landlord then that will only translate into higher rents because what determines the rent is in fact the market. If I had said “What I’m going to do is I’m going to put up the rent by $3000 a year for every single one of my tenants in this block of apartments.” they would have been well within their rights to say “If that is the case then we are handing in our notice.” and I could well have ended up with an empty apartment.For me—and I know for a lot of landlords—the ability to have tenants in there that are going to stay for a long time is much more important than ramping up the cost every single time I possibly can. I have not increased the rent at all and yet I have installed four heat pumps. That is because that is how the market works and I reject the notion that placing an obligation on landlords to provide warm dry healthy homes means an increase in rent because that is not the case. The market determines the rent and tenants have the ability if the rent is too high to say “I’m not going to stay here anymore.”When we talk about insulation the evidence is incredibly clear. If a person or a child or a family lives in a home that is warm and dry then it is safe and it is healthy. My son is in hospital at the moment. I do not want to talk about my son—I do not want to bring my family into the debate—but on the wall in the children’s ward there is a list of 10 things that children need. One of those things is a warm safe dry environment. What children do not need is to live in homes that do not provide them with the sort of security they require to be the best they possibly can be.I just think it is inherently unfair to not require landlords to provide that sort of house. Not to do that is manifestly wrong and I think it breaches the implied social contract between society Parliament the Government and those who rent a house for whatever reason. Let us be honest about this. We have talked about the housing crisis in a number of ways and I would like to acknowledge as someone who lives in Napier that the housing crisis is not simply an Auckland issue at all. There are 130 people on the waiting list in Napier. This is a crisis that goes across the country and I want that to be known because this is often assumed to be simply an Auckland crisis. It is not. But we must provide tenants with warm dry homes.Dr PARMJEET PARMAR (National): It is a pleasure to rise and take this call. The Opposition has been going on and on about heating and ventilation so I would like to talk about clause 13 which amends section 45 of the Residential Tenancies Act which states the landlord’s obligations. Yes the landlord’s obligation does not include heating and ventilation as a minimum requirement. There are significant reasons for that. No. 1 is the evidence. The evidence shows that most benefits in terms of health outcomes related to cold houses can be obtained by insulating uninsulated houses rather than adding heating to insulated houses. So it is based on evidence. Yes I understand—it is technical. It is difficult to comprehend. That is why a technical advisory group was set up to look into the idea of a warrant of fitness. That group did come up with ideas for ventilating bathrooms but later on dropped that as a minimum requirement because it realised that that is linked to the behaviour of the person in the house. So it will be the tenants’ obligation to ventilate the bathroom.Given the lack of evidence of adding all of these requirements on top of the requirements that are in this bill I do not see any sense in that. I do not see any sense in that. This is all based on evidence and based on the evidence we are focused on insulation.A second point I want to talk about is clause 6 and I also want to talk about the Green member’s Supplementary Order Paper 172. I do not support that Supplementary Order Paper. The Green member Metiria Turei says that there should be calculations indicating increases in rent. That is not possible because we cannot base this on any baseless assumptions that all landlords will be able to absorb the costs that we keep imposing on them. Every landlord is in a different situation. Some landlords can put in heat pumps and may not pass the cost on to the tenants but others might have to simply because they just cannot afford it.The second thing is that landlords love to have long-term tenants but sometimes if landlords want their property back for some reason they should be able to give notice to their tenants to get their property back. Clause 6 also requires landlords to specify the extent of insulation. They are required to include that in the tenancy agreement. If the house is exempt from that requirement then the landlords are also required to provide that statement in the tenancy agreement. That is a good thing because we are putting the responsibility on to landlords to assess the property and provide that assessment and statement accordingly to their tenants. Yes if tenants feel that they have been given the wrong information that they are not satisfied with the state of the house or that it does not match with the statement that is provided by the landlord then they can get an independent assessment done. They can go to the Tenancy Tribunal and they can get a work order issued for work to be done on that property.We heard about a warrant of fitness for houses. We have been hearing that continually from the Opposition. But the idea of having a kind of warrant of fitness—having an independent body assessing houses—is going to cost. Yes it does cost. These things do cost. We did a cost-benefit analysis. Yes cost-benefit analyses are important. You cannot dismiss them. The cost-benefit analysis said that it would cost $100 million a year—$100 million a year. Yes landlords will pass that cost on to their tenants. So if I break it down to the cost per house it comes to $225 a year for a tenant. This is without providing any additional benefits. So how is it fair to pass on this kind of cost to tenants when there is no benefit for them?The member opposite Peeni Henare spoke about a family he knows that is left with just $15 after paying their rent. This is $15 per week. If this cost of $225 is passed on to that family they will be left with just $10 a week. How fair is that? It is not fair. We do not think that the idea of having a warrant of fitness is good. If I speak about the amounts for unlawful acts I believe that they are very reasonable after the changes that have come after the select committee process especially for breaches under section 54(3) inserted by clause 15 for a retaliatory termination notice. We know that these kinds of notices are not uncommon. After looking at that we decided to increase the amount from $2000 to $4000. Looking at other amounts that are there for unlawful acts to make sure that landlords are complying and also to make sure that tenants are complying—for example if tenants fiddle with their smoke alarms they can be fined up to $3000. When looking at these things I believe that this is reasonable.PHIL TWYFORD (Labour—Te Atatū): The Minister for Building and Housing the Hon Dr Nick Smith in his last contribution I think if I am correct urged the Committee to stop what he called nit-picking. I was kind of reflecting on this—that the Minister thinks that the criticisms that the Opposition have of his bill are nit-picking. We have a lot of fun on this side of the House at the expense of Dr Smith. It is mostly because there is such a big gulf between the scale of the housing crisis and this endless procession of half measures that he brings to the House and to the public. That is why we have so much fun at his expense.Nevertheless the Residential Tenancies Amendment Bill deserves to be treated with some gravity because it is something. It is something. After prevaricating for several years the Minister has brought a bill to the House that actually does contain some good stuff. It does actually set some standards for insulation and smoke alarms. It has comprehensive provisions that put in place the machinery of government that will be necessary in the future to administer and enforce some proper and decent standards about the quality of housing. That is something and that is why we are voting for this bill.But the sad thing about it is that it falls so far short of what the Minister could be doing. He knows that credible New Zealand research and evidence shows that $1 invested in retro-fitting houses through insulation and modern affordable heating saves $5 to $6 in future public health expenditure. That is the cost-benefit analysis and that is why we cannot understand on this side of the Chamber why the Minister is legislating in this bill redundant insulation standards that go back to 1978. That is the shame of it. When this bill passes—as it will because National has the numbers in the House—hundreds of thousands of rental properties in New Zealand that are currently insulated to the 1978 standard will not have to be upgraded to the current 2008 standard. That is the shame of this bill and that is the poverty of ambition that underlies so much of this Minister’s housing policy.The reason for the deficiencies the rationale for the deficiencies at the heart of this bill is that it would be too much of a burden on landlords. The Minister is clearly afraid that requiring for example a $3000 heat pump will be such a burden on landlords that they will have to put the rent up. My colleague Stuart Nash has put paid to that assertion. We know everybody knows the Minister knows that rents are set by supply and demand. Just because a landlord has to replace the roof because it is leaking and spends $10000 on replacing it the landlord cannot put up the rent to recover that cost from the hapless tenant.If you consider the case of heat pumps a heat pump might cost let us say at most $3500. A modern heat pump would have a lifetime of 15 years. Over that time across the country an average rental property with an average weekly rent of $440 would generate gross revenue of $340000. If it is an Auckland property with an average rent of $520 a week the gross revenue over the 15-year period the lifetime of that heat pump would be $400000. To suggest that requiring a landlord to invest $3500 in a heat pump is going to force them to put up the rent and throw the tenants out on the street which is the argument that the Minister has repeatedly used is a complete nonsense. It will not happen. It is simply a cover for this Minister’s refusal to do the right thing.By taking this position the Minister is standing up for slum landlords. As an earlier speaker said there are good mum and dad landlords and professional landlords all over the country who understand the importance of making sure that their rental property is not a threat to the life and health of their tenants.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Mostly I am proud to be in this House but sometimes I am absolutely ashamed. People out there must think this is a place of such hypocrisy when they listen to this debate. We have spent tens if not hundreds of hours in recent times debating health and safety legislation in this House to protect the lives of New Zealanders because we had a terrible tragedy in my area where 29 people lost their lives.On this particular issue the Children’s Commissioner came to the Social Services Committee and said there are “42000 [hospital] admissions” and “fifteen children a year die” because they are in cold damp homes. This is an outrage. Where in the health and safety legislation did we say: “Oh it is OK to have a few New Zealanders die?”. Did we say that? No we did not. Yet in this legislation the Government is saying it is OK to let 15 children a year die—quoting the Children’s Commissioner. The Government made a promise to New Zealand children: “We will make your house healthy.” Three years on from that Budget promise this bill will do little for children living in cold damp mouldy housing. It is a wasted opportunity and a broken promise to our children. I do not want to be part of a hypocritical Parliament that on one hand stands up for the rights of working New Zealanders which is good but here today does not stand up for the rights of the 15 children who will die every year because this Government is not prepared to legislate for proper healthy safe and dry homes. That is what we are talking about here.We have a Government that is running a review of Child Youth and Family because there are faults in the care of children who need care. We have got people marching in the streets for the tragedy of poor Moko Rangitoheriri who lost his life because of terrible terrible domestic violence that is rife throughout our country. And so it should be that people speak out but when we get to Parliament where the Government has the right—the obligation I would say—to put in place legislation that does the very best possible for young children in this country it is failing.The CHAIRPERSON (Lindsay Tisch): Order! Back on the bill.Hon DAMIEN O’CONNOR: It has failed and it is on this legislation.Just as the Royal Commission on the Pike River Coal Mine Tragedy said we had to change legislation to protect New Zealanders in mines and other places the Children’s Commissioner comes into the Parliament and says there are 42000 hospital admissions per year and 15 children dying per year from houses that are not adequately insulated or heated. And this Government says: “Oh no we have got to have an exception. We have got to have an exception for old properties and old insulation methods.” We did not say that in the health and safety legislation. We did not say that some could abide by a lesser standard and that is OK and we will allow those poor New Zealanders working in those conditions to take a greater risk but we are saying that here in this piece of legislation.The National Government has bowed over once again to landlords who are putting children every single day at risk in this country. It is not unusual I have to say. I have battled to try to get lower speed limits outside schools. Somehow whether it is because they do not vote or whatever children do not get the same level of care and protection that they should.This is an opportunity for the Government to show that it really does care and it does not just bring to the House hypocritical pieces of legislation—because that is what it is: moving one step forward but leaving a big gap that most likely the most vulnerable children in our country the ones who can pay the lowest rent in the oldest houses will fall into. But no we are not going to give them a guarantee of warmth of a dry home or of a safe home—never mind the fact that the Government does not even want to give them a home.This is a disgraceful piece of legislation and the Government is not protecting the children in this country which it should be doing each and every day.JENNY SALESA (Labour—Manukau East): Thank you for this call on the Residential Tenancies Amendment Bill. Putting in place a legal framework to ensure that residential tenants are renting safe and healthy homes is crucial. This bill proposes to introduce some useful provisions towards providing standards for housing in private rentals but it does not go far enough in addressing the dreadful circumstances that many families are living in especially as we go into winter.I would like to tautoko my colleague the Hon Damien O’Connor. We have a responsibility as parliamentarians—121 of us chosen by our constituents to come into this Committee—to do our best to save children’s lives. When we sit on this side we hear members of Parliament particularly from the other side talking about the cost and how it is too expensive to heat and to insulate houses but when you actually put to the other side that we are talking about children’s lives—children’s lives—we should actually feel a little bit ashamed or maybe a lot ashamed that we are not doing what we as responsible MPs should be doing.Minimum insulation standards for private rental houses are a step in the right direction—they are. However this National Government should do more. This bill proposes a minimum insulation standard. When you insulate a cold house that house still remains cold. When you insulate a cold house but you do not put in efficient modern heating do you think that house will magically become warm dry and healthy? No it will not. I agree with Dr Russell Wills; this bill should do much better for our children. This is a shameful bill. This is an opportunity to do right by our children but we are not doing that. Rental houses need to be warm dry and healthy.My question as we talk about insulating houses is whether we are also going to ensure minimum insulation for garages. Just this last week we saw so many garages where families are living. I do not think this current legislation actually covers minimum insulation for garages but it is a reality that we have too many families living in garages and as we go into winter we should also consider the fact there are families that have been forced out of houses—forced out of houses—to live in cars as well as in garages. They also need to live in warm dry conditions.The Productivity Commission stated in its report on housing affordability that “Generally the quality of New Zealand’s housing stock is considered to be poor.” This issue of quality applies to private houses as well as to Housing New Zealand State houses. In the Auckland Regional Public Health Service submission to the Health Committee it stated that “New Zealand currently has a high proportion of unhealthy rental homes and the average temperature in almost a third of New Zealand homes is below World Health Organization (WHO) recommendations.” The WHO recommends a minimum indoor temperature of 18°C for most people and if you are a child if you are elderly or if you are disabled it recommends 21 degrees for a house. But in this country the mean temperature in Auckland homes which is what was in this submission is around 16.5 degrees; 16.5 degrees is pretty cold. That is something this legislation should actually cover: insulation as well as minimum standards of heating.Clause 6 of this bill covers information that must be included in tenancy agreements. Clause 6(3) would require a landlord to describe the insulation that is installed at a property he or she is renting out. Omitting to provide this information would be an unlawful act. This bill came back from the Social Services Committee with an amended clause 6(3) where landlords would be allowed to state that despite making all reasonable efforts they have not been able to satisfy themselves of the extent of the insulation. So I worry that this is a fairly slippery set of requirements whereby insulation that is too onerous—MAUREEN PUGH (National): It is my pleasure to stand and speak to this the Residential Tenancies Amendment Bill in its Committee stage today. I want to take this opportunity to note my thanks to the Hon Nick Smith for being the driving force behind this sensible and practical piece of legislation. I am sure that the rest of my colleagues on this side of the Chamber join me in congratulating the Minister on sponsoring such a great and practical bill.I live down the road from a small place called Ōtira. Back in the day Ōtira grew into a tent city as workmen inhabited it to work on the Ōtira Tunnel. In that tent city the women and children grew and worked and survived in canvas houses and some of them who were lucky enough had wooden floors. So we have come a long way since those days and the standards have improved over time and continue to improve. This legislation will provide yet another way for us to improve the living standards of those people who depend on rental properties—I am talking about 450000 New Zealanders who live in those rental accommodations. This legislation is going to ensure that they are warmer drier and safer.Currently the Residential Tenancies Act requires landlords to keep their properties in a reasonable state of cleanliness and repair and they must comply with a variety of standards. These include meeting the standards in terms of ventilation cooking facilities heating and so forth. Today I would like to talk about smoke alarms. That has been a great topic of conversation today. It is one of the key objectives of this Residential Tenancies Amendment Bill and it is designed to reduce fire-related fatalities and injuries in residential rental properties. As the Minister has noted already today the highest incidence of those fatalities and injuries is in rental properties. Smoke alarms will be a requirement as of 1 July this year.Insulation will be installed progressively over the next 3 years and landlords will be required to disclose the extent of insulation in tenancy agreements. This offers openness and transparency to tenants as they enter into tenancy agreements. However social housing landlords who receive income-related rent subsidies must install floor and ceiling insulation from the commencement date of this bill which is 1 July. These measures as we have heard from the Hon Nick Smith today will save 129 lives a year.I would like to go on to talk about some of the main changes that were made at the select committee stage. The Residential Tenancies Act will now have a higher maximum payment for two unlawful acts in order to help address the natural power imbalance between tenants and landlords. The maximum amount payable by a landlord to a tenant in the form of damages for failing to comply with regulations about smoke alarms or insulation has been increased from $3000 to $4000. This is an encouragement to landlords to ensure that they comply with this potentially lifesaving requirement.The other issue that came up at the select committee relates to retaliatory notices. We heard that some tenants are reluctant to bring complaints against their landlords for fear of eviction. We also heard that some tenants found the 14-day time requirement to appeal too short and were submitting too late. This time requirement has been extended from 14 to 28 days. The maximum penalty for a landlord who does give a retaliatory notice is going up to $4000.A third change that was made in the select committee process was to forbid and prohibit cash payments in return for work that was required on rental properties. A fourth change was giving landlords a specific right of entry for installation of smoke alarms and insulation which brings it in line with repairs and maintenance. Thank you.KRIS FAAFOI (Labour—Mana): Thank you very much. You did have a choice so thank you very much Mr Chair. I do want to take the opportunity to respond to a number of the submissions made across the Chamber to clause 38 around insulation. The last speaker to make a contribution Maureen Pugh said that the Residential Tenancies Amendment Bill was “practical”. Unfortunately for that speaker that is not what the Children’s Commissioner thinks. He said in his submission to the Social Services Committee rather bluntly that in his view “this Bill will not achieve improvements in the quality of rental housing and will not reduce the numbers of children becoming ill from living in cold and damp housing.”I think the Children’s Commissioner might know a thing or two about keeping children safe and healthy. Although this Government may think that the bill is practical the Children’s Commissioner disagrees with the Government saying that it will not make any difference to reduce the numbers of children becoming ill from living in cold and damp housing—something that I think the people of New Zealand should take into consideration when they think about being practical and keeping children safe and healthy in cold and damp houses.Also in relation to clause 38 another one of the Government’s speakers said that based on evidence having a heater in an insulated home will make no difference at all—again something that the Children’s Commissioner at the select committee disagreed with. He said: “… I would have expected to see the following elements included in the Bill: 1. A heating standard for all properties not just those in which insulation cannot be practically installed. The health benefits of insulation come from the combination of insulation and efficient space heating producing a warm dry living environment. It is well known that children especially very young children suffer significant adverse health impacts from living in unheated environments;”. I think again that the Children’s Commissioner might know a thing or two about the effect that heating may have on the health of children.Also if we are going to look at evidence research by the University of Otago showed that insulating to the 2008 standard would reduce child hospital admissions by 6 percent around 3000 children each year. In rental properties this reduction would be about 19 percent. So in terms of evidence and practicality it seems the evidence is on the side of the Children’s Commissioner and the practicality is only on the side of the Government which is doing nothing in this piece of legislation to improve the lives of children living in damp and cold homes.If Government members are going to stand up in this Parliament and say that based on evidence a heater will not make any difference to the lives of children and families living in insulated homes I have got a challenge for them: take the heaters out of your houses and see how winter goes for you. See how winter goes for you because that is the reality for many of the people families and children whose lives we are trying to make better here. So if we are going to look at being evidence based go and live in your insulated—I am assuming—houses without a heater for winter and see how winter goes for you.DAVID SHEARER (Labour—Mt Albert): I want to pick up exactly where my colleague Kris Faafoi left off because he is absolutely right. Just think about what it would be like to live in a home that may be insulated but without a heater. It does not make it any warmer and that is exactly the point that we are trying to make in the Labour Party and the Greens—frankly everybody except the National Government—in trying to promote and get through a bill that will actually make a real difference.If you look at the statistics and you look at what this bill could potentially do for children—but does not—it could reduce the number of kids being admitted into hospital by about 6 percent and by Otago University’s figures that would be 3000 children a year. That is a very conservative estimate; there are others who believe that it could in fact be much more. Just think: 3000 kids who will not need to go to hospital with rheumatic fever with respiratory conditions with colds—with problems that will get so serious that they need to be admitted. Think of the savings to the taxpayer on our health bill if 3000 children no longer need to go to hospital. There is an overwhelming benefit to New Zealand in this bill being done properly. It is an overwhelming benefit because it costs the Government effectively nothing. I cannot think of a policy change that we could look at right now that we could implement that would have such dramatic impacts on the very people that we want to help most who are the people who are living in poverty and living in rental accommodation. Another statistic—if you can keep this in your head—70 percent of kids who are in poverty are in rental accommodation. So we are addressing the issues affecting most those children who are living in poverty and in the worst conditions. Think of another policy that would be able to target them and have that dramatic effect as quickly.My surprise is that I think this was brought up in 2013 and here we are debating it in 2016. I am thinking: 3 years? That was 9000 hospital admissions ago. We have 16 children dying every year from poverty and housing-related issues. Just imagine—some of those kids might well have been here as a result of this. Three years at 3000 hospital admissions. Think of the cost in dollar terms. Think of the cost in social terms. Think of the cost to those families of having to take their kids to hospitals because of not meeting the basic requirement of having a warm dry house. Many of my colleagues have already spoken about this and the fact that New Zealand is well behind in terms of the housing quality that we have here in New Zealand. This is an Act that has needed to be addressed for some time. I do not know why it has not been addressed more urgently.Here are the three things that we in particular want to be able to see. We want to be able to see that when these houses are brought up to spec—when they are insulated and they are warm and dry—they are monitored by the local council and there is an enforcement policy. I know—certainly from people who are coming into my electorate and talking to me about their housing issues—that many of them are too scared to complain to their landlords because they think their landlords will kick them out. In Auckland where there is a real housing crisis—how anybody could not call it a crisis I do not know; it is a severe crisis—they are scared about complaining to their landlords. So we need an independent arbiter making sure that those houses are monitored and enforced. We need to heat cold houses for God’s sake. It is all very well putting insulation and everything else in it but we need to have a heating source so that those kids stay warm. And we need to make sure that the insulation is up to date—that we have 2008 insulation standards and not insulation standards that are 20 or 30 years old. When I mentioned at the beginning of my contribution this evening being able to save—SARAH DOWIE (National—Invercargill): I move That the question be now put.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 177 in the name of the Hon Dr Nick Smith to Part 1 be agreed to.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 172 in the name of Metiria Turei to Part 1 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 60New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.Noes 61New Zealand National 59; ACT New Zealand 1; United Future 1.Amendments not agreed to.Part 1 as amended agreed to.Part 2 agreed to.Schedule agreed to.Clause 1 agreed to.Clause 2 agreed to.Clause 3 agreed to.Bill to be reported with amendment presently.Taxation (Transformation: First Phase Simplification and Other Measures) BillIn CommitteeDebate resumed from 10 May.The CHAIRPERSON (Lindsay Tisch): Members we now turn to further consideration of the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. When we were debating this bill we were debating the question that Part 1 stand part. Before I call the speaker who will be Stuart Nash if he wishes to finish his 2 minutes 40 seconds I have a statement in terms of a ruling that I made when we were last debating this bill. You may recall that we had a Supplementary Order Paper in the name of Julie Anne Genter and I ruled it out of order being out of scope out of scope of what the bill is. There was some discussion—quite lengthy discussion in fact—and I said that I would come back and report to the Committee as to the rationale behind my decision.To clarify the ruling that I made: the Clerk’s Office will draft amendments for members and circulate them even if they are not in order. It will advise the member that amendments in its view are not in order. The fact that it publishes and circulates a Supplementary Order Paper does not indicate that it is in order. Ultimately it is up to the Chairperson in the Committee of the whole House to rule on the admissibility of any amendment. To be in order an amendment must be within the scope of the bill as introduced—and this is Speaker’s ruling 131/4.The Chair rules on scope by considering the amendment in light of the bill as introduced and the report-back from the select committee. An amendment that is outside the scope of the bill does not widen the scope of the debate on the bill—and that is Speaker’s ruling 132/1—nor does the debate determine the scope of the bill or the admissibility of amendments.For a Supplementary Order Paper that is outside the scope of the bill to be considered by the Committee of the whole House it can be done only by way of an instruction—and that is Standing Order 176—to the Committee by the House at the second reading.Part 1 Amendments to Income Tax Act 2007 (continued)STUART NASH (Labour—Napier): I must admit that it is difficult to stand in the middle of a Committee stage that I think we were talking about 2 weeks ago and hit it because I was really hitting my straps I remember when we pulled up stumps. If you give me about 2 minutes I will talk about what this bill is about once again.This is the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. The title is probably longer than a lot of matter in the bill. Basically it looks at bringing the tax system into the 21st century. This is about simplifying the communication process electronic signatures and sending and accepting emails instead of written notices. In the tax Acts before this if you wanted to officially communicate with the commissioner or vice versa it needed to be in writing. It was required to be in writing. Now we are talking about emails.As in all tax bills that have come through this House recently we do think this is a missed opportunity because there are some huge huge issues in our tax system at the moment that we know about: avoidance aggressive tax planning to the tune of between $1 billion to $7 billion worth of lost revenue to our economy. And here we are talking about whether we should be saying “notify” or using other small terms. What I was talking about when I was interrupted by the bell is something that I think is quite important. This is clause 59 and this amends section RM 5. It is an amendment of the overpayment on income statements [Interruption]—it is Mr O’Connor; this may affect you—in the Income Tax Act 2007. What it did say—Grant Robertson: Very interesting.STUART NASH: You are dead right Mr Robertson. It is very interesting. It is a huge piece of legislation but also a very important piece of legislation. What it used to say was: “This section applies when an income statement has been provided to a person and the result is that an amount of tax must be refunded to the person. For the purposes of this section the amount of tax must be more than $200.” As we know $200 these days hardly pays for a good night out on Ponsonby Road. What they have actually done is they have brought it into the 21st century.Let me provide a little bit of background. When a wage or salary earner—not a company but a wage or salary earner—needs an end of year assessment they are issued with or they can request what is called a personal tax summary. If the result of this personal tax summary is a refund and they can confirm the personal tax summary that refund will be issued automatically. [Bell rung] Mr Chair?The CHAIRPERSON (Lindsay Tisch): Stuart Nash.STUART NASH: Ha ha! Thank you for that vote of confidence!The CHAIRPERSON (Lindsay Tisch): Your big moment!STUART NASH: In the past or before this bill—well at this point in time if the refund is less than $200 and they do not confirm their personal tax summary then that money will be automatically released to the taxpayer—i.e. it will be put into their bank account or they will be sent a cheque after 30 days. What this bill does and I think this is most important—it is sort of tucked away but it will affect a lot of people—is it proposes to reduce the time delay and increase the threshold so credits that would be released in 15 days after a personal tax summary would be issued if the refund is less than $600. So instead of waiting for 30 days and not having to do anything if the refund is under $200 it will now be done in 15 days—15 working days so it is 3 weeks; still a bit of time—but it is $600.The reason I think this is important is that the Inland Revenue Department (IRD) actually owes New Zealanders $750 million. Not many people know that—that the IRD owes New Zealanders $750 million. A good chunk of this money is owed to people who have paid secondary tax or other withholding taxes and do not actually realise that the IRD does owe them this money. There are not many engaged—well there are a number and I must admit that awareness of the personal tax summary or the fact that there actually exists a personal tax summary is increasing. There is no doubt about that and what I will say to anyone who pays secondary tax is that I would absolutely encourage them to go to the IRD and request a personal tax summary. Even if it means that they do not do anything about it they will come up on the radar of the IRD and I would almost guarantee that if someone pays secondary tax they will be owed money by the IRD. If they do not do anything else except apply for a personal tax summary and they are owed $600 or less then the IRD will automatically either (a) send them a cheque or (b) put the money in the bank account if the IRD holds that bank account.The reason I say this is important is that what it does I think is it enables more people to become engaged and to get the money back that they require. I must say that the interesting thing about this $750 million is if a taxpayer owes the IRD money the IRD will go after them to the ends of the earth. If the IRD owes the taxpayer money then this falls off the cliff after 4 years. So if the IRD owes you money and it is 5 years since that obligation was incurred then the IRD does not have to pay that money back. In fact it does not pay that money back. I think this is wrong.We have talked to the IRD about this and asked it what it is going to do in respect of actually going as hard to give taxpayers their money back as it does chasing the money owed. It believes that this new business transformation system should make it a lot more streamlined and people should not be owed money or if they are owed money they probably will not even have to request a personal tax summary. In fact for me the ultimate is to not even have to pay secondary tax. Secondary tax at the moment is a withholding tax that people must pay because what happened in the past was if they were working two or more jobs they were underpaying their tax and at the end of the tax year they were hit with a massive bill by the IRD—something they just could not pay. It was a withholding tax. So secondary tax meant that they did not end up with a bill but what a lot of them actually have ended up with is a credit but most of them do not know.I have an incident of someone who was working for a relative of mine. These relatives were saying to this person: “Give the IRD a call. Go on.” She was very reluctant to. In the end she did and she found out that she was actually owed $800. That is not an unusual story. So to everyone watching—and I know a lot are—who pays secondary tax just go to the IRD. In fact you can go to the IRD—public service announcement here—website. As long as you have got your IRD number put it in and it takes about 5 minutes—David Bennett: How long?STUART NASH: —about 5 minutes—after you have put in your IRD number to find out whether you have got a credit or not. Until the IRD becomes a lot more proactive in giving this money back we have got to do it ourselves. I would encourage you all to do it. Or as mentioned what I would do is I would go to the IRD and I would ask for a personal tax summary. The taxpayer will then come up on the radar and if they are owed less than $600—David Bennett: Is this the best he can do?STUART NASH: —they will get it back automatically. It is very important. Mr Bennett here on this side of the Chamber is going “Oh $600 isn’t important to good hard-working Kiwis.” I believe it is and most people do.The CHAIRPERSON (Lindsay Tisch): I call Jo Hayes—stand up if you want to take a call.Joanne Hayes: I do.The CHAIRPERSON (Lindsay Tisch): You must stand up. If a member wants to take a call they must stand up and call out. I cannot second-guess whether someone wants to take a call.JOANNE HAYES (Third Whip—National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 171 in the name of the Hon Michael Woodhouse to Part 1 be agreed to.Amendments agreed to.The CHAIRPERSON (Lindsay Tisch): We now move to Julie Anne Genter’s amendment inserting new clause 45A as set out on Supplementary Order Paper 173. This amendment is out of order as it is outside the scope of the bill and I ruled on that earlier.Part 1 as amended agreed to.Part 2 Amendments to Tax Administration Act 1994GRANT ROBERTSON (Labour—Wellington Central): It is a pleasure to take a call on Part 2 of this bill.I want to focus my initial contribution on the section of the bill that deals with the communications framework and in particular clause 74. It may come as a surprise to those who follow tax legislation intimately and closely that this particular clause tended to be more like an English grammar class. Chris Bishop came into his own during this period as somebody who was educated in the 2000s when grammar was taught. I struggled because I went to school in the 1980s when they had stopped teaching grammar at all and so some of this was confusing to me but—Chris Bishop: It was a terrible Labour Government then.GRANT ROBERTSON: That is right. Well that particular Labour Government—yes Mr Bishop. But this was quite an interesting and actually quite important part of the bill. Essentially what this was about doing was trying to simplify and make clear different forms of the ways in which the Inland Revenue Department (IRD) interacts with taxpayers and trying to bring that into the modern age at the same time as defining various terms. Essentially what the bill did was to set up three tiers of interactions between the IRD and taxpayers and it then sought to define those. The Finance and Expenditure Committee did actually come to the conclusion that we needed to amend aspects of this to make absolutely clear to taxpayers the meaning of these different terms.So the three tiers that were proposed were a tier that included the terms “asking requesting or informing” and any one of the following was a means by which you can do that: “by telephone” “orally in person” “by electronic means” “in print” or “in another manner permitted by the Commissioner.”Kris Faafoi: What does that mean?GRANT ROBERTSON: Well that is right. You may well ask Mr Faafoi what it means. So we could take the example perhaps of whether or not John Key asked requested or informed Bill English that he was going to put tax cuts back on the table 3 days after Mr English had taken them off. He certainly did not notify him—which is something we will come to shortly—nor formally notify him so he possibly did ask or inform him by phone orally in person by electronic means and perhaps he texted him.Hon Clayton Cosgrove: Semaphore?GRANT ROBERTSON: He may have done that. So the lowest level of form of communication is asking requesting or informing. Then we include—David Bennett: Tell us about your tax increases.GRANT ROBERTSON: Mr Bennett was all over the detail of this when we went through it I can tell you.Then we came to “applying or notifying” by which any one of the following is an acceptable means to apply or notify: “by electronic means” “in print” or “in another manner permitted by the Commissioner.” So we have stepped up here and you cannot do it by phone and you cannot just drop into the IRD and let it know. You actually have to do it by electronic means in print or in a manner that is acceptable to the commissioner. Then the highest tier of communications is that of “formally notifying” which is to be “in print delivered personally or by registered post” but not by way of “email the internet or other electronic means.”I guess in many ways that starts to show us the limits of what we were trying to do here in the Committee. So it is a recognition that most people are not going to fax through their communications. Mr Cosgrove might still fax people as he does from time to time but actually most people have moved on from that and frankly most people have moved on from using the post to communicate with the IRD. So these clauses do have a serious element which is that it is time to bring the IRD into the 21st century and have email as an acceptable form of communication.What we learnt in the committee was that from a tax accountant’s point of view for those people who have regular interaction with the tax system these terms need to have specific meaning within specific Acts. So the Tax Administration Act is one of those but the Income Tax Act is one as well. And we had submitters come to the committee and tell us that unless those terms are notified this could provide some difficulty. They felt that the three tiers were not sufficiently defined within each of those Acts. So in a sort of belt and braces approach we now by the amendment of the committee have decided that we will define each of those terms in each place that it appears in taxation legislation. As I say you might think that this is not an important thing but if people fail to comply with what the IRD wants from them there are serious penalties. If they do not know for example that notifying cannot take place by telephone then they may find themselves in breach of various things. So it is actually an important thing to make clear to taxpayers that the way that they communicate with the Inland Revenue Department is confined—[Bell rung] Mr Chair?The CHAIRPERSON (Lindsay Tisch): Grant Robertson.GRANT ROBERTSON: I tell you there is more to come on this. So this I think is actually an important part of it. The—Kris Faafoi: This is the soundtrack.GRANT ROBERTSON: That is right. This is only tier one notification I can tell you. We have got more coming here.Interestingly the IRD itself was very keen to tell us that it was trying to put emails on the same footing as paper letters delivered by post and I think as I say for most people that that is important. However its highest level—the formal notification—is still done by post and not electronically. One day perhaps that will change.There was an element of futureproofing so there is some ability for the commissioner to be able to say that as new technologies arise and as new forms of communication occur they can be adopted into the practices of the IRD without necessarily needing to change the legislation every single time that occurs.So that is an advance. There was a bit of confusion I have to say between the officials our expert adviser the submitters and ourselves about the exact meaning of various terms. But under clause 74 and related clauses I do believe that we have now found our way to a position where people will be able to understand what is required of them and certainly it is now possible to use electronic means for at least the first two tiers of communication between the IRD and others.Hon Clayton Cosgrove: Brilliant.GRANT ROBERTSON: Yes and it is an advance. It is to quote from the title of the bill transformational because that is the standard this Government has for transformation—the meaning of the word “notify”. We will come back in a later debate to the title of this bill and I think this is the point at which we must acknowledge the radical transformation of the definitions of the words “notify” “inform” “ask” and “request”. So well done I say to the Government—radical agenda there! That will turbocharge the economy for you right there!The other point I wanted to make was related to this and that concerns the use of electronic signatures which have previously not been allowed but are now allowed under this legislation. There was some concern about the veracity of them and about how they could be stored and so on but actually again this is the modern world. An electronic signature is your own signature. In a whole lot of walks of life people use electronic signatures where they have obligations under the law and there is no reason why the Inland Revenue Department cannot also be in a position to deal with that also.The other matter—which I may not get to finish in this call but I will certainly happily take up another call—Hon Clayton Cosgrove: Have another one.GRANT ROBERTSON: My colleague Clayton Cosgrove will want to talk about this because it was a matter that he was seized of when the committee considered it. It is the question of co-location of offices.Chris Bishop: Oh this is a cracker.GRANT ROBERTSON: I know Mr Bishop enjoyed these discussions as well. So the IRD—as are now a number of Government departments—is co-located with other Government agencies. In Christchurch for instance the Ministry of Social Development is looking at being in with the IRD because they are the people who are going to be in the Christchurch central business district because Gerry Brownlee has forced all the Government agencies in there. So they are going to be working together and there is an issue about the secrecy requirements on IRD staff versus the secrecy requirements on other Government agencies. We had a very long and in-depth discussion in the committee about how to manage this. And in the end what the committee came down on the side of was to say that IRD employees are not considered to have breached secrecy conditions “if they did not intend the breach and took the care reasonable for place and conditions to prevent it.” That notion of reasonable care was what the committee inserted into the bill.There was considerable debate about this. Obviously if you have knowingly contravened the Act and if you have deliberately gone out and broken secrecy rules then there are punishments that should follow that. But where you are sitting in a co-located environment and you are having a conversation with one of your IRD colleagues about a taxpayer or a tax matter—which you are able to do—and you are both aware of your obligations if there is a staff member of another Government agency within earshot to what extent is it the responsibility of the IRD staff member to not have those kinds of conversations? You know the nature of modern work spaces now with open-plan offices means that the risk of this increases and in fact all of the co-located ministries and so on are starting to work in those environments.On the committee we were concerned because the secrecy of taxpayer information is something we should all take seriously and it is actually more often than not a higher obligation than that of other Government agencies. So we were concerned to make sure that we had adequate protections in place around both the understanding that taxpayers would have of how their information would be treated—Hon CLAYTON COSGROVE (Labour):I want to pick up where Mr Robertson left off in his eloquent address and analysis of this bill—but in all seriousness the point that he made should be made again for the record of the Committee.The Finance and Expenditure Committee did take quite a bit of time to work through a scenario that essentially some of us felt at the time was providing less of an incentive if you like to comply with the law—that is the penalty was less than it ordinarily should have been.Those of us who were around in Parliament back a wee way can remember inheriting in 1999 an Inland Revenue Department (IRD) that had significant difficulties.John Perham I think—if I recall his name correctly—was charged as the Commissioner of Inland Revenue at the time with trying to rectify many of those difficulties where there had been in the 1990s significant breaches of information. I do not think the IRD at that time had electronic fingerprinting if you like—or footprinting as it was—in terms of traceability of personnel who were accessing information. I know that the then member Rodney Hide along with some of his cohort was quite vigorous in illustrating some of the problems that had occurred and as I recall some prosecutions came out of that.It did test the select committee and we tested officials in terms of whether there were enough safeguards around these issues to protect taxpayer information.Regarding tax systems as I have said in other debates there are a number of principles: transparency simplicity and community confidence in them—but also that information is incredibly secure.One of the things that I think—I am reflecting on Mr Robertson’s analysis of the various terms in clause 74 and the huge precise definitions around those terms. Some of us struggle with the fact that the IRD and its Minister have taken great care over those terms—which is fair enough—but it seems there was a lesser duty of care around those other arrangements in respect of co-location. However we have given the analysis and the recommendations the benefit of the doubt.I think it is incumbent upon the IRD—to put on the record of this Committee—to take extra care.If you are going to be co-located and there is even the slightest chance of taxpayer information being inadvertently shared—and I make the point that I believe that since the IRD has cleaned its act up from the 1990s the IRD staff are pretty well exemplary in their conduct. They take a great deal of care in terms of the security of taxpayer information. However if you do move into a co-location scenario things can happen. I like Mr Robertson—and I am sure the Minister would share the view—do not believe that these things are intentional but there is a tenet of law that says that the greater the penalty the more carepeople are likely to take because the circumstances they may find themselves in if they are prosecuted are far more heavy-duty than they may ordinarily be. That is a basic principle. So I think that as we go through this we would be grateful for some assurances from the Minister around taxpayer security given the co-location issues and I think it would be important to get that on the record of the House.I think the bill is—I would not call it transformational but certainly it updates many of the IRD systems. It is linked to the so-called Business Transformation programme and I would be remiss if I did not ask the Minister while we have got his attention whether he could perhaps give us a quick brief on the expenditures in—to be fair to him—the mess that he inherited with the Business Transformation programme which I think we are going from what was it $1.6 billion—Grant Robertson: $1.9 billion.Hon CLAYTON COSGROVE: —$1.9 billion and then it went down again and then it went up again. I am mindful of Novopay—without getting into that—and I am mindful of the difficulties the Police are having as espoused today with the PricewaterhouseCoopers issues and their payroll systems. We do have a track record in this Parliament I have to say on the National side not on the Labour side if you go right back to INCIS of IT programmes just going right off the rails.I would be grateful if the Minister could give us a continued assurance that we are not going to have money spent like water because there is a large amount of discretion provided to the department—it is the expert it hires the contractors and it signs the contracts not the Minister. With that discretion comes a huge amount of responsibility and we would like to ensure that the dollars are accounted for.I do not know whether I can enlarge on the eloquence of Mr Robertson especially in respect of clause 74 but at this point I like others—subject to those assurances from the Minister—support the bill.STUART NASH (Labour—Napier): I would also like to elaborate on a couple of things that Mr Robertson has spoken about. As mentioned electronic signatures—we have talked at length in Part 1 of this bill on how there is a move from requiring a written notice to the acceptability of an email or other electronic form of transaction. The reason for this is that it does bring it into the 21st century and that is important. But there is a very important rider on that and this is where electronic signatures come into play because if an electronic signature was not acceptable what it would in fact do is it would negate everything else in the bill in terms of an acceptability of the commissioner receiving the document on behalf of the taxpayer. So it is an important thing; it is an important measure.I would say though that it does say in new section 13B(3) inserted by clause 73 that “When the Commissioner receives a document bearing the electronic signature of a person unless there are reasonable grounds to suppose otherwise—(a) the document is treated as signed by the person;”. I am not too sure what “reasonable grounds to suppose otherwise” might be. It may be for example that it is so out of character or that it is a piece of communication that is not part of the correspondence that is going on at that point in time. I think it would be quite good to clarify that because “reasonable grounds”—it is the sort of “reasonable man” test in law. But what does define reasonable grounds for accepting or not? I suppose the one question I would have is that what I would not want to see is a taxpayer and the commissioner in court because the commissioner has said “Well I had reasonable grounds for not accepting this signature” and the taxpayer has said: “Well it actually was me.” That is just my one concern—the definition around those reasonable grounds.The other thing is under clauses 71 83 and 87—from 2001-02—this is part of the tax administration area to make it easier for taxpayers to actually get what they need. This is amendments being made to the Tax Administration Act to allow the Commissioner of Inland Revenue to provide a special tax code directly to the Ministry of Social Development to help people receiving New Zealand superannuation or the veterans pension to meet their income tax obligations. What it does is it reduces compliance costs it makes it a lot easier and it requires a whole lot less obligation on behalf of the superannuitant or the veteran.I would also like to talk very briefly about something that Mr Cosgrove mentioned and something Mr Robertson alluded to and this is about disclosure of information. Crucial to this is the intention test. I think it is the only test we can have and if it is proved that someone has intentionally disclosed private information then that person under several different Acts and I think also under their employment contract can have their employment terminated immediately. But the intention test is very hard to prove and a classic case of this is actually under the Income Tax Act where whether or not the sale of a property is subject to income tax is based around the intention of the owner of that property when they bought it—whether the intent was to make a capital gain or to buy it for rental yield. The interesting thing is that the Inland Revenue Department (IRD) has only ever successfully prosecuted one person for not complying with the Income Tax Act due to a misallocation of profits on there. We have to just be sure that the intention test is applied correctly.What I would hope and what I am assuming is going to happen is that the IRD will actually issue a briefing note if not hold briefings with all its staff around what this action means. I trust the IRD I think it does a fantastic job and I would never question the integrity of its staff in any way shape or form but what I would like to see and what I would like to know is that the IRD is taking this as seriously as the select committee took it and as a consequence of that it does make very very clear to its staff the rules and regulations around this. I have a suspicion that they know this anyway but we do need to ensure that there is clarity because the last thing we would want to do is have someone divulge information unintentionally but break the law and then have to be dragged through some sort of employment court or employment dispute because the definition of intention is incorrect.But on that note we do understand that what is happening with Government departments is very important—they are working closer together and we do believe this needs to happen. Whether this is out of necessity—i.e. in Christchurch when different departments had to come together and co-locate or whether it is just out of greater efficiency—The CHAIRPERSON (Lindsay Tisch): Sorry to interrupt the honourable member but the time has come for me to leave the Chair for the dinner break. This debate is interrupted and I shall resume the Chair at 7.30 p.m.Sitting suspended from 6 p.m. to 7.30 p.m.FLETCHER TABUTEAU (NZ First): Thank you for the opportunity Mr Chairman. I just want to touch on a few of the contributions that have been made this evening and acknowledge the kinds of issues around the electronic signature problem that the Inland Revenue Department (IRD) has been working through over the years. And the reality is in modern practice—and we look to most of our banks at the moment—we see there is very much a safe and appropriate mechanism for the electronic signature and it is taking a while but we have got there. I think it is absolutely appropriate which is part of the reason why New Zealand First is supporting the legislation.But what I did want to touch on in particular because it is an issue—and it is still perhaps for me and for New Zealand First—that needs further exploration and some commitment from the Minister one would hope is the co-location and secrecy issue that was raised in terms of discussions within the Finance and Expenditure Committee.So firstly let me put it into points. The conversation started with the fact that the IRD was going to have to share locations in terms of physical office space with different Government departments and that would raise some privacy and secrecy issues. I just wanted to note though that the IRD considers that no amount of training best-practice guidelines or adopted behaviour is likely to adequately address the substantial risk of the IRD employees inadvertently disclosing taxpayer information to other Government employees in a co-location environment. So what we have here is the ministry itself acknowledging that this is quite a huge problem and there does not seem to be even with the best of intent the ability to mitigate—well maybe mitigate is a possibility but to eliminate these privacy issues is a real concern for the ministry itself and the staff involved.So in the select committee we had very in-depth conversations about what that would involve. I note Mr Cosgrove made a contribution about that earlier in the evening. I would like to support his words because it was a contentious issue. What we have done within this legislation is we have said: “Well actually let’s acknowledge that this is a possibility. Let’s acknowledge that despite the best efforts of ministry staff best practice implementation and procedures we will have issue.” So that is not a debate. I think that is perhaps the primary concern for New Zealand First. There will be an issue. There is no debate on that. It is how we get around the problem for individual staff.So with great reluctance as part of that committee my contribution was to support and say that yes let us come up with some additional safeguards for employees if it was proven that they were not deliberately trying to disclose private information—that that was unfair and unreasonable to take them to court proceedings if that was established in the first instance. But as that conversation was fleshed out actually we decided that is what a court is there for. So the court is there to establish the intent and the degree of the intent and if there was intent then the court would come down hard and appropriately on those individuals. Conversely if there was no intent then the court would establish that and the argument would be that well clearly there was no intent and it was a true mistake on behalf of the employee—“Why has it come to us? Let us dismiss it for the accident it was.” And yet we have more legislation around this. I think it is quite an issue that needs further exploration and consideration from the Minister.I think in terms of cost saving we may have gone a bridge too far; for the expediency around a few dollars we are compromising the privacy of New Zealand taxpayers. It is an important issue that needs I think more consideration from the Minister and the Government. But in the main when we consider that this legislation is about updating the technology and the practices available to the ministry I think we can support it.GRANT ROBERTSON (Labour—Wellington Central): You were spoilt for choice. Thank you Mr Chair. I actually do want to pick up the very point that Fletcher Tabuteau was discussing and that is the question of co-location and perhaps go back to the beginning because I think there is some confusion here around the question of a deliberate breach of secrecy by a staff member and an inadvertent breach. Currently the Act applies only where someone knowingly acts in contravention of section 81 of the Tax Administration Act which is about disclosing information that they should not. Should a breach occur there is a legal process to determine as Mr Tabuteau said whether the breach was unintended or made knowingly and then appropriate sanctions apply.When we were discussing this in the select committee the position we reached was that an employee could be judged to have knowingly contravened section 81 where the breach was inadvertent but it occurred where there was a real risk inherent in the co-located environment. As it says in our report: “For example an IRD employee might be aware of the risk that a co-located employee could overhear information but not be able to avoid that possibility.” So we acknowledge that but obviously we have an obligation to ensure that that information is held in appropriate secrecy. So that was the discussion we were having: do we need a threat of a sanction to emphasise the point that this is a really important area of confidentiality and there is an increased risk with co-located departments?At one point we almost discussed whether we needed the clause at all because actually at the moment the obligations on Inland Revenue Department (IRD) staff are quite clear; they know what they are and they sign an enhanced secrecy agreement above and beyond what almost any other public servant would do. But the co-location issue means that there is now a set of increased risks around those employees. We did on balance decide to include the concept of taking reasonable care in that co-located environment. Quite clearly for the IRD employees who have already signed their secrecy agreements they are going to be taking care but this is a clause that at least acknowledges in some form or other that reasonable care would be required. Again to quote the most excellent report of the committee: “Being compelled to take reasonable care would motivate employees to proactively manage the risk associated with a co-located environment. It would also provide an additional safeguard against reckless and negligent behaviour.”I do not want people to gain the impression that we think that the IRD staff are going around engaging in reckless and negligent behaviour but that the risk of inadvertently giving information out needs to be considered. I do think it would be useful for the Minister whom I believe may take a call to just address the way in which the IRD is going to go about taking this into account. This applies to the wider Public Service in my view as well—that although we are all looking for efficiencies that come from public sector agencies being co-located we know in the regions of New Zealand there used to be large Public Service agencies in—I do not know a city like Wanganui until the Government tore them out and took them back to Palmerston North—places like Wanganui where Public Service agencies come together as a matter of efficiency and ease for the public to use them where there is a lot of information flowing around. We have been encouraging through legislation—including in this legislation in fact—public sector departments to share information where relevant.So we have got on one hand a level of encouragement but on the other the risk that the information particularly around tax could inadvertently be shared. I know that those who are listening in on this might be saying: “Well why is this such a controversial issue?”. It is because it is about sensitive taxpayer information. We know that every time there is a privacy breach—every time someone leaves a briefcase on Lambton Quay—this causes upset. Well here we are with people day in day out needing to talk about taxpayer information but working now in an environment where people who do not have the same secrecy provisions in their contracts will be.So we are really just looking for an assurance from the Minister that it is understood what has happened here. The select committee grappled with it and we came up with what we thought was a decent solution which was to include a higher duty of care but not try to effectively criminalise people just going about their daily jobs. So I hope the Minister understands what the committee has tried to do here. We certainly support the co-location of departments but when it is the IRD we do absolutely want to make sure that New Zealand taxpayers’ privacy is protected. Given that you have not rung the bell Mr Chair although you are just about to do that—Hon MICHAEL WOODHOUSE (Minister of Revenue): I just want to address the three or four very important issues that have been raised either side of the dinner break. But before I do can I thank the members of the Finance and Expenditure Committee for their consideration of this bill. Tax bills tend to be reasonably dry things but I think the select committee has applied itself diligently to some issues that have been raised both in the select committee and in the Committee of the whole House.I will start with the point that Mr Robertson has addressed in respect of co-location. I want to thank the committee specifically for its diligent consideration of this issue because I think we all understood what was intended. Firstly co-location is not only about efficiency; actually what we will be seeing—and indeed the Inland Revenue Department (IRD) has the responsibility for the administration of things like the student loans scheme Working for Families and child support—is a significant overlap with the Ministry of Social Development and its roles and functions. So co-location might have efficiency in at least one office that it occurs in now but it also has the potential to improve the quality of the service that we can provide to the New Zealand taxpayer. But I think that the committee was right to look carefully at clause 117 in order to ensure that we have the right balance between ensuring that due diligence takes place because there is a higher standard of care that is required to maintain the secrecy of people’s tax records and that inadvertent breaches do not give rise to an unnecessary punishment. I think the committee landed that clause in exactly the right place but the proof of the pudding will be in the eating.The effectiveness of the amendment that the committee has made will be in the manner in which the commissioner gives effect to it. I am confident that she understands and will use her best endeavours to protect the integrity of the tax system bearing in mind that the exception applies only to unintentional breaches—no intentional breach will be given the protection of this clause. I think that was understood by the committee but I think that the question was more about the margins and what effectively constitutes “reckless” or “careless” and not really about understanding or applying oneself to that requirement as an IRD employee. I am confident having spoken to many many IRD staff around the country that they take their secrecy obligations very very seriously. I have yet to find anybody who is flippant about that. In fact if anything Ministers have found section 81 a very very strong black box and rightly so. However I do note that later in the year as part of the tax programme we will be reviewing the Tax Administration Act and so this is a nice sort of segue into a broader review and the questions of the privacy of information are going to be foremost in that.Can I turn now to the issue of electronic signatures because—Chris Bishop: Oh please do.Hon MICHAEL WOODHOUSE: OK I will. Mr Nash made a very good point before dinner and it has been followed up by Messrs Tabuteau and Robertson. I think he asked the question about what would constitute “reasonable grounds” for the receipt of an electronic signature but he then went on to quote clause 74. That was inadvertent I am sure but clause 74 actually works on out-bound communications so I want to touch on both of those things.At the moment we currently have an arrangement whereby a document might be deemed to be sent if it is sent to the last-known physical address even if that person has moved on. We certainly need to update that because the whole essence of this is to give effect to a much more modern tax administration system. I think it would be enough simply to say that if somebody has communicated with the IRD by email then there are reasonable grounds to presume that the commissioner can then communicate back. In fact registering with myIR requires an email address to be put on there. Once the identity of the registered person is verified then I think it would be reasonable grounds to assume that the commissioner can communicate with the taxpayer via that email address. Even if the email address changes the same thing would apply with the last-known physical address: that it would be deemed to have been sent.It is clause 73 that deals with the issue that Mr Nash was raising in respect of what would constitute reasonable grounds for the use of electronic signatures in the receipt of communications from it. I think the same principle would apply but the question then becomes one of identity—verification that the communication is from the source that it claims to be—because it is not difficult actually to purport to be someone else in an electronic world. There is I think an allowance for the IRD to place a reasonable reliance on the use of electronic signatures because there is discretion obviously for a signature not to be accepted if the IRD has reasonable grounds to suppose otherwise; that might be inconsistency of information such as having a separate communication from someone who was also purporting to be that taxpayer from a different electronic source. But in the absence of a “reasonable grounds” test the IRD would be prevented from actually acting on not accepting the signature even though it had good grounds to suspect that it was from a fraudulent source—perhaps changing a bank account for example and then asking for a refund to be paid into a different bank account. The IRD has got to be very diligent in ensuring that it is on top of that. I think “reasonable grounds” is a well understood nomenclature in legal jurisprudence so I am confident that the tests that will be applied will be effective ones.I want to just finish by giving the Committee a brief commentary on an issue that Clayton Cosgrove raised before dinner and that was on the issue of the update on Business Transformation. The essence of taxpayer security the reliance on electronic signatures and the things that this bill will give effect to are all predicated on a business transformation project the like of which I think the Government has not seen at all. The number was $1.5 billion; it is now down thanks to well excellent efforts by the Minister of course backed up by the IRD. But actually the fact that we are not building a bespoke system has I think a significant value-add and I am satisfied that although this is a project that is not actually just about technology this is about fundamentally changing the way the IRD engages with the many millions of taxpayers around the country—that real lightbulb moment where we are building our tax system around the needs of the taxpayer not the other way around. I think that is a significant opportunity to materially improve the experience of interacting with the IRD. But it is a big project. It is risky. Mention was made by Mr Cosgrove of going all the way back to the 1990s and INCIS and Novopay more recently but there are successes in Government IT projects—the ones you never hear about. Certainly the department of immigration’s online system version 2015 has gone extremely well. It is under budget and it was just on time.Clare Curran: Why don’t we hear about them then?Hon MICHAEL WOODHOUSE: We do not hear about them Ms Curran because they are good news—they are good news—and of course good news does not make the front page of the Dominion Post I have to say; bad news definitely will and Novopay is a good example of that. But it is also true to say that Novopay was a good learning experience I think in making sure that we do not sign agreements before we know that the vendor is ready to roll.The CHAIRPERSON (Hon Chester Borrows): Hipkins would agree.Hon MICHAEL WOODHOUSE: Mr Hipkins would certainly agree with that I am sure. But I am satisfied actually that I have seen the whites of the eyes of the IT managers at the IRD—their blood pressure is normal; I test it every fortnight—and although we are still some months away from phase 1 the GST roll-out I am confident that the Business Transformation project and the IT platform that will underpin these changes are well on track for a successful implementation.The CHAIRPERSON (Hon Chester Borrows): Rev. Dr David Clark.Dr DAVID CLARK (Labour—Dunedin North): Thank you Mr Chair. It is very kind of you to use my extended title. The Minister of Revenue has raised the issue of the rebuild as many members before him have and some of my questions that I would like some reassurance from the Minister on relate precisely to that same project. I wish to discuss—and I do not think anyone in the debate has yet raised these—clauses 59 and 116 which specifically point to changes in thresholds. Clause 59 amends the repayment threshold for overpayment on income statements. They relate to the personal tax summary.The CHAIRPERSON (Hon Chester Borrows): Are they related to Part 2?Dr DAVID CLARK: Yes absolutely Mr Chair—clause 116 is absolutely in Part 2. The other clause is in Part 1 but it is the same general principle that is in both parts of the bill and relates to the thresholds. The basic issue for those who are at home or new to the debate is that if your personal tax summary shows that you are owed a refund it can be automatically returned to you as a taxpayer. There is a threshold which is currently $200. So if the refund is less than $200 and you do not confirm it through a personal tax summary interaction with the department it is automatically returned to you after 300 days. If it is over $200 then you have to go through the process.The proposal in those two clauses together amounts to changing that threshold to $600 and making the wait just 15 days. So if you are entitled to a refund you get it within 15 days which seems to me broadly a sensible step. It is about reducing bureaucracy. It is about saying if it is below a certain threshold we should not have lots of bureaucrats batting backwards and forwards. It would be very odd given the competence historically of the Inland Revenue Department (IRD) for that number to be wrong. “We should just get on and do it” is the basic premise I take it behind this change.My one concern is whether the IRD can deliver on this given the significant changes that are going on with the business transformation package that is before us which the Minister has just spoken to because we have had situations in this House in the past couple of years when the Minister—and the previous Minister is the one who has had to do this—has brought back child support legislation that simply has not been able to be implemented when thresholds have changed or when a formula has changed. We have passed a law through the Parliament which is one thing to say: “We’re going to change this to what we think is more sensible as a Parliament.” It is then voted upon a change is made that looks sensible on paper and then the Government has been in the distinctly embarrassing situation of having to come back and reverse out those changes because the IRD had not been able to implement them through the computer system. It has happened more than once.What I would like to know—and I believe it was not discussed at the Finance and Expenditure Committee—is whether the Minister has sought assurances that this change can be simply made and whether it can be delivered in the time frame which in the proposed amendment in the original commentary was 1 April this year. Clearly that is no longer the schedule and I would be interested in the Minister letting us know whether this is in fact still the schedule for delivery—whether it is a retrospective piece of legislation. I mean it is a detail but this is what we are here to discuss in respect of the committee changes. This is the kind of thing that could trip the Government up and see the whole legislation coming back to the House. If the Minister has not got that assurance I am prepared to move an amendment that would either remove that or push out the date for implementation to a time when the Minister thinks he could safely ensure that change as a part of the rebuild without the embarrassment of having to bring it back to the House again as has befallen the Government previously. The Minister I see has had some advice so I will look forward to his contribution.I do not wish to prolong my contribution much further only to say that if that is not deliverable as I have mentioned already to the Minister I would be happy to move an amendment that either changes the date so it can be safely implemented or if that is not necessary I am sure the Minister will explain to us shortly. Thank you.GRANT ROBERTSON (Labour—Wellington Central): Mr Chairperson you are catching the eye of the Minister of Revenue there to see whether he wanted to respond to those questions—I am sure he will in time. I just have a couple of smaller minor matters in Part 2 of the Taxation (Transformation: First Phase Simplification and Other Measures) Bill to raise that have not been raised yet because the Government members of the Committee are assiduously promoting this piece of legislation that has come before the House which they are obviously so proud to get up and talk about.I want to talk about one matter that is actually a very positive and necessary development for a reasonably small group of people but one for whom this particular clause matters and that is around the question of special tax codes. This did occupy a little bit of time for the Finance and Expenditure Committee when we were working on it. Essentially amendments are being made to the Tax Administration Act to allow the Commissioner of Inland Revenue to provide special tax code certificates directly to the Ministry of Social Development (MSD) to help people receiving New Zealand superannuation or veterans pensions to meet their income tax obligations. These amendments are basically about reducing compliance costs imposed on superannuitants or veterans pensions recipients in providing the certificate to the MSD and removing any delay in the application of the correct tax reduction rate.It is quite a specific change but one that affects a group of people for whom the amount of income they are getting outside of their pension source particularly is often quite small and there have been unnecessary delays in the relationship between the Inland Revenue Department (IRD) and MSD in terms of providing the information that is required. So the amendments are going to enable the commissioner to provide a special tax code certificate directly to MSD when the superannuitant or veterans pension recipient has applied for that certificate and advised MSD they want the certificate to apply to their superannuation income or veterans pension income. Many electorate MPs in the House will have had the experience of someone coming to their office to talk about the issues that arise between making choices about these issues and how quickly you are able to access the money. So I think this will be a welcome change for those people.There was one issue where it appeared in the original drafting we were limiting this to being in respect of having only one employer. If someone had more than one employer that may have been ruled out so a change has been made within new clause 84 of the bill to make sure the reference could be to income from one or more employers. That small oversight was one that would have led to more people coming back to Mr Woodhouse asking him to make it easier for them to be able to work between MSD and IRD. So I do want to actually congratulate the Government on that. It is a matter that has been of concern to those who receive veterans pensions particularly that there was unnecessary bureaucratic delay and unnecessary double-handling essentially of the issues of the income they receive. I thank the Minister and the officials for bringing that before the Committee.The only other matter I wanted to raise in Part 2 relates to biometric information and I do think this is one of those clauses we will come back to in time—we all know the use of biometric information is increasing all over the world. Every time we got to an airport every time we enter all kinds of different buildings now biometric information is used. The issue here was around the disclosure of biometric information and potentially the illegal disclosure of biometric information under the now famous section 81 of the Tax Administration Act. What the previous clause 117(5) of this bill did was authorise the disclosure of taxpayer voice biometric information to an officer or employee of a public sector agency. What the amendment the committee proposed did was specify that that data could be released only with the taxpayer’s consent and only for the purpose of verifying the identity of the client.I know as a lot of taxpayers are doing more of their interactions with the IRD online and more of their interactions over the phone that there is an increasing concern about what happens to that data and what happens to that information particularly in the days of identity theft and all those sorts of things—biometric voice data is now very significant in the interactions that you have. The committee again not wanting to get in the way of progress but wanting to continually assure ourselves that we are putting the right rules around the use of this new information felt that this was an additional safeguard that we could put in. The Minister of Revenue will be delighted to know that he will now be notified when biometric information is shared. [Bell rung] Mr Chair?The CHAIRPERSON (Hon Chester Borrows): Grant Robertson.GRANT ROBERTSON: Just briefly the Minister will be notified now when the information is shared—The CHAIRPERSON (Hon Chester Borrows): I am sorry to interrupt the member. I should not have given him the call because he has had four calls on this part and his time has expired.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.Dr DAVID CLARK (Labour—Dunedin North): I do want to press on the previous point that I was making because I have also perused a bit further and I have got further concerns about whether this will be able to be implemented. I am going to cover a bit that has broadly been covered so far in the debate but from a different angle. It is in Part 2—quite rightly—and it is clause 71. We are talking here about software packages that are accepted and able to be used. I go back again to the ability of the Inland Revenue Department to work with these packages and whether this will indeed be able to be implemented.The point I did not make perhaps strongly enough in my previous contribution is about this particular change that is going on at the Inland Revenue Department which the Minister spoke so eloquently about—in fact about his own involvement in bringing the figures down from $1.5 billion to $1 billion. I would be interested to hear how he did that—whether he licked his finger and held it into a stronger breeze or quite how he got to the $1 billion figure because it is a fairly round number. That aside—no perhaps the Minister would like to address that. Part of that change is actually about bringing that computer system into the 21st century.The current system was designed and implemented in about 1993. That is 10 years at least before Facebook came on the scene. It is about the time that Excel spreadsheets were being invented and used. Certainly things like Twitter and all kinds of other things that we use as MPs in our daily correspondence with constituents were not even dreamt of. The existing system we have known has been a legacy system that has not been able to deliver the modern tax system we need.The Prime Minister said—I think it was in 2012; it was certainly on Valentine’s Day because I described it as a Valentine’s Day promise at the time when I was the tax spokesperson for the Labour Party—that he would be horrified to think that policy was being held back because we had a computer system to deliver our taxes that was out of date. We now know as I said in my previous contribution that in fact some proposed tax changes have had to come back to this House because they could not be delivered by the existing tax system. Again here we have some more complex interaction involving software packages. I seek assurances from the Minister that he is confident these can be delivered.In my previous contribution I talked about the changes in thresholds and the date of delivery being 1 April. Some at home may find it ironic that that is the date that is being aimed for by the tax department to deliver changes it has previously struggled to deliver. I ask the Minister whether he has sought assurances that these changes can be put in place without this legislation having to come back to the Parliament to be reversed out again—and of course we know that has an associated cost.The cost of running this Parliament is well over $1 million I think for every bill that goes through. I hope I am right in that. It is a figure I looked up a long time ago. I was certainly surprised at all of the departmental costs that go into it—the staff the MPs’ salaries; the whole works of Parliament. Democracy is an expensive thing. What we do not want is duplication. We do not want to duplicate those costs as they go through. The Minister looks like he is ready to address the question.Hon Michael Woodhouse: I will at a later stage.Dr DAVID CLARK: He will at a later stage he says. Well I think the Minister ought to jump to his feet soon because the people who are following this debate will want an assurance that the Minister is concerned about whether this can be delivered and is not being frivolous with taxpayers’ money to simply ram a political point through and that the system should be more accountable should be quicker and should be less bureaucratic. That political point has been made in this House before and we have all carried the cost as the legislation has come back and we have had to reverse it out. Taxpayers at home have had to bear the cost of that. I think the Minister owes those taxpayers an assurance that the same thing is not going to happen again with this bill.The question was put that the amendment set out on Supplementary Order Paper 171 in the name of the Hon Michael Woodhouse to Part 2 be agreed to.Amendment agreed to.Part 2 as amended agreed to.Part 3 Amendments to other enactmentsGRANT ROBERTSON (Labour—Wellington Central): This is the first go on this part so we will make sure we keep counting this time. I do not actually have many things to raise in Part 3 of the bill but I do want to discuss the clauses relating to KiwiSaver and in particular clauses 205 to 211 which relate to minors—that is younger people as opposed to those down coalmines—opting out of the KiwiSaver scheme. The bill proposes a new provision that would allow minors who have been incorrectly enrolled into KiwiSaver to opt out before their 19th birthday. This would as the officials told us provide some protection to minors who may not know they have been enrolled and want to exit the scheme. Members who opt out of KiwiSaver under this new provision will have the contributions they have made returned to them their Government contributions will be returned to the Crown and their compulsory employer contributions will be returned to their employer.Members of the committee asked officials how widespread this problem was because we did find it a little curious that we were coming to Parliament to debate perhaps this rush of young people being enrolled in KiwiSaver by parents over-eager to get them in when they genuinely did not want to be or felt it had happened in an incorrect manner. Officials assured us this was not an enormously widespread problem but there was a need to provide a provision for KiwiSaver members to do that. So new section 59CB inserted by clause 210 will allow members who have been incorrectly enrolled in KiwiSaver when they were minors to opt out up until their 19th birthday. They have to meet these criteria: they are aged under 16 and they have the consent of one of their guardians or they are acting under their own authority between 17 and 19 years of age.I really do want to make a couple of points here. The first is that I do not think it is desirable to be promoting in any way the withdrawal from KiwiSaver of people who have been enrolled under the age of 18. The Government has withdrawn the kick-start payment which was a very attractive reason for a lot of people to be enrolled before they reached the age of 18. I think that is a pity and a shame and I think it undermines some of the improvements to the savings culture that have been developed as KiwiSaver has gone on. But we do accept that there may be situations where people feel the need to do this. I think it is important to make that point.I am still a little bewildered about the extent of this and why it has come to the Committee in this way. Minors are only able to join KiwiSaver by directly contracting with a KiwiSaver provider obviously as they will not necessarily have an employer and the providers have the ability to receive and review parental consent. That all should actually be happening. This is to try to cover a situation where for some reason a provider has decided that it is just going to accept someone coming in as a minor and signing up for KiwiSaver. The officials eventually said to us—and they say it in the commentary on the bill—“To date Inland Revenue has not received any complaints from minors who have been incorrectly enrolled into KiwiSaver through their employers.” That would be none enrolled through their employers.So I think the extent of this problem is very limited but I guess it is a good thing to ensure that people under the age of 18 particularly are not exploited. The reason the clause goes up to 19 years of age which we did discuss is to give time for KiwiSaver members once they have reached 18 years of age and are in a position to be advocating on their own behalf to be able to get out of the scheme should they wish to.As I say it is not a clause that I think we would like to see used very often but it is conceivable people will find their way through either a rogue KiwiSaver scheme a rogue parent or a rogue employer—although there are not any who have done that. It would seem an odd clause but I thought it was worth noting that it is now possible under this section of the bill.When the bill came before the Finance and Expenditure Committee we did consider that the wording of the bill appeared to treat an automatic enrolment as a mistake and only if there was a failure to meet all of those criteria that I mentioned before rather than one of them and so the committee altered the bill under clause 207 to ensure that if any of those criteria were failed then the person who had been incorrectly enrolled had the ability to withdraw from the scheme. Unless the Minister of Revenue wants to clarify the extent of the thousands of young people writing to him with deep concern about their automatic enrolment in KiwiSaver we are happy to support the clause.Dr DAVID CLARK (Labour—Dunedin North): I wish to disagree with the previous speaker a little. I think he may be understating the potential of this problem. The Inland Revenue Department may in fact be trying to cut off at the pass a serious concern about minors wanting to withdraw from the scheme. I was not on the Finance and Expenditure Committee so I will defer to those who have wider knowledge but my concern arises from the fact that in the last Budget the Government cut the KiwiSaver kick-start.The terms of the KiwiSaver scheme have changed. In Dunedin my home town I know that as a result of those changes 14000—14000—young New Zealanders probably first-time savers the majority of them will have missed out on that kick-start payment. If someone signed them up and they thought they were going to get that they may well have felt aggrieved and may wish to remove themselves from the scheme.Rt Hon Winston Peters: How many thousand?Dr DAVID CLARK: 14000.Rt Hon Winston Peters: That’s unbelievable.Dr DAVID CLARK: It is unbelievable.Rt Hon Winston Peters: Doesn’t he come from Dunedin?Dr DAVID CLARK: It is shocking—and the Minister comes from Dunedin. There are 14000 people missing out on that $1000 KiwiSaver kick-start as a result of the last Budget. It is indeed an outrage.So I think it is entirely possible that young people who have been signed up to a scheme where they thought they were going to get a savings boost from the Government will find out later that the Government has taken it from them in the previous Budget as is its wont at the moment. And goodness knows what we will find out later this week as it plays to the mega-wealthy. I mean we have seen what the Government is doing with the Panama Papers and so on. We will see what it does with the Budget this week but I am betting that middle New Zealand will be cut out of the picture once more by this Government which is increasingly arrogant Mr Bishop and out of touch. Mr Bishop knows it: he laughs he laughs and he laughs. He takes this lightly but I genuinely think that New Zealanders will be disappointed—those people in the middle who are struggling to get by—and I think some of those young people who might have discovered that they have been enrolled in this scheme would quite rightly be aggrieved and may wish to withdraw.I politely put it to my colleague that this might be an issue and that in fact it might be in the interests of Minister Woodhouse to play it down because it is his Government that has robbed middle New Zealand and is making it tougher and tougher for them so that it can look after its mates who are the ultra-wealthy. It is this Government that is screwing the scrum in favour of those who have privilege already.It is my concern that this clause may in fact be there for the right reasons. I would seek the Minister’s assurance that that is the case when he delivers his short address on why the existing system will be able to deliver all the changes in this bill because he promised me that when he interjected before. I am looking forward to that speech. I hope it is not the Minister just pushing this out into the never-never as though his Government is above explaining itself because that is becoming a pattern that New Zealanders are becoming increasingly concerned about: a Government that makes changes and says: “Well to hell with the rest of you. We’re going to make the changes we want because we do not want to engage with the public any more. We’re just going to make the changes that we want to do.”I come back to the point that is around clause 213 in the bill where those deductions can be looked at and people can withdraw from the scheme.GRANT ROBERTSON (Labour—Wellington Central): I thought it would be useful to carry on this discussion with Dr Clark because I do not think we are disagreeing at all here in fact. He does raise a very good point about the impact of the removal of the KiwiSaver kick-start on the very people whom clause 207 alleges to help. The Prime Minister stood up in this House and said that removing the kick-start would “not make a blind bit of difference” to the number of people who were joining the KiwiSaver scheme.Rt Hon Winston Peters: Who said that?GRANT ROBERTSON: John Key said that—he said that. It is interesting Mr Peters because he said that and then we got under the Official Information Act the advice of his officials who said that this would significantly reduce the number of people who enrol in the scheme. But Mr Key took his own advice—an unwise course of action—and said: “No this is not going to make a blind bit of difference.”Well what occurred within a year was a reduction—and my colleague Trevor Mallard always says that you cannot have a reduction like this—of 182 percent in the number of 0 to 17-year-olds joining the scheme. In other words—[Interruption] I know and Alastair Scott is making the point that there was a reduction of 1188 people on the average new enrolments of 0 to 17-year-olds over the previous 12 months. It fell away. It has collapsed and it has collapsed for a very good reason and that is that the kick-start was an incentive to young New Zealanders to get themselves into the KiwiSaver scheme. So I accept the point that Dr Clark is making which is that it is possible that some of those people who were enrolled will now feel aggrieved about the fact that they were enrolled because they do not get that kick-start any more. I think that is a legitimate point.Rt Hon Winston Peters: That’s been a kick in the guts.GRANT ROBERTSON: It is indeed a kick in the guts. It is a kick in the guts for the savings culture that KiwiSaver has developed—the very thing that we have been so poor at in New Zealand for so long: saving. I know the member has a history of promoting savings in New Zealand and the importance of it but KiwiSaver has made a real difference and to see that kick-start go in the Budget last year was a huge disappointment to a lot of New Zealanders. As my colleague Dr Clark says who knows what they will do? So I do just want to put on the record the fact that I share the concerns of Dr Clark.What this clause did was create the process by which people could withdraw from the scheme up to the age of 19. I still do not want New Zealanders to do that. I still want young New Zealanders to be in KiwiSaver because long term it is important to New Zealand that they are. It is just a pity that this Government has consistently undermined KiwiSaver over the last 8 years.Dr DAVID CLARK (Labour—Dunedin North): I think we are reaching a point of harmony in the Committee. It may just be a difference in emphasis. I ask Mr Robertson to consider that it will be in my estimation more than 30000 first-time savers in the Greater Wellington region who have missed out on this $1000 KiwiSaver kick-start as a result of the changes the Government had made since the last election where it increasingly is skewing the playing field in favour of the ultra-wealthy and is letting people in the middle miss out. I think Mr Robertson and I are indeed in agreement that this will create some concern for people and that there may well be people who wish to withdraw.I agree also with Mr Robertson that we should not be encouraging people to do that—that instead we should be encouraging people into savings and that the movement that was started by the last Labour Government to really push a savings culture is one that is worth taking into the future. I guess we would encourage this Government to take up that cause. For starters it could look at restoring the kick-start fund that it took out because that is the harm that has been done. It has changed behaviour and the Government has had the advice that that has changed behaviour. So that is where I suspect the concern from officials came—from the Government’s own advice. I mean the Government’s best economic advice is that the damage the Government did to that kick-start scheme which withdrew that entitlement for a lot of first-time savers will have a lasting impact and that we will see it play out in different ways. So I suspect that is what is reflected in this.Mr Robertson and I agree. Harmony is breaking out in the Committee and actually Labour is supporting this bill. I think that is something we should also note along the way. We believe in a broad-based tax system that is fair. Of course there are aspects that we will disagree with the Government on. We do not think that it has the tax system right but we do want to work towards simplification and that is what a good deal of this bill is about. I am still looking forward to the Minister giving us some assurances that he can actually implement this legislation. I hope that he does not consider himself above giving members of this House and the wider public that assurance. It is a mistake his Government is slipping into where increasingly it is seen as arrogant and out of touch. I hope the Minister himself will rise to the occasion and give that assurance. Thank you.The CHAIRPERSON (Hon Chester Borrows): We are all glad that you are getting on.Part 3 agreed to.Schedule agreed to.Clauses 1 and 2Hon MICHAEL WOODHOUSE (Minister of Revenue): I am pleased to take a very very short call to address the issues raised by the Rev. Dr David Clark in Part 2 of the bill and specifically clauses 59 and 116—his challenge to me to verify—The CHAIRPERSON (Hon Chester Borrows): Clauses 1 and 2.Hon MICHAEL WOODHOUSE: Yes we are working on the commencement clause which is why I raise it in this context. The member will note that clauses 59 and 116 among others have a commencement date of 1 April 2016. The date 1 April has passed. The system changes that will give effect to this have already been made; now we need to give legal effect to it. These are system changes being made to the legacy system not to the new system. They have already been made we are ready to go and the only thing holding it up is the passage of the legislation. I encourage—nay I implore—Messrs Clark and Robertson not to delay it any further and to get out of the Committee stage.Dr DAVID CLARK (Labour—Dunedin North): I thank the Minister for that explanation. We will see whether in practice this is true. I suspect the Inland Revenue Department (IRD) had given assurances around the child support legislation previously which were amendments to the legacy system. Simply because they are amendments to the legacy system does not always make them straightforward—that is part of the problem with the legacy system. It is something that needs to be addressed and updated because it is hard work to push changes through the system—at least that is my understanding from talking to those technical experts at the IRD who make those changes. That is part of what needs to be rectified.We need a 21st century responsive tax system and this Government has of course delayed. It has been in Government for 8 years and the whole time it has been here it has had brought to its attention that the system is out of date. The Government has been very slow off the mark and these changes along the way which it has not been able to make have hindered tax policy in New Zealand and they have harmed the reputation of the IRD which is no longer as strong as it once was. Its reputation as a place of fair dealing and of being easy to deal with has slipped under this Government and I do not think that the Minister can duck that responsibility so easily. I do thank him for his assurance; he has at least sought some assurance that this will be possible to implement but of course the proof will be in the pudding.GRANT ROBERTSON (Labour—Wellington Central): In clause 1 I do want to refer to the title of the bill. It is the first and second words of the title of the bill that I want to reference: taxation transformation. Well I think we have heard in the course of the debate tonight that it is the view of the current Government that the transformation of our taxation system relies on the definition of verbs—that is going to transform our taxation system. It relies upon electronic signatures being allowed to be used—that is transformation for this Government. It is about the ability of young people to opt out of KiwiSaver—even though none of them have actually asked to—that apparently is transformative as well.Transformation of our taxation system will occur when the Government gets off its chuff and starts actually making people pay their fair share. Fundamentally tax is the price of a decent society the price of a fair society and the price of making sure that every single New Zealander gets the opportunities that they are entitled to by being here. It is about making sure that everyone gets a fair go—David Bennett: No it’s not.GRANT ROBERTSON: —and David Bennett does not care about New Zealanders getting a fair go. David Bennett is so out of touch that he does not think that transformation of the tax system in New Zealand actually requires people to pay their tax.I will tell you what else would transform the tax system in New Zealand: when the Prime Minister gets up—he is talking about multinational tax avoidance—and says “Well you see the problem here is that the ethical thing to do might not be the legal thing to do.” How can those two things be different in a proper functioning tax system: the ethical thing to do and the legal thing to do—they are not quite the same? If we were transforming the tax system—which is what this bill says in its title that it wants to do—then we would not have the Prime Minister standing up and saying that. We would have a Prime Minister who actually understands the difference between right and wrong and who actually understands that everybody paying their fair share is the core of our tax system.With all due respect to colleagues who use phrases like “aggressive tax planning” “aggressive tax planning” is people getting away with not paying their fair share. That is why members on this side of the Chamber have been so annoyed and upset with the blasé attitude of the Government to New Zealand’s increasing reputation as a tax haven. I know that the Minister and others will say “But we’re not a tax haven”—The CHAIRPERSON (Hon Chester Borrows): Order! I just want to bring the member’s attention to the fact that a Supplementary Order Paper addressing the issue that the member is straying into has been found out of order. He was allowed the opportunity to make an aside. If he wants to continue to make this a bigger chunk of this speech then I am afraid that he will have to sit down.GRANT ROBERTSON: I am referring to the title of the bill which claims to be transforming our tax system—The CHAIRPERSON (Hon Chester Borrows): Well make that argument then.GRANT ROBERTSON: —and the transformation of the tax system we are looking for on this side of the Chamber is one where we can hold our heads high internationally. That would be a transformed tax system. A transformed tax system would collect the billions of dollars from multinationals that decide that they do not want to pay tax in New Zealand. Transformation would be about saying we stand for every New Zealander paying their fair share. Would it not be a great day when rather than aggressive tax planning we actually had companies and individuals in New Zealand who said: “I am paying my tax because it’s the right thing to do. I’m paying my fair share because it’s my contribution to society. It’s my way of saying I am part of society.” That would transform our tax system not tinkering about the edges not looking into whether or not different parts of the IT system work or not but actually saying that our tax system is the fundamentals of a decent society the fundamentals—Andrew Bayly: Why don’t you just say it—you want to put up tax rates?GRANT ROBERTSON: —of what allows New Zealanders to do that.Andrew Bayly is talking to us here about the right and wrong thing to do. Andrew Bayly and his Government need to make sure that they are on the side of ordinary New Zealanders—David Bennett: Oh what a load of rubbish.GRANT ROBERTSON: David Bennett reacts—the people who pay their PAYE every day of the week those New Zealanders who do the right thing who meet their tax obligations—and David Bennett would prefer to be on the side of the fortunate few who can hire an accountant and hide their tax. Well shame on you Mr Bennett. Shame on you. If you want to transform the tax system Mr Bennett get alongside parties who want New Zealanders to do the right thing. [Bell rung] Mr Chair? There ain’t no one else.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.Dr DAVID CLARK (Labour—Dunedin North): I want to pick up where my colleague Grant Robertson left off because he raised the critical point: this bill is called a transformation bill. I had a look in a dictionary for what “transformation” means. It is a very simple term. It means to make a “Marked change in the form nature or appearance of:”—“Make a marked change in the form nature or appearance of:”. It is not about a little patch-up here and there which this bill is about. We approve of the patch-ups but what we would like to see is genuine transformation where people are actually encouraged to pay their fair share where tax avoidance is not something to be sniffed at and laughed at and where Mr Bennett does not chuckle away at the very suggestion that everyone should pay their fair share.We want genuine transformation on this side of this House. We believe in having a fair society where everybody has the opportunity to get ahead not just the wealthiest people whom National is alongside. We want a New Zealand where middle New Zealand has the same kinds of opportunities that the wealthy few whom those members on that side are supporting have. That is the kind of transformation we want and it is not in this bill and that is why I contend that this bill is not named in an accurate fashion. We might be better to say “Incremental Change:”—the “Taxation (Incremental Change: First Phase Simplification and Other Measures) Bill”.What we see in this bill is not genuine transformation. It is not changing those tax structures that enable tax planning aggressively to avoid paying a fair share. It is not addressing the issue of the way in which our society is becoming increasingly divided in which we have got these growing inequalities where we have the lowest homeownership rate—David Bennett: No rubbish—rubbish.Dr DAVID CLARK: —since 1951 Mr Bennett. It is not addressing those issues this bill. It is an incremental bill and so I contend it would be better named the “Taxation (Incremental Change: First Phase Simplification and Other Measures) Bill”. I look forward to the Minister’s consideration of this suggestion and to his thoughtful response.Rt Hon WINSTON PETERS (Leader—NZ First): I have got to confess that some of us are down here tonight for this debate on false pretences because we were told that National was going to introduce and pass through certain stages the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. That is why we are here only to find out that we have been grievously misled.You will recall there was a family down in Louisiana in the United States called the Long family and Huey Long’s famous comment about taxation was—very much epitomised by the National Party attitude when on the hustings until it gets in here—that taxation reform is very much like “Don’t tax you don’t tax me tax that man behind the tree.” That is exactly where we are now tonight because when we talk about transformation it is quite possible that people out there who do think that the Parliament in this country has got some sort of credibility and is actually serious about the word “transformation” in the title. There is nothing very transformative in this legislation at all. In fact all it epitomises is that in the 8th year of its term in Government National is still flitting around the edges and does not quite know what it is doing and it will probably be back in 6 months to change this as well.And then on the issue of simplification let me say that we have more tax law than the United States.Hon Member: No we don’t.Rt Hon WINSTON PETERS: We do so. It is more voluminous and more complicated than the United States but of course over there if they catch someone cheating they put them behind bars for 10 20 or more years. Here we give them a knighthood or we cover it up. We do our utmost not to disclose it. Any transformation or simplification would certainly be attacking for example those trusts that are a big issue politically in this country but which no one can mention tonight. With all that evidence glaringly out there in the public domain with voluminous amounts yet to come soon to home in on all sorts of personalities in this country and headlining the latest National Business Review on the front page it does not make it into this legislation which tells you that we may be wasting the taxpayers’ time and indeed the time of this Parliament.Clause 1 agreed to.The question was put that the amendment set out on Supplementary Order Paper 171 in the name of the Hon Michael Woodhouse to clause 2 be agreed to.Amendment agreed to.Clause 2 as amended agreed to.Bill to be reported with amendment presently.Human Rights Amendment BillIn CommitteePart 1 Amendments to Human Rights Act 1993.JACINDA ARDERN (Labour): It is pleasing to be able to have an opportunity to speak again on the Human Rights Amendment Bill which was originally brought to this House by Judith Collins. I think it is interesting that—perhaps as we have seen with other transitions that portfolios have made between Judith Collins and the now Minister Amy Adams—there have been a few tweaks to this bill. I would say it has actually made a rather substantive change to the Human Rights Amendment Bill for the better and it does not actually surprise me that Amy Adams has reversed a decision that was made by her colleague Judith Collins when it was brought before the House.To quickly traverse the substantial parts of the Human Rights Amendment Bill—and the most substantive parts are contained in Part 1—currently the Human Rights Act 1993 does set out that there is room for the statutory appointment of two specialised commissioners outside the role of the Chief Human Rights Commissioner. They are the Race Relations Commissioner—and obviously I doubt anyone in this House would dispute the need to maintain that role—and the Equal Employment Opportunities Commissioner which is also a role that I think this Committee would probably agree there is certainly still an important place for and a role that I think has been fulfilled very well by an ex-colleague from this House Jackie Blue.The Act as it originally stood also allowed some flexibility in additional commissioners that could be appointed. We had a situation where you could have three full-time and then up to five part-time commissioners. That allowed a certain flexibility to appoint commissioners based on what needs were identified by the Human Rights Commission and also flexibility in the employment arrangement—which seems fitting for the Human Rights Commission given the fact that there were part-time roles available dependent obviously on the priority of those commissioner roles.What this bill does however is substantially change that flexibility. It provides different designations. Well actually it removes designations in its original form and reduces down the number of commissioners who can be available. So where we had a situation where there were three full-time and up to five part-time we moved to the situation that we have according to clause 6 of the bill which sets out the membership of the commission. Clause 6(1) states: “The Commission consists of the following Human Rights Commissioners: (a) the Chief Commissioner; and (b) not less than 3 and not more than 4 other Commissioners.” So there is a substantive change in the amount of flexibility going from three full-time and up to five part-time—a total of eight different designations that could be held.I think something important here as well is that removing part-time options does remove the flexibility that existed for the commission. It may well be that you might have a portfolio that did not require a full-time post. For instance what if down the track we see that we have substantial issues for our seniors and the Human Rights Commission determines it would be useful to have a role—Australia has done the same—to actually have someone identifiable who holds that role singly but maybe it was a part-time role. We are now removing that ability—it would be full time or nothing—and you might have a situation where the human rights commissioners are holding multiple designations. I think that really muddies the waters and muddies the distinction that we want between those different commissioners. So we have lost a bit of flexibility there.There has been quite a substantive change though since the time that the bill was introduced between what the original Minister was suggesting and what we now have via a Supplementary Order Paper that Amy Adams has produced. I would say this side of the Chamber supports that Supplementary Order Paper. We still have substantial problems with the bill and do not intend to support the bill but Supplementary Order Paper 175 is an improvement and something that we think we should support.Let me cover what that Supplementary Order Paper does. Originally under clause 6(1A) of the Human Rights Amendment Bill which sets out how the designation needs to work amongst those new three or four commissioners it states: “There must be a Commissioner other than the Chief Commissioner appointed to lead the work of the Commission in each of the following priority areas:”. Originally the bill set out “(a) disability rights” which actually is one part of the bill we absolutely support as did roughly half of the submissions at the select committee—they supported the establishment of a disability rights role within a Human Rights Commission; not before time I have to say. It is fantastic that that has been included and we absolutely support that. But we supported the idea of a disability rights commissioner.What the bill originally did was just set out that there must be a priority area of disability rights. There was not a specific commissioner. It was not clear necessarily how that portfolio would be managed and so on. Clause 6(1A) then set out (b) “equal employment opportunities (including pay equity)” as if pay equity were a side thought and “(c) race relations”. So those three designations were now just set out as portfolios rather than as specific designations for each of the commissioners.Then we had the Minister enter into it. On Tuesday 10 May Supplementary Order Paper 175 was tabled. This has been described as a minor amendment—a technical amendment to the bill. I often find that these “technical” and “minor”changes are wolves in sheep’s clothing because actually I would not consider this to be minor at all. The explanatory note notes that “This Supplementary Order Paper makes minor amendments to new section 8(1A) of the Human Rights Act 1993 as inserted by clause 6 of the Bill. The amendments give the designations of Disability Rights Commissioner Equal Employment Opportunities Commissioner and Race Relations Commissioner to the commissioners appointed to lead the work of the Human Rights Commission in the priority areas …”. So that was what we used to have. That was what we had as the status quo apart from the Disability Rights Commissioner that we accept is the new amendment. In this bill that was brought before the House by Judith Collins we did not have those commissioner roles before. She was getting rid of them. They were just titles bits of lead work that needed to be done by someone. Now we have Amy Adams bringing them back—bringing them back as specific commissioner designations. All I would say is—Clare Curran: Whew.JACINDA ARDERN: —good. It is—and perhaps “whew”. Clare Curran you are absolutely right: “whew” is a good description. Perhaps we actually had some role in persuading the Minister—who would know? But it did seem a waste of energy to us to say on the one hand that there is a need now to have a Disability Rights Commissioner but in the other breath we are going to get rid of the commissioners in the other areas. So I thank the Minister for her Supplementary Order Paper. I think it is the right thing to do.The comment I have though is that this Supplementary Order Paper does not change the total number of commissioners that can be appointed. We have not got a change to the total number. Remember that in clauses 6(1A) and 6(1B) it sets out that there will be a chief commissioner and “not less than three and not more than four other commissioners”. Well we have got disability rights we have got equal employment opportunities and we have got race relations. So basically we have our buffer of one now.We used to have more discretion before this bill came to the House. The commissioner had more discretion to appoint other commissioners and that has not been reinstated by that Supplementary Order Paper. So we are still disappointed. We do not see the rationale for that in terms of the make-up of the commission—and I will come back to this later on in the discussion. That discretion—much to our disappointment—actually now lies to a certain degree with ministerial discretion as well and we disagree with that. Priority areas now are in consultation. We do not think that is right. We think that there should be that absolute independence of the commission. So it is good on the one hand but does not go quite far enough in our thinking.The other question I would pose to the Minister is does the addition of the word “commissioner” as her Supplementary Order Paper 175 sets out—does a separate delegation of commissioner mean that you cannot hold multiple portfolios? So you could not be the Disability Rights Commissioner and the Equal Employment Opportunities Commissioner and/or the Race Relations Commissioner? If you can hold multiple portfolios I guess that means that there would be greater flexibility. I am not clear in my own mind as to whether or not the Minister’s Supplementary Order Paper precludes one designation from holding multiple roles and it would be useful to know that. Of course it sets out in the rest of clause 6(1B) that the “Commissioner must lead the work of the Commission in any other priority area that is designated by the Chief Commissioner and the Chief Commissioner may designate an area of work priority area only in accordance …”—and this was an amendment by the select committee—PEENI HENARE (Labour—Tāmaki Makaurau): You are spoilt for choice Mr Chairperson. I rise to make a contribution in this stage on the Human Rights Amendment Bill. I want to preface my contribution by mentioning that just recently approximately a month ago I attended the Ethnic Communities’ Engagement Summit hostedby Auckland University of Technology. They did a great job of bringing together a broad range of ethnic communities to discuss human rights of all things.We had present at that particular forum the current Race Relations Commissioner Dame Susan Devoy who heard from all of the ethnic communities that were represented there just how stretched the resources of the Human Rights Commission are from their perspective as people within the communities who are looking towards the Human Rights Commission to look after some of these issues that they are faced with every day. They were very clear in their dissatisfaction with the service they received and are afraid that that is going to get worse under this particular amendment bill.I think my colleague Jacinda Ardern has covered off quite well the aspects of the bill that we do not agree with that are forcing us to not support this bill. In particular I want to have a look at clause 5 “Functions of Commission” in particular where it says: “Section 5(2) is amended by inserting the following paragraphs after paragraph (k) that section 5(2) is amended by inserting the following paragraphs after paragraph K: ‘(ka) to report to either or both of the Prime Minister and the Minister responsible on any existing or proposed legislation (including subordinate legislation) administrative provision or policy of the Government that the Commission considers may affect human rights:’ ”Some of that I get. That is pretty straightforward. I think there should be a good relationship there between the relevant Minister and of course the commission in the important work that it does. But I take the contribution made by my colleague Dr Clark on the previous matter before the House where this seems like another process in licking your finger and putting it in the air and just wondering which way the wind blows. I am rather confident that there is no crystal ball in existence that allows that kind of a prescribed work agenda to be set to allow the Human Rights Commission to really do its job and do it well. What this tells me is that once it has put its finger in the air it has said to itself that there clearly is not a need for some of these roles—that we will not need an advocate for important matters such as equal employment opportunities.We have had particular pieces of legislation come through this House recently where it has actually been highlighted that we do these types of roles to make sure that there are people there to represent the views of a wider community that are disaffected by these matters. Also in terms of the disestablishment of the Race Relations Commissioner role I would have thought at this particular point in time—as I said at the beginning of my contribution about the ethnic communities’ summit and the realities that they face—we know that there is an increasing number of people entering and flooding into our country. Some of them find their feet but many of them do not.I want to just digress very briefly Mr Chair with your indulgence about one of the points made by a lot of the ethnic communities there. One of the panels that I spoke on was about the relationship between the Treaty of Waitangi and ethnic communities. They wondered whether there was any provision or any sort of plan by this Government and those who set the test for citizenship to allow ethnic communities and those who come into the country to be afforded some sort of training in the Treaty of Waitangi and a bit of history around the Treaty of Waitangi. But I will leave that on the floor for consideration.So it is important then that the disestablishment of the Race Relations Commissioner as a full-time appointment is of huge concern to us. It is of huge concern to us in Tāmaki-makau-rau where most of the large ethnic communities find a home. A lot of them struggle. A lot of them do not know where they can go to. I am afraid that sadly by disestablishing these full-time appointments we are going to find a group in our society who will not know where to go and who will not have the confidence to approach the office of the Human Rights Commission to express their views so that their views are heard and so that the role of the commission can be fulfilled in advising this Government or producing the types of evidence and reports that are required to assist this Government in making a good policy plan moving forward on how we help to establish the many ethnic communities that find a home here in Aotearoa New Zealand.I want to just go back briefly to the section that I talked about with regard to the provision “to report to either or both of the Prime Minister and the Minister responsible”. We have some concerns with regard to this as we feel that the role of the commission is actually to be somewhat of an independent lens upon many of the issues that are brought to its office from across the country. Sadly we feel that by having that kind of a relationship where work schedules are set and where policy directions are forced upon the Human Rights Commission we are afraid that a lot of the actual work that was done by the commission—the good work—is going to be lost. There will be no consideration in the future for a lot of the priority needs of the communities that seek the assistance of the Human Rights Commission.Just in conclusion one of the big concerns and this is my contribution this evening is the reduction in the number of commissioners. We have debated many times in this House about the huge workload and the programme being placed on institutions such as the Human Rights Commission and our public sector yet we question whether or not the support is in place for them to fulfil their job properly and we question whether or not they have the resources and the capacity to actually fulfil their job and do it well. Recently I have talked about the Māori Land Court and some of the shortcomings there and I am afraid that this amendment being proposed to the Human Rights Commission is just going to put more stress on it.I want to finish by quoting—which I have done before in this Chamber and others have—the expression of Meri Ngāroto from the far north who said “He aha te mea nui o tēnei ao māku e kī atu he tangata he tangata he tangata!” and I can say that he tangata come in many shapes and forms. We are afraid that the proposed amendment that we are debating this evening is going to remove the rights and the assistance and the services for those many people in our community who make up that expression “he tangata he tangata he tangata!”. Kia ora tātou.MOJO MATHERS (Green): I would like to focus my comments in support of Supplementary Order Paper 175 which reinserts the separate designation of the Race Relations Commissioner and the Equal Employment Opportunities Commissioner as well as that of the Disability Rights Commissioner. I want to stand and acknowledge the Māori Party for lobbying and enabling that and I acknowledge Minister Amy Adams for listening and bringing this Supplementary Order Paper to the House.The Supplementary Order Paper expresses one of the major concerns that the Green Party and many submitters had about the bill which the Minister of Justice at the time refused to address. It was clear to me from listening to the many submissions that the removal of the specific titles was perceived by the communities that these commissioners support as a lessening of the roles and a change in the specific special character and focus on disability of these roles.So the change in this Supplementary Order Paper I would say is not minor. It is significant. It is significant because titles do matter and for each of the priority areas of the Human Rights Commission it is vital in our view that the titles of the commissioners do reflect these priority areas. Specific designations not only create clarity and increase visibility; they affirm the critical importance of these issues to the groups represented in a way that downgrading to generalised commissioners leading the areas of priority does not.This is because the priority areas in the bill are just that—priority areas that really focus on the community where there is still a long way to go to ensure that their human rights are recognised for disabled people are amongst the most marginalised and discriminated-against people in New Zealand. They are under-represented in employment and homeownership they are overrepresented in prisons and they face major challenges in accessing health and other services. Over 30 percent of complaints to the Human Rights Commission are related to disability. Gender issues are as critical as ever with record levels of domestic and sexual violence in this country and a significant pay gap for women in many sectors. We see appalling—absolutely appalling—levels of abuse and racism directed at Māori in this country on an almost daily basis. All of these factors combined affirm that this is absolutely not the time to be disestablishing the specialised designations for the human rights commissioners.First I want to put on record again that the move by the Government to create the position of a Disability Rights Commissioner was partly prompted when a member’s bill by my colleague Catherine Delahunty was pulled from the members’ bill ballot in 2010. That bill by Catherine established a designated disability commissioner to sit alongside the existing specialist designations of the Race Relations Commissioner and the Equal Employment Opportunities Commissioner and it was long overdue because for far too long the needs and rights of disabled people have languished far behind those of other people in part due to the major structural and systematic failures that disabled people face in this country along with systematic negative attitudes towards people living with impairment—towards disabled people.Catherine at the time was doing her best in good faith when the Government announced that it would be creating a disabilities commissioner under the assumption that such a position would be created to stand alongside the existing designated positions and that is why we objected so strongly when it was found that the bill was going to go much further than that and actually restructure the commission and downgrade the specific designations. So it is a huge relief in fact that this Supplementary Order Paper now reinserts these specific designations. Thank you.DAVID SHEARER (Labour—Mt Albert): This bill is opposed by Labour because actually it is trying to fix something that is in fact not broken. We actually have a very effective system of being able to protect the rights of people in New Zealand who obviously and very frequently do not get a voice and for many of those people that voice is either going to be taken away or downgraded to the point where it is not going to be able to be effective.We do agree with the idea of having a commissioner who would protect the rights of people with a disability. That is something that is long overdue. We signed that convention in the UN in I think 2008 and this gives it weight and it gives it a means of being able to be carried through and supported. But what we do not and cannot accept is that with this legislation—as I say really not fixing anything because I do not believe anything is broken and I really question the underlying motives of why this legislation has come into being—why we do need to take away the specific roles of the Equal Employment Opportunities Commissioner which is currently held by Jackie Blue and the Race Relations Commissioner which is currently held by Susan Devoy.Just simply by looking at the number of times that those people appear in the media—and I know that is not a particularly good measure—you can see they are the people who are standing up for many of the issues that are facing us today. So if we look at equal employment—do we have equal employment opportunities in New Zealand? Of course we do not. We have looked at the number of times that for example women are not represented well; their salaries in comparable jobs are not equal. There is a very real need for ensuring that that particular commissioner stays there if only for that simple reason: to provide the focus of work and attention on those issues. They are real issues in New Zealand that are certainly not being addressed. In fact in many of the statistics we are actually going backwards and not forwards.Likewise in race relations—why would we want to disestablish this particular role in New Zealand at a time when for example the city that I come from Auckland is the second-most diverse city in the world? There is a need for looking at the opportunities the rights the way that people are treated in our society with regard to what kind of ethnicity they have what background they hold and to make sure that somebody is specifically standing up for them and protecting their rights and making sure that they get a fair go. This has been longstanding in New Zealand. We have had a Race Relations Commissioner for a very long time and this Government wants to disestablish the position. This is a lessening and a weakening of our system of rights in New Zealand and it is for that reason that we are opposing this legislation. That is the first reason.The second issue is the independence and the operations of this office as well. I unfortunately happened to be on the select committee that was looking into the operations of the Government Communications Security Bureau in 2013 and I heard John Key when the Chief Human Rights Commissioner came before our select committee—John Key clearly did not agree with the findings of the Chief Human Rights Commissioner. He said that the Human Rights Commission needed to pull its socks up implying that it was going to lose its money the $9.3 million that it is given every year in order to do its job effectively. That is the really scary frightening aspect of putting an office like that too closely in sync with the Government and what this bill will do is ensure that the office itself will have to pass its work programmes in front of the Minister.The Minister might be a very honourable person but I do not believe that it is healthy for our Parliament for our society to have a situation where the commissioners need to pass their work past a Minister. There should be a complete separation and there should be no threats being able to be levelled at one of those commissioners by the Prime Minister or whoever. We might have good Ministers now but Ministers like all people come under enormous amounts of stress their situation is criticised and perhaps one of their first reactions is to attack back at the independence and the ability of these people to do their jobs.The third issue is that this move threatens what we believe are international minimum standards. It has been criticised by the United Nations Committee on the Elimination of Racial Discrimination with particular emphasis on the abolition of the Race Relations Commissioner. The move down this track does nothing for the reputation of New Zealand internationally—it does a lot of harm. It is not just a re-juggling a change that is supposed to make this more effective; it is actually in some ways going to bring some discredit to New Zealand in terms of the way it is going.These are I think three very powerful reasons why we do not need to change this piece of legislation. I have yet to see and have yet to hear a rational strong argument by the Minister and those who are in support of this bill for why this bill needs to go through. It has taken a year for it to get from when it was last read to now so it is not exactly urgent anyway but irrespective of that I do not see the reason why we are spending valuable parliamentary time on a bill that does not purport to do anything that is going to be remotely positive. In fact it is going to take away as I say the focus on critical areas and critically weakened areas within our society that need to be stood up for and supported.We agree with the introduction of a Disability Rights Commissioner and support that inclusion but taking away the Equal Employment Opportunities Commissioner in the form of the current holder of that role Jackie Blue—actually a former National MP who to her credit has come out and criticised this Government. She has not stood back and withheld her criticism. She has been I believe a very effective commissioner.The Race Relations Commissioner again appointed by this Government in the person of Susan Devoy was actually highly criticised when she got the job. People said: “Why has she got the job?”. I think she has done a very credible job. She has actually stood up for and done what we expected her to do. Sometimes I did not always agree with her but I have to say she has tried to act as independently as possible.But the fact that those two people can do that speaks volumes about why we need to have those people in our society and as part of the structure of our institutions. Take those away and we lose something—those people who might be supported by those very institutions lose an advocate and that is an important point.Secondly as I said before the independence of these groups is being threatened by the fact that their work programme and the ministerial oversight is so strong that it will influence the way that they are able to operate independently. I think that is such a backward step. This Government used to call the former Labour Government nanny State; this is actually more than that. This is about a steel grip around our independent organisations pushing them in the direction that the Government wants to go. Thirdly I do not believe that it actually helps our international standing in the world when we sign up to these agreements.Hon AMY ADAMS (Minister of Justice): I will take a call this evening on the Human Rights Amendment Bill and address a number of the issues that I have heard discussed around the Committee this evening. Firstly it is not entirely clear to me that Mr Shearer who has just resumed his seat and Mr Henare I think it was who spoke earlier in the debate are aware of the Government’s Supplementary Order Paper 175—which I will talk to in a minute—which makes it very clear that far from disestablishing any positions they are absolutely being maintained in name and in function.What I want to take the Committee through is that the point of the bill was to address the fact that at the moment the structure of the Human Rights Commission limits the ability of the Commission to act as effectively as it could so at the moment the Commission can only act with three full-time members and a number of part-time members. It might interest the Committee to know that actually at the moment the commission has the equivalent of 4.7 commissioners so we have three full-time and a number of part-time commissioners who make up 4.7 full-time slots if you take them out to a full-time equivalent. What we have found in talking with the commission is that actually for those part-time commissioners although they have done some excellent work it has really impinged upon their ability to take full part in the life of the commission as what they are first and foremost which is human rights commissioners.The change of the structure of the commission is an important one and one that the commission supports which is to say that actually to have four or five full-time commissioners absolutely preserves the resourcing of the commission and that is the point I wanted to make very clearly. We are not reducing the total number of commissioners. Four to five full-time commissioners is the same as is available at the moment and slightly more if needed but it means that each one of those commissioners is a full-time human rights commissioner and is not finding that they are losing a large part of their working day on administrative matters.I have spent a number of my working years in part-time roles. I can tell you that when you are in a part-time role you spend a huge amount of your time doing the administrative meetings that everyone has to do and that leaves you very little time to do your job and that is certainly what our part-time commissioners were finding. So by making them all full-time commissioners we expect and the commission expects that they will be far more able to take an active role in the life of the commission.I want to come back to this point around this alleged disestablishment of the roles. I want to read what the bill said initially which made it very clear that there must be a commissioner other than the Chief Human Rights Commissioner who will lead the work of the commission in respect of disability rights—which is of course the new commissioner position—equal employment opportunities including pay equity; and race relations. All the way through the bill has been extremely clear that there has to be a full-time commissioner appointed to lead the work in each of those roles.Talking with my colleagues in the Māori Party they felt very strongly that the title itself had to be provided in statute and look I was very open to that. So we have put up the Supplementary Order Paper which makes it clear that after each of those lines it now goes on to say “(the Disability Rights Commissioner)” “(the Equal Employment Opportunities Commissioner)” and “(the Race Relations Commissioner)”. The roles were always in the legislation the roles have never been disestablished and now with the Supplementary Order Paper we are making it very clear that the title also remains. If the title gives this Committee some comfort then that is wonderful; I am very happy to support that. The roles were always there. They were there in substance and they remain there. So to stand in this Chamber and suggest that the roles are being disestablished is completely misleading and I would say somewhat disingenuous. From the day this bill was introduced it has been absolutely clear in statute that there would always be a requirement for commissioners to be leading each one of those pieces of work and in fact as I have said now we have made it very clear that the titles are also not being removed and I would argue that there was no requirement they ever would be. But as I said if it gives the Committee some comfort we are very happy to do that.The other allegation that has been made is one that somehow the bill removes the independence of the chief commissioner. Again I dispute that. The bill makes it very clear that the chief commissioner has the right to determine other priority areas. One of the things I like about the structure of this bill is that although we have created the new Disability Rights Commissioner and we have protected the statutory roles of the Equal Employment Opportunities Commissioner and the Race Relations Commissioner we have also made it very clear that we have provided the capability for the chief commissioner to identify other priority areas.Human rights are not a static beast. We are living in a period of incredible change with the advent of the digital economy and the way we live our lives is changing. It is absolutely clear to me that in the period that this legislation is current there will be the need to have human rights commissioners focused on other pieces of work. We wanted to make sure that the chief commissioner absolutely had the capability and the legislative scope to do that. Under the bill the chief commissioner has the absolute right to determine any of those other priority areas. Yes there is an obligation to consult with the other commissioners as there is an obligation to consult with the Minister but the Minister does not control it the Minister does not dictate it and the Minister cannot veto it. You would expect any chief commissioner working under the responsible Minister to at least advise and seek the views of the Government. That chief commissioner can ignore them if he or she chooses and that is very clear in the bill—it is only an obligation to consult. I would suggest that to not do that would be absolutely poor practice and I would not think anyone would support that. But it cannot be said that somehow the Government has the control or that that independence is in any way being diminished.The last comment I wanted to pick up on was again Mr Shearer’s suggestion that somehow this bill was being looked down on by the international community and we were being criticised or it degrades us. In actual fact I was at the UN—Jacinda Ardern: We were. The UN criticised us. That’s why you changed the bill.Hon AMY ADAMS: —no—Human Rights Council in Geneva this year and it was very clear—in fact it encouraged the Government to pass this bill without delay. So I would just say to the Labour Party which is opposing it that the Human Rights Council of the UN urged the Government to pass this legislation without delay. That is what we are doing and I think the Labour Party has to look at itself to ask why it is opposing legislation that the UN Human Rights Council has urged this Government to pass without delay that the Human Rights Commission is anxious to get under way with that creates the new role of Disability Rights Commissioner that provides the scope and capability for the chief commissioner to develop other priority areas and that ensures that they have the full resourcing to do that.It is an excellent bill. I look forward to this House passing it.DENIS O’ROURKE (NZ First): Every party in this House wants an effective and efficient Human Rights Commission—that much I think is common amongst us all. The only question then is: how do you achieve that? On this occasion New Zealand First agrees with the Government and does not agree with either the Greens or the Labour Party. The reasons for that are fairly clear in my mind. Firstly I listened to David Shearer’s speech and he said that the bill is not fixing anything—for reasons I will give later I think that it does—he questioned underlying motives which he did not specify; he said that there would be a weakening of rights which does not occur in this bill; he questions independence which is not actually threatened at all; and he says that internationally minimum standards especially in relation to the Race Relations Commissioner would be reduced thus resulting in international reputational damage. I do not see any of that occurring either.The truth about the matter is that if you actually look at what the bill says it says that there must be a commissioner other than the chief commissioner appointed to lead the work in each of the priority areas which are actually specified: disability rights which the Greens are particularly interested in and that is great; equal employment opportunities which I know the Labour Party is particularly interested in and that is great too; and race relations which we are all very interested in. But the important thing here is that the chief commissioner is also able to designate a commissioner to lead work in other priority areas and that is a leap forward as far as I am concerned.We in New Zealand First for example think that there is a lot of work to do as far as the elderly are concerned and some of the rights that they are not being delivered in this country. In fact ageism is a really serious problem in New Zealand. I hope that the chief commissioner will have a look at that. Of course he will have to consult about those additional designations with the other commissioners—and yes with the Minister—but I see no harm in consultation on that.New Zealand First does not agree with the other parties about the perceived loss of specialised commissioners. If you look at Supplementary Order Paper 175 you will see straight away that the titles or designations are actually restored in that anyway. The new approach will lead to commissioners being appointed to lead priority areas but that still allows the flexibility that those commissioners can work in other areas as well. I think that is very important. I think that is one of the things that is fixed in this legislation. I think it will make the Human Rights Commission more effective and more efficient and surely we all want that.Hon David Cunliffe: More efficient to abolish it altogether.DENIS O’ROURKE: See that is the kind of comment that I hear from Mr Cunliffe: “abolish it altogether.” Can that member have actually read this bill if he is going to make an inane and idiotic statement like that? Can he have actually read the bill if he is going to make a stupid statement like that? Obviously not—obviously not. What the bill actually says is that the decisions made about what those lead areas are going to be has to be done in accordance with the strategy that all of the commissioners have to agree upon. The Justice and Electoral Committee actually added the words to amended section 8(1B): “… in accordance with the strategic direction and the general nature of activities determined by the Commission under section 7(1) …”. So it shows that what is going to guide its decision making in this is a strategy and I am very glad to see that because if it had not been in this bill it is exactly what New Zealand First would have moved to achieve.Those new priority areas will have to be allocated in accordance with the strategic direction determined by the commission as a whole. That is I think one of the things that is being fixed in the bill. We do not have the concern that some of the other parties have over the fact that the Minister is to be consulted over the strategy in those priority areas. There is nothing wrong with consultation if that is all it is—consultation. Consultation with the Minister of Justice is completely appropriate as it would be with anyone else who has a direct interest but consultation does not mean direction. Direction would be inappropriate and I am sure that if direction was attempted with that commission it would be rejected. So I do not see an issue with that either.The issue that I want to end on is simply this: the bill does fix something else in that it makes sure that the people appointed will be suitable people for the lead areas. This is something that I would like the Green Party in particular to consider because I know that it is especially concerned about disability issues and I have great respect for its expertise in that area. But it says that you have to have a commissioner whose only job is to do that. I do not think that is necessarily good for the commission and I think that as long as suitable people are selected then there is not going to be a problem. If you look at new section 13 inserted by clause 9 you will see that the Minister has to have regard not just to their own personal opinion but to some specified criteria. The first is an understanding of the principles and practice relating to the relevant priority area—the relevant priority area; secondly an appreciation of the issues in the area internationally; and thirdly an ability to carry out the functions specified in new section 16 which itself has actually been substituted to ensure skills and leadership ability and the ability to contribute to public debate. So if you look at all of those criteria together I am sure that this regime will result in a more effective and more efficient Human Rights Commission where people will have specified roles leadership to exercise special expertise backing that up and they will also however work together as a commission on everything. I think that one of the defects in the existing legislation is that it did not make that very clear.I think that this is a prescription for a much much better Human Rights Commission one that will work together in an integrated way and one that will understand what each area is doing and yet at the same time will mean that that leadership that is necessary in those priority areas will still be exercised. So I think that is a great balance. It is a big step forward. I do not for the life of me understand why either the Labour or the Green Party are opposing it because it is good legislation. We do not hesitate to say so when that is true and we will be voting for it.DENISE ROCHE (Green): I just want to clear something up: the Greens’ position on this bill has changed from time to time and with the introduction of Supplementary Order Paper 175 in the Minister’s name we have revised our positon. If that Supplementary Order Paper passes then we will be supporting the bill. The reason we are doing that is that we see it as an act of good faith. The reason we see it as an act of good faith is—if some people in this House cast their minds back they may remember—that in October 2010 the Greens had a member’s bill in the name of Catherine Delahunty pulled which was called the Human Rights (Disability Commissioner) Amendment Bill. That bill essentially set out that the Human Rights Commission would have a designated disability commissioner because we do not actually agree with the New Zealand First speaker who suggests that you can do everything. Generalisation means that specific attention wanders and that is what we need if we are to address some of the issues facing the disability community.As well as creating a designated disability commissioner Catherine Delahunty’s bill also spelt out the specific criteria for the appointment and an extensive list of the functions that that disability commissioner would undertake. It was developed in extensive consultation with the disability community. One of the things that the disability community said it really wanted from a disability commissioner was for that person to have experienced having a disability for them to actively engage with different communities or persons living with impediments—they needed to be an advocate for their interests rights and well-being and crucially they needed to assist the Government to work towards the implementation of the United Nations Convention on the Rights of Persons with Disabilities. This was all part of a bill that was pulled from the ballot. When the Government said in 2010 that it was looking to introduce legislation that would enshrine in legislation the position of a disabilities commissioner we pulled that billin good faith. So you can imagine that we were very very disappointed when this bill came to the House and it was not actually at all like what we had hoped for. In fact it looked like it was set to disestablish the specific positions and to just have them covered by broad portfolio roles. That has been our major concern all the way through: that the Equal Employment Opportunities Commissioner and the Race Relations Commissioner and the work of disability would basically be portfolios rather than specific commission roles.The other thing that we found extremely difficult about the introduction of this bill as it was written when it went to the first reading was that it did look like it was restructuring the Human Rights Commission by stealth. We certainly believe that we still need designated commissioners working within the Human Rights Commission with the Chief Commissioner and that they are specifically addressing the issues of each of those areas. We still need an equal employment opportunities commissioner. We just have to look at the whole situation with the Kristine Bartlett equal pay case where the Crown is currently negotiating what the principles are in order to ensure that women’s work is valued at the same amount as traditionally male occupations. There is still a pay gap of between 11.8 percent and 14 percent for the average hourly rate for women workers. So we have not achieved pay equity yet. Women are still facing barriers to leadership in the workplace both in the public and private sectors with only around about 43 percent of women in senior positions at board level. How can we know these facts if we have not got someone keeping their eye on it? The role of these commissioners is to advocate in these areas. We would not necessarily know this information if we did not have someone set to do it.We also need a specific Race Relations Commissioner. The New Zealand Federation of Multicultural Councils rightly pointed out in its submission that the “genericisation” or “mainstreaming” of positions that are dedicated to race relations functions means that the functions are diminished and absorbed which is why it stated that it is therefore all the more important that the designation of Race Relations Commissioner itself not be disestablished. We know from its report which it released last year Our Multicultural Future that non-Pākehā New Zealanders still continue to face massive discrimination in New Zealand particularly in the areas of education and employment with people who have the requisite qualifications and experience facing difficulties finding commensurate employment and having their previous employment overseas recognised. The 2012 Statistics New Zealand report revealed that 187000 New Zealanders had experienced racial discrimination and that nearly one in five Asian New Zealanders has also reportedly experienced racism in the last 12 months. That harassment ranges from a variety of bad behaviour including workplace harassment street cat-calling applying for work or dealing with the police. So it is clear that New Zealanders have a lot more work to do and that a specific Race Relations Commissioner is part of that.We also support and we specifically need the Disability Rights Commissioner and that is the major reason we are supporting this bill because it creates that in legislationfor the first time. We need a Disability Rights Commissioner because of the shocking 60 percent unemployment rate among people with disabilities. Disabled people are also less likely to have a formal qualification with 67 percent holding a school or tertiary qualification compared with 85 percent of adults with no disabilities. Sixty-four percent of disabled adults have an annual gross income of $30000 or lower compared with 45 percent of the abled community. So overall it is clear that in this country we are not doing more to enable New Zealanders with disabilities to fully participate in everything that our country has to offer and that is why we need a Disability Rights Commissioner to advocate for that and to make it happen. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to reaffirm Labour’s opposition to this bill and I do so on two grounds in particular. Firstly this bill undermines the independence of the Human Rights Commission. It makes it subject to consultation with a Minister which is the antithesis of the independence required of an independent body such as the Human Rights Commission which is charged sometimes to lean against Government policy. Therefore making its work programme subject to ministerial consultation is entirely the opposite of what would make a more effective and more efficient commission.Secondly although it is true the Government has introduced a late Supplementary Order Paper that restores the title of the Equal Employment Opportunities Commissioner and the Race Relations Commissioner which we welcome we still do not believe that the process there has been transparent nor was the original bill one that would uphold New Zealand’s reputation and I will come back to that reason and the evidence for it.Thirdly this bill still reduces the number of commissioners thereby limiting the scope of the commission. Taken as a whole Labour continues to believe that this was not a bill that was required and that the so-called fix is worse than the problem. It reduces the effectiveness and efficiency of the commission.May I also introduce as I set out the case here the fact that the Government’s attempts to weaken the Human Rights Commission—because that is what it amounts to; or to fetter it or to hog-tie it to the whims of the Minister of the day—is in keeping with other efforts that the Government has made to weaken the independent statutory watchdogs of our polity. The underfunding of the Ombudsman is something that is now so well-known across the community and the backlogs that have been created by the current Government’s arrogant and out-of-touch efforts to constrain its resourcing are such that we are faced with a position where Ministers thumb their noses at Official Information Act requests awaiting an appeal that might take a year to come.We have also noticed in terms of independent watchdogs the weakness in the Overseas Investment Commission which has been thrown—The CHAIRPERSON (Lindsay Tisch): Order! That is not in this. Come back to the bill.Hon DAVID CUNLIFFE: —into stark relief no doubt by the Panama Papers.Coming back to this bill our concern is that the weakening of the Human Rights Commission would be amongst the factors that Transparency International will consider next time around when it gives New Zealand a further downgrade. Why does this matter? Because New Zealand’s international reputation as a trading nation let alone our hoped-for position as an upstanding member of the international community committed to the rule of international law and human rights is downgraded by this successive top-slicing of these independent institutions by a Government that is showing every sign of “third-term-itis” wanting to take more power to the executive undermining the role of the watchdogs—Hon Simon Bridges: The member knows all about that. He’s been there done that written the book.Hon DAVID CUNLIFFE: —undermining the role of the legislature. Oh Mr Bridges. Mr Bridges has not learnt the lessons of the Northland campaign where he showed up and offered a whole few bridges and the good people of Northland sent him packing.The CHAIRPERSON (Lindsay Tisch): Order! Come back to the bill.Hon DAVID CUNLIFFE: I am responding to an interjection Mr Chairman which I am sure you found as amusing as the members opposite. Look how enlivened they are. Look how enlivened they are by the debate.Chris Bishop: You couldn’t even be bothered running.Hon DAVID CUNLIFFE: Mr Bishop the also-ran from Lower Hutt is just looking across at his colleague in jealous admiration—Peeni Henare: Get involved in Northland.Hon DAVID CUNLIFFE: —of his also-ran in Northland. I am surrounded by the sons of Ngāpuhi and they are looking across the Chamber and saying “Mr Bridges good luck.”But look back to the issues that concern us here. All revelry and joking aside—it is late in the evening—the issue here is that New Zealand’s reputation counts for something. If we want to be a trading nation if we want to expand our markets overseas then our reputation for integrity has got to be beyond question. It is a matter of concern to New Zealanders that we are slipping down the rankings for the anti-corruption index and Transparency International and it is in part because the Government is doing successive small weakenings of our independent watchdog agencies—and that is what this is.Let me come to the second issue here which is concerned with Supplementary Order Paper 175. The Government initially stripped the explicit titles of the Equal Employment Opportunities Commissioner and the Race Relations Commissioner out of the legislation governing the Human Rights Commission. Although we support as our Green colleagues do the appointment of a disabilities commissioner we are very concerned to see those titles withdrawn. It might seem semantic but how would a commissioner stand up in public and uphold the specific weight of an office if that office’s title has been removed? And why do it other than to subsume that?Hon Member: The SOP.Hon DAVID CUNLIFFE: I know that the Supplementary Order Paper does but I am just saying that we in the Labour Opposition have not been impressed by the original displayed intent nor the lack of transparency in the process. It is only after the United Nations itself criticised the Government for the original drafting and only after word has it some of the Government’s coalition partners turned turtle on it and it lost the numbers to get the bill through in its original form that it has had to compromise and come back to the House with its tail between its legs offering up this Supplementary Order Paper in a last-ditch attempt to get the bill through.Why such a humiliating back-down for a Government on a bill that has been before the House since January last year—and done in Budget week. Has the Government nothing better to do? Has it nothing better to do? There are huge issues facing New Zealand—climate change homelessness poverty—The CHAIRPERSON (Lindsay Tisch): Order! If I have to interrupt the member again on relevancy I will terminate his speech.Hon DAVID CUNLIFFE: Thank you Mr Chairman. Therefore we have had a considered reflection on this bill and we maintain our opposition to it. It is in summary based on three grounds—firstly the fettering and limitation of the commission by requiring consultation with the Minister of the day and I will say a couple more words on that. The Minister of course represents the executive. The whole point of having an independent statutory commissioner is to weigh against the executive by taking an independent statutory perspective. The commission has its own resourcing; it has its own media. It is not subject to Order in Council. It is not subject to Cabinet collective responsibility. That is the whole point. It is a creature created by statute created by this House.The commission has delegated statutory powers that depend upon not only its actual independence but its perceived independence. That perceived independence is under threat as is the actual independence when its work plan has got to be consulted on with the Minister. Consultation in this context is a loaded term. It means that the civil servant has to walk up to Minister Adams’ or Minister Collins’ office as it was when the bill was drafted to say: “Well this is what we want to do. What do you think?”. The Minister says “Well I really don’t want you doing (a) (e) and (f) on that list.” and some sort of compromise might be worked out. That is what consultation amounts to. That is inappropriate both in substance and in perception and that is the principal reason why this Labour Party continues its opposition to this bill.If we want to have a reputation for integrity if we want that to underpin our position in international affairs then we have to have not only the substance but also the recognition of that independence and that does not mean fettering independent watchdog agencies to consultation with a member of the executive. It is not appropriate. It is actually the antithesis of what the commission should be.So summing up we have got three reasons why we are continuing to be opposed to the bill: the first is the consultation process the second is the lack of transparency and the original formation of the withdrawal of the titles of the Race Relations Commissioner and the Equal Employment Opportunities Commissioner and the third is the overall limitation on the number of commissioner positions. Thank you very much.JACINDA ARDERN (Labour): I think we need to be absolutely clear about what Minister Adams has and has not done with her amendments to this bill. This bill does not simply reinstate positions that were removed and everything is back to the status quo. The current legislation allows for there to be up to three full-time and up to five part-time commissioners and for the flexibility to appoint around what those roles need to be. Of course we have added the Disability Rights Commissioner the specific role and we applaud that. Obviously it means that we would then have four commissioners. But what this bill does is it means that we could essentially end up with fewer commissioners than what the original Human Rights Act allowed us to have. I want to be absolutely clear. Thank you Minister for your Supplementary Order Paper 175. We support the Supplementary Order Paper. It was the right thing to do to reinstate those specific designations but the bill still has not changed the fact that the commission will consist of the Chief Human Rights Commissioner and no fewer than three and no more than four other commissioners. Even if they take the maximum we will still have fewer commissioners. That is a matter of fact.I am yet to see a rationale from this Government as to why we would want to reduce the representative roles that commissioners have within the Human Rights Commission. Why would we want to reduce their capacity? They have always used their flexibility appropriately in that regard. They have sometimes used their part-time roles as a 0.3 and up to a 0.5 according to what the needs of the commission were. But it seems suspicious to me that at the same time there have been criticisms that the chief executive of the Human Rights Commission is drawing a salary that required as I understand a special exemption from the State Services Commission. At the same time as we are drawing higher salaries for our chief executives we are reducing the number of commissioners. So I am somewhat suspicious about that. Unless the Minister can tell me that she fully exhausted all of the rationale as to why we would not want to give the capacity to have the same number of commissioners as we have now then I will remain suspicious as to why we are doing that—unless I hear some rationale as to why we would reduce that representation. That is one of the reasons that we have had concerns and previously had opposition to this bill. Thank you for the designations but I still have significant suspicions.Perhaps the Minister might want to rise and if she is perhaps suggesting that this is not an issue of concern why is there not a Supplementary Order Paper that at the same time as she has included the specific designations reinstates the number of commissioners that it is possible to have? It was one of the options canvassed by the regulatory impact statement. It looked at just simply retaining that flexibility. In fact one of the whole reasons we had this bill in the first place was a complaint that there was a lack of flexibility for the commissioners to be appointed. Well now we have got a situation where the Minister rightly has said we will have a specific Equal Employment Opportunities Commissioner we will have a specific Race Relations Commissioner and we will have a specific Disability Rights Commissioner. Actually if you include the Chief Human Rights Commissioner in there we could end up with nothing else—nothing else.Minister  I would really appreciate some rationale from you perhaps; maybe if not that a commitment that any budget saved would be going back into representative work and not just higher salaries or a Supplementary Order Paper on the Table saying that actually there is no point reducing the number of commissioners and that you will maintain what was the status quo. I look forward to some response from the Minister in that regard because it is significant. It may seem like we are just removing some flexibility but we of course had grave concerns with taking out a designated title so why would we not have concerns with removing the discretion in the future to appoint a commissioner in an area that becomes of substantive concern? I have already raised an example of where down the track it would be potentially useful to have that ability from the human rights commissioner.There has also been raised the issue of consultation with the Minister. Even though there is some specification within the Human Rights Act 1993 around consultation—that is in specific reference it reads to me to the commissioner’s allocation of portfolios—in this particular amendment bill it is very clear under Part 1 clause 6(1B) where it states: “A Commissioner must lead the work of the Commission in any other priority area that is designated by the Chief Commissioner and the Chief Commissioner may designate an area of work as a priority area only in accordance with the strategic direction and the general nature of activities determined by the Commission under section 7(1) and after consultation with the Minister and the other Commissioners.” That reads to me that both the strategic direction and the designation of roles could therefore be determined with the Minister.I know it has been stated that consultation—consultation—means that the commissioner can come in and inform. I have seen the word “consultation” used in those relationships before. Let us be really clear because I have heard for instance the Law Commission which I doubt anyone in this Committee would think feels under the thumb of the Government at all say at select committee that even though it has the ability to set its own agenda in terms of the work that it does it knows there is no point in bringing to the Minister—in consultation with the Minister for its work programme—something that is not within their political orbit or their political priorities. So there is a self-filtration that happens when you are required to consult—even though it is the word “consult”—that means entities naturally will not bring something that they consider to be unpalatable in case it gets taken off the agenda and just dismissed. If it is simply a matter of being informed then call it that. Let us be specific that it is actually just that they have to notify the Minister. The word “consult” is very different to the word “notify” and I have no doubt that a human rights commissioner who is obliged to consult is therefore likely to take on board the feedback that is given by that Minister when it comes to allocating any potential new commissioner roles.I thought that this amendment bill could have been a perfect chance to reflect back on the Paris principles which were passed by the United Nations General Assembly on 20 December 1993 which set out the status of national institutions—basically what should it look like when a country sets up a human rights institution? What are the really core principles to make sure you establish a proper robust human rights institution? It says in the Paris principles that a national institution “shall be vested with competence”. It should be given “as broad a mandate as possible”. I think that is interesting: “A national institution shall be given as broad a mandate as possible which shall be clearly set forth in a constitutional or legislative text”. So although we want to specify composition and sphere of competence actually allowing that flexibility that we talked about in those roles which we lose in this bill is a core principle of the Paris principles. It also talks about submitting any human rights concerns to the Government “on an advisory basis either at the request of the authorities” or at the exercise of its own power.But all the way through right down through I found particularly Minister the methods of operation—the framework that the national institution shall freely consider any questions falling within its competence whether they are submitted by the Government or not; hear any person; address public opinion; and establish working groups from among its members as necessary. All of these fundamental principles talk about the need for it to maintain that independence. There was a prime opportunity with this review of the Act to sit back and ask: are we upholding the Paris principles to the very best of our ability? And if there is any concern that embedding principles around consultation may be misinterpreted by a commission to be more than advising or informing then perhaps we should change our language. Perhaps we should look at the kind of language that embeds independence.In fact if we really were taking a first-principles review why would we not set up at the same time a select committee within our Parliament to review human rights on a regular basis to ensure that we are upholding those important institutions within New Zealand? It has been recommended. I think there are good grounds for it. That is the kind of first-principles debate we should have been having when this amendment bill was put forward and in fact when the Ministry of Justice in 2010 established its review in the first place—going back and ensuring that we were trying to uphold those principles that we signed to in Paris in 1993.CHRIS BISHOP (National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 88New Zealand National 59; Green Party 13; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 32New Zealand Labour 32.Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 175 in the name of the Hon Amy Adams to clause 6 be agreed to.Amendments agreed to.Part 1 as amended agreed to.Part 2 agreed to.Schedule agreed to.Clause 1 agreed to.Clause 2 agreed to.Clause 3 agreed to.Bill to be reported with amendment.House resumed.The Chairperson reported the Residential Tenancies Amendment Bill with amendment the Taxation (Transformation: First Phase Simplification and Other Measures) Bill with amendment and the Human Rights Amendment Bill with amendment.Report adopted.Sitting suspended from9.55 p.m.to9 a.m. (Wednesday)